February 23, 2009

Grand Opening Liquidation Sale: Signs Of The Times And SF Freeze?

Bamboo Colony Sale

A plugged-in tipster captures the seemingly oxymoronic "Grand Opening Liquidation Sale" sign adorning Bamboo Colony at the base of Potrero Hill. The tipster’s succinct subject line: “It's gonna be a deeeep freeze” [in San Francisco].

UPDATE: A plugged-in reader sets the record straight:

This is just a marketing gimmick. I live close by and I have gone to that store a few times (they carry some decent stuff) and asked about the sign and if they are closing shops. They aren't. They have been opened for a couple of months and they keep getting more furniture every time I go in. The sign has always been there.

As such we're scratching our "signs of the times" designation, but standing behind our tipster's first thought.

First Published: February 23, 2009 8:45 AM

Comments from "Plugged In" Readers

Here's a video I came across:

http://www.bizwebvideo.com/Bamboo_Colony.html

Doesn't seem like any big loss to the economy to me. These sorts of places are pure misallocation of resources driven by bubble distortions IMO. However, I'm sure a few people could score some reasonable values in the liquidation, and that's a good thing!

My advice to anyone buying at a local place like this is to bring cash. When you negotiate and agree your best price, pull out a credit card in one hand and 15-20% less than the agreed-upon price in cash in the other. Ask the storekeeper to choose. That worked for us about 6 months back when we had a pretty pricey Persian rug repaired (and cleaned) - $535 credit card price (negotiated down from $750 initial quote) versus $400 in cash. Cash is the king - everyone must bow down to it :)

Posted by: LMRiM at February 23, 2009 9:05 AM

Merchant credit card fees are not 15-20%. Are you saying that they want cash that very moment instead of waiting for 30 days?

Posted by: kel at February 23, 2009 9:14 AM

Where is this place?

Posted by: Rob at February 23, 2009 9:15 AM

kel, I'm well aware of that. I suspect cash "discounts" have more to do with taxes and the "underground" economy, but that's between the IRS an the merchant. Not sure how well that strategy would work with a business that is no longer a going concern, but you never know until you try :)

Posted by: LMRiM at February 23, 2009 9:17 AM

I am not sure it was a misallocation of resources. It offered a change from Ikea, Crate and Barrel, Room and Board and Design Within Reach.

Posted by: flaneur at February 23, 2009 9:20 AM

what kind of stuff does this place sell?

Design Within Reach needs to get with the times and change it's name or cut its prices at least in half.

Posted by: resp at February 23, 2009 9:32 AM

LMRiM is correct. Cash has a way of sidestepping a lot of "issues" if that merchant is of the sort that engages in creative accounting (Merchant fees 2%, sales tax 8.5%, Federal 30%, state taxes 9%). Some of these are offset by deductible expenses of course, but if you put $85 cash in that merchant's hand, I don't think there's any question they are going to come out well ahead vs $100 on a credit card.
Oh and I don't know who does your credit card processing, but in my experience 7-10 days is the max wait for payment on a credit card charge. And sometimes the money is there in a day or two. You can get a slight discount on your merchant rate if you push it to 30 days, but that discount pays less interest then what you would get at any bank savings account, so it doesn't really make sense to wait that long.

Posted by: missionite at February 23, 2009 9:41 AM

This works for me. There's a linen store over on Pacific at Polk that's been going out of business for years.

Posted by: vox at February 23, 2009 10:01 AM

My dry cleaner once told me that she pays something like a 15% processing fee for every credit card transaction. I try to pay her cash as a result, but maybe her situation is atypical, I don't know.

Posted by: Jake at February 23, 2009 10:02 AM

LMRIM is right about it being taxes. it's not processing fees. with credit cards theres an audit trail, with cash there's none. screw the frequent flyer points - has anyone tried redeeming them lately? just pay in cash and demand a discount.

Posted by: resp at February 23, 2009 10:08 AM

Of course it's taxes.
I did something like this 6 years ago or so when I was looking for a chinese style armoir. I was pretty appalled at the prices for the cheapo knockoffs I found at the pottery barn type places and SOMA furniture stores and wound up in (duh) chinatown. I got a much better deal for a much better and actual chinese armoir. Even though most of the furniture I was looking at was made in China, the antique stuff is a lot better quality. I got a good price by paying in cash; a deal which they proposed, not me.

Posted by: kaya at February 23, 2009 10:39 AM

Jake,

I worked a few years in the CC processing business. Interchange rates (that's what they are called in Credit Card speak) are more like 2-5% for merchants.

Sure a few % do matter, but I think the main reason some businesses want cash is for other non-disclosed reasons...

Posted by: San FronziScheme at February 23, 2009 10:42 AM

What was I thinking? That was obvious.

Posted by: kel at February 23, 2009 10:51 AM

These guys are part of a network of the same people who import stuff mostly from Indonesia and sell it at perpetually "going out of business" businesses around this area. They are very creepy sort of used car salesmen types. Avoid.

Posted by: Jaundiced Eye at February 23, 2009 10:52 AM

I think Bamboo Colony closed down in LA a while ago.

Posted by: anna at February 23, 2009 11:16 AM

"Design Within Reach needs to get with the times and change it's name or cut its prices at least in half."
We've always called it Design Outta Reach". I have a catalog on my desk right now that offers free shipping and 15% off everything (March only..we cannot do this all day ya know). Personnally i'm waiting for the going out of business sale.

Posted by: bvneighbor at February 23, 2009 11:42 AM

Posted by: invented at February 23, 2009 11:52 AM

Jake,

Interchange (merchant processing fees) consist of a fixed amount and a variable amount. So, for very small transaction amounts, the fixed + variable amount could be 15%. That's why many merchants say there is a minimum credit card amount. For the record, these 'minimums' are against their merchant processing agreements and they could be fined big time if you report them. Merchants usually get all pissy with me when I point this out but then run the small transaction through anyway. Hey, if they don't like the credit card rules, don't take 'em!

Posted by: SunsetGuy at February 23, 2009 12:02 PM

SunsetGuy: you are correct for sub-$3 transactions when the fixed fee is 20 or 30 cents or something. But it's something you can negociate, depending on the processor marketing strategy. Gte a lower rate with a fixed fee, or a slightly higher rate with no fee. And it depends on the Issuer as well (Visa/MC/Discover/Diners/JCB/Amex all have specific policies)

bvneighbor,

Personnally i'm waiting for the going out of business sale.

Well, think again. A lot of those "liquidation sales" are actually handled by professional liquidators with little connection with the troubled company. Found any good deals at the Circuit City liquidation sale?

Posted by: San FronziScheme at February 23, 2009 12:13 PM

The economics of Indonesian furniture imports are amazing. Labor is really cheap over there and raw wood is abundant. You can bet your sweet bippie that the markup is over 5000% on most items. Shipping the stuff across the Atlantic costs more than manufacturing.

I was amazed to see the prices in an Indonesian department store. A detailed, hand carved hardwood coffee table for $7 (retail) which would have easily listed for over $1000 in the USA.

Here's a fun Javanese construction tidbit : When building a new house, instead of dropping off a load if finished 2X4s, plywood, etc. they just drop off a whole tree trunk (or fell a tree on the site if possible). The laborers mill the planks and studs on-site with hand saws from the big 4-6' diameter logs.

Posted by: The Milkshake of Despair at February 23, 2009 12:33 PM

"Shipping the stuff across the Atlantic costs more than manufacturing."

Wouldn't they go the other way? When I flew to Bali I flew west.

Posted by: anonn at February 23, 2009 12:38 PM

I think the credit card/cash thing is it's easier for the merchant not to declare all income in a cash transaction (even better if said merchant is going out of business). For example, they can claim they gave you "half off" and only give you 15% (assuming they want to properly account for all inventory). Very hard to track that down.

Merchant fees are about 2% + small transaction fees, which account for minimum requirements, as others have said.

Posted by: dub dub at February 23, 2009 12:50 PM

Du-oh ! Yeah, I meant the Pacific, not Atlantic.

D- in geography today.

I hear that stuff is pretty cheap in Bali too though probably not as cheap as Java and Sumatra since the latter are not as touristy as Bali.

Posted by: The Milkshake of Despair at February 23, 2009 1:05 PM

MoD: if they are paying 10% fees with 30-day settlements, perhaps they are shipping from bali the wrong way 'round too!

Maybe there's a simpler reason they are going out of business :)

Posted by: dub dub at February 23, 2009 1:21 PM

Anybody got an address, because yelp says its in Hayes Valley and the comment said Portrero, 90% off is still worth a look see.

Posted by: Rob at February 23, 2009 4:10 PM

This is just a marketing gimmick. I live close by and I have gone to that store a few times (they carry some decent stuff) and asked about the sign and if they are closing shops. They aren't. They have been opened for a couple of months and they keep getting more furniture every time I go in. The sign has always been there.

Posted by: LiveOn20thSt at February 23, 2009 4:15 PM

Here is the address : 1045 17th St. It's a lot cheaper than Room and Board or CB/CB2 but don't expect to buy a dining table for $100. They are not giving stuff away.

Posted by: LiveOn20thSt at February 23, 2009 4:20 PM

Didn't they just open a store at Gough and Market? I saw it over the weekend. It used to be a Chinese restaurant.

Posted by: anon at February 23, 2009 5:38 PM

Sounds like Interior Resources which has had a "Going out of Business" sale for years and years.

Posted by: John at February 24, 2009 12:34 PM

A number of years ago, I was under the impression the "within reach" referred to price. However, I was quickly informed that they were not a discount store and that the phrase was meant to indicate that the furniture was already imported to the US and the buyer didn't have to wait months for the piece to arrive from Europe.

Posted by: John at February 24, 2009 12:44 PM

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