Melodie van der Baan - Max Retail On the Success Secret: "You have to be so obsessed with the problem you're solving because it is going to be so freaking hard that you must have the wherewithal to continue going when it gets tough, when you hit dead ends." Melodie van der Baan has seen some things. As an experienced entrepreneur in the clothing and retail space, she has learned what to do, what not to do and what new thing should be done. That new thing is Max Retail. You see, clothing stores and retailers have products on their shelves. those products need to move, from shelf, to customers arms, through the checkout and out the door. If that doesn't happen, something has to give. So if a product isn't moving, it has to go. But where should that non-moving inventory go? Melodie has united the masses of retailers to allow them to buy and sell excess inventory so they aren't losing money and they are gaining value. This genius business came from the mind of someone that learned through first hand retail experience. Listen as Melodie details how she brought Max Retail to life and how it has helped countless retailers. Enjoy! Visit Melodie at: https://maxretail.com/ Sponsors: Calls On Call Extraordinary Answering Service, phone answering for small businesses: https://callsoncall.com Some videos have been recorded with Riverside: https://www.riverside.fm/?utm_campaign=campaign_5&utm_medium=affiliate&utm_source=rewardful&via=james-kademan Podcast Overview: 00:00 Retail markdown strategies 04:38 Challenges of retail inventory turnover 07:27 Starting out with no funds 12:30 Adapting to Modern Retail Challenges 16:48 Discovering the art of inventory planning 18:44 How planners manage excess stock 24:03 How MAX Retail data matching works 27:01 Starting Swap Retail in 2016 30:32 Trying e-commerce partnerships 32:58 Rebranding to Max Retail 35:15 Navigating economic ups and downs 38:48 Challenges of starting a retail store 44:44 Sales as a team sport 46:27 Selling seasonal inventory efficiently 51:21 Managing sales team performance 55:16 Pizza Friday gatherings explained Podcast Transcription: Speaker B: What I have learned is that there is nothing more powerful than being human. And when you are human and you treat people like they are people and not a transaction, you will always win. If you chase the American dream in air quotation marks, which says you have to live in a fancy house and you have to drive a fancy car, you will never live the life you want to live. You will be a prisoner to the comparison of others. And if you don't love your dream more than you desire the accolades of others, just don't even bother. There's always going to be someone with more than you. That would probably be my second piece of advice, is instead of keeping up with the Joneses, why don't you make everybody else desire to have the joy and the peace that you have? Speaker B: So instead of going for an object, You're going for a feeling. Speaker A: That's right. Speaker B: And a feeling of wholeness, completeness, happiness. Speaker A: Times are hard. Things will be challenging, but you will always be able to know who you are and, uh, and separate it. Speaker B: You have found Authentic Business Adventures, the business program that brings you the struggle stories and triumph and successes of business owners across the land. Downloadable audio episodes can be found in the podcast link found at drawincustomers.com. We are locally underwritten by the Bank of Sun Prairie, Calls On Call Extraordinary Answering Service, as well as The Bold Business Book. And today we're welcoming slash preparing to learn from Melody of Max Retail. And Melody, uh, let's just start with what is Max Retail? Speaker A: Max Retail is a retail tech platform that helps independent retailers get their cost back on that past season unsold inventory by easily selling it online. Love this. Speaker B: Now, I was so excited when you reached out because I was thinking, uh, so I'm in Wisconsin and Wisconsin stores are very seasonal, and it seems to be the season before the actual season. So if it's January and you want a winter coat, you're a month late. Or if it's, let's say, August and you want a swimsuit, you're a month late. So I always wonder, like, what did they do with all the winter coats? It's August, but they didn't just burn them. So what do retailers typically do with them versus what you offer them to do? Speaker A: Sure. Well, you know, most people assume that an independent retailer is going to just drop it off at TJ Maxx or Marshalls and liquidate it. But that's actually not true at all. Because For the independent retailer, first off, they don't know those guys. And secondly, the money that TJ Maxx or Marshalls would pay the retailer is pennies on the dollar. So for this particular dress that I'm wearing today, let's say it was, you know, $220 retail. Someone like TJ Maxx or Marshalls would probably give me about $7 to $10 for it at most, at most. Speaker B: Wow. All right. Speaker A: So for an independent retailer, we have to pay our vendors, we have to bring in new shipment, we have rent and payroll. So to get rid of a sale rack for pennies on the dollar doesn't make you whole in any way, shape, or form to where you can actually bring in new shipment or run your business. So instead, what retailers do is they mark down that inventory. So this is going to go from $220 to, you know, maybe $180, Then down to $150 and $120 and, you know, $100. And, you know, if it still doesn't go by then, maybe they're going to take it to the sidewalk sale and maybe sell it for like $50 or $80. Still better than, you know, $7 or $10, but still not great. And if it doesn't sell at that warehouse sale, they're going to put it in a box and they're going to put it in the basement. And then next season, When it's warm again, they're going to pull this dress out again and they're going to try to sell it again. Speaker A: But the problem with markdowns that take a long time, or even boxing and bringing out next season, is that you lose time. So in retail, we make money by how many times we can buy and sell inventory in a given time period. So let's say I buy this dress today and I'm a retailer. I buy it today for $100. I sell it tomorrow for $200. Okay, great. What am I gonna do? I'm gonna pocket $100 profit and I'm gonna reinvest the next $100. Now let's say the next day goes by and I'm gonna do it again. Speaker A: I'm gonna buy another one, sell another one, buy it, sell it, buy it, sell it. 10 days goes by. I've made $900 profit off of my $100 investment. But if I buy this dress today for $100 and I don't sell it tomorrow or the next day or the next day or the next day or the next day, and I get to day 10, and on day 10 I sell it for $100, well, did I really win? I got my cost back, but I made no money and I lost time, which is why it is so important. that if something isn't performing well in a store, that retailers have a way to have more distribution, more eyeballs on those amazing products. Because James, the truth is there's nothing wrong with this merchandise. It just needs more people to see it. Speaker B: So how did you get into this? I guess we'd call it, would it be a reseller market or what would you call a market like this? Speaker A: You know, it's interesting. I mean, I call us an excess inventory solution. It's probably like the easiest way to, to describe it. And I, and I speak about this problem because I was a retailer for 9 years. Speaker B: All right. Speaker A: So I had my independent retail store in South Florida. I carried apparel and footwear. And before that, I was a distributor. And a distributor is just a nice word for a young girl in her 20s who had a Sprinter van full of clothes. And I drove from South Florida up to Boston, over to Chicago, down to San Antonio, and everywhere in between, selling to the independent retailers like the one I would become. Speaker B: How did you get into that? Speaker A: Just, I was just really passionate about, about fashion. And funny enough, it all started, if I had to go back to the very beginning, is, uh, I spent 6 months in Israel. Speaker B: Okay. Speaker A: And while I was walking down a street called Bugra Shov, they had boutiques. And I walked into these boutiques and the fashion was amazing. I must— James, I must have been 19 years old at the time, 20 at most. And I looked around and I was so blown away and I said, where can I buy this in the US? And they said, well, we're not sold in the US. How would we get there? And I was so naive. Obviously, I didn't have any fashion background. James, I didn't even go to college. But I had this naive thought and I said, gosh, if only I could help designers get to the United States so that they could be discovered. Speaker A: So I said to myself, I'm going to make an e-commerce site and I'm going to make a place where people can discover this inventory and buy it. And this is at the time of Net-a-Porter and ASOS. And I came up with this whole business plan and I spent about 6 months on it. And then I said, oh geez, you know what? I don't have any money. How would I ever pull this off? So then I said, well, maybe I can place them in stores for a commission. So I went to the local art institute and I found some graduate designers who had nothing to lose. And I said, hey, listen, why don't you let me try to get your collections in store? And they said, oh, sure, why not? I'll pay you based on what you can sell. And so, I just started by sitting at my kitchen table and I picked up the phone and I said, hi, it's Melody calling from JuJu Costa. Speaker A: Can I show you the collection? And the person on the other side of the phone would say, what are the price points? And I'd say, I'll call you right back....