Zac Montgomery: ⁓ you My name is Zach Montgomery. This is Built by Liquidation, a reseller podcast. And today we are with Forge Pirates owner Austin Owens debating one of the hottest topics in liquidation and that's mystery boxes. So Austin, really quick, tell us kind of who you are, where you came from, why you chose liquidation and specifically in liquidation, why you went with mystery boxes over anything else. Yeah, absolutely. So my name is Austin Owens. And again, you know, I'm A relative newcomer to this degree of liquidation exposure. I've been ancillarily around it for a while, but I really cut my teeth in my professional life first 10 years working at a company called Fascinal. It's one of the world's largest industrial suppliers. And I went from scrubbing toilets to working with the CEO and got very familiar with the corporate scene internationally. My claim to fame, there is any, Fascinal had a very very stagnant e-commerce program. founded their website in 97. And I got into that piece of their business in 2017. It had been going backwards for three consecutive years. And when I left in 2025, we had taken it from $200 million annually to $2.4 billion. And it's the fastest growing piece of the business. you know, I started the porch pirates on the side. ⁓ you know, COVID, everything was easy money during, you know, quantitative views are printing money, right? And so think a lot of people got into the space during that time. And an interesting topic that we'll talk about later around mystery boxes is why so many of them are now exiting. In my background, occasionally around ⁓ macroeconomics, I think a lot of people react to what's going on right now. Like there have been stores are struggling and I feel bad for a lot of folks because they're beating themselves up. When in reality, there are forces that are a lot bigger than any of us that are influencing what exactly is happening in the scene. Okay. Well, cool. So we got started. You entered deliquidation 2023. sounds like it's 2026 now. So give me a little bit of the timeline. Obviously we have the Peddler's Mall to start. We're building our own boxes still at the Peddler's Mall. we can get into... I know there's a little bit of a technical error at beginning of this, but like I'm saying, the first 30 seconds or so. You know, we got into the Pebbas malls. At first I was merchandising it. And then I realized after looking at some other mystery boxes, I was like, why don't I just put the, mystery mail out and do that. As we started to scale that we had a number of people say, you know, this is stolen off somebody's porch, right? And, you know, so was like, you know, instead of explaining it to everybody, we'll just call ourselves porch pirates, right? And so, you know, I had a, had an artist make plunder pause here and I think- And realized he had a name. So yeah, so yeah, that's his name. And he's a panda, technically, but everybody calls him a cat. So I'm like, okay, that's fine. But realistically, we started making the boxes because we started seeing ⁓ Amazon goes through phases where you'll get, you know, a season of good, decent boxes, and then really quickly shifts over to food and, and you know, excessive clothing, etc. And then the supply chain dries up. And it could drive for you know, for a long time or, you know, short time. And it's really hard to build a, model around that. And so when we were in the, minerals, we saw some boxes come up and pretty quickly I realized when I flipped it on its head, understanding like when I worked at Fastenal, like I worked directly with Amazon corporately, know, international levels. It doesn't take that to flip over a box and see you lying at the bottom and then be like, ⁓ that's probably not a actual Amazon box. ⁓ I had a, I had a late night conversation with a, with a close family room I was like, you know, should I, should I go and try to do what they're doing or should I put the time in to make a brand and, you know, energize it with years of, of hard work. And so, you know, that's what porch pirates is. ⁓ it just takes a long time. I always talk about the Bruce Lee saying that, you know, didn't fear the guy who did 10,000 different kicks. was the guy who did one kick 10,000 times. And that is truly what we have specialized in. So we got into the mystery box space. Late 2023 is when we really started doing mystery boxes and pretty quickly we identified that that was a niche that was really good for us. And because we were using our own brand, we got so much invaluable feedback over the years that really helped us adjust with market fluctuations. Yeah. I know, you know, we, think everybody in liquidation kind of heard about you guys probably late last year, 2025, somewhere. Around fourth quarter, I think you made that like initial splash, which kind of got the conversation going. Because I mean, everybody had always built mystery boxes. You know, it was always a kind of a vehicle to move products. You know, we can put, you know, our Amazon LPN FC product in any kind of box. We call it a mystery box, that's what the customer it is. But when you came in with the porch pirates box, you kind of brought light to what is now curated boxes are a big, a big topic in liquidation. ⁓ in your opinion, because we've had a few people on with, we've, I've given my opinion multiple times on the, you know, kind of the benefits to a curated box versus a raw box. But for you, you know, obviously you're the first person we've brought on that's building the boxes themselves. What benefit do you, I guess, pitch your, your customers that your curated box is better than just, you know, order it. can order, you know, am as on mystery boxes. from Amazon for $32 a box. I don't know what's in them. Customers don't know what's in them. It's a true mystery. What's the benefit to buying a box that you built that you know the value in? Yeah, so I'll answer this kind of a curated box that's branded appropriately macro. And then I'll talk specifically about what we have bought because there are plenty of good programs out there. I'm a little biased. So I'll try to make this as objective as possible. When you think about pushing someone else's brand, like let's say Amazon. And Amazon is nothing more than a collection of merchants that sell goods on the marketplace. think of it as Amazon as a brand has been charged by the brands that fuel it. You can buy any number of Apple products or some from Amazon. And so people just associate the Amazon brand with that basket of goods. And there's no reason why another... you know, brand can't do that. And especially if you, if tune it specifically towards the niche. And so I think Amazon boxes, you know, they do a relatively good job of moving commodities. So I always talk about commodities versus consumer goods. And this is really why insourced have been struggling so much lately. We'll dig into that a little bit more. But when you, when you have a branded box, you're able to communicate certain things to the customer. to the end user that is a little bit more nuanced and specific. You can say things like, you know, these boxes don't contain this or don't contain that. You have a chance of getting this or getting that. The average retail value is this. And it comes with a level, it's ⁓ a balancing act because by doing that, you're taking on accountability. If they don't like their box, et cetera, you know, you're accountable. However, if you can answer to that, accountability in a way that is meaningful that the customers like, you stand to benefit everything, right? If I tell a customer today with the Portraits brand that there are Louis Vuitton's or electric bikes or any number of things that we do, obviously PlayStations and Xbox, nobody questions that at all. And I think people don't, they don't really consider how important that is. What's nice about having a third party brand like Porch Pirates in your business, your palace or whatever it is, is that you have the benefit of the quality that and the relationship with the market that we have without taking accountability at your store, right? So you still have the ability to say, well, you know, Porch Pirates is the one that sent this to me, you know, where does it your own brain on? So I think that's a really, really simple way to look at it. But we've attained enough sort of a wallety reputation to where we move boxes really quickly. Now I know obviously you're building the box with something else that makes you a little unique to the mystery box space is not only curating the box, but you guarantee a certain amount of prizes in every so many boxes. So with the Amazon, obviously the raw product, we don't know if there's any high value. ticket items in there. Have you run the risk of food, clothing, face masks are still really common. I think also just the fact that you can guarantee your customer, know, somewhere down the line, someone's getting so many, you know, so many quote hit prizes. I think that adds a lot of value because we've sold both, right? We've sold curated, we've sold raw. And when you're in a store environment and that customer opens up a box and it's, paid 50 bucks and they got a box of chips. It's a really hard thing to be like, well, sorry, you know, Your luck sucks, especially when they're in a crowd of people. So, you know, with the raw box, I think you run the risk of losing that customer on a $45 sale or a $50 sale. Whereas a curated box, you may not be a big winner every time, but you're not walking out the door going, expense store screwed me over with a box of chips, which I know from experience has happened to us in the past. Yeah, I mean, well, that's correct. I've seen some attempts to try to kind of have the cake you need it to. Honestly, a lot of the Amazon boxes are made by my contract holders. And so I've seen recently, it's like, invented the golden ticket concept and we've evolved that to the ultra. So, you know, there's some Amazon boxes out there that don't have that. But then the customer feedback is like, well, wait a minute. So are you in control of these things or are you not? Because if you are in control of it, then why the hell did I get a bag of chips? Right. Like that, like that's, kind of there. So, uh, it's one of those things where, you know, we, and I've been very proud of the fact that we run a very thin margin. We're pretty transparent about this. We aim for four to $5 gross margin, uh, per mystery box, especially our big classic box, like the ones behind me here. Um, and, know, by doing that and using those funds to pay for our entire operation, just maximize how much we are, are given to the customer and whatever we scale more and get more, you know, economies of scale where you can buy in bulk. We give that back to the customer. We just continue to do that. That's why a product we have today is so much better than it even was a few months or a year ago. Now I know something that, because we've also, we've built, you know, just like a lot of people in the industry, we've built our boxes ⁓ ourselves. One thing, you know, I struggled with, and I don't think Porsche Pirates specifically struggled with this is obviously I'm not the guy building the boxes. My employees build the boxes. So when a customer lands my load, gets their boxes, their customer opens one and it's for lack of a better term, dog shit. They're calling me complaining. Now we do quality checks. So could it slip through? Yeah, of course. But I try to, you know, we try to make sure the boxes are full, try to make sure the boxes are quality. So how, I can't say anything besides, you know, I'm sorry, send me a picture. But from my understanding, Porsche Pirates does something that I think is a little unique that Nobody has replicated yet. So how do you, how are you different with that? If my customer gets a bad box and I'm calling Austin, tell me your ⁓ process to combat that. are you guys doing? So, so a couple of things here and like, you know, the biggest thing of course is the serial number that we put into our boxes. So we have a unique serial number for every box and we photograph each box and we're even getting internally. associating each one of those serial numbers with a specific employee. know, one thing I found at Fastenal is whenever we install the vending machine where we knew who was deploying or consuming, you know, gloves and PPE, we saw 30 % ⁓ in consumption just by having the accountability. You know, internally it helps us make a better box when we know that they're photographed and things like that. It just, it's how humans work. We like to live in a world that is not the one that should be, right? It also helps on the customer side because... Unfortunately, there is in the 2 % of people that ruin it for everyone else, right? I had a woman the other day that had a porch spires box and she sent us a photograph of, ⁓ was like four things of hay inside of it. And it's like, you know, if you like, we always talk about, don't put user excessive clothing in our boxes. We don't put food, ⁓ all that good stuff, but we actually have a long proprietary list of things that we, we ratio, like we limit the number of phone accessories, things like that. You know, what do do with calendars? There's a lot there that we go through in that reverse process. Do things slip through? Sure. You know, one thing that we've been really working on is the LPNBs, specifically we put these serial numbers in every box. We photograph it and we do really two things with this. We put on that serial number, we say this box has been photographed. And we do that for security purposes. That's to protect porch pirates, to protect the customer and the business that, you know, is buying it. from us in bulk. And so, you know, it acts as a deterrent as much as a direct customer support tool. Because if we pull that and it's a legitimately bad box, okay, well then we have tools to remedy that, right? If we need to send out another box or issue credit or whatever it is, you know, we do that, right? And I'm happy to say we have to do that less and less as we continue to do better at this. ⁓ But we also see literally a 90 plus percent reduction in complaints. Does that tell you that a lot of complaints are disingenuous because selling a mystery box is a magnet for people to, they can claim anything. They could get a million dollars in the box and say that they got nothing. So it's a way to protect us and the customer. And we also take those photographs and make them available for marketing purposes and to ⁓ enter the business as well. They want to review that. So as a wholesale client, can say, awesome. want to get my whole folder of every one of my boxes. So I can review it before I started selling to my customers. Which is, to me, a wild, it's a lot, it's a lot of extra steps on y'all's part. I know how much extra work that has to be. Obviously you've got systems in place to speed it up, think on everybody's side, it offers so much protection. Um, and it makes you guys unique, which is kind of like what I want to roll into next is obviously, you know, Everybody said earlier, everybody, not everybody, but I mean a very high percentage of people that process loads in the past, build boxes for people. That was not a secret. I don't think it was like as well advertised as it is now. But since you guys kind of came onto the scene, I think we've all noticed more people trying to replicate it to a certain degree. So with that being said, you know, what do you see these other companies doing that is... They're doing as well as you are, or maybe they're not doing it as well. you know, what do you, what's your opinion on these other people that are making similar boxes aren't, I don't think, there's, there's maybe two other companies that I've seen that are adding their brand, which is new to the industry. feel like before it was always brown tape. Now I think people are seeing the value of building a brand. What's your opinion on other people and how are they doing it? Maybe different than you or how maybe have they copied you in your opinion? Yeah. ⁓ You know, they say that's the highest form of flattery. ⁓ know, and I would just ask if any of them are watching, like, please, if you're going to copy, at least do it as well or better, right? But, you know, as long as you're not hurting the concept of mystery boxes, like that's the only thing that really, you know, irritates me is when it's like, I'm talking to a business, they're struggling, you know, we, or even someone else has a great solution. They could turn around their business because like, you know, the Bin Store business does a lot of our clients. And you know, that requires people to come in, you humans in your store. And mystery boxes do that. We proved that concept in our new store in Lexington, ⁓ that these boxes will bring people in. And so when I'm talking to one of these businesses and they're like, ⁓ I got burned on, I won't name anything specific, but I got burned on so-and-so box. You know, so I'm wary of mystery boxes. know, that is that to me, that is the biggest thing. It's like, cause mystery boxes are a really easy way. to screw someone if you wanted to do that, right? I think there's much more wealth opportunity by doing it the right way for a long period of time. But people are here today, gone tomorrow in this industry, which is one thing that's been really interesting for me to go from a company that's been around for 60 plus years and customers and that to people that are here one day, gone the next. I've seen a lot of brands vanish that have come up and gone. or they transition to using retailer tape, some authorized, some unauthorized. But I mean, basically the, where you start to hurt the consumer is when you engage in deception. If the consumer actually thinks that, you know, this is a, this is a box from TikTok or this is a box from, you know, Target and they open it up, they open up the Target box and it's filled with, with Amazon stickers and things like that. It's like, it's like, what are you doing? Cause now you're opening up, not only yourself as the mystery box manufacturer, but now you're opening up that business and the people that are buying it to lawsuits, scrutiny, reputational damage, and that you're hurting the entire concept of mystery boxes as well. And, you know, to me, that's the biggest issue. So it's like, if you're going to do it, there's an ethical way to do it. There's a way to do it. That's right. I understand the temptation because, you know, you can make a lot of margin and customers will basically just give you slack. But while saying, Jeff Bezos sent me a bad box, right? So like that's kind of my thought process on that. I think it's interesting. Obviously there's some people that sell the Amazon boxes that sell, you know, tick tock box through target boxes. Yeah. I think there's something to be said. Even the guys that maybe, you know, aren't doing as well as building boxes. It sounds like, you know, there's something to be said about sticking your brand on a box because everybody knows. Whether it's porch pirates, you know, think another one that's been big has been the Blitz box that we've heard about. I know who to call and complain to. Austin will pick up the phone if there's a bad porch pirate's box. know, nobody at Target is picking up your phone call if you're calling about a bad Target box or a bad Amazon box. And so I think it, you know, it's a big change for our industry that people are starting to be willing to put their name against it. Now, what's again unique about you guys is as the moment you're solely a mystery box company. know you guys opened a retail store in the last month or so, which I be honest when I heard about it, I like, this is, this is going to end very poorly and very quickly because why on earth would anybody come chop just for the boxes? I mean, we've all used boxes in our, in our bin stores to kind of like upsell the customer because the crowd is there. The crowd's there for the $5 bin or the $6 bin. They're also down to buy a mystery box. You know, I'd like to know your thought process behind opening the first mystery box store. And then, you know, how many boxes are you selling a week? And then are you, you have any plans to open more? So yeah, great, great questions. ⁓ I've gotten pretty used to ⁓ being told by everybody ⁓ that it's a terrible idea. that, you know, someone's right, but yeah, we've had some, some home runs. We've been open for just over 30 days in Lexington and we've seen the growth. continue to spike. We're seeing the return customers. We've had people come in there 15 times, right? And multiple times a week. There's an element of fun. A big part of my macroeconomic research has to do with what happened during the 2008 recession. know, movie theaters and entertainment did fortunately well. And also when we're in economic hard time, know, the equation does well too. These people are looking for discounts and deals and they want to feel like they're wealthier than they are in times of, you know, economic stagnation. So when you marry the two together in a way, we happen to have the best mystery box for the money. Happens to be way, right? That's a happy by-product of the fact that we're focusing on, you know, delighting the customer and keeping it as simple as possible. The store we've done, we did about a quarter million dollars in just mystery boxes in the first 30 days, which, you know, I thought it would be successful. I was like, hey, if we can do like 25 boxes a day, that'd be great. And it ended up being hundreds and lines wrapped around the building. And you know, we... that gives us what we need from that new channel of revenue to have more content to scale to benefit all the other channels too. The reason we opened it wasn't even for revenue, it was for getting information from the customer. I wanted to know, I'm sending these boxes across the country, it's going to California, it's going to Rhode Island, and I'm having to go through these business owners that are smart, but they've never merchandised our product. What does that look like? And so we've, we've had thousands of little pieces of information come in, adjusting this, adjusting that. And so now we have this laboratory that isn't hypothetical to see what the market wants before we do that. you know, another thing, so we can talk about like, you know, the Porsche products piece, where are the people that are actually selling to the customer? When we talk to you about a product, a problem, an opportunity, it's not hypothetical, right? We actually, it's actually battle tested and we have, you know, that piece of it. But yeah, we're going to be opening up new locations. We're looking at Louisville. So I've just had wholesale. That was great. Nice meeting everybody there. Yeah. But we're going to be opening up in Louisville in the next looks like the next 45 days. And then also in Cincinnati. So we're to be having those three corporately owned locations. Had a lot of people reshow about franchising, things like that. We're looking at that. But again, we like to nice steady growth. We want to make sure we don't shock the supply chain. But we are getting a little bit more selective about you know, who we work with on the truckload side. Again, you know, we have much more of a supply. If there's a challenge between supply and demand that we have to face every day, the supply is a bigger challenge than the demand. nice thing about, you know, the porch pirates box, guess, I mean, really all the curated boxes is we've stepped away from the Amazon box. I think as a whole, a lot of people have stepped away from it with what I preach to a lot of people in liquidation is Yeah, especially Amazon and these big retailers. Supply is an issue, especially right now we're dealing with, you know, it's contract season and supply is dry on high count. The nice thing about working with a company like Porsche Pirates or other curated mystery box companies that are building from different, not only retail products, but closeout goods and more is I don't see you guys drying up on product anytime soon. Yeah, correct. I mean, just. You know, that's really good point actually. If you're selling an Amazon box, and Amazon, you know, right now we're going through this request for proposal season. So it's like, what do you do? You you run out of supply, your quality goes down, or you have to counterfeit, right? Those are not, those are not optimal, in my opinion. With us, you know, I mean, thankfully we haven't been affected too much by it, but I mean, we have the ability to pivot to other retailers and other solutions, you know, ranging from closeouts to Walmart, Target, you name it, to make sure that is there. And by doing that, we find, you know, we are able to strengthen the relationships with our suppliers and our customers continue to get, you know, new experience every single month or week. So, you know, it's been, it's been, it's a really good point you make. The other big piece of this is really, you know, the long-term effects, right? Because we find people become Mystery Box customers for the first time to our brand. And there's more cross-spin too. One thing I know I'm going to keep the time of this, you know, under, you know, an hour. goal is always, know, 30 to 45 minutes. I know my attention span is always, it's gotten worse with the, with TikTok on my phone. know a 20 second video, I'm like, gosh, this is too freaking long. No, I totally get it. I mean, the big thing is, and this is what I want to say to like, if you never encounter my brand, if we go out of business tomorrow, if you're running a Ben store, like, I want people to really think about the fact that, you know, there are bigger forceful when it comes to what's happening to the US dollar or to the energy market that are affecting your business. It's not just that, like what worked in 2022 when you were still printing money, it's not going to work the same in 2026, right? It's right. when inflation happens, certain things inflate faster than others. Right. And that's one that's when Ben's do really, really well. When that goes away, I started raising interest rates in 2023, you really start to, to see a collapse and at that margin. Right. So if you're selling a commodity like an Amazon box, and that's really what it is. Prove to me that Amazon box is a commodity. Well, explain for our, you know, lot of our explain, give me the definition. in layman's terms of a commodity. In layman's terms. think of a Stanley Cup. A Stanley Cup is not a commodity. It's a consumer good. The steel and the plastic that comprise of it, those are commodities. Oil is a commodity, right? How do you sell a, you know, $200, how do you sell $200 worth of oil? You have to do two barrels worth, right? There's no if, ands, or buts about it. If you then process the oil into something, that is a consumer good. So the point I'm making is, An Amazon box, how do you sell a $100 Amazon box? You make it bigger. That's it. If you try to go around that, well, now it's no longer a commodity. It's like, well, what are you doing? Like, is it actually an Amazon box? With these curated boxes, particularly the porch pirates, how do you sell $100 porch pirates box? You change the color of the tape, right? That is the most fundamental thing. When you're thinking about bin stores and trying to improve your margins and you want to stabilize cashflow, you want to bring more customers in. So there's more buying pressure on your high dollar days. This is the strategy. You need to use some type of mystery box. Make your own, buy mine, buy somebody else's. know, try not to break the law while you're doing it, but you know, that is the strategy. That's the reason why we're growing paramilically. While I see all this market consolidation and people going out of business that are doing that. The last thing I'll say is I keep seeing a lot of people, they get short on capital, they get short on whatever, and it seems like they go into turtle mode. Right. As if I'm going to wait and hold my breath. Hold my cash and hope that somehow or another more cash just comes in. Your competitors aren't stopping. Inflation is not stopping. You got to move. Right. And the market will destroy those who don't move and move decisively. It doesn't mean make stupid decisions. My philosophy is if I know 70 % I'm acting on it. No, I think that's a fair point. to, know, sometimes I've made this remark to you talk real fancy and a lot of our, you know, this industry Is it? I I dropped my college dropout, you know, so I've, but I preach a very similar thing to people. And that's to put it maybe a little more simply for some people like me is you have to know when to pivot. Don't be afraid to pivot, but move, right? If you're still living in the days where, you know, COVID is gone. I think a lot of people got into liquidation during COVID and they assumed that that like sweet spot was going to stay. They invested a lot of their money in certain things that are, they're dead today. And if you don't pivot, if you don't start adding things to your store, like the mystery boxes, especially Ports pirates, because if you talk to Austin, he will not only sell you the product, and this is what I've been preaching also is find yourself an educator, not just a seller. Austin will help educate you on your market, how to get these boxes to move. He's not just going, Hey, here's my little boxes, sell them. He's going to explain to you how best to move them, which is something I don't think you'll find. with a lot of other companies. So I think that's a huge selling point to porch buyers and being specific to them is they're going to help you move the boxes and show you the best path to do so. yeah, mean, last question from me is obviously you're growing at a fast pace. We went from selling at a vendor mall to you're moving thousands of boxes in your own retail store. Two years from now, three years from now, what do you see as the vision for porch buyers? We, we definitely broaden out. Yeah, we've really focused on the Eastern seaboard. We, there's some exceptions to that, but I think two years from now, we almost certainly are penetrating into, ⁓ to Mexican and Canadian markets pretty well there. I think that the variety of boxes continues to blossom. We have to juggle the speed without straining the supply chain. I think we diversify that supply chain to be much more onto much. We're trying to go a little bit away from. the Amazon side, you know, at one point our boxes were 80 % Amazon. you can make a great box out of that. But if you're going to supply that much, having good contracts, new stuff from closeouts to manufacturing, I think that's what it looks like. I also think there's an opportunity for us to really explore, you know, these specific items that we put in these boxes and offer those up on the different sides. think. The future is bright for the whole market, including porch pirates. Hopefully we continue to expand mystery boxes as a concept, ⁓ rather than just a quick, a get rich, quick scheme. Yeah. Well, it's cool. It's super exciting. ⁓ I definitely wish you guys the best. It sounds like you're doing some cool stuff and I think a lot of people should take note about not just, you know, buying and reselling, but understanding business as a whole. And if you get a chance to talk to Austin outside of this, You should because he's very knowledgeable and brings a little bit of a professional background to it. So we're not just out here hustling boxes. We're actually understanding the economy behind it. So yeah. living a pirate's life. that's it. living a pirate's life. One more time. The name of the dude. Yeah. Plunder paws. Yeah. Plunder paws. That's scary. Very Mickey Mouse's cousin. Yeah. Mickey Mouse's cousin. you