‘It lands between a trip to Dollarama and an appearance on reality TV’
Mousa and Mo Tarabieh found a formula for success with stores that sell overstocked and returned merchandise at deeply discounted prices (Kagan McLeod)
The sun was barely up on a hot morning this spring in Alberta Park, a normally sleepy industrial area of Edmonton and already hundreds of eager bargain hunters—eyeing the competition—had arrived at the newest location of discount retailer Krazy Binz. The crowd had the giddy energy of tweens lined up for Taylor Swift tickets and formed a line that snaked twice around the building.
At 9 a.m., a siren rang and the first group of allotted shoppers rushed inside, some with a particular find in mind, others combing large bins for hidden gems before their 30-minute time limit was up. “It’s like a real-life treasure hunt,” says Krazy Binz general manager Nora Mousa. “Often customers don’t know what it is they’re going to walk away with, but very few shoppers go home empty-handed.”
Mousa and her husband, Mo Tarabieh, made their pandemic career-pivot late last year. Both accountants, they were eager to launch a new business venture and thought the concept behind Krazy Binz—based on a novel American model where shoppers line up to score mystery deals—would work just as well on this side of the border.
In February, they held the grand openings of Ontario stores in Hamilton, Cambridge and London. Since then, Alberta locations have been opened in Calgary, Red Deer and, most recently, Edmonton. By the end of the year, they plan to open three more locations, including in B.C. and Mississauga, Ont.
Shopping at Krazy Binz lands somewhere between a trip to Dollarama and an appearance on a high-drama reality series. Would-be bin divers can either brave the lineups or sign up online via Canadian line management software company, WaitWell. Registration opens 12 hours before the next shopping day and customers (at least those who aren’t waitlisted) get a text with their allotted 30-minute shopping slot in advance.
Inside every Krazy Binz location are between 50 and 100 rough-hewn wooden bins stocked with a random assortment of electronics, clothing, pet supplies, jewellery, cosmetic items, home and kitchen supplies and other odds and ends. If you can find it on Amazon, it may be somewhere in the heap. The world’s number one online retailer is currently Krazy Binz’s main supplier of overstocked, off-season and grade-A returns (i.e., returned with tags on). The fact that unsorted merchandise gets deposited directly into the bins may be part of the fun, but it’s also intrinsic to the profit model. “If we were paying employees to sort through the items, organize and stock shelves, we wouldn’t be able to offer the kind of low prices that we offer,” says Mousa.
Mousa mentions a shopper in Kitchener, Ont., who scored a smart watch for $3; one in Red Deer got a ring light for $1. Electronics are probably the most popular finds—Dyson hair dryers, PlayStations and even computers are all regularly in the mix. The fact that Krazy Binz has become a destination for online resellers may be worrying for traditional retailers. For Mousa, it just means repeat customers.
For resellers, Krazy Binz’s business model is a no-brainer, says Retail Insider founder Craig Patterson. For consumers, the appeal is multi-layered, starting with the thrill factor. “Consumers are no longer wanting to go to a physical location just for the sake of making a purchase,” says Patterson, “so what else are you bringing to the table?” In the case of Krazy Binz, the answer is “gamification,” as staff members plant a series of secret gold and blue eggs among the merchandise. If you find one, you can trade it in for a high-ticket item.
Mousa explains that merchandise is purchased by the truckload but is otherwise vague on specifics. She says they are currently working to develop new retail relationships with other online retailers, especially those that deal with challenges around reverse logistics—that is, returns. The ability to give a second life to merchandise that would otherwise be discarded may be the true advantage of Krazy Binz’s model.
“For so long, it has been about the shift to online, but now that shift has happened,” says Daniel Baer, a CPA with EY working in the retail sector. For online operations like Amazon, this has meant major revenue increases over the past year, but it has also presented challenges when it comes to returned merchandise. “For brick-and-mortar stores, managing returns is a relatively simple process, but many online shops don’t have the infrastructure to handle returns. Nor do they have the financial means to figure it out,” Baer explains. And, so, hundreds of thousands of returns get rerouted to landfills, as demonstrated last October in a CBC Marketplace special investigation. “If a business can align themselves with ethical consumerism,” Baer points out, “that’s going to work in their favour.”
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