How bad inspections will make your whole house of cards fall ⎜ Movley ⎜ EP 123
Ryan Cramer: What's up, everyone? Welcome to my corner of the internet. I'm your host, Ryan Cramer, and this is Crossover Commerce, presented by PingPong Payments, the leading global payments provider helping sellers keep more of their hard- earned money. Hey, what's up, everyone? Thanks for tuning in. I'm your host, Ryan Cramer, and welcome to episode one, two, three, or 123 of Crossover Commerce. This is my corner of the internet, where I bring the best experts in the Amazon and e- commerce space. They're going to share their insights on the most important aspects of selling online, and today is no different. The question I wanted to ask myself before this guest pops in is, as an online entrepreneur, you spend so much time in your money on your business, right? We're all product researching, we're all constantly looking at what's going to be the next big thing? How am I going to make money as an Amazon seller or as only an entrepreneur or even service provider? How can I spend time so that it becomes a success? If that something goes wrong and once I find that product or I find that solution, how can I quickly ensure that I'm going... Why not ensure that you're going to be secure in that and you're going to be protected with that, whatever you negotiate or pay for, whether you're buying goods or services from somebody else? Why wouldn't you want to secure that piece of mind, if you will? Well, inspections have guaranteed that everything is as promised, and of course, as expected, which we'll talk about today. I wanted to make sure that if something goes wrong, you can actually quickly adjust and fix a problem without months of ramifications happening to you over time. Such a headache, you don't want. You want prevent the headache instead of ... Don't want to prevent it. You want to be preventative in the measure that it's not going to affect your entirety of your business. That being said, I want to think of this topic more like insurance, right? But just without the British gecko or the yelling duck, if you will. Or the Jake from State Farm. But let's talk about today how bad inspections will make your whole house of cards fall. Of course, our guest today to talk about that is McClain Warren of Movley. Welcome to Crossover Commerce, McClain. How are you? I am doing well. Thanks for talking. I had you on mute for a second, but I knew exactly what you're saying. Hey, when I search house of cards, obviously not the most likely things come up, right? You think of house of cards, you think of something clumsy. Hopefully, you're not thinking of Kevin Spacey or any of those other political things. But hey, when I hear of a house of cards, I think something flumsy, but it's something delicate in nature, right? That's what we're talking about today?
McClain Warren: I like the analogy too because we're talking about inspections and more specifically inspections in China. When you really get to understand the Chinese culture and how suppliers, manufacturers, inspections work, really the whole supply chain, it's very much a lot of gambling almost involved because it's like this song and dance where everyone's trying to get a deal, everyone's trying to negotiate, and the Chinese definitely like to play their hand in the big game of product development. Yeah. That's not what this whole podcast is about, but essentially it's a good analogy for it.
Ryan Cramer: Well, yeah. In this regards, let's take it maybe a step back even further. We were talking about just the time aspect and protecting your investment, right? There's a lot of different ways to do that. Insurance in general is something to protect and so that's so down the road doesn't happen to you. I would classify Movley and just inspections in that regards. It's not obviously a payout or anything like that. It's something that you want to make sure that if something bad does happen, something can enact really quickly and you can get it fixed, no problem, instead of the trickle down effect, if you will. That being said, before we get into that, what's your background... You're newer to Movley, you are new on board to marketing. You're badass super mom, you're content writer, all this other stuff. Maybe introduce yourself quickly to people, and then we can dive into while that led you to Movley.
McClain Warren: I think you did a pretty good job. I started in this industry probably about six years ago as a content writer for Amazon sellers. I ended up owning my own Amazon focus company and then wanted to stretch my horizons. I started up a copywriting business and that's when Sajag sucked me in and convinced me to join his company, which has been awesome. It's been very challenging, but I love everything about it. It's good.
Ryan Cramer: Well, it's a growth... Yeah, I was going to say Sajag said... He has a way of words, and obviously, he's been successful as this seller, but also in the solution you guys are, which is obviously quality control inspections. We're not talking about detective and looking over every aspect. We're talking about protecting your investment. Ultimately, I wanted to make it a little bit bigger and not just more glamorous, but something that's super important because this is maybe something that a lot of sellers want to gloss over maybe when they're getting going crosstalk I would venture into. Why do you think that's the case?
McClain Warren: I think having been in the industry earlier on when I was more focused on helping Amazon businesses start up, the focus was on product research, finding photographers, finding the right person to do the listing optimizations, marketing, all that exciting fun stuff that most sellers really get into. It's easy to get so hyper focused on those aspects that other things that may seem a little bit less relevant or less important fall to the back burner. Unfortunately, I always like to say the devils and the details. When you gloss a over that stuff, that's when you can start having issues and inspections tends to be one of the main ones that people either don't understand fully, or they... Yeah, I would actually say they don't understand it properly. There's a lot to not understand because is between finding a supplier, finding the correct manufacturer and facility, and then finding the right inspection, it's a daunting process. Especially if you're not actually in China and able to do a lot of that recruitment yourself, it can be even more daunting. But it's important that you understand the right process to get the right inspections done.
Ryan Cramer: Right. When I think of inspections, I'm thinking about an inventory line as things are starting to trickle down and you're making it the full... Throughout the process, you're looking at it, picking out at random a good or product, and you're inspecting it, looking over making sure it's either tight or the solution itself is exactly what you were promising to, in this case, the seller on Amazon or on e- commerce. That being said, is it more intricate than that than just how haphazardly grabbing something, looking it over and then putting it back? Is there more details in that?
McClain Warren: Oh yeah.
Ryan Cramer: inaudible might be listening. What would those be?
McClain Warren: Yeah. There's a lot of tests that... I will preface this by saying not every product is equal. There's certain products that probably need more tests and more focus on the intricacies of how that product is working. Every time you get inspection, there's always going to be a visual test, which is where you explain, where you pick up the package, you open it, you check all the vitals, make sure everything looks right, and that is the end of that inspection. But there's so many more tests that are important that are often overlooked. For example, wear and tear is a very important test to do. Essentially, everyone knows that no matter what your product is, when the customer finally receives it and starts using it, there's always going to be wear and tear, right? You want to mimic the types of wear and tear that a customer will eventually have to deal with, and make sure that it can last as long as your company has promised that customer. I'm trying to think of a really good example. crosstalk
Ryan Cramer: I think like something stretchy or elastic, if you're pulling on it or something that's going to be durable, you want to push on it over thousands of times. You see with even side by side comparisons like inaudible, for example, to be brand specific. You see putting in your product into both side by side, how long they last versus your competition. Something like that. Where it's a base line, you know what to expect, but you want it to exceed expectations and you know how long it's typically going to last.
McClain Warren: Yeah, exactly. A lot of it is a simple test like how much weight bearing can a bed hold or a crib or... If you're making baby seats, you definitely want to make sure that that baby's not going to be falling out of it anytime soon.
Ryan Cramer: It'll stay. If you maybe have one of those heavy babies that are full of a lot of love, you want to make sure that that Cribette buy is going to be supportive. If it's promised, obviously those are big things. I would say, categories that promise a lot, you're talking about consumables, something you're putting in your body or around your body. Maybe something that you're either electronic or having lots of moving parts or mechanical parts. Then I would say, like you said, even child... Anything that's small that involve smaller humans or children, those are the big ones that you want to make sure that everything you are claiming is going to fulfill those promises.
McClain Warren: Well, and that transitions to safety tests because obviously not every product is going to involve a lot of safety testing. But especially if you are providing medical devices or baby products, you want to make damn sure that what you're selling isn't going to electrocute someone or have a baby choke on it. That gets into safety testing, which is also really important. Again, not necessarily for every product, but that's up for you to decide in terms of what your product offers and what potential issues there may be, including liabilities, because you certainly don't want to get sued down the road because you weren't providing the right test.
Ryan Cramer: Right. That would be the worst case scenario for any businesses to say you're claiming something and something, for a lack of better term, injured or brought harm upon somebody. That would be the worst case scenario in that regards. Let's make sure we don't do that, and for all intensive purposes. If I'm doing an inspection, am I doing at the end when the product's fully made, or am I doing it along the way, and what's really the best way to go about all of that?
McClain Warren: Well, before I get into that, I also wanted to mention because it's often overlooked and it's really important is to do a drop crate test because... This happens right before it goes out to shipping. You really want to make that all these units are protected and that through the process of being shipped out and going to your 3PL or FBA or whatever, that they're not going to get damage in the process. That's definitely a test that tends to be overlooked, but it's really important. crosstalk
Ryan Cramer: Amazing. Oh no, that makes sense. I didn't know that that was an option. We talked about, just a recap for everyone, for the people who are listening too, we're talking about durability tests or a longevity test, we're talking about lifetime. We're talking about quality inspection, and then we're talking about... What was the name of at the last one you were talking about where you were protecting your whole shipment?
McClain Warren: The drop crate test.
Ryan Cramer: Drop crate test. Okay. When I hear that, sorry, I was thinking an egg and you're putting a carton around it. If you drop the egg, the egg is still secured when you did that back in middle school or something like that. Pretty cool. Well-
McClain Warren: Right. crosstalk you want to make sure your egg is not going to breaks. It's similar, really.
Ryan Cramer: Which is fascinating, that underlies and goes under a quality control instead of shipping and logistics. Why wouldn't that be under... Do those two work hand in hand, or why would that be considered under a quality or inspection kind of company like you guys provide?
McClain Warren: Because ultimately it is the inspector's job to make sure that nothing can go wrong with your product. Your freight forwarder could do it, but it's usually better to have an out third party inspection company do it so that before it even gets to freight, they can go back to the factory and say, " Hey, this is an issue. We need to resolve it."
Ryan Cramer: That makes sense. If you're going back to it, if it's going to obviously teeter over on a flight or even on a boat, if it's jostling around inside a box, it's preventing potential damage that can come along the way. That does make sense and super fascinating that you brought that up. Thank you for that. Timeline, we're looking at... I think it's the most fascinating thing. We talked recently on a webinar of when to implement quality inspections because that does distinguish when you schedule out, when you want to get your good delivered and to shipped out, and as soon as you get an order in between the time that your supplier gets an order and it's being produced and inaudible to sent out, when are we implementing quality inspections?
McClain Warren: Your manufacturer should be doing quality control throughout the process, and that means mid- inspections, a 20% of the process of it being built, 50%, et cetera. But at the end of the day, the manufacturers are looking at protecting themselves. They aren't looking at protecting you necessarily because they just want to get paid and get the shipment out. Right? Again, it's crosstalk
Ryan Cramer: More speed instead of quality, you're talking about?
McClain Warren: Yeah, exactly. That's the first line of defense, but you want the last line of defense to be the one that's checking stuff at the end during the pre- shipping stage. Usually, we highly recommend having a third party do that, because again, a manufacturer who does that has a vested interest in themselves, and freight forwarders who could do it, they also have a vested interest in themselves because they get paid too based on how many units they ship or bring over. It's always better just to have someone on your side that's looking out for you and your business.
Ryan Cramer: You guys are providing the boots on the ground, the part that step in along the ways of 20%, 50% done. All this time, how often are they interacting or communicating with you? Is this something that you need to talk to them every day, or is this something that you get weekly updates? What would be the timeline in that regard?
McClain Warren: Well, it depends on what your order is and how long it takes. If it's a two- day process, obviously you're not going to get a call every hour. What happens is there's-
Ryan Cramer: I hope not. That'd be a lot.
McClain Warren: Yeah, no one wants to be on the phone long. Usually there's a critical point of almost every product where in the process of development, if this one aspect goes wrong, then it's going... You can't correct it really. Right? At that critical point, you want to make sure that everything's going right so that if you go past that critical point and then realize there's all these issues, it's going to be significantly longer and more costly to have to go all the way back and start the process all over again.
Ryan Cramer: What's the story maybe you can share, like a worst case scenario point of you guys were working with the client before they implemented the likes of Movley, and they had the story where they're... if a simple inspection just halfway through or even before they put it on the water it would have solved a lot of headaches, time, money, effort? Is there anything you could share with that with our listeners?
McClain Warren: I actually don't have any story that comes to mind, unfortunately.
Ryan Cramer: Or is there like it? Walk me through. Let's do inaudible, and obviously, since you're new with Movley, there's nothing wrong with that. You individually have no experience in that. But as a seller would go through, I would expect the processes of even just that last good being created before it gets on to it's container, looking it over. Walk me through best case scenario and worst case scenario if there's an inspection in place versus not. Does that make sense? Almost like before it gets on the water, you can... Someone's looking it over and they're like, " Actually, these are not good to go." What's the worst case scenario if you don't have an inspection in place? They gets put on the water, there's default or something wrong with the product that gets put on the water.
McClain Warren: Well, worst case scenario is that it gets put on the water, you are no more the wiser and suddenly all of your inventory, to say if you use FBA, is shipped to FBA and you don't see the product at all, right? Then customers are purchasing these defective products and you don't necessarily know they're defective until you start getting returns and complaints, and-
Ryan Cramer: Right. That can be a matter of what? Not just weeks, but we're talking months from when they were shipped out from the supplier. All of a sudden you're now seeing and getting basically noticed in the reviews and that could be a matter of months, right?
McClain Warren: Exactly. Exactly. To compound that issue is that with all of the delays currently happening with backlog and just logistics and chain supply, to have to fix that issue could take months even after that. Then you've lost months and months of potential profits that could have been avoided if you had implemented the right steps to ensure quality control.
Ryan Cramer: If my goods to get shipped out in February, they land 60 days later so that you're talking about beginning of April or April, and then getting fulfilled a couple weeks later, mid- April. People get it, they're reviewing, and you start to get notice of that, we're talking about May. Between February and May, which is a matter of couple months, best case scenario, you look at your product and then you see that it's broken or it's not right. Then you're going back to your supplier and saying, " Listen, you need to fix these." Is there any way as... As a person who purchased these goods, is there any course of ramification that I can take to them and say, " Hey, listen, you gave me bad products?" Can I bring anything to them and say, " You need to give me new products for free?" Or how does that work even? Or not even crosstalk at all.
McClain Warren: It depends on what supplier you're using and what kind of relationship you have. Unfortunately, a lot of cases, if it's damaged goods, there's a huge possibility that the supplier will say, " Well, that's not our fault." You've gone through all these other steps. There could be a multitude of other reasons that this is an issue. It just depends on what your contract is with your supplier, what your relationship is, and if you can prove that it was something they did.
Ryan Cramer: That sounds like a headache in itself of trying to even prove that they are capable and even building a brand product from the get go. Before I ask a couple more questions, just want to give a couple shout outs to people who are watching. Tiffany down there in Texas, I think she still is. Just beautiful people. We appreciate that. I know that I'm the looks of the show and I'm just kidding, McClain. She's the looks of the show.
McClain Warren: She's crosstalk, not you.
Ryan Cramer: I'm just the talking hit. No, I'm just kidding. Then Alisa in LinkedIn. If you're watching this on any of our social channels, thanks for watching live. Then obviously we'll be on all the podcast channels as well. Apple, Spotify. You can rewatch this on YouTube if you didn't catch the beginning. You can definitely check that out as well on the PingPong YouTube channel as well. But McClain, tell me this. What's the most fascinating thing about Movley and why they're going to disrupt the inspections space? Why should we get excited about Movley? Because you're not the person who built this. You joined willingly, I'm assuming. That you wanted to say, " Hey-"
McClain Warren: I crosstalk is what happened.
Ryan Cramer: Yeah, I was going to say inaudible Yeah. Instead of cutting your hair or shaving your head off, you had to join Movley. Now that's not the case. You joined this willingly, so you buy into the vision.
McClain Warren: Yes.
Ryan Cramer: I've had Sajag on before, and I love hearing from a founder's perspective of what problem they're trying to fix. You on the other hand are an employee of a small.... I won't say small startup, but you guys are growing quickly. What was the decision like to say, " I'm going to take this journey with you. Along with the other things, I am a business owner, I have my own company, I have a family, but I want to do this as well?" What was that decision like and why jump in with Movley?
McClain Warren: In all honesty, I was never really part of the inspection process with regards to all of e- commerce and all the aspects that go into it. Since working with him, I've definitely learned a lot. One, I love his passion. I think he's brilliant, and I think he really genuinely cares about making sure that people essentially aren't screwed over in this process because he actually was one of those people, he had a multi- million dollar Amazon brand and to make a really long story short, he ended up having all these returns and complaints about defective products. He moved to China and did quality control himself, but he witnessed a lot of shady antics and bribery and laziness and people not knowing what they're doing. I think that sparked in him I need to try to revolutionize the process.
Ryan Cramer: How do you maybe forecast that this is even going on right now? Because in my solution, if I'm a seller, I'm not going to be in China, I don't have boots on the ground, I might be a small business owner that has to inevitably have blind trust in a company that I feel right by, or you're working with a great solution like Alibaba or one of the trusted networks that they are vetting with people. But even then, there's stuff that you say is happening. What should sellers be looking for that there might be this case in protecting themselves?
McClain Warren: I don't know. There's a list of questions that you can a supplier to try and negate any potential issues. But unfortunately, it's almost out of your hands. What I think makes Movley different and unique is that we have service pods. You get account management and you get representatives that are native English speaking, and they also translate for you so you can talk to the boots on the ground in China, and then you also have inspectors there. It really creates a... I don't know if buffer's the right word, but it creates a community that allows people that are looking for inspections and are lost in the process, or they don't know how to pick a sample size, or they don't know what AQL level they should be going for or they don't know how to fill out a product intake form, or they don't know what tests to ask for. We have a built- in pod that every person gets that really does a concierge type model in which you have constant contact with whoever you need. We're here to ask questions constantly. Movley is really good about the inspectors that we do have over there. We don't use the same inspector all the time. We often rotate through inspectors, and sometimes we'll even have two inspectors on the scene, and that's just to keep the inspectors... Not trustworthy, but it's just to keep them truthful and to avoid any type of bribery or laziness, because unfortunately, that is a huge problem within the Chinese manufacturing realm. That's something that we really actively strive to avoid. I'm trying to think of other aspects of it. I know down the future, we are working on building out a platform or portal that streamlines all the processes so that you have an under... you know what's happening with your supplier, what's happening with the factory, what's happening with inspection team, what's happening with your account manager, so you can manage all that together. That's something in the future, but it should really help streamline the whole process for people.
Ryan Cramer: That's fantastic. That sounds like what we do at PingPong. You simplify the process, make it easier for people to look at all in one dashboard to know if there is a problem, people are talking to each other. Almost like an ERP, right? A solution where all of your solutions are talking in place so that you can make sure that fundamentally everyone's on the same page and you can move forward effective. Is it expensive? You mentioned sometimes you have multiple people on the ground. Is it expensive to inspect, or what's that cost analysis like or the benefits? Obviously the benefits outweighing the cost. Does that become expensive to have multiple people on the floor for you guys or is that just the networking you want to go above and beyond to make sure you're crosstalk all this bad inaudible
McClain Warren: We bill based on man- days, and each man- day is$ 302, which potentially can seem a lot compared to other inspection companies. But again, you get the support system and the network that is really important and integral for enforcing good inspections. I was going to say something else on the matter. Of course I drew a blank. I'm sorry. I totally inaudible
Ryan Cramer: No, you're fine. Hey, that's the beauty of live, right? You start to think about your process crosstalk where was I going with this?
McClain Warren: Yeah, I was totally like there, and then... What was your question so I can circle back to it? crosstalk
Ryan Cramer: Right. I was going to say it, it seems like the point that obviously Movley's trying to make is they're going above and beyond and quality's super important, and you're talking about inspections. Sometimes it just depends on what product you're making or whatever you're trying to build. You might need multiple on the floor to look it over. My question was, is it expensive for you? Obviously, for the solution, obviously the benefits are outweighing the cost. But for you guys, is it necessary to even have that multiple people inspection or crosstalk are you just going above and beyond in that regards?
McClain Warren: Yeah. Everything is built into the pricing we quote. Anything from if we have to deal with traveling for inspections or food, stuff like that, you don't pay for that. When it comes to pricing, what happens is we try to establish what your risk threshold is. There's some people that they want to... Maybe they have a product that they're not too worried about. Maybe they're producing toilet paper, right? They don't think that they're going to need to spend a lot of money making sure they're doing all the product tests, the wear and tear and functionality and all that stuff because it's pretty, self- explanatory, easy to do. Then there's people that have a lower risk threshold. Those people usually have products that are expensive, delicate. They aren't the easiest to make. What happens is we decide what level you're at based on your risk tolerance. That's measured in AQL, which you have different levels for. One is very basic for inspections, two is what we usually recommend for brick and mortar stores, and three is what we recommend for specifically Amazon and Walmart sellers. Just to back up, what those levels really mean is how many products do you want to set aside to sample and what is the percentage required for it to pass inspections? Right? If you're at a level three, you're going to want to test a lot more products than say if you're at a level one. With that being said, it gets more costly because obviously testing instead of 50 units, you're testing 100, that takes more man- days, right? But then you have to look at the other side of it, is if you are going to go into it with a high risk tolerance, it's like gambling. It goes back to the whole gambling crosstalk
Ryan Cramer: I was going to say it's like investing. Right?
McClain Warren: Right. It's like this-
Ryan Cramer: I'm going to invest into inaudible or something if I have a high tolerance and wanting to waste money, or if I think it's going to be the currency of the future, then I'm going to put all my eggs in that basket, in this regards. I guess maybe because you're on the product research side and you've done a lot of research and helped a lot of Amazon sellers, should now quality inspection be a part of your research into development of product? Just if I'm going to even go in this industry in general, should that be a part of the solution from the get go or the research that you're doing?
McClain Warren: I think that would be pretty hard to judge because you don't... Unless you actually know what you're going to sell your product at and work backwards, and then negotiate with inspectors and suppliers for that, I think it'd be really hard to really get an idea of what kind of inspections you'll need, and if that should promote or negate what your product should be. I think in the long run of things, inspections are not your highest cost. I definitely don't think it should be a main factor. Yeah.
Ryan Cramer: I didn't know if that would apply into time managed or how quickly you can get your goods. Is there ever a industry or a product type where, I would hate to say, inspections may be not deemed in regards? Is there something that's super simple that it may just not need an inspection, it may not be worth your while?
McClain Warren: I think at the very least you should always do a visual inspection during pre- shipping. It's standard, it's what everyone does. There's really no reason not to, even for toilet paper.
Ryan Cramer: You don't want that stuff to be dirty in the get go. I can tell you what.
McClain Warren: No, no crosstalk No, you don't. Moving toward the Amazon platform, it becomes really important because Amazon and Walmart only allow a 1% to 2% defect rate on their platforms, right? You can actually get suspended if you have returns that are over... The average is 10%. Yeah. If your returns are around 10%, and this is based on your reviews, how many one two star reviews you have and it's based on how much chargebacks and cards there are. They can suspend your account.
Ryan Cramer: You're talking about 10%? You're talking about even Walmart is 2%. You have to stay way under this typical for bad products, you're talking about?
McClain Warren: Well, think of it this way. Amazon and Walmart, they want to make sure they're putting out the best products for their companies. Right?
Ryan Cramer: Sure. Of course.
McClain Warren: They have guidelines for what they expect the quality to be, which is why we at Movley suggest a level three inspection because it does more samples, and thus, it diminishes the chance of you having any issues down the road. With that being said, I did want to mention that that 10% number I mentioned, it does depend on what category you're in.
Ryan Cramer: Sure.
McClain Warren: For things like clothing, often people return because it just doesn't fit. That's inaudible
Ryan Cramer: It's highly advertised for you to return clothes that don't fit.
McClain Warren: Yeah. Exactly. crosstalk
Ryan Cramer: Fit and size is not a diminishment of quality crosstalk
McClain Warren: Yeah. That has a way higher percentage return rate than say camping supplies. But it's important to note that Amazon does look at what your percentage is for returns, and most of those returns are going to be based on two things. One, that they're damaged or they don't work, or there's a defect, and the other one is that you have it on your listing actually properly described your product. That's another reason to have proper inspections, because then when people are getting shoddy products, they're going to come back and not only want their money back, but they're going to leave a bad review. Studies right now show that, on Amazon, people that are satisfied with their experience with their products, only 1% to 2% people actually leave reviews. Now, people that are dissatisfied with their products, that number jumps to 66%. As we all know, reviews are incredibly... They're almost a make or break it for your company, right?
Ryan Cramer: It's a decision. Yeah. To even buy a product or to even say choose between one or another, that's a lot of the decision making is between written content that lives almost with you forever. If it's legitimate, it will live with your product listing forever, or it can determine your money going to your competitor. You're right. It's all based upon reviews and even the news coming out with... It is based upon reviews. We're talking about reviews, we're talking about just people leaving for products. Is there just an opportunity with just a bad one- off product and that's it and you just have to live with it? At what point do you need to get really worried like, " Oh my gosh, my product batch is just completely shoddy?" Is there a juncture in which you'll get to notify by that?
McClain Warren: There's three different kinds of levels of defects. There's critical, which means... If it's a critical defect, 0% are going out. If it is a major problem, meaning that it won't cause harm to someone, but it's not going to function the way it is, then that percentage goes down to, believe it's 2. 5%. Then you have minor defects, which allows a little bit more leniency. A minor defect might be that it's not quite the color you wanted or there's scratches on the boxes or something like that. Something that is way less likely for a customer to return. Again, this all goes back to your risk threshold. Are you willing to make that gamble and let those supplies go out in hopes that they don't leave better views or there's no returns? Or do you just put those aside and send them back? That's up to you.
Ryan Cramer: I see quality inspections working hand in hand in terms of customer service, and what I mean by that is there are ways that you can prevent customers even leaving better views in the case something slips through the cracks, or if they need a replacement, you can get that to them effectively, whether you have a 3PL or you just need us send out a new shipment. This is an offhand. I order something on Prime Day, right? There is lots of different competitions, and you see a service agreement inside, and you talk about after sales contact and whatnot. Is there ways that with your quality control that you at Movley are looking at, not just working with just the factories, but then after goods hit the water, they go in the warehousing? If something happens to be wrong with it, you're preventing that customer to either go and leave a bad review, but instead you're trying to internally fix that problem? Is there ways that you guys are working on that?
McClain Warren: That's not currently in the works.
Ryan Cramer: Not currently.
McClain Warren: At that point, really at the seller's discretion to handle that. It's not a bad business plan. If you want to go into that with us, Ryan, if you want to be recruited over to Movley, maybe we can do something.
Ryan Cramer: Well, I was going to say I think this makes sense in warehouse. If you're a partner in this industry, I think it makes sense to work hand in hand because, look, customer service is always going to be deemed by, hey, the customer's always right, let's get you a better product if they truly just want it, and if it was just a one- off, it's a one- off. But how I see it is you're always hearing these things of if I'm buying goods from a supplier manufacturer, I buy definition of Amazon and the manufacturer. I am buying goods, and therefore, I am taking on responsibility of the quality of that product. I can offer things like warranties, I can offer things like get a free replacement or service replacement, or offer additional incentives for people to feel comfortable that I'm buying from a third party seller. Do any of those ring true in terms of quality? In your mind, what would be the most important thing to offer if I'm a seller on Amazon apart from obviously doing quality inspections? Do any of those ring more true than the other or more important than the other?
McClain Warren: Yeah. I think really... With Amazon, even with this new rollout of being able to respond to bad reviews, you're still very much limited in what you can say. It's not like... Here's the thing. It's like if you own a brick and mortar store, and this is why we say for brick and mortar, you only have to be at a level two for inspections, because at least with brick and mortar, if someone doesn't like your product or they found defect with it, they come in, they actually talk to the owner or the sales assistant or whatever, and a transaction can be made where both people are happy, they understand each other, it's easily replaced, and that person is very unlikely to leave a review. Where are they going to leave a review? Maybe on their web page or Yelp. crosstalk
Ryan Cramer: They're going to take a full page out in their local newspaper.
McClain Warren: Right. But with online, everyone is looking at reviews. That's the first thing people look at. That's why we think that, if you're selling on Amazon or Walmart or wherever, you really need to focus on those reviews. Make sure that that customer that's not happy doesn't have a chance to just jump on your page and start ripping apart your product.
Ryan Cramer: Yeah. Sorry about that. My dog was barking because someone was delivering a package from you guest.
McClain Warren: Was it an Amazon broker?
Ryan Cramer: It was. I think, but this person actually might be waiting for some sort of signature. I'm not going to go with that, but that's a part being live. Right? You get to interact with... I talked about before the show, right? You said if your child walks across naked, we're going to have to sensor something. That's not the case right here. It's about barking dogs and people delivering packages. But crosstalk Exactly. You never know with live. But that being said, McClain, I'm going to shift over just a little bit, because you've also been not just in the Amazon space or just inspection, but you have your own copywriting business, which is fantastic and that's growing. You're copywriting for other service providers out there as well. What's been the one thing that you've learned this past in 2021 that's been most exciting for you as a service provider, but also as an entrepreneur yourself?
McClain Warren: Before I answer that, I just want to make one other point about inspections crosstalk
Ryan Cramer: Oh yes, please do.
McClain Warren: Yeah. Yeah. Sorry. Then I'll probably make you remind me what the question is.
Ryan Cramer: It happens.
McClain Warren: crosstalk We need to get this out there because with regards of talking about how bad inspections can affect this whole chain of events with regards to the success of your company, one other aspect of that a lot of people don't talk about is the valuation of your company when you go to sell it. Right now, as we're hammered by all these aggregators and buyers and stuff, that's the hot topic right now, a lot of people are thinking about selling their business. It's important to understand that most companies, the three main pillars they look at are your assets, they look at your profits and they look at your market, right? If you don't think that returns and loss of money because of defective products is going to not affect the valuation of your company, you're wrong. It will. If you want to look in the long term of things, that's another reason that you really should be focusing on getting the right inspection company.
Ryan Cramer: Well, you applied to what I always love talking about too, is making clean books for your people if you want to exit a business because of an accountant or an aggregator in this space, they're going to look at it and see, hey, what's the feedback? Your supplier and manufacturer you're actually working with, where they can actually increase operational efficiencies is where they're going to ebb and flow. But you as a seller, if you want to make more money, the best case scenario is obviously working with a quality factory supplier, obviously depending on what you're selling. Making sure they goods are constantly being reviewed well, and that can come in the forms of make sure you have quality products, making sure you're sourcing correctly, and you're just applying margins to your bottom line, right? We talked about the scenario, worst case scenario, if I'm not looking at my products and have defective batch go out, for example, and have 1, 000 units go to FBA warehouse, and there's potentially 1, 000 reviews out there that hit my inbox and say... You said the fact 60% to 70% more likely for them to leave a review. If that's the case, that is 600 to 700 reviews that could be negative towards your product listing. That's not going to yield well on your exit.
McClain Warren: No.
Ryan Cramer: Yeah. That's a good point to bring up.
McClain Warren: Which really circles back to when you asked about what are the costs. Personally, I feel like that's one of those areas that you should not skip out on pricing or looking for the best deal, because in the end, sheepening the inspection process is going to cost you so much more in the future. It'll cost you so much.
Ryan Cramer: crosstalk but you get what you paid inaudible
McClain Warren: Exactly.
Ryan Cramer: Great point. I can't imagine, again, $ 300 for an entire inspection if you're ordering 1, 000 units, 10,000 units. I can't imagine that being an investment that people look at and scoff at, and if they do, I'm going to look at you right now and say let's prevent the bad happening because you know karma will come back to you and say, " The one time you don't do it, it will happen," and it will affect your business. I think everyone wants to be protected it at the end of the day. Again, we talk about insurance. Why do we buy insurance for our home, for our car or anything like that? It's because crosstalk if the worst case scenario happens and someone else hits you or the factory doesn't make your quality products the way you want it to be, you need to be protected, and this is the sure fire way to make sure that you're going to be safe in that regards. But going back to the original question, I guess would be what's the one thing you've learned this year that's actually surprised you, or that's stuck with you in 2021 leading into the summer?
McClain Warren: This actually has nothing to do with inspections, but what I-
Ryan Cramer: It's okay.
McClain Warren: What I find interesting, especially like I said having my side business, is that with there being so much focus on videos and images in content marketing, in general, there's still such a high demand for copywriting. It shocks me how many people still need web content and blogs. It doesn't shock me, but it's just... Let's say that copywriting is definitely not a lost art, and that's been really exciting for me. It's been fun writing stuff for Movley as well. Especially now that I've transitioned into inspection and supply chain, I've learned a ton. A ton, and I still have a lot more to learn.
Ryan Cramer: Right. We're constantly always students of the industry, right? You always have to constantly learn what's being new and developed as we know in the space. At the drop of a hat, anything can change. Inventory levels, an inspector can have a bad day. We can talk about 100 million different ways that something goes off or goes a different way than expected. You know that for a fact that we have to learn through the hard way of how to overcome those boundaries. The other thing I know that you said, you were traveling before we hopped on the show. You said you're traveling a little bit more. Not what's your favorite conference or event that you go to. What has provided the most important value that you've walked away from that you've ever attended at an in- person event?
McClain Warren: I've said this a few times. Obviously you learn a lot because you're surrounded by people in various areas of the industry, and if you're paying attention, you can learn stuff. But to me, what has always been heartwarming and encouraging is this seems to be one of the only businesses or platforms in which everyone is in the same field, a lot of our companies are competing against each other, but everyone is so supportive of one another. It's just like this awesome group of people that wants each other to succeed, we want our clients to succeed. It's really been inspiring to me, and I just appreciate being part of the community.
Ryan Cramer: What are you excited about the rest of this year for either yourself, Movley? Because you've had some big life changes. You've moved recently. There's so many different crazy things going on. What are you excited about for the remainder of this year?
McClain Warren: Staying alive.
Ryan Cramer: Wait, say that one more time. Just staying alive?
McClain Warren: Staying alive. Just surviving all this.
Ryan Cramer: I heard five different responses and I was like, " Do I ask her again if I have her to clarify?" But staying alive. All right. Keeping yourself alive. That's very true. There's-
McClain Warren: It's an important rule of thumb. I highly recommend it.
Ryan Cramer: That's good.
McClain Warren: crosstalk in seriousness, I'm anticipating the growth of Movley. I really believe in the company. My own company, it's growing fast too. It's just a wild ride and I'm just trying to enjoy every minute of it.
Ryan Cramer: What's the most exciting thing about being a mom right now for you? I'll say exciting. Not the most headache- inducing or-
McClain Warren: Yeah. Well, right this second, he's like-
Ryan Cramer: Yeah, I was-
McClain Warren: ...crosstalk over there, I'm like, " Stop talking." No, he's great. He's five, which is just an awesome age. He's just becoming his own person and having his own personality. He's actually really into writing like his mom, which excites me. crosstalk
Ryan Cramer: It's amazing.
McClain Warren: It's been cool. Yeah.
Ryan Cramer: Five is a great age. Six and a half is when they start to get personality and fight back with you. Not fight back, I won't say. They start to... If you say something, they're going to challenge what you say.
McClain Warren: Oh, yeah.
Ryan Cramer: crosstalk really, is this what you actually meant to say, or is this what you meant? You know that you're crosstalk a lie?
McClain Warren: Yeah, for sure. He's already doing that.
Ryan Cramer: Exactly.
McClain Warren: I call him Donald Trump, art of the deal, because everything to him is a negotiation. It's like everything's a negotiation. I'm like, " No, no, no, I'm your mom. You don't get to negotiate with me. This isn't that kind of transaction here."
Ryan Cramer: Exactly. Yeah, exactly. It's a one- way street. It's not a if you accept my terms and accept my call crosstalk or anything like that.
McClain Warren: You'll be a great businessman someday though. I will say that.
Ryan Cramer: Great. Lawyer's great business people. We're grooming our children to be just the next leaders of arguing, I should say, or negotiation. Yeah. What's not a negotiation, obviously, is quality inspections, and obviously inspections in general. Obviously, check out Movley. Where can we find out more about them or connected to you or the team as well, McClain?
McClain Warren: Yeah. If anyone's going to Prosper, I actually am running a booth at the Empowering Women Conference, which is right after Prosper. You can check out our website, www. movley. com. We have Facebook page, Facebook group. Pretty easy.
Ryan Cramer: Exactly. We'll follow on them. We'll make sure we at least link out to them on Facebook and you as well, connect with you because you always have great content that you're pumping out. crosstalk about inspections that I ever would've learned in my entire life has come from you and Sajag. Thanks for that. I blame both of you.
McClain Warren: inaudible
Ryan Cramer: But it's some part of the business that, again, I think you both and I would both agree, it gets overlooked a little bit more than it should, but it's important in the world of standing out with your competition, always making sure you can protect your business in various ways and this is one of those.
McClain Warren: Exactly.
Ryan Cramer: Thank you so much for hopping on Crossover Commerce today. Friend of the show now. Go check them out at Empowering Women's Conference, as well as Prosper as well. You'll be there. Make sure they go up and wave and say hi to you inaudible Thanks so much.
McClain Warren: I need a drink.
Ryan Cramer: Exactly. Well, there you go. The first ask of the show of... Buy McClain a drink if you see here in person because events are starting to pick up. Make sure that if you are traveling, go and say hi to anyone of the friends of the show. Thanks so much for hopping on Crossover Commerce today.
McClain Warren: Thanks for having me. It's been fun.
Ryan Cramer: Of course. Again, everyone, thank you so much for hopping on again another great episode, 123, or easy as one, two, three. Inspections, that is making sure that you are going to protect one of your greatest assets, which is yourself, your business, your other entities that you have. It's always important to make sure that you know all the aspects in place. You want to to make sure that this is one of those few that get glazed over. Go ahead and check out Movley, one of our partners here at PingPong. Check them out at movley. com. Let them know that Crossover Commerce sent you or PingPong sent you as well. Before we hop off again, I want to thank our presenting sponsor, PingPong. Again, Crossover Commerce wouldn't be a show without them, working with over a million customers worldwide, $ 150 million a day and$ 90 billion in cross- border payments to date, plus now of course, have been transacted through PingPong. Helping people save money in time when you're paying your manufacturers, your VAs or distributors overseas. Making sure that you save money when you do so in local currency. Go ahead and check out PingPong today. That link is going to be in the show notes below as well as everything about Movley, how to connect with them and their team. But make sure you check them out of course. Sign up for an account today. It's free to do, why wouldn't you do that? But again, Crossover Commerce is presented by PingPong. Thank you so much. This week is action packed. We got more people on the way. Tomorrow we're going to be having episode 124. We're going to be talking about sourcing e- commerce businesses for investors, talking more about boutique investors in private equity money with David Carroll. Then of course on Thursday, we have one of the favorites of the show. I have had Anthony Cofrancesco, PickFu, back on, finding the answers you didn't know you needed. What does that mean? I don't know, but we're going to find out on Thursday when he hop on the show. Again, big stuff from PickFu and their team over there. We'll have him on. He's hopping on from Brazil. Excited to have him back on Crossover Commerce. Since season one and episode 100, he's been on, but we'll have him back in on Thursday. Make sure you tune in, subscribe to our social channels and subscribe on all of our favorite podcasts destinations, wherever that might be, and you check us out there as well. I'm Ryan Cramer, host of Crossover Commerce. Take care, everyone.
Ryan Cramer of Crossover Commerce talks with McClain Warren of Movley about how bad inspections will make your whole house of cards fall.
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