Business Monday

CentralCloseout.com turns liquidations of cosmetics into big sales

Angela Romero, CEO of Central Closeout.com, in her Hollywood warehouse.
Angela Romero, CEO of Central Closeout.com, in her Hollywood warehouse. cjuste@miamiherald.com

The company and its products: CentralCloseout.com is an online wholesale business that buys large volumes of cosmetics and hair and skin products from retail store closeouts, liquidations and overstocked stores and sells them to other wholesalers in the U.S. and overseas, particularly in Central and South America. It also buys products directly from manufacturers and distributors.

Sources of merchandise for the Hollywood-based, woman-owned company can be a large retail store or chain that wants to get rid of remaining product to make way for new seasonal items, a company going out of business or liquidating stock, or a retailer that bought excessive merchandise and wants to sell a portion.

Its sales are made online using its two websites, CentralCloseout.com and Cosmeticosalpormayor.com (which means wholesale cosmetics) for Spanish-speaking clients. The firm ships merchandise to customers from its Hollywood headquarters and warehouse, but local wholesalers can also pick up orders at the Hollywood site.

“We sell a variety of brands such as L’Oréal, Revlon, COVERGIRL, Maybelline, Milani, L.A. Girl and others, and our product lines change due to the fact that we mainly source closeout and liquidations,” said Angela Romero, the founder, CEO and owner of CentralCloseout.

Romero, who was born and raised in Cali, has a degree in business administration and moved here from Colombia in 1998. For several years, she worked in local companies that liquidated general merchandise.

“I started out buying and selling liquidations and closeout merchandise online from my apartment in Lauderhill in 2010,” Romero said. “I already knew the ins and outs of the industry and had some money saved up from my commission checks. I saw the opportunity and jumped at it.”

Over the past six years, CentralCloseout has grown from one person (the founder) to 21, with 14 in Hollywood and seven in Colombia. Last year, it had sales estimated at $5 million.

“We grew because I made a lot of contacts in my earlier jobs,” she said. “I build lasting relationships, I always keep my word and I pay on time. Now we have over 2,000 customers, ranging from mom-and-pop stores to other distributors. About 80 percent of them are international, and the rest are in the U.S. We have great customer service, and that’s why we have a high percentage of repeat buyers.”

Products include displays of cosmetics, packages of lipsticks, mascaras, foundations, etc., and mixed boxes of 100 pieces.

Getting started: After moving to South Florida at the end of the 1990s, Romero worked in sales for a nutritional products company, then for two merchandise liquidation companies where she learned how the business operated. She worked for seven years at her last job. “I busted my butt and helped build a general merchandise and cosmetics [closeout] business for someone else,” Romero said. “As soon as the business was up and running and successful, the owner fired me.” That was in 2010, and Romero decided to start her own closeout company. As compensation for her firing, she acquired the rights to the domain CentralClosout.com. Later, she acquired the Cosmeticosalpormayor.com site, which provided a big boost to sales in Latin America. Her company also has 21 posting sites on Facebook, and uses Twitter, Instagram and other social media.

“At first, we would have to send out emails, look everywhere for closeouts and buy from middlemen,” Romero said. “Now that I have been in the industry for a while, I have been able to build great relationships with suppliers. And now they send me offers for merchandise on a daily basis. The majority of times, I do not even have to bid on offers.”

The difference: “Our main advantage is our customer service,” Romero said. “We are very upfront about our products and get our customers what they need.”

Sales: For 2016, Romero expects sales to reach about $5 million, up from $4.4 million in 2015. Revenues grew by 961 percent in the three-year period between 2013-2015. Inc. Magazine rated CentralCloseout as one of the country’s fastest growing companies in its 2016 list, putting the firm at No. 398 out of 5,000 companies reviewed. 2016 was the second year CentralCloseout made the Inc. list.

Competitors: Gomez Ossa International, Favorato Express and large liquidators and wholesalers throughout the U.S. “When we were general liquidators — selling clothing, general merchandise, toys, etc. — we had a ton of competition,” Romero said. “Now that we are exclusively in cosmetics, the number of competitors has gone down. Even though some other liquidators also sell cosmetics, they do not have the variety of items we carry.”

Learning experience: One problem is that sellers have occasionally shipped more merchandise than CentralCloseout ordered or delivered old products. “I’ve lost numerous nights of sleep, but I’ve always been able to resolve any problems,” Romero said. “They’ve made me a better businesswoman.”

Outside view: “They have an extensive line of name-brand products that appeal to a variety of people,” said Dawn Johnson Ekvall, a New York-based consultant in beauty, fashion and cosmetics with international experience. “[Romero] offers excellent prices, which gives her and her buyers a way to make money,” said Ekvall, also a personal shopper who previously ran her own cosmetics business from New Jersey. “She knows what she’s doing and has built a strong business in a complicated industry,” Ekvall said after a recent visit to CentralCloseout.

What customers say: In Costa Rica, Luzzi Fashionista sells wholesale cosmetics online and through outlets all over the Central American nation. “We’ve had a commercial relationship with CentralCloseout for about three years, and we purchase almost all the products they sell,” said Ana Laura Ávila, the company’s owner and general manager, in an email responding to Miami Herald questions. “We were very lucky to find Central,” Ávila said. “They’re always concerned about supplying us with quality products so we can offer the best to our customers. They have the best prices and excellent customer service. Their products are very much in demand.”

Rack21Tienda is an online vendor based in Colombia that sells cosmetics to wholesale and retail customers in Colombia and Ecuador. “Central Closeout has a lot of advantages in comparison to other companies,” Vanessa Castillo, the founder of Rack21, said in an email. “They offer a broad array of products and brands, strictly oversee quality control and always pay attention to customer service,” Castillo said. “The prices they offer are hard to find at other companies, and they respond immediately to any question we may have.”

Castillo also praised the Hollywood firm for its excellent logistics, constant product innovation, and the friendliness and efficiency of their employees.

Challenges: Sourcing appealing, new merchandise and trying to stay ahead of changing trends in cosmetics.

Outlook: “I see our company continuing to grow in the next few years, especially in Africa, Asia and Europe,” Romero said. “Since I opened this company, our sales have grown year over year. Knock on wood, we’ve yet to have a losing year.

“We’ve already started off 2017 much better than last year, a good indicator that sales will increase substantially this year. Our business is doing great because our customers are doing great.”

The writer can be reached at josephmannjr@gmail.com.

Business: Buys large lots of cosmetics and hair and skincare products from retail store closeouts, liquidations and overstock situations, as well as directly from manufacturers and distributors. The company, whose official name is AR Central Closeout Corp. (AR is the name of the founder, Angela Romero), sells products from lines like Maybelline, L’Oréal, COVERGIRL, Revlon, L.A. Girl and Milani wholesale to more than 2,000 buyers in the U.S. and overseas, mostly in Central and South America.

Headquarters: 4200 N 29th Ave., Suite D, Hollywood.

Founded: 2010.

Sales: Projected at about $5 million in 2016, up from $4.4 million in 2015.

Founder, owner and CEO: Angela Romero.

Employees: 14 in Hollywood and seven in Cali, Colombia.

Websites: centralcloseout.com and cosmeticosalpormayor.com

Source: CentralCloseout.com

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