Recently I had the opportunity to sit down with Eddy Breazeale, a ten year veteran, and incredibly valuable asset to our buying team.
Eddy has been involved in more than 700 inventory pack ups in his career and has some wonderful insight into the psychology and mindset of the salvage/liquidation industry.
His most recent inventory pack up was a bankruptcy liquidation in California of one of the nation’s most prestigious decorative flower wholesalers. Their company was the industry leader for more than 50 years, and was being forced to close their doors.
“It’s tough,” Eddy said, “this company was down to their last employee, and you know when that last load is shipped this guy’s about to be out of a job.”
“You just have to be empathetic and try not to look like your coming in to clean house. These are real people with real lives and we’re just trying to do our job. But sometimes they don’t see it that way.”
Eddy says that bankruptcy liquidations are especially the toughest because sometimes the business is in a forced liquidation where the banks have mandated it and there’s nothing they can do.
“With surplus inventory or closeouts or more traditional liquidations the business owners are usually indifferent or they’re happy to see us because they know that they’re getting some working capital back into their system. But with a bankruptcy or insurance salvage loss, you never know what the mindset of the business owner is going to be. It’s usually shock.”
Eddy explained that the recent bankruptcy he worked on was valued at $16M wholesale. The warehousing facility housed more than 200,000 sq. ft of silk flowers, vases, and other flower accessories. The final trailer count for the inventory was 84 truckloads of silk flowers!
Hilco Trading Company, who is globally recognized for their work in the liquidation, bankruptcy, and business solvency industry called on us to help them with the disposition of this inventory. Eddy added, “It speaks volumes. For a company like Hilco to call on us, out of all the companies that they could have called, it says a lot.”
When I asked him why they would call us instead of one of our competitors he said, “First of all, they know we’ll pay them like we say we’ll pay them. Capital is always #1. But we’re in good standing with them because they trust us to get the job done in a timely manner and they know that our experience in the insurance salvage industry has trained us to get the job done right.”
“Because of the sensitive nature of this transaction, we faced some unique challenges. Namely the facility leasing agent not allowing any outside labor, so we were forced to use the warehousing company’s crew to load up and pack up the merchandise for us. Because we do pack ups every day, the efficiency that we lost due to the warehousing crew’s inexperience set us back two weeks,” said Breazeale.
“Another challenge was finding a way to dissolve $16M worth of silk flowers. In order for us to do that, we had to call on some outside help in our network to partner with us. This also added to the complications and delays to some degree.”
But even with all the extra dimensions and added complications involved in this deal, Eddy and his crew still managed to finish it in just over three weeks.
I asked Eddy about the idea of liquidation companies being perceived as the vulture, the enemy, and how he personally deals with that in his on the job relationships. This is what he had to say:
“The representative of the company that’s handling that inventory is the face of the entire company to that client. So how you interact with that individual is going to influence how they see your company. Especially in a salvage loss, we’ve seen that type of deal a thousand times. But for the business owners, obviously, this is probably a first. So I use that as an opportunity to encourage them by sharing success stories of how other businesses have overcome similar situations. Or maybe I can give them some advice that I picked up over the years of working with insurance losses. You just have to treat them with respect and be extra sensitive to their situation. I think that’s what sets us apart from our competitors and really says the most about our company.”
Eddy closed by saying, “I think empathy and humility go a long way in this business. Most people overlook that, and I think that’s one of the reasons people like us and continue to do business with us.”
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