Apr 24, 2020 1:30:00 PM
Bob Phibbs interviewed Neil Abramson, Chief Financial Officer & Strategist of ECI Stores. In this episode, Bob and Neil talked about the unique challenges of the resale market.
Bob: So tell me, how did you get into resale? I don't think you were four years old and said, “Someday I'm going to be in the resale business.”
Neil: My father was the hometown, small town, pharmacist in upstate New York, in between Schenectady and Saratoga. And I grew up in retail my entire life. He had a store called Glenville Pharmacy in the town of Glenville for over 40 years. So, he ran that pharmacy there.
Bob: How did that evolve to get you to where you are today?
Neil: How did that evolve? That taught me a lot of lessons, not just when he would lock me in the basement.
Bob: I’m picturing you working with Mr. Gower, the Wonderful Life pharmacist.
Neil: When they opened in 1960, they gave away ice cream scoops because they had ice cream and everything, and they had the soda fountain counter and the ice cream counter. And I still have one of the memories of my father's store is that ice cream scoop, that they had.
So, I do have that. Those fundamentals that I learned back in the day of how important the customer was. How that transitioned to food on the table for the family, and taking care of your community. You know, really being a community pharmacy really taught me a lot about that.
And so that prepared me for things later in life that I look back on fondly as a teenager and everything else, my father would probably not have used the words that I “fondly learned these things,” but I really did take the time and take those lessons with me, every day in our business.
Bob: That's great. I love that idea of being a partner in the community. It sounds like he didn't take it for granted that he had a business. It doesn't sound like.
Neil: No, he did not at all. He really took that role to heart. You know, our home phone became our business phone at times.
You know, people would call for their prescriptions and you could go to the pharmacy and get something. So, nobody went without, it was a different time in the world, but it was also the world and the way he approached living and taking care of those around you and it, and it served him well in life and beyond.
The real lessons you learn ultimately is that your family is first. So even when you could have a knockout drag out fight about how to do something in business, you know, we could go home and have dinner together. And, be okay with that. And so, really, some phenomenal lessons that serve me well today. You know, I'm in business with my wife.
Bob: Okay. So, what's the secret to that? Because I know we have plenty of people working in retail who are going to be listening to this while they're jogging on their StairMaster or something at the gym or driving home, and they're saying, “Well, how does that happen?”
So, what would one key be that you could think of that keeps up? Because I've known family members who worked in the same business and don’t talk to them and haven't for years.
Neil: I remember that I'm married to my wife, not my inventory. I'm not married to my business I'm married to my wife. Her name's Cassandra, and that is who I'm ultimately married to. In business, it becomes like Ghostbusters.
Ghostbusters teaches us a phenomenal lesson about working with family. Okay? In Ghostbusters, in that final scene where they're taking on the Stay Puft marshmallow man. Okay. You remember that scene?
Bob: I remember that too well. What did you think about? The only thing I could, the Stay Puft man.
Neil: Yeah. Right. Then they say, “Okay, we are going to beat the Stay Puft man. We're going to cross the streams. Cross the streams? You said never cross the streams. You said what will happen if we cross the streams? Bad things, really, really bad things.” And that's what happens in business. When you're in business with family, when you cross the stream, when you cross your role, when you don't have well defined roles for what you're supposed to be doing and where you're contributing in the business, bad things happen.
So, my wife and I, when we cross streams, it's pretty quick to tell that somebody stepped their toe across the wrong line. And so, we have clear designations, both for ourselves and for our team, so that they know who to go to for what and where our roles and responsibilities are and we don't cross over because when we do, really bad things happen.
Bob: I think that is a great analogy. I was like, “How's he going to get there with the Stay Puft man?”
Neil: How's he going to get there.
Bob: I liked the journey along with you, my friend. Well, how did you get into the resale business? You know, resale is really big right now. Everything from The RealReal and verifying.
I've read something like they spend like 80 hours on certain types of items to verify all the way down to the corner thrift store, consignment stores. Everyone seems to be into resale, but you've been into it for almost 30 years, is that correct?
Neil: We're in our 22nd year right now, and it's super exciting and super humbling to have been in it that long.
I was actually back in the day consulting to retailers. I was working for a software provider to retailers, and so I’d travel around the country working with them on their systems, and on their business, it was really rewarding. You saw things that worked in independent retail.
You saw things that didn't and it was a great educational experience. I was on my way home one night and I got a frantic call from my wife, and she was, at the time very, very upset because the consignment store where we bought clothing for our then-six-month-old daughter was closing.
She was like, “I don’t know what we're going to do. How are we going to get clothes? This has been such an affordable way for us to clothe our daughter. You know, she only wears things for a week. How are we going to clothe our daughter?” And she ended with saying, “I know exactly what we're going to do. We're going to open our own consignment store.”
Bob: You make it sound like it was like bread and eggs. Like it was a necessity. “How are we going to survive without that?” And that was the way she felt, right?
Neil: That is the total way she felt. And I said, “One condition, we're going to run it like a business”. And at the time she had no clue what I meant when I said run it like a business. And I had no clue what I was getting into with a consignment store, other than I knew that's what her and her mother did on Saturdays, I would watch our daughter and they would go out consignment store shopping, and they'd have a great day together.
So that was our level of knowledge.
Bob: It would seem like there's a hell of a learning curve on that though, isn't there?
Neil: There is a learning curve and we were open 40 days later.
Neil: You know, there are challenges and things that you face in doing that. We had a couple of racks of clothing pushed up near the window. I had a landlord that was willing to take a chance on us and get us in. And, I think our first lease was a six-month lease because I was like, “Okay, if no one shows up, no one ever came in and bought anything from us, do I have enough money to be able to pay him for six months?”
That's how I convinced him to write a six-month lease, you know, at least you're going to get paid. Yes, it's been a long learning curve. We've learned a lot over the years.
Bob: What would be three things that either you wish you knew then, or the new operators in the resale market do poorly. What would those three be, do you think?
Neil: Well, the first thing I would do is make sure I was a member of NARTS. Being a member of this association, their whole thing is education, and I'm proud to be a member of it now. We weren't, the first couple of years we were open, we didn't know it existed back then.
We couldn't Google everything back then. And so that's one thing. One thing I see common with a lot of operators, especially trying to enter the resale space, is they cut corners. Everybody cuts corners. When you're opening a business, you try to do things on a shoe string, but one of the areas they cut corners on is installing a POS system from the start.
They say, “Well, I can do that when I get going and I have more money.” And you need inventory control. This is all about the flow of inventory. I'm married to my wife, not my inventory, but you need to keep that inventory moving and you need to know what is moving, what isn't and where it is.
And there's phenomenal choices out there. The opportunities are endless with those choices these days. And, you need to have that. And lastly, I wouldn't be so stuck on a location. So often I see it in business, and I'm sure you see it too. I see it with resale stores, but I'm sure you see it all the time, Bob.
They think this is the best and only location. It has to be this place and, you want to be in a good location, but it's like buying a car. There's more than one red car out there. If red is what you have your sight set on and you want a red Chevrolet, there's another one out there.
The car salesman wants you to think that's the only one available. There's more, you can find one, there's another storefront out there. One thing I always tell people is, “Remember, for this space to be available - this space that you want, that you think is the only place your business can succeed - to be available, somebody else closed, moved, grew out of it. Okay. And so, for that for sale sign to be there think of it as somebody else went out of business. How are you going to succeed beyond them?”
Bob: That's like a version of the old thing, something has to die for me to be able to live. People eat meat, you know, it's the same idea, right? The corollary to that also is that it may not have been the best location.
Neil: It may not have been, which is another thing that I tell people to do. And so, when someone calls me as a resale store owner and says, “Okay, I found this perfect location,” I tell them to go sit there all day long. And they're like, “What? What do you mean sit there?” I'm like, “Go park your car.”
We all know it. Anybody that's been in retail, any period of time knows you live in your store. My wife says I always wanted a vacation home. I didn't know it was going to be in Massachusetts. But you live in your business and so you're going to do it. Once you open your business, you're going to live there anyways, so go live there.
Do you see your customers already shopping with the other stores that are neighboring it? Are people already getting out of their cars? Are they walking to other stores in the strip center? Or are they going into the one place they were going and leaving? You know, so you're expecting this cross traffic, you're expecting certain things.
Are those things already in existence? Because if they're already in existence, it's a lot easier to build off of that than it is to reinvent the wheel and, do that for yourself.
Bob: That's a really great idea because also when you open that business, you're going to be staring at that parking lot for a while.
Were there any memorable challenges in retail that you were able to get over and then change for the better from?
Neil: One thing I always try to do, Bob, is look at things very positively. Life's too short not to be positive. I'm a fairly positive person at heart. I tend to look at all the things that have happened to us over the years. Okay. And, there've been many challenges. Okay. Many challenges. Okay. I look at them. Any one of those things could have defined us.
Anyone else? Anyone? Half your listeners that are listening right now would say, “Yeah, if that was your definition of what happened and caused you to close, totally get it.” You want the time when I got the call that our air conditioning wasn't working? And when my repairman called me back, he told me all the copper was stolen out of our rooftop air conditioner.
Bob: I love these stories. Keep going. These are great.
Neil: The time that our dumpster was on fire by a former employee. Okay. Disgruntled employee. The time where I walked in, I just came into one of our locations and I was really in a great mood. I just came from the doctor and my family has got a history of heart disease and high blood pressure, and my doctor was like, “Your blood pressure's great.”
And at the store they look at me and they're like, “She's having an affair with my husband. And I hadn't even put my briefcase down yet. Okay.
Bob: I'm not even going to ask how you got out of that one.
Neil: Hey, you know, it's okay. No, no, she's not having an affair with your husband. Your husband's her drug dealer. It's so much better was the end result of that story, but it didn't come up quickly. You know, longtime trusted employee who embezzled up from us.
Bob: But see, you're still laughing about it. That's what I respect about you. Because sometimes when I talk to smaller retailers and you know, they get caught up in the catastrophization of their business. And right now we're recording this in March and you know, we're still dealing with the virus and how that's spiraling out of control and we're going to get, and fear is really dangerous.
But I think holding onto that fear and passing it on to others is far worse than what we actually imagine in our minds. So how do you keep a good attitude about all of this, Neil? I mean, you seem like a naturally positive guy, but you gotta get scared at times too, I would think.
Neil: You stay positive because I'm not going to let this define me. Okay. I'm not going to let the fact that, you know, we have this, this huge catastrophe that I lost this staff that I've lost this … the copper and the AC units was 30-something thousand dollars.
I'm not letting any one thing define me or define our business. We're going to keep on moving forward. We're going to deal with the situation, whatever that may be. We have to deal with it, but I'm not going to let it define me and I'm going to keep on moving forward because I have too many people and in resale you really see it.
So, one of the things in resale is, talk about a community business. You're the epitome of Main Street, okay? You depend on Main Street for your inventory. Okay? Main Street depends on you to sell it. Okay. So that you turn their inventory so that they can do whatever, fulfill whatever their dreams are.
So, I have thousands of consigners that are dependent on me running a business so that they can buy milk for their family and put food on their table, so they can send their kids to summer camp, so they can put money away from birth to college. So, they have money for a college fund for their kids. So, they can just simply buy next season's clothes for their kids and family.
So, we epitomize all of that in resale. And so that's just my suppliers depending on me running a business. Not to mention my customers who are shopping with me that we're part of their community or all the things that we donate to that are a part of our community that depend on us. Our 20 to 30 staff that depend on us for their livelihoods, they worry about what’s happening in their lives, not in the business. So it’s my job to make sure these things aren’t a problem for our company and for all these stakeholders that we have in our business.
Bob: That's a great attitude. I mean, I don't think I've ever heard that expressed that way. I really liked that Neil. The title is, Tell Me Something Good about Retail. It's always my last question I have. What would you say? Tell me something good about retail. What do you love about it?
Neil: I love your podcast because it is something good about retail, okay?
And so much of the news that people turn on the news today, they will find a thousand articles that are negative about retail or negative about business or negative about the world, okay? Negative sells headlines. Okay. And I turned myself off from that because it's so easy to have your mind drift into that.
The best days of retail are not behind it. The best days of retail are ahead. Okay? You have to evolve. You have to change. That's what's exciting, okay? That when you're not doing the same things the same way as we were 20 years ago, five years ago, the way that we did them in my father's pharmacy, those things aren't the way people are doing things.
You have to evolve. You have to change. And whether you're dealing with, you know, in resale it's tough. I only have one of this shirt. I don't have 10 of them in the back room, so I have to get creative with how I take care of my customer because of that.
And so, you know, the best days are ahead of us. There is so much good about retail. And it's thriving. Good retail is thriving and you should be a part of that because it's the most exciting thing to interact with your customers, to know what's happening in their lives, to touch them and know how you help them get through different things.
Bob: That's the key, my friend. Okay, well that brings us to the end of our podcast. So Neil, how can we find out more about ECI stores and also the National Association of Resale Professionals?
Neil: So ECIstores.com is our website, and you can see lots of great things to shop. All of our home decor items are on our website and we ship, all the home decor smalls we ship. So, you can reach out to me from there as well.
And the National Association of Resale Professionals is NARTS.org for more information. Our upcoming conference in June this year is in Charlotte, North Carolina.
Bob: Nice. Well, thank you very much for your time today. It's been a real pleasure, Neil.
Neil: Thank you so much.
Find out more about Neil here.