Dave Kelly 4:59
You know, AI can Do a lot of different things as a as a language model, you know, as you and I have kind of used it, we’ve, we’ve had some fun with it. But I’m telling you, I’m learning more and more about other people just about our clients and prospects by taking some of the information that we know about different people in sales scenarios and bringing into chat GPT.
Rolando Rosas 5:22
And it’s a very good sentiment analysis, right, using emails, using posts that a person has made for it to gather some really interesting clues on mindset. And I think that using it in such a way, gives you a leg up on on really understanding the other side, especially if you have no idea what to what you’re gonna get at a meeting, or where you’re going to walk into a negotiation, being prepared and having some of that ahead of time. So that you know, this is where things could go south, as well as these could be hot button issues that can help it take for us if it’s a game changer. Really. Yeah, I
Dave Kelly 6:07
think salespeople should really start to embrace it not, not really so much in a way to you know, how do I write an email that’s going to you know, it’s not, it’s not. I know, a lot of people use this for writing and writing emails and posts and things like that. But analyzing sales scenarios, is, you know, a real interesting way to use the AI. As long as the AI doesn’t start making phone calls and replacing all these BD ers and you know, doing phone sales in the b2b own sales. Almost
Rolando Rosas 6:38
there. Dave, I saw something where somebody put something out on LinkedIn, I can’t recall who it was, but it was sounded sounded very conversational. It did. It was as if somebody called in. And you know, Hey, Johnny, why did you not want to buy that blue car? What was the reason behind that? And it, you know, Johnny talked, and they said, Well, could we have done something better in entrepreneur was like, Whoa, this is getting interesting. Now, now that you can have like a back and forth kind of conversation in real time. It’s something to pay attention to.
Dave Kelly 7:14
Yeah, I would say, Listen, if I got a call in the middle of the night from Ai, I take that back. AI is not calling me in the middle of the night you want. You want to know why wander away. Because unlike so many salespeople that are using their personal cell phone number, or business, I don’t do that. And I think people need to stop doing that. Don’t take sales calls, don’t use your personal cell phone anymore, you know, for your, for your, for your clients, and your Iran, in your business. You know, you you can do better than that. You can do better than that. And that’s why I wanted to tell you about zoom phone. All right. So listen, a lot of people know what Zoom is right Zoom video conferencing, during the pandemic, it was probably one of the number one free downloads that are out there, but a video meetings. But zoom, actually, they have a phone solution. So they have, it’s called Zoom phone. And what zoom phone allows you to do is use your personal cell phone, but don’t expose your personal cell phone number, because with Zoom phone, you can have an application on your, on your computer on your on your mobile device, you can control the hours for it so you can kind of control the availability that you have. So you can take back and now you can sleep better, you can be more productive with Zoom phone, because you’re not staying up thinking about that client that just woke you up at one o’clock in the morning. You were able to kind of take care of it. So what’s great is zoom phone, you can rest more easily you can be more efficient during your work day. And also with Zoom, the zoom and Global Teck Global Teck Worldwide. We are a zoom phone partner. Setting it up is as easy as 123 Check us out at Teck.global/zoom actually check them out at Teck.global/zoom to get started today. CEO I kind of tried to sneak that in there with a little more practice it’ll it’ll come across and roll off.
Rolando Rosas 9:24
You don’t roll off the tongue but you don’t want Dave I want to try something I know that things don’t always roll off the tongue but I think you get an A for effort right Little John That’s right. I can’t wait to use all the buttons on this new soundboard is just gonna He’s the beginning of that. Come on. Give me a one. Oh, no, wait, do we have a What? What? What? Yeah. So Dave, you were saying we were talking about AI? And you know what this is? This is actually We want to let you know that we’re continuing a series that we call operational excellence. There’s some things that kind of fly under the radar that are signals hidden signals that you may not be paying attention to, when it comes to your business operations. And we want to share some learnings with you. We want to share some stories, some cautionary things that even large corporations fail to see when it comes to some of these hidden signals. So Dave, well, we will I think what we want to do is jump into one a well recognized company that was around in the 80s and 90s 2000s. And the 10s, do we say 2010s? Is it 10s of the teams?
Dave Kelly 10:47
I think about that every day? I’m not exactly sure. Yeah, I’m not exactly sure what we call that
Rolando Rosas 10:53
right late into 20 teens, that was a household name. So this particular company had almost 500 stores, retail stores, nationwide and in several other countries. But that is not a guarantee for success. When you miss some hidden signals that we’re going to get into today. already hit that, hit that video, so we can show the audience and if you’re following along, well, there we go. We got it, we got it. So it’s the Sports Authority. That’s what we’re going to talk today about. And we’re going to pull back the curtain a little bit on Sports Authority, as well as talk about some of the things that happen in an operation. Whether you’re an online business, whether you’re a retail business that can help you navigate some of these hidden signals. Dave, I’m Dave, I was the ory. Let’s show folks the little clip on what happened to Sports Authority.
Guest Speaker 11:56
The clock has run out for Sports Authority, the sporting goods retailer plans to begin going out of business sales as soon as this Friday and will close all 463 stores by the end of August. Sports Authority had filed for bankruptcy protection less than three months ago, but it wasn’t able to restructure its debt. Sporting Goods retailers are being hurt by online competition.
Dave Kelly 12:19
They blame online competition. I’ve been into a sports every time I went into Sports Authority. They didn’t have my size. They didn’t have my style.
Rolando Rosas 12:31
They didn’t have your talking with. Dave, they didn’t have the right inventory for you.
Dave Kelly 12:41
Right. Yeah, I mean, it’s a pair of sneakers, right? Like, I can’t find a dub, I can’t find an extra large shirt. I can’t find a size 13. Sneaker or if I could they were just some god awful style that isn’t isn’t something for me. But yeah, you know, big stuff. That was a household brand. I am thinking about where I am up here in the northeast, just in probably a 15 to 20 mile radius, I can think of at least for sports authorities that obviously all crashed and burned. It was unfortunate.
Rolando Rosas 13:16
Right? And so let me let for those folks that are unfamiliar with sports that let me just give you a few highlights. So Sports Authority was founded in 1987 in Fort Lauderdale. They were they in the 90s, early 90s. They were a subsidiary of a parent company called Kmart. And as they as time went on, they merged guard sports OSH men’s and rolled those into one company that was called the Sports Authority. And as they grew, they then went on to become public. And then something started happening and where the things did not go the way as planned. They became a private, they went back from a public organization they were private equity came in and became a private organization. And only 10 years later after that private equity deal. In 2016. They filed they filed for bankruptcy. And later on, Dick’s Sporting Goods went on to buy the trademarks for Sports Authority. So the Sports Authority as a physical retail store no longer exists as of as you saw on that clip, and several factors. were contributing to its ultimate bankruptcy, not just on line online is only one piece of the equation and we’re gonna get into some of the other problems that Sports Authority have in what it means for an operation. Whether you have 500 stores, one store or yours Online that is kind of common in from our previous episode of operational excellence.
Dave Kelly 15:07
You know, I’ve never worked in retail, I’ve never managed retail business. But I would suspect that there’s still that there’s a lot of similarities between retail in an E commerce, right? We have physical products. You need to have inventory in order to sell it. You have to be competitive, you have to market yourself, I’ll tell you, they did a great job marketing themselves. As I’m looking at this, I’m kind of having these flashbacks. The story was showing some of the bee, bee bee spiral, the B roll. Thank you. So within the B roll, I’m looking at some of these models. It’s Holyoke Mall and Massachusetts Warwick mall in Rhode Island. It’s like, yeah, those are stories that I had all been to. And it’s sad. But, you know, if you have consumers like myself that go in money to spend, and they don’t have anything to sell me, or what they do have is completely overpriced. And I can walk literally next door to footlocker and get the same thing. You know, that’s, that’s crushing to an organization.
Rolando Rosas 16:13
And from the information that we had, it says here that the lack of inventory control, which is what you’re talking about, not able to get the size. And imagine you’re just one person, imagine if every day, one person walked into all their own nearly 500 stores and had the same problem. So you’d virtually have 500 people that were having a problem, and they walked out, right? If we were to translate that into the online world, we could say maybe something like the bounce rate, or the click through rate, right, people coming in, and then leaving, or people actually engaging, and not buying or not adding to cart, all of these are signals, right? We’re gonna use the word signals through the today to mean different actions that occur. And those things can be measured. And those things that can be measured, that are signals act as data points that can then be filtered back into some software, right, let’s just say a software or software that can be extracted for information and actionable intelligence. So that’s kind of what we’re going to focus on. And, you know, Dave, this source goes on to say, the lack of inventory control had a cascading effect, impacting their profitability, that’s the Sports Authority, and making it harder for them to compete with rising online retail giants, right. And other more efficient sporting goods stores, I would presume, like Dick’s because they’re the ones that Dick’s Sporting Goods, which is kind of they’re still around, right, and Sports Authority is not. And, you know, when it comes to when I think about our own business, and for the last 21 years that we’ve been selling products, you know, when I sit down with our financial people, the over and over again, tell me the same thing that the cost of goods or inventory is the, for us one of the largest expenses on the books. And so, for companies that are buying inventory, holding it and selling it, this can become a drain on the operation, if the signals that are out there are not connected, or those signals are being ignored, or those signals exist, or that data exists. And they’re all in separate compartments. And we got a couple of stories on what happens when the signals are not connected, or completely ignored.
Dave Kelly 18:53
You know, we were talking earlier, Rolando about the small to medium businesses out there. And you had said that there’s way more small to medium businesses than large giant conglomerates, like a Sports Authority. Right. And I think this is where, you know, I’ve, I’ve worked for a lot of larger organizations in my time. And I think what they would kind of say is, you know, it’s hard to turn the ship around the internal communication from A to Z. There’s so much in between that once you get to Z that the ship is still going this direction. It’s hard to it’s hard to correct your mistakes, or it’s I should say it’s hard to connect the dots sometimes with large organizations, there’s so many levels to it. One of the things that I really love about working with Global Teck is our size and ability to communicate internally so that when we start seeing different signals, we can talk to the different departments so that we can connect these dots so that we don’t get lost in this world of, like you say, having gold bars on the shelf that aren’t moving, there’s a lot of money that gets tied up with the inventory
Rolando Rosas 20:14
out. Absolutely. And so that’s important. And one of the things that we’ve value here, and I know that others are starting to see as well is that customer data, and there’s a lot around customer data that we have, over the years really focused in on that I think, would serve other folks that are listening to us, that that can be valuable pieces of information. For example, did you know that when you have a customer return, that can be a signal for bigger problems. And a lot of times, especially as the organization gets larger, and you’re you’re beyond one person, or two people or 510 50 100 500, that information about a complaint never makes it to the sales team. And there may be several layers that disconnect these two organizations. That’s also the logistics team completely disconnected from that information that’s completely disconnected from management, then making this decision as well as being disconnected from purchasing. A single customer complaint that can be shared among the organization can save 1000s, if not 10s, of 1000s. And if you’re a much larger organization, like a sport, sporting goods, retailer, like Sports Authority was potentially millions of dollars. To give you an example. years ago, we were selling a product that one of the companies we work with very large multinational started rolling up and rolling out a product takes months. It’s not something where you flip on a switch and all the products are online, and then that their inventory does. A lot of planning goes into this. And so does it for so as well for the manufacturer, of course. So once all of the agent, the agency that worked with them did all the photoshoots did put put all the images together for all the channel partners like ourselves, and we reused those images. And turned out that once we had the product staged and ready to go at Amazon at Amazon, so that showed up with the prime logo. Something wrong was with the images. Something broke down in the communication from the people at engineering, the people in sales, the people in marketing and the agency that produced those images because the image portrayed a product that could sit on a conference room inside a conference room with no wires connected to any person seeing those images would assume that that product was either wireless. Or rechargeable meaning you didn’t have to plug it into anything. Turned out we started getting complaints. Hey, hey, Dave, what are you selling me? Well, hey,
Dave Kelly 23:26
that’s great. Listen, Rolando. We want complaints.
Rolando Rosas 23:29
Right? Hey, what are you selling me with that product? Right? Do you remember that? What was going on? I see a wireless. A battery type powered product. No cables. This must be a wireless product that’s rechargeable. And it turned out that the product sitting on the table Dave had no batteries internal wasn’t rechargeable. You had to have it plugged in 24/7 for it to work. Yep. Okay, somehow that small detail slipped through all those channels. Every single one in because one complaint from one customer that we got led to changes in the entire thing. So came in we were that one complaint. And this is where a signal comes in to be important. When people complain, it’s not always everybody that’s going to complain. It you proportionally may have one complaint for every 50 to 100 people that experienced this problem because some people just straight up return. Right? They’re gonna send it back to Amazon. No questions asked by Amazon. And that’s the end of it. You don’t you don’t see. They may not never leave a review, whether it’s a negative one. They may never post any feedback. They may not put anything on social media. They may not even call you. They may not send an email or chat. So six different ways that you could get that information. Not one doesn’t appear anywhere until one person says Hey, Dave, you guys are bumps. What are you selling us?
Dave Kelly 25:04
Right, right. And then so we go back and we review it. And within the listing itself, I think we had the, we had the description spot on, right, we put a lot of effort into our descriptions, put a lot of effort into our imagery. Now, this was at a time where we were relying more on the brands, and their marketing teams to use their images, because they want their partners to use their images. So we were writing boatload
Rolando Rosas 25:33
of money. And these agencies and photographers doing these professional photo shoots. So that’s what they want representing the brand.
Dave Kelly 25:40
Right? So you, we did everything that we could to describe the product and the capabilities and how it worked. But you know, kind of like you’re saying a lot of people, some people, they may look at the pictures. That’s what shiny, that’s what was grabbing your attention. And sometimes you don’t just scan through some of the some of the listing itself, but it is it’s the images that site great, nice wireless speakerphone sits on the thing, this is going to fit our needs. It’s great. It’s also a very high dollar item. Yes,
Rolando Rosas 26:10
very high dollar item. Yes, that’s right. So $100, almost 700 bucks.
Dave Kelly 26:15
So so we get a, we get a customer complaint. So signal, right, they call into our customer support team. And someone on that team reaches out to me and asks me for just kind of a better understanding of the product. And as I kind of review everything, I’m trying to not get frustrated with the buyer, because the buyer is doing us a favor here, the buyer could have easily triggered a return return the product, we’d see a pop up and a report later. But we may not fully understand what the issue was so that we could make some changes. It turned out that we did have a handful of people that didn’t complain, and did return the products. That the that the complaint triggered us to do a little digging to see how many times this product was returned and why. And we then worked with our catalog team to fix the image. Actually, what did we do that we actually pulled,
Rolando Rosas 27:18
we pulled those images, we modified them ourselves, we went and took our own images and posted those in our listings, because it then reflected that, you know, there was a cable that needed to be connected. And anytime you put a cable into an image, rather than just leaving a device by itself, then the brain thinks oh, this needs this cable this this this cable. So we represented the image as accurate as possible now, so that the buyer had it in their mind. Okay, so somehow there’s some cable that I need to use with this product. And so one of the things that I remember with was we went down to, to our reverse logistics, folks. And we’ve actually inspected the returns on this particular product. And we’re talking about it just before we came on air. And we had Oh, my goodness, Dave, we had a bunch of these stacked up at the returns facility. And I could not believe what I was seeing.
Dave Kelly 28:22
And they were not $40 items, $100 dollar
Rolando Rosas 28:27
items at all. And luckily for us, the story of that problem started to go away once the inventory that we had at Amazon was was was changed and we changed the images. And so but we were able to change that situation. Had we not all from the complaint. And then we saw another review that mentioned something about you know, inaccurate This is not a very accurate and not depicting, like what now this is this is too, so something is not right. And the company, this company that we buy from this electronics multinational their salespeople were not aware of this issue wasn’t an issue in itself. It was that they were unaware that the marketing images Dave did not properly depict the product, causing customer frustration causing customer complaints. Engineers over there at this company knew exactly what the product was designed for, had all the specs had all the information. But somehow everybody in the organization thought well we thought which is It’s wireless, and it’s rechargeable, and you don’t need to plug in anything. Oh, wait a minute. We got that wrong. And it escaped everybody. That’s the surprising part until this little complaint. And what’s even funnier about that is that initially when we reported this to the manufacturer, they gave us some push back. Now, because their marketing firms didn’t want anything cluttering up their beautiful, wonderful, expensive photography that they paid for,
Dave Kelly 30:12
you know, when, when these when, when partners, when partners visit, it may take you to lunch, and they show off the new products and all that stuff. That’s fine. You know, okay, I got a salesperson, I got a marketing person here. You know what we started wanting to include the engineer, bring it, bring your head engineer, bring an engineer with you? Oh, no, that’s not they don’t come up for client visits. Why do you want to meet with an engineer, and I didn’t say this to their face. But engineers won’t lie to your face engineers. They want to really dig into the technology, what makes it good, what makes it success susceptible to interference, whatever it might be. After that whole experience, I started finding so much more value, and hanging out in speaking with, you know, the engineers at some of these organizations. I think that’s where you get your real information is from the people that were part of the r&d process, part of the the alpha and the beta testing and you know, whatnot. Those are the folks Hey, there’s a there’s a pro tip for you. Yeah. You want to throw it up there, go, here comes a Pro tip. Pro tip numero uno. Yes. Invite me engineering staff, inviting an engineer to come. My wife always makes fun of LSA that invite an engineer out to lunch, you can pass on to the sales and marketing people. They’re the party enhancement folks, they can come to direct your attention to the engineer, you might lie to your face. Hope that’s not too rash. But I think many people can kind of relate to that, you
Rolando Rosas 32:06
know. Exactly. Exactly. And I think for us has, it’s been very helpful, especially with products that electronics, there’s a lot can that can that can go wrong, and can be missed. And we learn a lot in that right Little John. Ah, all right. I’m just having a little too much fun with this soundboard. So,
Dave Kelly 32:30
you know, so Rolando, this actually reminds me of another story that we had with a boy. It was a very popular product. You know, one of the things that I love about the industry that we’re in is the product lifecycle, because these are commercial goods, not necessarily for that consumer, even though a lot of consumers still use, you know, some headsets and speakerphones. But the commercial products, the lifespan on these is much longer, you know, so I think about one of our best selling products, we were selling it for, shoot 678 years on Amazon, we could troubleshoot this product in our sleep, we knew every component that was in the box of like, every piece, every component we could tell you. And one day we had an exam, we have our listings, were selling a couple of 100 of these week, we had a customer come in. And they said they didn’t receive one of the pieces. And it wasn’t a very important wasn’t a vital piece. But it was a piece that we had some imagery around. It was a component that allowed you to take a headset and wear it behind your neck. A lot of these headsets they call them convertible. So it’s one headset, there’s multiple wearing styles in the box. So you can buy 10 of them for your staff. And regardless of what the staff needs, they can all snap on the wearing style that they want.
Rolando Rosas 34:01
So accessory that was in the box that somehow disappeared, right?
Dave Kelly 34:06
And then and then the complaint comes in and they said hey, this piece isn’t in the box. I’m like, Okay, interesting. Maybe it was just an issue during the production of it, which is rare,
Rolando Rosas 34:15
which is rare, because that’s probable that could happen.
Dave Kelly 34:19
Good. We took care of the customer, then we overnighted them the piece that they needed. And then we communicated quickly with our warehouse. And we had them pull a few and do a sample test. Just to open them up. See if just to see if this component was in the box. And they came in. They reported back with the images. And this This piece was not in the box any longer. And you know, this was one of our top selling products. What happens now?
Rolando Rosas 34:54
Yeah, because the accessory should have been in the box, right? So I Do you think this is a, this is a batch that was a fluke, you know that they had a production run. And we happen to catch a batch where that, you know, I would imagine 1000s In this case, out without this accessory that was there previously.
Dave Kelly 35:16
And we thought it wasn’t in, we thought it was a fluke. So, you know, if we had a couple of boxes, if we had four cases, we pulled one piece from each case, we open it up, that piece isn’t in there. It could have been because of a run, or because of a change with the manufacturer, we really weren’t sure. So, you know, we had a good relationship with them. We contacted the manufacturer, and they didn’t know. So you weren’t writing? Yeah, we work with salespeople should have got an engineer on the phone. Proper salespeople work with marketing people, like no, no, that should be included the include. And then we had some additional complaints and product returns. So we were seeing kind of a heavier return on that one SKU. We escalated it with the manufacturer, they had to then escalate it to their global headquarters. And after a few weeks, they came back and learned a couple of things. Corporate took this part out to save a few dollars, which is good, you know, I mean, they don’t when we most manufacturers don’t even include the wall chargers. And anyone Oh, those are gone now. And that makes me happy. That’s a little less plastic that’s being created to be dumped in an ocean somewhere. This particular headband, they came back and they said, You know what, you don’t want Global Teck, you’re right. We no longer include this in that product SKU. Right. And the thing that really irked me was we have a lot of competition in this space. After so we brought this to light, we communicated it up to the manufacturer, and the manufacturer was then able to analyze it. And then they send out an announcement to all of the channel partners about their change particular skill. And that kind of goes to my my, my frustration with doing homework for other people doing homework for other people, I want to do business with people who don’t want to do homework for you so that you can go back and tell all of our competitors, you know the change so that they don’t make those mistakes. So here we are, we’re jumping on landmines, so that so that the entire North American market for this particular SKU can now fix their own issues with
Rolando Rosas 37:43
But I know what Dave this this Imagine, imagine this, we we bring this to them. But a lot of times, this could fly under the radar, and they would have for a longer period of time. Because they’ll feel like this toot our own horn, we are very proactive in the products that we sell. We do do a lot of deep dives we do we take we take parks apart ourselves, and we are able to connect those dots. But it is shocking, shocking in this example, that it took weeks to get that response. That’s the first thing. And that’s so many different departments. Again, we’re not able to disseminate information. So all the relevant parties, all the stakeholders, the channel partners like ourselves, marketing teams, sales team, which is usually who we interact as a partner with a lot of these larger organizations, they have a sales manager, that that were the ones doing the day to day, they were completely unaware of this change, there was no internal documentation that provided this dis information. And because of because of that lack of communication or being able to collect that information and disseminate it properly, you have this cascading effect. And if we were to that just kind of transition a little bit to the Sports Authority example. Imagine what that ramification means to organizations that have a ton of retail stores, or that have an Amazon presence and have a lot of merchandise at Amazon warehouses. You can go for weeks, if not months, only to discover much later. Wow, we’ve got way too much returns on this product, our normal return should be 5%. But it’s 25% on this product. And because one bit of data exist out there and is not connected. It’s a signal about like let’s say returns that’s higher than normal. The complaint or complaints from the customer, the interactions on the phone because one of the things that we do internally is we are able to do do a recording for quality control, like most folks that are running an organization with customer support, record the calls to, you know, be able to better assist agents and customers as well. We’re able to go back and review those calls and hey, wait, Dave? Yeah, yeah, in the month of July, we saw a spike here. And what’s going on and you know, we look into it, and you have a way. But if you don’t have a way to a find those data points or those signals, and then collect those pieces of information, and then be able to share it, you know, like we do with our customer support, team, sales, team, logistics, purchasing, management, all of everybody has a stake in it. So that, wow, that isolated incident, which looks like an isolated incident, doesn’t become the Titanic, that brings down the whole ship, or getting of an iceberg that punches a hole in the side of the ship that didn’t eventually brings down the ship.
Dave Kelly 41:03
It’s an interesting analogy, because I was thinking about the nets that we have cast out where the lines that we have cast out to catch any of these, these signals that are that are coming in, you know, I think about, I think about what we do for our clients, right? So first and foremost, we support everything that we sell. It helps to alleviate customer returns, it helps to build confidence with our clients. And we want to help customers get set up sometimes the technology can be daunting for some users could be basic for some and not basic for others, we want to I look how you say this, remove some of the friction points. Or what I’m trying to say is if you were to go to any of our stores out there. We’re highlighting our phone number, we’re highlighting our live support. We’re highlighting our live chat. We welcome phone calls, we have people that we’re we have people that will actually answer phone calls that work for the organization want to talk to people, you know, could you imagine if if we had if we just hired a call center to kind of support our stuff, I don’t know if any of these signals would have even been noticed.
Rolando Rosas 42:24
That’s exactly in today’s world as well. It’s very common, I would imagine in the 90s and early 2000s, the offshoring of call centers that was still happening. But today, it’s very common, you know, especially with the way technology, where we are today, it’s so easy to, you know, easily stand up a call center from a technology perspective, and have 100 people answering the phones, answering email complaints, looking through social media, they have the data, they may funnel up a percentage of that. But every signal is a data point. And you don’t know that’s the thing you don’t know if something is an isolated incident, or a one off, and that will never happen, or a representation of a bigger thing. Again, what we’ve noticed in the years is that one complaint usually is a representation of a possibility of 50 to 100 more complaints that have from orders or customers that are out there. So if you’re getting 123, let’s say you get 10 That’s the possibility that 1000 customers with, with 10 complaints that are all similar with some variation, all have roots in in some reality. And that is representation of maybe 1000 other customers now met Imagine, imagine what you have, if you have 100 complaints that are maybe this this, this, the reporting of it, and some of it comes through email form. Some of it comes from phone calls, some of it comes from reviews, but you have no way of connecting these dots. Right. And, and Dave, not only not just connecting the dots, but because this is all in the Customer Support Center, or the customer service team. It doesn’t have a way to really funnel back to sales funnel back to logistics funnel back to purchasing, funnel back, even if you’re in real estate, like product manager that’s in charge of that. If it does sometimes that that little slow trickle will start but you have to have this in real time in today’s ultra competitive environment. If you don’t have visibility in real time to what’s happening. You could lose big, you know a big mistake there. even not even euro for me we can think about. We’ve had products that we’ve ordered. And we have the specifications. This is how the packaging should look, this is how the product should look, this is what should be in there, all of all of it arrives at the warehouse, warehouse, ships it to Amazon, Amazon, ships it to customer, customer says you bombs, what are you doing? I got the wrong product. You’re scratching our heads? Like, what are you talking about? Everything checks out, just go back to the warehouse, right? We send a message to the warehouse team, warehouse team sends back some images, they take out the product, oh, we got a problem. We got 4000 of these that have the wrong label on him from the manufacturer.
Dave Kelly 45:54
Oops. And it’s a problem. And it’s a problem that can’t go ignore that that is a fire that is a major fire that needs extinguishing immediately, immediately,
Rolando Rosas 46:06
immediately, all hands on deck because your reputation is at stake. Your debt is very difficult if you’re working on Amazon, and you want to avoid those problems. What we learned from that very costly lesson is that we needed better checks and quality control in the process. Although again, the manufacturer had the specs on what we needed. Exactly. They put the wrong label on the wrong product happens. And we put a process in place to avoid that happening in the future. Because the cost of that in implementing that is significantly smaller. Then once you have 1000s of these units at FBA, or Amazon or in customers hands, and then the gravy train of returns comes the gravy train of one star review comes the gravy train have nasty emails and nasty social media and all of that avoided by Do we have something in place to prevent that’s like an insurance policy Dave. I don’t want to ever crash in my car. But if I if something happens, you have a way to protect yourself, your investment, your own body, there’s insurance that protects you know, so you got bills, medical bills, get another car, all the rest. This is kind of like that, this is one of those things where so if you’re doing private label, and you’re buying products from China, or Vietnam, or India or anywhere else around the world, you absolutely want to make sure you have some kind of quality control that you or your team or a third party that is qualified to check for that those products before it hits the boat. If you’re buying from China especially, you want to have somebody that checks those products before it hits the boat on its way to the US from China, because there are there are several reputable firms that will do this kind of work for you. If you don’t want to do it yourself or can’t do it yourself at your own warehouse. And there are some not so savory, not so reputable organizations that do that, that we’ve found out that you know, they’re there, they’re getting paid under the table to our products and go right through, which is a bad thing to happen. So having a way to connect the dots again, one complaint, two complaints. But imagine Dave, you get one complaint on email, another one on the phone call and maybe a one one bad review three different data points. It’s very possible that you could have all three different things going to different people. And if if it’s not shared, collaborated or communicated Hey guys, thought I’d you know, inside the system we’ve got we’ve got three things that have showed up on this product in the last two days. You know, and it goes to all the different teams boom, action. Oh, wow, you’re right. We got a problem action. Let’s do something about it rather than they sat there for months. And then another complaint now the complaint coming through all those different points, right. They’re all single no way to connect them no way this disseminating collaborate that within the teams
Dave Kelly 49:26
Rolando we used to joke about we used to joke internally but also externally with other Amazon sellers. When we would talk about returns, everyone would kind of be like, ah, returns is the new returns is the F word. Yeah. We want to talk about it. Oh doubt. But I would be very interested. Listen, if you’re an Amazon seller, leave a comment. Tell us about tell us a story or an example of something that relates to this. There was an issue with a product If you were able to stop it before the fire spread throughout the whole boat, what was the signal? And what was the action that you took to correct it? So if you’re watching this, you’re an Amazon seller, we’d love to love to see your comments down there. In the section below. I know you had mentioned that you had heard kind of a similar story with a, an apparel seller, I believe,
Rolando Rosas 50:23
yeah, I belong to a group of a group of sellers that are on Amazon MDS group shout out to folks that have read nds. And in that group was a new person that joined us. And she sold apparel. And she says, What do I do about high returns? With a particular product, I have 75% of the item being returned. I was like, oh, and I saw it was like, Wow, you got a problem. And for her for the industry of apparel, 25 30%. Even a little higher than that is standard, from what I understand, well, not in apparel, but that’s what I hear. It’s much, much higher than our returns, but standard for the apparel industry. One of the things that ended up happening, she wanted to know, what do I do with all this return merchandise one, like we were saying earlier, those are gold bars. So they’re just sitting there and storage. If the merchandise is good, there’s a couple of things you could do about it. But but at the end of the day, the the signal that was coming back, that why is this rig being returned more, I’m sure at some point it, you know, 510 20 30% 40%, or whatever, at some point, the signal of these returns, like ding, ding, ding, ding, ding, they should have been a flashing red light, wait a minute, this is much higher than our average return. caught early enough, you could save yourself some pain because you can take the listing and turn it off. And that’s a much better thing to do than to leave the listing on, say we’re going to put it out in the world. Because when you when things go into Amazon’s warehouse, you have a lot less control than if you caught the problem earlier at your own warehouse, or even before it gets your warehouse at the manufacturer before he gets on the boat. But in her case, she didn’t. So she had all of this returned inventory. And I said to her look, turn off the listing. And here’s what I would do with the return merchandise with the ones that don’t have a problem because there were some that had garment issues. And so because I’m not in the garment industry, I know that there’s a couple of liquidation things and you can mark it off, as you know, not perfect or some some kind of thing. But in the end, 75% of those items that were returned, could have been avoided with a quality control system, catching it early. But let’s just say there was another way if you’re able to see those signals, communicate it with the right team members, so and a lot of folks that are on Amazon that are private sellers as well, as well as brands, they may have an outsourced team that’s handling the support. The support team that’s handling this these complaints, these emails, these one star reviews, have to have a way to funnel that information back to people in sales back people in purchasing back to people in logistics, back to people in management that understand, hey, we’ve got more than a one off here. We’ve got a lot more in their case, it got up to 75% of the island. Yes, we need to look at this. If it’s a manufacturing problem that can be handled. But the more immediate problem we have, when we have a 75% rate of return, I should say return of item not rate of return but return of items, you’re going to have a lot of angry customers. And on Amazon angry customers can derail your efforts, especially at that kind of 5%. The Amazon has all the numbers. First of all, they understand every category is different. And they know that there’s a certain amount of that that’s going to go back to their system, they’re back into their ecosystem of return warehouses. But when you have something that’s a very large signal to them, they may take as action as drastic as a suspension or cutting off the listing or prohibiting you from shipping in the future into their own warehouses so that you can’t ship prime anymore. So being able to catch these signals early on, being able to communicate and collaborate with the rest of the team, or team members that have a small stake in this in knowing that information is vital. In this happens, Dave, every single day to every single business, whether you’re physical retail, or you’re on line. And when those bits of data points because kind of escape, one month, two months, three months, five months, six months, nine months, you get to 75% of the items return, or even worse, other other really, things starts to snowball that can really ruin an operation. And I would imagine in the case of Sports Authority, it was so online contributed to their demise wasn’t the only thing but you get the snowball effect inventory. Like you said, they didn’t even have my shoe size I walk in and I walk right out. Imagine that happening every day. And that signal is not being captured somewhere. And being shared with people that hey, in the footwear aisle, we need size 15 through 16 for these customers, right?
Dave Kelly 56:08
What’s so cool about being on the online space, though, is we have an opportunity where we can catch some of that data,
Rolando Rosas 56:16
right? That’s right,
Dave Kelly 56:17
I don’t, I’ve never considered earlier, I’ve never been in retail. I wonder if retails has some sort of software that says 2500 People came into my store today. And these in a percentage of these people left without purchasing at all. So we can see that. Yeah, that’s cool. I’m gonna, I’m very pleased that that’s our advantage not being in retail, we know when people come in and leave without buying. So Sports Authority, seriously, every time I walked into that store, their marketing would pull me in when they were going on a business. When they were going out of business, there was only a couple of stores surviving, the one that’s local to me, their marketing pulls me in big set, big banners going out of business, buy one get one, you know, they had the big BOGO. And I’m like, I need sneakers, I’m gonna just I just want to just go and they probably don’t have it, I go in, even if they had what I wanted to buy one, get one it was not a buy one, get one free, it was a buy one get one half half off,
Rolando Rosas 57:25
the same. inaccurate, again, inaccurate, inaccurate, somewhat close to being deceptive, right.
Dave Kelly 57:33
And you can tell that the people in the store when I kind of mentioned it, they just roll their eyes. We know we were just so buy one, get one at three quarters of the price is 12 or less.
Rolando Rosas 57:54
Your glasses on to see the fine print.
Dave Kelly 57:57
But the people in the store didn’t care, you know, because if they’re so big, and they’re just clerks in a retail world, they’re like, whatever, you know, we’re going out of business anyways. But I think it’s some of that negligence that brought them to that going out of business world. Question for you. So with the apparel seller, did they mentioned anything with any signals any? Like, how long did it go before they finally realized
Rolando Rosas 58:26
Monroe months, months took months, because I believe she had a production run, you know, any, anybody that is in the apparel business would know more intimately. If you’re no matter what piece of garment you’re making, you’re not going to make 10 to 20 pieces, you know that there’s no factory that’s going to agree to that on an ongoing basis. They want a production run hundreds if not 1000s. And that’s what they want in order to do to make your whatever garment and so she had all of these 1000s of pieces that came back. And it wasn’t until it was too it was pretty much not a lot you could do is too late at that point. But imagine this Dave, that is not an uncommon scenario that I just explained. And this is a smaller seller who can pair it to like a big large chain. But this is happening today in retail this is happening to the on the online space. And it can be avoided. It can you can have a system in place that can disseminate information, you can have a system in place where multiple stakeholders have visibility into that information, and then be able to take actionable intelligence, just like with our electronics partner that we have worked with. These are also signals that are sleeper signals that can fly under the radar. I mean, they’re there and that’s the beauty of online Selling like you said, they, they’re there. They’re there their warehouse somewhere. And too often, even within the information, if we didn’t forget the people part, forget the cabinet collaboration part, it is very common that on Amazon especially, you have one piece of data that’s sitting over here, another over here, you may have a third party piece of software grabbing information over here. And if you don’t have a way to bring that all together, then it will be you may have somebody in the same department, even in customer support that sees, hey, I’m in charge of looking at returns, and then somebody else is in charge of customer feedback, somebody else is in charge of returns that that are coming back from where Amazon’s warehouse back to your facility, right? Somebody else that may be doing some of the front end selling, and in, they’re grabbing their information, also from Amazon, but from another piece of Amazon. And none of that’s making it none of that’s being shared in a collaborative fashion. So that, again, it’s all about the ecosystem of information. And that ecosystem is what allows companies like Walmart, that they’re known for the logistics, you almost have I was thinking about this the other day, Dave, you have to from an operational perspective, more than operational excellence, you have to be almost obsessed with operationally creating efficiencies that allow the organization to thrive. Because if you’re not, if you don’t have that as part of your DNA, and operations, logistics, returns, inventory, it’s kind of way down the list. It’s part of the organization. But in terms of the culture of getting this to work as an ecosystem with the rest of the company, then you do yourself a disservice in the long run, because things start piling up over time. And I heard Daymond John, say this as well. That’s one of the reasons why he didn’t invest in a particular company on Shark Tank. Because if you look at what he anticipated, he says in year one, you’re going to have no $50,000 in returns year two, you’re going to have 250 If you grow the organization, and your sales go up, even if your return stay proportional. So if you’re at a million dollars in sales, you’re one 5% return, you’re looking at $50,000 You’re number two, you go up another 2 million in so you start seeing if you’re not able to manage, capture, share, collaborate with that information. $50,000 becomes $100,000 in in inventory, that sitting that needs to be managed and handled from returns perspective. And in some cases, it can balloon out of control and year 345. And eventually, you have a set of products that are unsalable, that are old, that are that are really defective because just kind of things just snowballed and weren’t weren’t, they weren’t visible to the all the stakeholders. So this is really critical. And something the best part about this, Dave, is that every organization, whether you’re a one person shop, or you’re 1000 people, you can exert way more control over physical goods that are either in your possession and in your warehouse, in transit to you, then once those products are out in the world, into the Amazon warehouses, or, or start living somewhere else in some other location, it’s much easier to try to get a control of that, then market trends, I can’t control all the customers coming in and foot traffic, I can’t control that people are going to go from physical to online, I can’t control the the preferences of the consumer,
Dave Kelly 1:04:12
you can’t sell you can’t sell someone who’s a size 13 A size 10 You know that right?
Rolando Rosas 1:04:21
But how data can help you manage that? How many you mean, you people that are in the in the apparel industry know that certain sizes sell more than others? Right? Unless you’re like a big and tall store where you’re saying we are specifically specializing in size 10 Plus, right for the bigger guys, you know, you gotta have a whole bigger collection of those shoes. But you know, there’s a certain portion of population that’s going to need above 10 Right. I mean, I use size, almost a 12 I know that I there’s places that are going to have those right. And that’s what happens. Now guess what, they’ve, you don’t have it but in today’s space and I’m sure that in the teens, as Amazon and other online retailers started specializing in apparel, footwear and other places, Home Goods, electronics, I got to cover Dave. And not only that, but you don’t even have to leave your your house or your mobile phone, you can see how many units we have in stock. And it’s delivered in two days, three days, whatever the speed is, right. And so for them part of moving forward in time and trying to catch up to what the customer started evolving to, plus the mix of inventory that didn’t match the need of their customer base, again, over time, and then you got people returning stuff that don’t like things, it’ll start piling up, right.
Dave Kelly 1:05:48
It’s important, I think, as an Amazon seller, don’t act like these big monster brands that don’t, that make it difficult for their customers to get in touch with them. We, we make it super easy for our benefit. And for the customers benefit. Our phone number is front and center, our email address is front and center. And I see more and more where that is not the case, you go to I’m not I’m not going to call out anybody even though it would be fun to but there’s so many big brands that their phone numbers aren’t even. They’re not even on the Contact Us page,
Rolando Rosas 1:06:28
you get to the contact with the contact us page is seven or eight clicks deep.
Dave Kelly 1:06:33
Yeah, right. I mean, everyone, for the sellers out there, you all know that as well, for Amazon Seller Central, that those phone numbers as phone numbers don’t come up until after you have clicked other three or four times. And you’re just so deep into that that Seller Support page and I do find that phone numbers or the bottom right hand side, like font six or seven, not font. Yeah, like I said, the right size of the font, the font size, excuse me is the small, they’re trying to be invisible. I understand that you know what people may not have a group of customer service agents that are available to take telephone calls. That’s another subject for another day, we can talk about that and explore. But there needs to be an option for your customer. To again, like Rolando says, you want to remove that friction point, give them a path to come and communicate with you. I know selling is way sexier than supporting, but you’re not going to catch any of those signals. And we’re just talking about some of the instances here where we caught a, we caught a problem and we were able to rectify it. But I would say three or four times a month, we’re getting signals that turn out to be in our favor. But we’re at least having an opportunity to analyze it. So we’ll get a signal from something that something might potentially be incorrect with the product or potentially be incorrect with a listing or with the images. And because we’re a team that prides ourselves on communicating, we’re able to get our hands on ship. All right, do quick investigation, we investigated and we can come back and say hey, great news guys. We don’t we don’t have a problem here. But good job trying to good job keeping your ear to the ground. Because like Rondo says, you ignore these things, you know, you might have a, you might have a small hole in your ship, but you if you if you ignore it, you’re gonna take on so much water that you’re gonna have a hard time getting out of it.
Rolando Rosas 1:08:41
Right. And I think in the in the marketing world, lead gen and attribution. That’s kind of the problem here. When we talking about this back end systems, back end support call center. All of that is viewed as costs. And when your view of those things does you can’t attribute a value like what did they save us money? What kind of problems that they save us? What kind of financial catastrophe catastrophe was avoided because we were able to catch things in in real time or near real time. If you don’t have an attribute a way to attribute that. And wow, it was great that this piece of information was shared with the with logistics, and they were able to make sure that that container then get on the boat, or, wow, we’re glad we caught this at the warehouse. And instead of having a container full or half a container full of goods hit Amazon’s ecosystem in their warehouse. We save ourselves a boat load of issues. Those are the types of things and events when you’re connected when you have dots connected when you have collaboration. When you have In a real time or near real time, information that can be disseminated, all of those things could be attributed back to people in the backend office that are taking care of these things. So that you can actually save a boatload of money, frustration, bad press or bad publicity. And so there isn’t a very clear linear way to it from an attribution of her you use an SEO term, an attribution model that says, these guys over here saved us $100,000 Because they’ve even been able to catch it. And that’s part of what happens. It’s just hey, you know, these we have 30 people over here in this call center in India, and it cost us X amount of here to operate it. I bet there’s a lot of good nuggets in a lot of these call centers and call center operations that can a improve a product, be save a ton of money, see, improve efficiencies in the operation itself, so that it’s more resilient, when you’re looking at the long term horizon is how do you become real? How to get the 20 years? How do you get the 10 years in business? How do you go beyond that? Well, part of that is really being obsessed about processes, systems, dissemination of information, collaboration, back end systems, where all of that can be extracted and used with different stakeholders so that then you can take some actionable intelligence otherwise, these are sleeper signals, like we talked about earlier. They just go under the radar.
Dave Kelly 1:11:37
Rolando, this was a really good episode. I think we should revisit this at another time. And discuss how our software stack and advanced voice services platform integrate together so that these signals
Rolando Rosas 1:11:58
aren’t going ignored. Yeah, no, no doubt, I think. I think that’s a great idea. And, you know, if you’ve been listening to this episode, and you’re wondering, well, what else is out there? What else can I learn about becoming more efficient with the way we operate our business, so that you can avoid some of these big mistakes that we talked about with these larger companies? You’ll want to go check out that last episode that we did about operational excellence. And Dave and I will be in that video. And we’ll join you then. And we’ll see you next time.
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