WIN Warehouse began in 1991 by Clinton Laws. Today, we spoke with his son and our guest, Travis. The mission is simple, to connect nonprofit organizations with corporate excess inventory.
This business model could largely be one of the better win-win scenarios out there. Essentially, WIN Warehouse will act as the middleman between excess corporate inventory and 501c(3) organizations in need of resources.
WIN Warehouse Catalog
To clarify, WIN Warehouse is a nonprofit organization, which is key to how everything works. Travis tells us,
‘As the supply chain gets more and more complicated, items that are out there and are stranded for whatever reason, [therefore] they are not part of the normal forward logistics (i.e. manufacturer, distributor, consumer processes.) [Because of this, they] are stuck in different areas and that is problematic.’
WIN Warehouse gives these businesses an outlet to distribute this excess inventory to nonprofits who have real needs for the resources in order to do their jobs.
In essence, corporations have the need to get rid of old supplies and nonprofits need the supplies to go about business function. A real win-win!
The supplies in WIN Warehouses catalog can be found here. We’ve also listed a few categories that can be found in their warehouse below:
- Automotive Equipment & Supplies
- Electrical Equipment & Supplies
- Food Service Equipment
- Hardware
- Home Furnishing
- Office Supplies
- Janitorial supplies
This is the only tip of the iceberg. Make sure to visit their website to discover all the needs they supply!
We love what Travis says about carrying on his father’s mission:
“We are creatively helping corporations solve a problem by being generous.”
How Does it Work?
Business professionals understand that there is a cost to all things, and therefore it must be compensated for the sake of net balances. What is interesting about WIN Warehouse is that they have discovered a way to make donations more valuable than traditionally recognized.
Travis’ dad, Clinton, recognized the value of Tax Law 170 Charitable, etc. Contributions and Gifts.
In essence, Travis tells us the law specifies that corporations ( specifically C-Corps) can not only donate their cost when they donate certain items of excess inventory, but they can utilize a rule that allows one half of their markup to the fair market value of the piece.
To make this even more plain, let’s assume a corporation is looking to get rid of old office chairs.
They essentially have three options, they can liquidate the chairs (sell them on their own), they can donate them, or they could throw them away.
When liquidation takes place, more often than not the corporation would be at a negative or loss on the resale of office chairs. Think – they are used and likely less than what the business paid for them originally. Not to mention, there would still be costs associated with the labor and logistics of selling 100s if not 1000s of office chairs.
So the second option, donation right? Depending on tax rates and how the math works out, it could be more valuable for the business to donate their supplies (with a 1.5x multiplier up to a 2x multiplier per the IRS & FMV).
By doing so, the business can potentially earn tax savings when it’s all said and done.
On for-profit books, by reducing tax liability (assets) the business can ultimately pay less in taxes at the end of the year, which will increase their net (loss) of income.
All of this complexity to say, if a corporation is willing to make a donation of supplies, they may be in the position to get more out of those supplies than they would if they were to go out and sell them individually.
Clear as mud, right?
The donation also has a hidden, intangible benefit as well. And that is knowing that the business is indirectly supplying a nonprofit out there who may be in need of whatever they’re getting rid of.
Logistics for Good
Travis and Tosha explore the realities of logistics in the ecommerce industry. Tosha raises a great question for Travis, ‘How has your business changed?’ They began in 1991, and much of the world has changed since then, so of course the business has too, especially with the ecommerce boom.
Travis tells us that drop-shipping has become a key strategy in their logistics and business model.
Drop-shipping, as explained by Travis, may be similar to WIN Warehouse coming across PPE that a business in Chicago is looking to donate. Instead of shipping the equipment from Chicago to St. Louis, and then to Michigan where it is needed, they will have the product shipped directly from Chicago to Michigan.
In this scenario, WIN Warehouse will act as the logistical middleman, but never actually see the product.
Another logistical scenario that they are proud of is called ‘Reverse Logistics for Good.’ This is where WIN Warehouse will assist in cutting a businesses cost down by helping them track returns and manage them.
It can become rather expensive for businesses to process and handle returns (this is why you may see fees associated with returning an item). So, the business will donate the item to WIN Warehouse, WIN Warehouse will process the return and add it to their inventory, and then the consumer will get a promissory refund, new item, etc. from the company the original item was ordered from.
Costs are kept low for the business, WIN adds inventory to their warehouse, and the consumer gets their product. Everyone here wins as well!
There are plenty of takeaways from the conversation today. If you find this could be valuable whether being a donor or recipient of the cause, visit www.winwarehouse.org.
To hear the full story, click here.
You can also find Tosha and the Charity CFO team on Youtube or our website, thecharitycfo.com!
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