Gideon Kotzer Has Found a Niche as King of the Electronics Liquidators
In the heart of the Downtown Arts District, a one-man show known as Crazy Gideon's has been packing them in for nine straight years.
Gideon Kotzer is utterly convincing as the crazy old man who greets customers at the door and sells them merchandise for ridiculously low prices. But the real story behind Crazy Gideon's, the home electronics and appliances discount store tucked away on Traction Boulevard, is that of a shrewd businessman who inhabits a more lovable public persona in order to compete with the likes of Best Buy, Circuit City and The Good Guys.
For years, Kotzer was just another small-time retailer, sub-letting a piece of floor space at a Cal-Fed department store in Gardena. But as he became more familiar with the home electronics business, he saw a golden opportunity in the steady flow of items that are regularly sent back to manufacturers due to customer returns, company liquidations, overstock and discontinued product lines.
By the time Kotzer relocated to a Downtown storefront on Los Angeles Street in 1991, he had nurtured his relationships with manufacturers and begun regularly claiming the merchandise that no one else wanted. For Kotzer, the products provided him with an unbeatable bottom line and a unique market niche, while the manufacturers were only too happy to work with someone who kept the returned inventory off their books.
"You see this fax?" the 56-year-old Tel Aviv native asks while sitting in his office on the ground floor of the three-story Traction Boulevard building, which was once a garment factory. "A store that JVC deals with is going out of business and now JVC wants me to buy all these items that are going to be returned to them."
It was in fact when Crazy Gideon's became the primary agent on the West Coast for JVC's refurbished goods that things really started taking off. Kotzer was suddenly in need of a much larger space and moved in 1993 to the east side of Downtown for the same reasons artists would soon follow—cheap rent and plenty of parking.
Crazy Gideon's has the look and feel of a produce market. With its bare concrete floors and walls, handwritten cardboard signs and overflowing merchandise, it's no accident that the Sony big screen TVs, Panasonic camcorders and Technics stereo equipment appear to be on sale by the pound.
"If you don't shop here, you're crazy!" Kotzer says with a smile. "I'm crazy, this store is crazy, and you have to be crazy to do a story on me."
It's all part of the act, perfected over the years through a series of cheaply produced late-night TV commercials. On a recent Wednesday morning, Kotzer was up at 6 a.m. to put together more Crazy Gideon spots with the help of a moonlighting KCBS crew. The commercials will undoubtedly inundate airwaves soon.
By constantly reinforcing his alter ego, Kotzer is able to draw a steady flow of customers to his store and have them most likely believing that the price they paid for the merchandise includes very little profit for him. Meanwhile, since Kotzer carries on average an inventory of over $5 million, life at Crazy Gideon's is all about the next deal.
"Give it to them for $150, but make sure we clean it up first," Kotzer tells one of his employees, holding up a dusty computer peripheral that was on floor display. "If the rotisserie they want is out of stock, give them a microwave for the same price," he instructs another employee who is leading a couple to a pile of kitchen accessories outside the store.
Sales at Crazy Gideon's and the chain's two smaller outlets in Hollywood, which are run by Kotzer's wife, Lonie, account for 50 percent of the company's total sales. Kotzer moves an equal amount of merchandise by acting as a wholesaler to smaller retailers who lack the credit to buy directly from the manufacturer, as well as through fulfillment and shipping partnerships with some 200 Internet websites. Kotzer is well known within the industry for his no-nonsense approach to this side of the business and is said to have very little patience for vendors who default on payment.
Ironically, Kotzer gained the name "Crazy Gideon" long before he invented the persona. In 1972, after he moved to Southern California from London, England, where he was managing several nightclubs, his friends said he was crazy for choosing Gardena as the location of his electronics store. The name has stayed with him ever since.
2000 Revenues: "I have enough enemies as it is,
without telling them how much money I made last year" —Gideon Kotzer
Address: 830 E. Traction St.
Web-Site(s): buy.com, onsale.com, overstock.com, and many others
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