As he strolls through the aisles of a massive M@C Discount warehouse in the Pittsburgh Mills mall, Shawn Allen sees a pallet of TVs with cracked screens.
He’s not worried about the defects.
“Someone will buy them” and reuse or resell the parts, says Allen, co-founder and president of M@C, a 5-year-old online auction site where consumers bid on returned and liquidated items.
Nearby sits a gleaming, stainless steel Frigidaire refrigerator. It’s marked “scratch and dent” but with no visible damage, it’s likely to be scooped up quickly, says Allen.
Stacked throughout this sprawling space is an eclectic mix of appliances, furniture, tools, toys, housewares, clothing and more that M@C buys by the truckload from big-box and department stores including Home Depot, Walmart, Target, Kohl’s and Lowe’s. It also carries stock from Amazon return centers.
On a gray winter day, the inventory featured lots of electronics returned after Christmas — including computer monitors and TVs — plus never-used wood cabinets, vinyl flooring, mattresses, a wine cabinet and two pallets of brightly-colored glass flamingoes poised to become treasured garden ornaments.
M@C Discount — M@C stands for merchandise at cost — posts thousands of items daily on its website and an app where winning bidders typically pay 70% to 80% off retail prices. All bids start at a minimum of $1.
Because they are returned or scheduled for liquidation, the condition of goods ranges from broken or damaged to “like new.”
“We don’t know what’s on a truck when it arrives,” says Allen. “We kind of look at this as there’s no such thing as a bad truck.”
After bidding closes — typically at a posted time of 6 p.m. or later — the winning buyer has three days to pick up their goods in person.
Employees inspect all items before they hit the auction site and customers are encouraged to visit the warehouses and inspect items they’ve viewed online before the bidding process begins.
M@C believes it’s created a niche opportunity because many other auction sites that handle returns and liquidated goods — such as bstock.com and directliquidation.com — are targeted for business-to-business sales and offer merchandise primarily in bulk.
Allen won’t disclose M@C’s revenues, but says the company is profitable and is eyeing expansion.
Since launching in 2018 with a single warehouse in Washington, PA, M@C has grown to 14 sites in western Pennsylvania, eastern Ohio and South Carolina. Allen hopes to open 15 new locations nationwide in 2023.
“We didn’t expect it to grow as fast as it did,” he says.
The explosion in online shopping during the pandemic and since helped boost expansion, Allen says, because “return rates for online sales are two to three times what they are for brick-and-mortar stores.”
All of M@C’s sites are in existing warehouses or previous retail sites like the Pittsburgh Mills warehouse in Frazer Township which once housed a Sears Grand store and is M@C’s largest at 165,000 square feet.
The Washington space is a former Macy’s store at Washington Crown Center in North Franklin Township. Other Pittsburgh region locations are McKees Rocks, Monroeville, Robinson, Beaver Falls and Butler.
Reusing empty malls and other existing structures is part of M@C’s “second chance theme,” says Allen.
“Besides our products, we are renewing activity in these spaces,” he says.
The same philosophy applies to M@C’s workforce.
Many of its 850 employees have employment challenges or reside in halfway houses and were given an opportunity at M@C.
“Maybe they couldn’t be hired in other places,” says Allen. “And they’ve allowed us to grow.”
Allen, 56, a California native who came to western Pennsylvania to play soccer at Allegheny College, has deep roots in the auction sector. He was general manager at FreeMarkets from 1999 to 2003.
The Pittsburgh-based tech darling — a business-to-business auction site for industrial supplies — was acquired by Silicon Valley software company Ariba in 2004.
Allen purchased FreeMarkets’ industrial assets division, which primarily sold surplus materials for state governments, including transportation vehicles and office supplies.
After selling that, he worked as a senior product manager at Giftcards.com and later joined GENCO Marketplace, a wholesale liquidation business.
That’s where he met Kellen Campbell, 40, a University of Pittsburgh graduate who played fullback for the Pitt Panthers.
When FedEx acquired GENCO, the pair created M@C to bring resale auctions to consumers.
Not everything on M@C sells at a discount. After the 2021 holiday season, hard-to-get PlayStation 5 consoles that retail for around $500 were auctioned for well above that price, says Allen.
He seriously considered buying a limited edition “Star Wars” Mandalorian pinball machine when it showed up last year at a warehouse. The retail list price was $4,500 and the winning bidder paid $9,000.
“I was very tempted … until I saw what it was going for,” says Allen.
For some bidders, M@C represents the “gamification of the auction process,” he says.
“There is a level of surprise and addiction. I’ve heard people say they had to delete the app from their phone because they were buying too much.”
