Markdown central

As you stand in line this week, waiting to return the unwanted crock pot or karaoke machine Santa left beneath the tree, you may wonder where all that rejected merchandise ends up. One answer: Spokane Discount.

Owner Steve Waco’s business philosophy is simple. “Buy the right stuff at the right price,” he said, “and make sure everything brought into the store sells within a month or two.”

So how did he end up with 4,000 single running shoes?

“When you deal with so many suppliers,” he explained, “you get the leftovers. We can’t pick and chose; we have to take it all.”

Waco and his 48 employees operate stores at 523 S. Dishman-Mica Road and 6715 N. Division, and carry everything from large-screen TVs to tools to teriyaki sauce. About the only things you won’t find are frozen food, produce, alcohol and tobacco.

Some 27,000 customers rummage through Spokane Discount’s cluttered aisles each month, and 7,800 subscribers receive weekly email updates and coupons from the spokanediscount.com website.

Waco discussed his business – and his plans for the orphan running shoes – during a recent interview.

S-R: How do you describe Spokane Discount?

Waco: We deal in returned goods and overstock, so there’s extreme value to be found. And our rapid turnover guarantees a fresh mix of merchandise every few days. If an item has been in the store too long, we keep increasing the discount until it’s gone.

S-R: How did you get into the business?

Waco: My brother started Spokane Discount 29 years ago, and I went to work for him. A little over a year later, he decided to move away and I bought the business.

S-R: Where does your inventory come from?

Waco: I have to go out and find merchandise – a lot of cold calling. We get returned goods from stores all over the West Coast.

S-R: Any stores you can mention?

Waco: We sign agreements with them saying we won’t divulge the source.

S-R: But it must be common knowledge, since some merchandise is labeled with store brands.

Waco: That’s true.

S-R: Does the volume of merchandise vary seasonally?

Waco: In January, we receive twice as much merchandise as normally comes into our stores.

S-R: Any particularly memorable bargains you’ve offered?

Waco: We bought a semi-truck load of Belgian chocolate because the packaging was not up to the seller’s standards. Those retailed for $15 a box, and we sold them for $4.

S-R: Do friends ask you to keep an eye out for certain items?

Waco: All the time. Typically it’s a TV. Or they might want a particular coat or DVD player.

S-R: With so many televisions to choose from, what model do you own?

Waco: I’m quite frugal. I still have an old projection TV at home, and I only get channels 2, 6 and 7.

S-R: Does your wife work at Spokane Discount?

Waco: She comes in occasionally, but her job is to make sure the money earned at Spokane Discount makes its way to the area’s other small stores and boutiques.

S-R: Customers comment on how cluttered the stores seem. Is that part of your strategy?

Waco: In the discount trade, if you have time to straighten up the store and make it look impeccable, then you’re not doing enough business.

S-R: What impact has the weak economy had?

Waco: Sales have been soft the last couple of years. I think we’ll continue going sideways for a while, but I’m very optimistic about the future.

S-R: Do you ever dicker with customers over price?

Waco: Yes. If we have something that’s been in the store for more than a month, we’re all game for trying to make a sale. But the general public doesn’t normally haggle.

S-R: When you go to another store and see a long line at the return counter, do you picture those items at Spokane Discount a week or so later?

Waco: Precisely.

S-R: You mentioned you don’t get to pick and choose what items merchants send you. Is that how you ended up with 4,000 mismatched running shoes?

Waco: Yeah. You have to be very resourceful in this business. Next summer, we may lay all those shoes out in the parking lot, match them up by size and let runners pick out pairs for the mud run (www.thedirtydash.com/races /spokane.html). People may end up with a size 10 Adidas on one foot and a size 10 Asics on the other, but they’ll have gotten a great deal.