Liquidation store 'treasure hunt' grows in popularity, helps online stores like Amazon
Experts say increased online shopping driving growth of liquidation stores
Andy Buchanan sifts through bins and bins of products at a new store in Ottawa where he and dozens of other treasure hunters are searching for deals.
"It's like finding a diamond in the rough … you never know what you're going to find, that's the big thing," he said.
Buchanan, who is retired, came to the Quick Pick store in the village of Richmond on the outskirts of Ottawa on a Wednesday, when every item is priced at $2.99.
On Fridays everything is priced at $25.99, and that falls throughout the week all the way to Thursday, when customers can score items for just 99 cents.
There are two Quick Pick locations that recently opened in the Ottawa area. The liquidation store, which also has a Bank Street location, sells overstock and returned items from giant online retailers, such as Amazon, and offers set pricing for items that drops each day.
Anything left over is then donated or thrown out, according to the store manager, and the bins are restocked with fresh items.
Similar business models have been operating in the United States for years, and a chain called Krazy Binz opened its first Canadian location in Hamilton, Ont., in February 2021.
Liquidation stores also save companies money
While bargain hunting isn't new, this type of needle in a haystack shopping experience is gaining popularity in Canada, according to Barry Nabatian, a director at the independent research company Shore-Tanner and Associates.
"The increase in online shopping is really the main reason for these stores to have come up," he said.
Nabatian said Canadians used to spend about five per cent of their total shopping dollars online, but that increased fourfold during the pandemic.
He said in-person shopping has begun to increase recently, and he expects online shopping dollars to stabilize at 10 per cent before rising again.
Online shopping also leads to more returns, which Nabatian said can become expensive for companies like Amazon. That's where liquidation stores such as Quick Pick can offset some of the cost.
"It's not worth it for [companies like Amazon] because you have to consider how much you have to pay the driver, the gas and shipment," he said.
Nabatian said some companies decide to sell off their returns and overstock items to smaller retailers to cut back on costs.
Thrill of the hunt
Gilles LeVasseur, a business and management professor with the University of Ottawa, said he suspects these stores are coming to Ottawa because the Amazon warehouse is close by and goods are easily accessible.
The liquidation stores then get a percentage of the sales, he said.
"That's the beauty of the system for Amazon, is that they're able to liquidate and have rapid growth of actual extra products that were not able to sell," said LeVasseur.
Shopper Dhamia al Fahad said she came to Quick Pick's Richmond shop for low prices and has found "good quality clothing, or stuff for the house for me or my kids."
The thrill of the hunt is why customers return, according to store general manager Nidaa Yassin.
"The concept is to have random items. The concept is to have a real treasure hunt for you to [hunt] through and find items without knowing where they are," said Yassin.
The company has said it plans to open other locations in Ottawa.
With files from Hallie Cotnam