What happens to those grocery items which are nearing an expiration date? How about those boxed grocery item that are somehow damaged in transit on their way to your local big-box grocery store? Most people never see behind the curtain of grocery retailing. Millions of dollars of grocery items are rounded up daily and shipped to large processing plants known as reclamation centers where retailers and distributors make a last ditched effort to “reclaim” revenue with damaged and near dated consumable items.

Enter the world of salvage grocery retailers! Clever and hard working entrepreneurs are buying truckloads of salvaged groceries and turning right around and retailing these items at drastically reduced pricing to cash-strapped families across the country!

I received an email from one such individual who is planning to open a reclaimed grocery store in his hometown. Most who decide to enter this niche area of liquidation merchandise retailing have many question that need to be answered.

Lets get right to his questions:

“When you’re done with the full book on salvage stores, I’d like to get one. I’m looking for as much information as possible. I’m opening in a small town in Feb or March and have three possible people to buy from whom I’ve already contacted… and all are on your list as well! I’ve got a few questions since you’ve started one of these businesses…. I’m looking at 1200-2000 sq feet… how much product would I need to buy to fill a store in that neighborhood… I was guessing 18-24 pallets.”

Congratulations and from the tone of your email I can tell you are very excited! I think you are on track with an opening inventory, but also keep in mind that the hardest part of running a salvage grocery store is simply keeping new stock on hand. Make sure the supplier you chose can offer loads ongoing because I have a feeling you will have a quick sell through within a week or two…and need to reorder fairly quickly. I would recommend that you find two or three suppliers to use as a backup because in the salvage grocery business supply and demand can be tough at times.

I would venture to say that when you open the doors a flood of people will come to make a purchase and you will have a fair amount that come in just out of curiosity. Some will fill up their cart at your grand opening, while others will carefully evaluate the inventory you have for pricing and quality (safety/expiration dates) before they decide to purchase.

You really should take the time to insure your store is clean and well merchandised. The last impression you want the public to have of your establishment is that of a “salvage store”. The term salvage brings to mind problems with quality and safety. I visited a store up in a little town (very similar to yours in population) where everything was jumbled together, floors were dirty and the overall smell was enough to send people walking! This particular store was about 40 minutes away from Walmart and Fred Myer and unfortunately for the store owner, he was losing business as most people continued to travel for grocery and staple household items. Do not make this same mistake as your sales will begin to dwindle as the newness of your business settles in such a small town.

“I want to look full and I’ll also have coolers for milk, eggs and butter. The town we’re moving to is very small (around 2500 population) with just a Dollar General and convenience store in town as the supermarket closed since Wal-mart opened roughly 15 miles away, but there are other small towns that surround this town that we’ll pull from. It’s in Northern Indiana and it’s a farming and light industrial town.”

Excellent! You must have the basics and fresh dairy products is a great start. You should also plan to stock other staple items including toilet paper, laundry soaps and personal care items (shampoo, toothpaste etc). I would also encourage you and your wife to maintain a non-food section selling general merchandise closeouts like pet products, utensils, greeting cards, cosmetics etc.

When sourcing suppliers, do not fear contacting those that are far away from your location as most reputable salvage grocery brokers will have contracts with reclamation centers close to your location. You should contact Damage Recovery (from our guide) and see if they can arrange shipments to your location; I know they also work closely with Church and Dwight for HBA and personal care items.

Please keep in mind: Just because I have listed or referred to a specific supplier does not mean you should not perform due diligence in full supplier research. Salvage loads can range from good to bad and often dependent on stock available at any one given time. I have personally experienced the good and bad that comes with buying and reselling salvage merchandise, it is a business like no other as heavy risk is involved. Unlike buying from a wholesale distributor where you know exactly what you are ordering, salvage loads are the exact opposite…most of the time you have no clue as to what will arrive upon ordering. Because of this fact, most salvage grocery stores will close within a year or two. You must be able to sustain the good and bad apples (pardon the pun)!

I have always felt a healthy balance of non-food items can help curb the occasional bad loads of salvage groceries you will encounter. Thank you for the questions and I wish you the best of luck in your new endeavor!

Please keep us posted as to your success!