I WAS WRONG ABOUT PALLET FLIPPING

what's up flip nation i am just gonna come out and say it i was wrong about palette flipping in my previous video i said that nobody should do it it's a complete waste of time and that was until i met the owner of nellis auctions this year alone they are going to do over 75 million dollars in revenue flipping pallets and lucky for us they're gonna show us exactly how they do it behind the scenes so let's go meet the owner spencer what's up bro hey how are you doing thanks for inviting me dude yeah welcome to ellis auctions yeah so i actually met spencer in ypo which is a little mastermind i'm a part of and he said he saw the video i made everyone in this office was passing it around and they sent it to you and you guys kind of chuckled because i kind of discouraged everybody from getting into pallet flipping yeah that was uh we thought that was good for business kind of getting people in the competition out of our way but uh i mentioned it to ryan that uh uh there's a way to do this right so i invite him to come down to our warehouse and check it out yeah dude like this is incredible like how many square feet is this warehouse yeah this location is uh 45 000 square feet this is one of three that we have in ellis auction so we have a location here kind of central las vegas we have a location in north las vegas and we have our big location in phoenix arizona which is just over 100 000 feet that's crazy how many employees are like running this thing i see people everywhere packing unpacking delivering it's chaos there's a lot of work to get this process done uh company-wide um you know warehouse work admin uh all of our tech team it's 350 employees total wow it's a seven-day operation so you know we have to have more employees to cover that time frame um so in a building you'd probably see about 50 or 60 at any given time to run the building this size how many items are in here currently would you say uh this building will store 25 to 30 000 units on its shelf space right um the turnaround per week is about 30 to 35 000. so you'll see 35 000 items come in and go out the door in a space this size and what would you say like all the inventory in here is worth right now that's a good question i mean so we look at it two ways you know there's a retail value on the inventory which is uh you know what the msrp is that you pay online um i don't know that's a good question so there's a lot i know you're gonna grill me buddy there's a lot of money in here oh yeah so i want to get into exactly how you guys process so much inventory i mean the process 30 000 items is crazy but before we do that like how did you even get into this like what made you go into pallet flipping yeah so um you know i started in 2012 uh in the auction business and uh our original business was estate liquidations and business activation so we would sell contents of homes and businesses that needed to get rid of things or close down and um you know it was an interesting business i learned a lot about the liquidation industry um and in about 2016 the end of 2016 i came across the same website that you uh mentioned in your previous video and i bought eight pallets of product and uh brought it in i made some money on those eight pallets and i kind of fell in love with it and uh we started to grow the business from there so you know 2016 was our first eight pallets uh 2017 was the first year that we really dedicated uh some effort towards trying to do this in higher volume and uh it's been forty percent growth we were over here since 2017 so and you guys are projected to do 75 million dollars in revenue this year starting just five years ago yeah buying the same pallets i bought you know a few months back but obviously you had a better experience than me because i i gave up i said this this business sucks i think maybe yeah maybe our experience in the auction business uh it gave us a little bit of a leg up from starting from zero but yeah i mean the experience that you talked about on your video with the pallets is something that we deal with every single day we've just built a process to handle it and efficiently move through the product that is uh either damaged or hard to sell which uh when you're doing in smaller scale is usually one of the barriers to entry so well one of the things you told me was you guys are kind of like that in between to solve a lot of the issues i have right because when i would go on you know liquidation.com i would have to buy the entire pallet i have no idea what i'm getting i don't know if it's broken or if it works or anything and then i get it and i got to sell all this crap well you guys do that like in major scale you get all of these pallets and then you sort through it over here and then you sell people like what they actually want still at a discount i think that solves a huge need yeah so i mean the the company processes 2 600 pallets a week so you know it's about 100 semi-truck loads of product every seven days and you're exactly right we go through the product uh we test it we take photographs of it we give you a description on you know the quality of the item then use the bid or have a more informed buying decision uh whether you want to buy that item or not so you know we target end users meaning you can buy stuff and take it home and enjoy it you know that's our target customer but we have a wide group of resellers that come here and they buy things and flip it for a profit you know some people do this full time just from things they buy at nellis auction i would guess that the flippers would have an easier time buying from you than liquidation.com we think so too yeah like if i was flipping i would rather know exactly what i want to buy because i know my margin on it and i can make money yep absolutely yep you can target in certain categories or things that your you know expert you know have some expertise in like couches yeah you guys got the couches over here there's some couches back there oh man i'm gonna try to sell them deal i'll take a look at the couches so i want to understand how the process goes from start to finish sure so uh you know first step here is receiving we have a couple of truckloads that have just come in today so we can look at uh three different kinds of merchandise that hit our dock every day you know these are uh returns these are processed from one of our clients uh distribution centers okay and they come to us in the truckload so um uh when we get them uh you know we don't order this product it just comes in you know haphazardly anything you don't know what you're getting it's a treasure hunt every time we open a truck so uh you know if you want to look at some of this product or yeah we can open up one of these boxes you always got a knife on you around here just today just today you know so all right so these are all returns yeah this is a return track so what you'll see here is items that have been in the hands of uh a customer and then sent back for some reason yeah uh we don't have a lot of information of why it's sent back so you know part of our process is to try to identify that and we look for damage we look for functionality we make that description in our processing uh our processing function which we'll show you next but uh we need to make sense of this pile so we can put it onto our uh our website and then our customers can have uh opportunities to bid on it from there you just gave me a really good idea so like one of our um problems with my company lunar ecom is returns right like sometimes you just kind of got to eat the cost of the return it's not really worth it like would we be able to send returns to you and have you sell them 100 yeah yeah so i mean last year uh there was a study that just came out that in america 860 billion dollars worth of merchandise was returned to retailers right so these are ecommerce these are big box stores yeah and uh you know this is not something that uh these sellers really looked at in in close to tail they just always kind of ate the cost like you're doing right now so you know we're building a function where we can take this all this stuff does have value you know whether it's broken or brand new we're trying to extract the most amount of value out of it to meet back to the inventory owner to help your your bottom line well and that's why when we always looked at it for lunar we were like well we'd have to get this warehouse we'd have to do literally what you're doing and go resell and it's like no it's it's a whole business like you're saying it'd be easier just to give you the inventory and let you do it and just split profit or whatever it is yeah we we have uh 20 major clients um three of which everyone in the world has heard of and 17 of which nobody's heard of right so you know companies like yours that are you know smaller e-commerce outfits or possibly using 3pls to fulfill their stuff in general you know we can act as the return center bring those products back and then net you back money uh attracting you know extracting value out of your return so yeah absolutely all right i've already made my money filming this video because that's gonna like help us out a lot because i've been searching for the answer to that here's an example of just different product sizes so these are uh these are uh you know box goods these are items that would fit like inside totes so these are the more typical returns that you see you know coming to your doorstep and maybe those foam packages right a lot of volume out of the industry and private product size like this so that truck over there was our medium to large size products this is going to be a more small size product now we saved a truck for you this morning okay to cut the seal and show you the first look of what we got going on here so why do they have the seal just to show like nothing's happened yeah it's a common trucking thing they uh at the uh the point of packing they'll seal it just to make sure that there's nothing uh nothing missing that's a good question here just put it right [Applause] ah pretty similar all right all right that was a letdown i was hoping there was a couch it would have been nice if uh they were falling over or something like you ever get anything like just like you're like dude i've never seen that before you know uh that's a great question random yeah i mean yeah i i guess put on a spot here i can't really tell you exactly what i mean we just had like a dog jump out of the truck oh no never anything that's been uh been kind of out of the ordinary like that but yeah uh you know we see everything i mean if you come across our website i wouldn't be surprised if we've sold almost every item in the last five years that's out there so that's great uh pretty interesting yeah so you know after we unload the trucks obviously that's our inbound side this is our processing function so we mentioned that we built the technology to manage this business from start to finish it's something that we've invested a lot of money and it's been very beneficial for the company right um but these are our inventory processors their job is to make sense of this product as it's coming off the truck so they're scanning barcodes looking for titles of items right they're opening the product and looking for you know the quality of the item to make sure that we communicate that to the bidder and at the end of this process we have a listing that's ready to go on the auction website with a description photographs if required and then a quality score so these guys are doing a quality check correct currently and then it goes to go get pictures no pictures happen right here yeah oh they'll take a picture right here yep we have the inventory you know fully prepared at this step here so the next step is uh on the website and uh ready for sale hey bro how many how many items do you see a day yeah how many do you unpack i go through a lot of two over 100 over 100 probably more than that yeah yeah yeah depending on the product size you know we will process you know 100 if they're larger items and some of the smaller items we see clerks that run through five or 600 items a day so wow crazy yeah so the next step here is uh you know after the item is fully prepared we need to store it so as you can imagine we're moving through a lot of product each day organization is key yep you know uh being able to find the box late the right box later is a one critical function of the business do any of these numbers represent anything like other than just that's where it is like are these categories or anything like that it's completely random put away so you can put any item on any shelf that it will fit on right uh these numbers that you see here just signify the aisle that helps our pickers find items a little bit quicker so we have this all laid out kind of in a matrix right where once we put it on the shelf and then we have a customer that buys it it makes our picking process more efficient on the other side so so it only goes on the shelf once it's already been listed yeah so what you're seeing on the shelf here is items that were either processed today that are awaiting auction right or items that have been auctioned and are awaiting pickup those are the two scenarios that you have items sitting on the shelf here on this shelf like the literal shelf life is like less than a week yeah we turn we turn our entire warehouse every five days so that's great every product in here if you came in uh six days from now you would expect to see completely new products on the shelf with no no reason bro did anyone buy these quest bars yet i don't know we can check it out i love oh they're the protein cookies i'll bid on them dude yeah we'll show you how to do that yeah yeah i want to see it i want to i want the quest part i don't know if it's interesting for to see it i mean the variety of stuff you can really get an idea between you know memory foam mattresses to okay some sort of pool pump to tools toilet paper halloween toilet paper skateboards wow bedding you guys literally get anything and everything yes sir wow oh dude nope i'm going to destroy all your stuff dude look at this nerf gun you're going i mean you know this is a good product you know i'm uh but you know this has been opened or it's been tampered with so you know if this goes back to a retailer they're not going to send this out to uh a new consumer this comes here with damaged packaging still a fine item but our customers get a discount on retail for going through the auction process let's talk about hypothetical numbers right sure i don't know what nerf gun sell for but with inflation this might be a what 50 gun msrp how much would you guys pick it up for you think i mean it's hard to say because like everything comes but what would you guess yeah so i mean we would see that you know on a 50 item um we would pay anywhere from time uh five to ten dollars on on the item that would be our cost and then what do you think somebody's buying this for at the auction depending on the quality i mean we we see items that sell for you know ten percent of retail up to eighty percent of retail so it's a wide variety of what you could actually purchase from but this is a good quality item i would say that you would probably pay about forty to fifty percent of retail so you would be paying 20 to 25 bucks for it yeah you guys get it for 10 sell for 20. quick flip quick flip yeah i like that very cool tell me about food like people are i mean this is cat food but like do you guys sell food that's perishable we don't sell perishable food lately we've been getting into some liquidations that come from fulfillment centers right so this is new stock that fulfillment centers need to get out of their inventory typically what we'll see is non-perishable food that's uh approaching expiration so if it's within a month to two months uh retailers won't be sending that out to their uh to their end users right so we could see you know for example this ice you know product this is probably nearing expiration our process works great for that because we guarantee that this thing is going to be sold within a few days we can get it out to the user to enjoy before the expiration date i didn't know water expired well maybe that's a bad example but maybe some chips i'm sure it does we shall yeah what is this one for this is where we process smaller items so um as i mentioned in that truckload you saw you know uh in the center truck load some uh smaller items so this just gives us a little bit more density and a little bit more organization as far as getting some products through so this is a super long conveyor belt yeah we've been uh uh experimenting with this a little bit this one's a little bit older for us but we just put in a conveyance system into our phoenix warehouse that's about a half a mile total it's a really cool sortation mile total of conveyor belts so you know as you could tell you know labor is one of our our bigger expenses in our business so anything we can do to make our employees more efficient uh move product with less touching and handling that obviously optimizes the business and helps our bottom line so the hard part with this business is just the data of like every item that comes in like accounting for it it's crazy yeah yeah it's something that we've had to focus on uh heavily you know the uh i mentioned the technology that we've been building but you know keeping organizing this business is critical you know we need to know you know what the product is we need to communicate that to buyers we need to communicate that back to our sellers so they can use that for uh you know reconciliations and whatnot yeah but um uh it's a it's a it's a lot to handle so tell me about the pickup so you know they're waiting i see this technology right here you guys made this yeah so this is a part of our entire management system uh around uh the time of covid you know businesses were forced to change so we moved into a curbside pickup model prior to this you would you know come into our location you know get out of your car come inside for your pickups it was a very inefficient customers were waiting a long time so during uh the kobe transition we moved into the curbside pickup model we redesigned our entire outbound system from our picking to our preparation for customers and then our parking lot our parking lot process so it's been very good for us it's allowed us to drastically increase the amount of customers that we've been able to service in a day drastically lower their wait times you know today we've had uh 48 seconds yeah we've had a 106 186 cars through the parking lot today we'll probably expect to see about 650 total but from the time of check-in to the time that we're out the door with their items uh you know 48 seconds is pretty impressive that's insane yeah that's is that is that the goal under 60 seconds like what two minutes is our kpi yeah that's your yeah yeah they're doing good today yeah so these guys was in town yeah these guys are trying to get their numbers up yeah so these guys are just basically like what happens for a customer like i come here to pick it up yeah so you uh you uh buy your item online um you'll be able to schedule an appointment to pick up at one of our locations uh give us a date and time we'll have that order prepared for you as long as you give us 30 minutes notice yeah and uh you come in pull up you'll be greeted by one of our parking lot attendance and uh get checked in we'll make sure that the order is paid for they can pay online or pay on site and uh once they're fully checked in the order is going out we'll help you load up and get you on your way to enjoy your items that's crazy all right so here's our website this is how you would participate with our auctions so you know we have different markets we serve las vegas and the phoenix market right now so we can toggle between these markets to look at the appropriate deals that are close to you um but you know as it looks here you know you can come on and search for items that you're looking for have saved searches on our website if there's products that you're looking for or hunting down and we can notify you that uh of them when they come up for auction but uh you know today uh in the vegas market we have you know 15 000 listings a majority of those are going to end tonight we have a very quick turnaround time uh on the products that do sell to the warehouse so when an item is listed it's put on a 24-hour clock wow everything's a 24-hour auction and the high bid wins at the end of 24 hours wow so you know you can see some of the the merchandise that we looked at today um you know coming across the block here you know take a look at this one here this is a a battery jumper for your car so you know the the output from the processing position is you know this photo this description and the customer can come and learn that this is a five-star item meaning that's very good quality it's new it's functional there's no damage and of course they can resort to uh these physical photographs that are taken at the uh the inventory desk to uh inspect it themselves if they'd like yes that one looks good as new it said the msrp was like 350 342 yeah 342 and they're currently at 200 bucks 200 bucks and uh you know looking at the site today you know you really have to look at these as they close right like any option yeah all the snipers yep it uh it doesn't matter until the auction is closed on what the purchase price is but um you know anybody can come in here and you know take a look at um couches here we go you know and here's our uh our inventory of available couches so dude that's a nice couch you guys got yeah so the two out of the five stars is that the condition yeah so you know you can see here that the condition is pretty poor on this one that uh the functionality of it is uh is uh i mean what's the functionality of a couch you just sit on it well i'm guessing here based on missing missing parts we're probably missing the sectional part of the sectional here so yeah okay we can see it there so in our clerk notes you'd uh be able to determine that the uh non-functional it's not a full couch it's just the chase we're missing the chase so you know 23 bucks yup 23 bucks so uh you know again going back to your previous pallet flipping this is the this is the dirty end of the business and uh you know at the end of the day we still have buyers that come in and like i'll take a chase for 20 bucks we'll either use half of it or you know they'll go through the work of finding the other half and making a complete one and make a great profit on it but you can search categories you can search for individual items you can search locations so for example in las vegas we have several sales going between our two warehouse locations and many off-site locations so what about tvs i'm sure you get a ton of those yeah there are quite a bit of tvs they're great buys uh you know again be careful about damage on tv so common that a tv comes in cracked and is unusable what do you do with those do people still buy them just they're going to repair it themselves or what yeah we have a we have a pretty um committed group of resellers that buy broken tvs and uh they'll harvest the parts so we'll take out the um power supplies and the motherboards and they'll put them on ebay so you can buy a broken tv and part it out and uh my understanding is they make pretty good money doing that so what is this this thing is eight thousand dollars and it's priced at 200 bucks right now yeah this is a question yeah i'm not even sure what that is to be honest ultrasound face and body slimming cellulite treatment yeah wow so it's 200 i mean if msrp is 8000 i might buy it i don't even know what it does well we can get you an account and check it out if you like it ends today no it ends monday so um you know kind of walking through the end of the process here once you win your items you'll you'll notice that these items are showing up in your uh pickups yep so this is the process of uh beginning to schedule an appointment so you know this uh this customer has three orders uh three items for pickup they can check out we have this system built in where they can schedule an appointment for up to three days in the future this is where we take payment and uh once they have an appointment our team will be ready for you and get you out with a smile man that makes it so much easier to flip pallets this way than it did on you know liquidation.com that was like a nightmare having these guys dropped the pallet off paying for all that shipping like not knowing what i was going to get parting them off trying to do what you're doing but like bootleg like this this would be way easier to flip absolutely i mean we we make all of our decisions as a business with a customer in mind we're trying to make the process easier for our customers so right we're trying to alleviate any of those pain points from buying from liquidation channels as possible and make it an enjoyable experience for you so yeah i mean i always thought that there was kind of like just the pure on palette flipping and then you have to be basically you guys and sell it all but it's like no you could actually buy from you guys and still make money with a lot less headache and just you know specialize in your niche like if i know couch is better than anybody i'm just only looking at your website for couches yeah absolutely yep yeah yeah we have uh you know i see this very commonly people buying rugs uh people buying uh uh memory foam mattresses you can see these niches from customers that they know the market buys every mattress you sell they know the price that it's gonna sell for they know that if they buy it at this certain price on our website they're to make their margin and they're disciplined buyers so they don't go over a certain price because they know that that's going to cut into their margin so it's a great opportunity to pick up the wins when you can based on the system that we've set up but at the end of the day if it sells for too much money on the auction website they move on to the next and uh preserve their time so what's the future look like for nellis auctions i mean you guys are in vegas you're in phoenix i mean the systems the processes are there i know you're investing a ton of money into tech and other things like what's the plan yeah so i mean optimization is one of our key focuses right now you know we're looking at things about making the buyer experience more curated and personalized to help people find the items that they're looking for easier that rewards us with more bids if you think about our business and if we could get one more dollar on every item it's a lot it's a huge margin that's a lot of money you know going to our bottom line so you know we're always looking at ways of trying to make the competition more fierce on the front end website uh replication you know we'll have uh one more location opened up by the end of the year and probably two more next year so we're looking to grow our current operations and then our technology that we've invested in is going to be a great management tool for us to onboard third-party sellers so you know for example your e-commerce business you know you could either hire us to run a full-service uh process for you you know send us the returns and we'll sell them in one of our operations or you could leverage all the technology that you saw today and operate your own uh liquidation outlet so i don't want to do any of that i won't even negotiate with you i'll just like whatever you give people i'm cool with that it's like it's not for everybody but you know there's a there's a lot of businesses out there that are in the operation business and uh they're looking for ways of turning returns into extra revenue so yeah we think that that technology is going to be a pretty powerful uh business driver for us for the next 10 years so yeah that's amazing dude so it sounds like getting supply isn't an issue like you guys can scale this out to multiple markets you know multiple even in vegas multiple you know locations like it doesn't seem like getting the the supply is an issue uh we're intentional on it i mean yeah supply is the thing that drives our business so um it's not something that happens by accident we we very intentionally look for product and we intentionally make deals with sellers to uh uh bring product into our operation but uh there is a lot of stuff out there to sell and the more you uh the more you see they realize you realize how much stuff there really is out there in the world so yeah do you think that like are you the biggest palette flipper in the country like how many other guys are like you um you know in the palette flipping business there's there's huge companies that that do you know pallet flips um i think i think that we're unique in the way that we break down the products into individual lots and uh in in that sense i think that we're the biggest company that's selling direct to consumer individual return products you have to be like this is crazy like that because you know you're either just selling the pallets as a whole and like that's that's it but like i've yet to see anybody master this because there's so much that goes into it just process wise tech wise and just running through i'm like man for somebody to replicate this it's very difficult to do yeah yeah that's where we see a lot of the the technology played to be to be valuable you know we've we've gone through this we've digitized the processes we're making it into a very efficient package and you know companies that want to get into this business in the future um or you know take on liquidation in their own businesses can leverage our technology and get all the efficiencies that we've figured out over the last five years you know on day one which is uh very powerful it's crazy well dude um i'll be the first to admit i was wrong about pellet flipping um not only from like a guy even my standpoint where i'm like obviously i'm not gonna go flip palettes i got time for that but like dude i mean this is gonna be a nine-figure business like flipping pallets right and then even for maybe the little guys who want to flip pallets i think this is such an easier way to go about it than you know buying from just the websites and just hoping for the best so i think you can definitely become very profitable just buying direct from you and you know reselling it yourself so i think it's awesome man and uh appreciate you showing me around dude yeah i appreciate it thanks for having us on the channel and hope to see some of your your viewers here making some money yeah guys um make sure you check out nellisauctions.com and if you like content like this make sure that you subscribe and let me know in the comments what your favorite part of this video was i'll see you later peace [Music]

Channel: Ryan Pineda

Views: 150,307

Keywords: pallet flipping, flipping pallets, pallet flipping business, pallet flipping for beginners, pallet flipping 101, amazon pallet flipping, flipping pallets for profit, pallet flipping side hustle, pallet flipping amazon, pallet business, flipping pallets side hustle, how to flip pallets, pallets, pallet unboxing, return pallet flipping, pallet flipping profit, liquidation pallets, is pallet flipping worth it, side hustle pallet flipping

Id: prSGnZjArOA

Length: 28min 22sec (1702 seconds)

Published: Wed Jul 13 2022