Meeting Title: Brainforge x Reju Introductory Call Date: 2026-01-23 Meeting participants: Robert Tseng, Eric Joo
WEBVTT
1 00:01:24.690 ⇒ 00:01:25.860 Robert Tseng: Hey, Eric!
2 00:01:27.090 ⇒ 00:01:28.310 Eric Joo: Hey, Robert.
3 00:01:30.520 ⇒ 00:01:31.549 Robert Tseng: Good to meet you.
4 00:01:32.250 ⇒ 00:01:33.589 Eric Joo: Nice to meet you as well.
5 00:01:34.240 ⇒ 00:01:36.080 Robert Tseng: I saw that you’re based in LA.
6 00:01:36.430 ⇒ 00:01:37.240 Eric Joo: Yes.
7 00:01:37.240 ⇒ 00:01:42.279 Robert Tseng: Oh, okay, great. I mean, I… obviously, we were at the conference in New York, but I’m actually in LA for…
8 00:01:42.280 ⇒ 00:01:42.810 Eric Joo: Overall.
9 00:01:42.810 ⇒ 00:01:49.880 Robert Tseng: I got here yesterday, I have some team out here, so we’ve been doing, some just co-working, and yeah, so…
10 00:01:50.310 ⇒ 00:01:51.870 Eric Joo: Okay, where in LA are you?
11 00:01:51.870 ⇒ 00:01:59.230 Robert Tseng: I’m currently in Culver City. I saw maybe you’re more on the Pasadena area, possibly?
12 00:01:59.460 ⇒ 00:02:00.350 Eric Joo: Yep.
13 00:02:00.350 ⇒ 00:02:02.760 Robert Tseng: Okay, nice.
14 00:02:02.830 ⇒ 00:02:26.070 Robert Tseng: I guess, like, how… I was clicking around, looking at Reju, and, trying to understand, kind of, your role in the whole operation. Seems like you guys are opening up a facility in around Rochester, New York. My understanding, it’s kind of like polyester recycling, or kind of like turning into new textiles, like some upcycling type of, business. Is that kind of… did I get that right?
15 00:02:26.300 ⇒ 00:02:27.279 Eric Joo: That’s right, yep.
16 00:02:27.570 ⇒ 00:02:34.380 Robert Tseng: Cool. And then your, your role, kind of something around North American kind of operations, what does, what does that mean?
17 00:02:35.450 ⇒ 00:02:45.810 Eric Joo: So feedstock, so setting up the infrastructure and, the operations around, feedstock supply, so, collecting, basically,
18 00:02:46.060 ⇒ 00:02:48.530 Eric Joo: End-of-life textiles for recycling.
19 00:02:48.880 ⇒ 00:02:57.470 Robert Tseng: Great. So I guess, is that more of, like, a B2B kind of situation, where, like, I don’t know, like, I… some… some CERB certain retailers? Yeah. Okay, great.
20 00:02:57.470 ⇒ 00:02:57.970 Eric Joo: Yep.
21 00:02:58.520 ⇒ 00:03:20.020 Robert Tseng: Nice. And, like, I mean, I’m a big fan of, like, Patagonia and brands like that, where they seem to own their… that whole kind of upcycling operation internally, so kind of curious, like, why, like, a brand would work… maybe all brands have that, so maybe some would prefer to just work with, like, like Riju in order to do that. Kind of how does that… how do you fit into that market?
22 00:03:21.390 ⇒ 00:03:31.249 Eric Joo: So, you know, if you take a look at what brands and retailers actually control in terms of, post… the post-retail environment.
23 00:03:31.410 ⇒ 00:03:36.649 Eric Joo: Generally, that’ll be mostly returns, some take-back programs.
24 00:03:36.650 ⇒ 00:03:37.120 Robert Tseng: Yeah.
25 00:03:37.120 ⇒ 00:03:40.840 Eric Joo: But that’s, you know, even… even if you’re… have a very high…
26 00:03:41.200 ⇒ 00:03:46.399 Eric Joo: Return rate, and high return rate is generally in, like, the 20% range.
27 00:03:47.080 ⇒ 00:03:52.549 Eric Joo: Or 30. I think the highest I’ve ever heard of is 40%, which is horrible, but…
28 00:03:53.780 ⇒ 00:03:57.469 Eric Joo: 20% is pretty high, 10% is usually the goal.
29 00:03:57.470 ⇒ 00:03:58.010 Robert Tseng: Yeah.
30 00:03:58.140 ⇒ 00:04:05.500 Eric Joo: and so, like, a lot of that material is not, you know, it’s not necessarily unusable, yep.
31 00:04:05.810 ⇒ 00:04:12.639 Eric Joo: So, there’s gonna be some resale involved, and some… maybe some repair, and all that kind of stuff, but
32 00:04:13.170 ⇒ 00:04:15.699 Eric Joo: If you take a look at the overall
33 00:04:16.079 ⇒ 00:04:22.689 Eric Joo: Quantity of material, what brands and retailers actually have control of is pretty small, relatively.
34 00:04:23.830 ⇒ 00:04:32.719 Eric Joo: So, yeah, we’re actually more interested in working with partners that control end-of-life textiles, like Goodwill.
35 00:04:33.060 ⇒ 00:04:33.490 Robert Tseng: I see.
36 00:04:33.490 ⇒ 00:04:40.090 Eric Joo: But brands and retailers are interested in talking to us more from a storytelling standpoint.
37 00:04:40.280 ⇒ 00:04:45.420 Eric Joo: Right. Not because it, like, it’s meaningful in terms of, you know, actually solving the problem.
38 00:04:45.580 ⇒ 00:04:46.240 Robert Tseng: Yeah.
39 00:04:46.240 ⇒ 00:04:46.940 Eric Joo: Yep.
40 00:04:47.150 ⇒ 00:04:53.060 Robert Tseng: Alright, yeah, I mean, that checks out. I used to run data for Ruggable, they’re, like, a company based in Gardena, I guess.
41 00:04:53.060 ⇒ 00:04:53.630 Eric Joo: For who?
42 00:04:54.120 ⇒ 00:04:55.120 Robert Tseng: Ruggable?
43 00:04:55.440 ⇒ 00:05:03.419 Robert Tseng: Oh, I’m not familiar with them. Okay, yeah, they’re like a D2C, like, washable rugs company based in LA. Okay.
44 00:05:03.520 ⇒ 00:05:18.019 Robert Tseng: Yeah, I think return rates were about somewhere between 10-15%, so I think that kind of checks out. Yeah, I’m curious, like, what were your takeaways from NRF? Kind of what brought you out there? Like, what were you trying to get done there?
45 00:05:18.020 ⇒ 00:05:20.830 Eric Joo: I mean, we’re… we’re not, as I said, we’re not…
46 00:05:20.990 ⇒ 00:05:29.020 Eric Joo: heavily involved in the, kind of, reverse logistics from a retail standpoint. Yeah. So just trying to see what’s… what is, happening in that space.
47 00:05:29.020 ⇒ 00:05:29.400 Robert Tseng: Yeah.
48 00:05:29.400 ⇒ 00:05:33.100 Eric Joo: Made some, you know, interesting connections.
49 00:05:33.500 ⇒ 00:05:42.059 Eric Joo: But, you know, it’s not something that’s really directly related to us, so we’ll have to evaluate if we’re gonna go again next year.
50 00:05:42.060 ⇒ 00:05:42.620 Robert Tseng: Okay.
51 00:05:42.930 ⇒ 00:05:44.420 Eric Joo: I, I, I feel like…
52 00:05:45.420 ⇒ 00:05:54.629 Eric Joo: the ecosystem… I mean, definitely a lot of people wanted to talk to us, but the ecosystem hasn’t, started looking at the…
53 00:05:54.940 ⇒ 00:06:03.669 Eric Joo: the overall part… the overall, like, part that involves, the ecosystem around what’s being created through EPRs and the regulatory requirements, so…
54 00:06:03.670 ⇒ 00:06:04.390 Robert Tseng: Sure.
55 00:06:04.390 ⇒ 00:06:08.050 Eric Joo: I think a lot of people are behind on that thinking.
56 00:06:08.260 ⇒ 00:06:08.940 Robert Tseng: Okay.
57 00:06:08.940 ⇒ 00:06:31.459 Robert Tseng: Yeah, I mean, from… I was walking the floor and talking to different vendors, like, obviously all the… a lot of the focus is still on point of sale and kind of just early, early life cycle of the transactions, so… Yeah. Yeah, I mean, I… I run… I run Brainforge AI, we’re, like, a data and AI consultancy, and I mean, half our business is CBG brand, so it’s always good for me to go understand, like.
58 00:06:31.460 ⇒ 00:06:33.289 Robert Tseng: I mean, my angle is always, like.
59 00:06:33.290 ⇒ 00:06:57.610 Robert Tseng: unified commerce, so, like, omnichannel. How do you really stitch together a customer journey across, you know, digital offline channels, trying to, like, evaluate tech. We had a few partners, that kind of… that were, that were there that, you know, we kind of supported. I jumped in on a couple of these, these talks, and so, yeah, that was kind of my, my reason for being there, and it’s great. Got to meet, got to meet people. It’s always…
60 00:06:57.610 ⇒ 00:07:02.529 Robert Tseng: Nice to go to a conference without having to travel, so, it’s also just right down the street from me.
61 00:07:02.530 ⇒ 00:07:16.250 Robert Tseng: But yeah, so that’s… that’s kind of… I saw that, you know, you went, and I’ve been doing some follow-ups with different people that I’ve either didn’t get a chance to meet, or just had great conversations when I was at the conference, and so that’s why I kind of scheduled this call with you.
62 00:07:16.840 ⇒ 00:07:27.829 Eric Joo: I mean, if you’re… if you’re looking for, like, kind of new business segments within the retail space, I recommend looking into all of the data reporting requirements from EPRs.
63 00:07:28.700 ⇒ 00:07:29.040 Robert Tseng: Yeah.
64 00:07:29.040 ⇒ 00:07:29.830 Eric Joo: Specifically…
65 00:07:29.830 ⇒ 00:07:38.239 Robert Tseng: Learn more about that. What is, like, I guess, like, kind of what… what would you… what would you say are some of the data needs, based on these requirements?
66 00:07:39.020 ⇒ 00:07:56.990 Eric Joo: So, with, specifically in regards to SP707, it hasn’t been, totally defined yet. They’re still, they’re looking for the producer responsibility organization, the… the body that will be running, the program for California.
67 00:07:56.990 ⇒ 00:07:57.380 Robert Tseng: Sure.
68 00:07:57.380 ⇒ 00:08:06.189 Eric Joo: But all of the sellers of textiles and apparel in the state of California will be required to report
69 00:08:06.520 ⇒ 00:08:19.419 Eric Joo: You know, their sales within the state, and then also give information in regards to different channels and, you know, material makeups and, you know, all that kind of stuff.
70 00:08:19.420 ⇒ 00:08:20.120 Robert Tseng: Okay.
71 00:08:20.120 ⇒ 00:08:33.919 Eric Joo: So it’ll be quite complex, and if you, you know, I’m sure you’ve seen with different brands and retailers, the larger they grow, the more complex their data management needs become.
72 00:08:33.929 ⇒ 00:08:34.379 Robert Tseng: Yep.
73 00:08:34.380 ⇒ 00:08:42.369 Eric Joo: And a lot of them have done, kind of, Frankensteined operations, where they’ve bolted on different modules that don’t necessarily communicate with each other.
74 00:08:42.370 ⇒ 00:08:42.860 Robert Tseng: Okay.
75 00:08:42.860 ⇒ 00:08:50.679 Eric Joo: And, don’t know what’s in their supply chain, you know, sometimes even running sales reports are pretty tough.
76 00:08:51.340 ⇒ 00:08:56.990 Eric Joo: You know, and then knowing what’s in your material makeup, you know, from a…
77 00:08:57.120 ⇒ 00:09:01.369 Eric Joo: You know, from an end-to-end standpoint, is challenging as well.
78 00:09:01.540 ⇒ 00:09:02.160 Robert Tseng: Yeah.
79 00:09:02.340 ⇒ 00:09:10.010 Eric Joo: So, you know, the reporting requirements, it’s gonna be, I think, a very… difficult bar.
80 00:09:10.340 ⇒ 00:09:15.030 Eric Joo: To… to… a difficult hurdle for people to… to overcome.
81 00:09:15.810 ⇒ 00:09:27.970 Eric Joo: And it’s something that a lot of people are looking into and trying to see what exactly they’ll need to report, but if you have, you know, data collection, and then, you know.
82 00:09:29.100 ⇒ 00:09:33.399 Eric Joo: A system that allows for easy data warehousing and organization.
83 00:09:34.120 ⇒ 00:09:34.600 Robert Tseng: Yeah.
84 00:09:34.600 ⇒ 00:09:39.170 Eric Joo: You know, that’s probably something that a lot of these guys will be interested in.
85 00:09:39.530 ⇒ 00:09:41.419 Eric Joo: Okay. Yep.
86 00:09:42.620 ⇒ 00:10:00.339 Robert Tseng: So, what comes to mind is… so we’re… first one, we’re a services company, and so, yeah, we don’t… we don’t need… we’re not really constrained by, like, having to build the product. Like, I think we’re… you can think of us like a general systems integrator. We have some preferred partnerships, and… but generally, yeah, I think you’re kind of on the dot in terms of, like.
87 00:10:00.340 ⇒ 00:10:06.659 Robert Tseng: Our number one thing that we do when we go to organizations is we help them land their data in a single place, get it all kind of
88 00:10:06.800 ⇒ 00:10:18.959 Robert Tseng: I mean, the trend now is, like, to get it AI-ready, which I think is a big value add for us, because, you know, now there’s all these, like, text-to-SQL, text-to-whatever kind of visuals that, like, kind of tools that have been built
89 00:10:18.960 ⇒ 00:10:43.889 Robert Tseng: over the past, you know, year or two years, like, these basically GPT wrapper kind of tools, but, I think what people are now realizing, you know, three years into the hype, is that you can’t just chuck it into ChatGPT, like, you know, you actually need your data to kind of be cleanly stored in a warehouse, and it needs to have some structure, some sort of knowledge tree management, so that LLM can be, can really go through it efficiently.
90 00:10:43.890 ⇒ 00:10:55.550 Robert Tseng: So, it just turned out that our kind of expertise as data engineers, really kind of just ended up becoming, you know, a good, a good angle to have, have in, to drive a wedge in this space.
91 00:10:55.550 ⇒ 00:11:05.159 Robert Tseng: And so what’s interesting about your… what you brought up is, yeah, it just seems like, you know, you have some industry… you obviously have some knowledge on, like, what…
92 00:11:05.160 ⇒ 00:11:15.700 Robert Tseng: what requirements people need to hit. I don’t know if Reju does these types of, like… it sounds like almost an audit, where, like, you need to basically educate organizations on what they need to do.
93 00:11:15.700 ⇒ 00:11:17.790 Robert Tseng: In order to, like, meet this requirement.
94 00:11:17.960 ⇒ 00:11:42.919 Robert Tseng: but they don’t necessarily know how they’ll be able to, like, kind of cobble all the data together in order to get… in order to figure that out. That’d be… that’s an interesting kind of angle, where, like, I don’t know if that helps you on business development, or, like, kind of how you came to… to… like, kind of where your part is in, like, helping organizations through that… through that challenge. But, yeah, I think, like, you know, we’ve… we’ve done similar things.
95 00:11:42.920 ⇒ 00:11:55.460 Robert Tseng: for, like, PE firms that, like, want to buy up, like, CPG brands. They want to do an audit of, like, some of the digital marketing metrics that they see. So, we’ve pretty much built, like, a tool for them that basically helps them, like.
96 00:11:55.950 ⇒ 00:12:20.590 Robert Tseng: land all of the… like, when they’re doing due diligence on… on a brand, like, whether that they’re… to basically assess their marketing performance translates that into EBITDA so that they can actually understand it from, like, a finance perspective. And, like, you know, that’s… that’s something that we built for them and is a way that we’ve been able to partner with an organization like that. So, I’m curious if there’s, like, some angle like that where
97 00:12:20.590 ⇒ 00:12:25.110 Robert Tseng: you know, with Reggie’s expertise, you know, if you just needed a way to basically, like.
98 00:12:25.300 ⇒ 00:12:34.199 Robert Tseng: It helps you in your go-to-market strategy, or, like, helping org… as you’re educating org… educating organizations that maybe we’d be able to kind of partner in that way?
99 00:12:34.930 ⇒ 00:12:43.689 Eric Joo: No, for us, I think, you know, we’re much more B2B, so our data points in the go-to-market strategy are…
100 00:12:44.080 ⇒ 00:12:51.270 Eric Joo: I guess, simpler to figure out than when you’re doing, you know, A consumer-facing model.
101 00:12:52.730 ⇒ 00:12:53.540 Robert Tseng: Yeah.
102 00:12:53.540 ⇒ 00:13:01.719 Eric Joo: So, you know, just… kind of my… where I’m thinking more is, product tracking.
103 00:13:02.030 ⇒ 00:13:07.829 Eric Joo: So, I don’t know if you’ve looked into some of the digital passport requirements?
104 00:13:08.080 ⇒ 00:13:23.680 Eric Joo: But every… every product out there that’s sold in the European Union, and this is also coming on board for California, needs to have product identification, where it came from, what the material is, you know, different attributes.
105 00:13:24.180 ⇒ 00:13:32.469 Eric Joo: So that digital product passport needs to be tracked, throughout the system, all the way through to end of life.
106 00:13:34.010 ⇒ 00:13:40.719 Eric Joo: And, you know, that’s a pretty massive undertaking, and you’re talking about, working across systems, working across companies.
107 00:13:40.930 ⇒ 00:13:47.159 Eric Joo: Oftentimes. And, you know, I think it’s, it’s kind of, you know, what you’re talking about, having
108 00:13:47.260 ⇒ 00:13:51.440 Eric Joo: Different, data generation platforms.
109 00:13:52.250 ⇒ 00:14:08.200 Eric Joo: you know, it’s difficult enough when you have it within just one company, but when you’re talking about different companies with different systems, with different processes, procedures, and all that kind of stuff, it becomes even more challenging, and I think that that’s where, there… today, at least, there is a gap.
110 00:14:08.910 ⇒ 00:14:11.600 Robert Tseng: Yeah. Is anyone building something like that?
111 00:14:12.010 ⇒ 00:14:14.430 Eric Joo: Yeah, there are companies, I think.
112 00:14:14.800 ⇒ 00:14:20.679 Eric Joo: I wanna say there’s, like, I wanna say Cloud Force, or Cloud Forge, or, you know, all these guys have different…
113 00:14:20.680 ⇒ 00:14:21.370 Robert Tseng: Yeah, they also…
114 00:14:21.370 ⇒ 00:14:25.579 Eric Joo: They’re hard to remember, because they’re all similar, but… Yeah. Yeah.
115 00:14:26.120 ⇒ 00:14:26.800 Robert Tseng: Okay.
116 00:14:27.310 ⇒ 00:14:39.370 Robert Tseng: Yeah, I mean… I mean, our perspective is that, like, I think data integration is becoming more of a commodity, like, you know, it’s becoming easier and easier to stitch systems together, so…
117 00:14:39.370 ⇒ 00:14:54.750 Robert Tseng: Yeah, I mean, like, we’re not gonna raise a bunch of VC funding to go and build 300 native connectors, like, there’s just no point. We’d rather just go and go out to the market, and we use that for our clients. And so, even that solution I described for, like, a PE firm, we… you know, it’s…
118 00:14:54.860 ⇒ 00:15:10.270 Robert Tseng: Yeah, I mean, there are, like, 50-plus, like, different platforms that need to connect to. It’s pretty easy to spin all that up, so it’s more of just kind of an understanding of what are the core systems that you need to really get to talk to one another, and then, like.
119 00:15:10.270 ⇒ 00:15:34.900 Robert Tseng: yeah, I guess, what does the… what does, like, that digital passport, I guess, look like? To me, that’s still just kind of like a… like, it’s… I mean, it’s… it sounds like it’s some, like, diligence report that, like, you need to generate and be able to kind of track no matter what that product… whatever organization that product sits in, so it’s almost like a un… it’s like a universal template that you could create. I mean, I’m not trying to oversimplify it, but, like, I… I think from
120 00:15:34.970 ⇒ 00:15:42.690 Robert Tseng: From, like, an engineering perspective, like, it seems pretty straightforward that it’s just, like, a similar thing that we’ve done, just in a different, different space.
121 00:15:43.230 ⇒ 00:16:01.120 Eric Joo: Yeah, I think that that’s, you know, from an engineering perspective, it’s probably pretty straightforward and nothing that you haven’t done before, but the complexity lies within that, you know, who are the stakeholders, and can you get all the stakeholders to cooperate? That’s the main challenge. I mean, it’s the…
122 00:16:01.810 ⇒ 00:16:20.189 Eric Joo: the human aspect of it. Sure. When you’re just talking about data, it’s pretty straightforward. I mean, if you have messy data, you can try to clean it up and all that kind of stuff, but, you know, when you’ve got people not inputting data, or not doing it correctly, and not wanting to do it, you know, then… then things fall apart.
123 00:16:20.330 ⇒ 00:16:21.770 Robert Tseng: Sure. Okay.
124 00:16:22.300 ⇒ 00:16:31.339 Robert Tseng: And I guess, like, to kind of come back to you and, like, Reggie’s rule of this, so it kind of seems like you’re maybe, like, a…
125 00:16:34.210 ⇒ 00:16:53.880 Robert Tseng: I guess… I’m still, like, a little bit unclear on, like, for… would that, like, was that helpful for your, like… I mean, you’re saying that, like, industry-wide, people need to… companies need to adopt this, but, like, what, like, what is… I guess, what… what are… what are you guys doing, like, to… to do that?
126 00:16:53.880 ⇒ 00:17:10.860 Eric Joo: We’re honestly… we’re still pre-operational. I mean, we’re, like, we’re still startup mode, we have pilot operations going, we’re still trying to figure out the structure of everything, so it’s a little bit early for us to say, like, yes, we need a data management system. Like, we don’t even know what data points
127 00:17:11.220 ⇒ 00:17:16.630 Eric Joo: We… I mean, we have an idea, but we have… we don’t have the specificity around our data points yet.
128 00:17:16.690 ⇒ 00:17:32.949 Eric Joo: So I’d say it’s a little bit too early, but I do know, you know, since, you know, you pinged me on the app and all that kind of stuff, that I thought, you know, hey, why not talk, figure out what’s going on in, you know, other industries, but just my view is that
129 00:17:33.460 ⇒ 00:17:36.930 Eric Joo: You have a lot of disparate actors that need to be connected.
130 00:17:36.930 ⇒ 00:17:37.460 Robert Tseng: Yeah.
131 00:17:37.460 ⇒ 00:17:46.849 Eric Joo: Brands… at the end of the day, brands and retailers will be driving it, especially within… in regards to EPR, because, they’re the ones that are going to be paying into the system.
132 00:17:46.850 ⇒ 00:17:47.400 Robert Tseng: Yep.
133 00:17:48.000 ⇒ 00:17:50.920 Eric Joo: So, the, the…
134 00:17:52.730 ⇒ 00:18:02.539 Eric Joo: The actor that will be able to offer, you know, the easiest to use, not necessarily cheapest, but the easiest to use, systems integration.
135 00:18:02.720 ⇒ 00:18:17.719 Eric Joo: like, with less pain points are… is ultimately going to be one of the most important actors within this space. And, you know, regulatory compliance, it’s not just for, you know, EPRs like this, but there’s a lot of regulatory requirements with, you know.
136 00:18:17.720 ⇒ 00:18:27.580 Eric Joo: Restricted substance lists, for different, chemicals and inputs, and making sure that you have that easily accessible and reportable and, you know,
137 00:18:27.580 ⇒ 00:18:36.609 Eric Joo: There’s a lot of requirements, and then, you know, just also within supply chain and metrics, you know, there’s a lot of black holes into, like.
138 00:18:36.610 ⇒ 00:18:51.019 Eric Joo: where are goods sitting in terms of, like, when you’ve ordered it, when will they hit the store floor, you know, what is the ultimate sell-through metrics of that? If, you know, there’s also questions about, you know.
139 00:18:51.020 ⇒ 00:18:57.419 Eric Joo: I’ve seen quite a bit of studies where if you’re able to place an order much closer to the time of sale.
140 00:18:58.140 ⇒ 00:19:03.699 Eric Joo: Like, if you’re able to deliver goods within 3 weeks, like, you know, because you know what will sell.
141 00:19:03.970 ⇒ 00:19:13.850 Eric Joo: Your sell-throughs and your accuracy and your margins are much better, even if you have to pay a higher price point, than if you’re ordering, you know, typically it’s like, you know, 3 to 6 months out.
142 00:19:14.000 ⇒ 00:19:16.070 Eric Joo: Yep. Of ordering.
143 00:19:16.360 ⇒ 00:19:26.909 Eric Joo: So, you know, when I’ve talked to some of the bigger retailers, at least, they’re… they say, yes, we know that, absolutely, we’ve done some pilot programs, and we know that, but to…
144 00:19:27.180 ⇒ 00:19:32.919 Eric Joo: To work our system so that we can report that at a company-wide level is impossible today.
145 00:19:32.920 ⇒ 00:19:33.490 Robert Tseng: Yeah.
146 00:19:33.530 ⇒ 00:19:34.250 Eric Joo: Yep.
147 00:19:34.810 ⇒ 00:19:50.779 Robert Tseng: Yeah, okay. That’s… yeah, I mean, I… I started my career in logistics, so this is before the point of sale, but in terms of all the… even getting the man… the manufactured good from… from source… from source to point is… it was… it was like, yeah, a lot… a lot of similar problems, so…
148 00:19:50.780 ⇒ 00:20:04.109 Eric Joo: So, like, yeah, I mean, the main issue is that, like, when you’re, you know, in the sourcing department or purchasing, you know, your performance is based on gross margin, so the absolute cheapest you can get a product for.
149 00:20:04.110 ⇒ 00:20:04.680 Robert Tseng: Yep.
150 00:20:04.850 ⇒ 00:20:06.940 Eric Joo: You know, that is…
151 00:20:07.240 ⇒ 00:20:14.660 Eric Joo: You’re much better off doing that, but at the end of the day, you know, you want to see what the net profit is to the entire company, right?
152 00:20:14.660 ⇒ 00:20:15.120 Robert Tseng: Yeah.
153 00:20:15.120 ⇒ 00:20:27.409 Eric Joo: So, gross margin performance for sourcing managers, to me, I feel like it’s counterproductive. I mean, it’s good in the short term, but long term, it’s absolutely kind of, you know, it’s a damage to the brand.
154 00:20:27.690 ⇒ 00:20:28.360 Robert Tseng: Yeah.
155 00:20:28.700 ⇒ 00:20:40.330 Eric Joo: And to the reputation, because if you keep cutting costs on the product, you know, you’re gonna deliver a worse product, you’re gonna, you know, trade off some other things that are of higher value.
156 00:20:40.470 ⇒ 00:20:57.469 Eric Joo: Yeah. So if you’re able to measure the performance and, like, the net margin, like, the total net profit at the end of the day for products, that, to me, would be a much better metric for the company as a whole, and to share that across merchandising and
157 00:20:57.730 ⇒ 00:20:59.559 Eric Joo: And, sourcing.
158 00:20:59.850 ⇒ 00:21:00.280 Robert Tseng: Yeah.
159 00:21:00.280 ⇒ 00:21:02.100 Eric Joo: Rather than just, you know, kind of
160 00:21:02.440 ⇒ 00:21:09.869 Eric Joo: Everybody’s done it because it’s just the easier way to account, an easier way to… I mean, it’s an easy metric, but to me, that metric sucks.
161 00:21:10.040 ⇒ 00:21:10.650 Robert Tseng: Yeah.
162 00:21:11.050 ⇒ 00:21:24.629 Robert Tseng: No, that’s a great insight. I mean, we do a lot of margin analysis for the CPG brands we work with, and, yeah, I think just… especially when they’re… when it’s a marketplace, you know, typical…
163 00:21:24.940 ⇒ 00:21:48.390 Robert Tseng: for… for marketplaces that they control, if it’s just, like, their own Shopify or storefronts or whatever, it’s… it’s a little… you have… you have… you have more controls. But if you’re, like, selling… selling through on… on Amazon, sudden… sudden demand spikes come, you know, you don’t really have that much control over your lead time of, like, when things get stuck, or can get restocked, and that totally kind of cascades down into the economics of everything else.
164 00:21:48.390 ⇒ 00:22:12.680 Robert Tseng: So even though it looks like Amazon’s selling through a lot of volume for you, I mean, they obviously price cut a lot, but the true margin that you’re seeing on the platform is usually not what they tell you. So, I think, like, you know, this, you know, what I’m hearing more from you is, like, to have this, like, full supply chain transparency of, like, true margin from source to delivery, I mean, that’s just kind of a dream right now. I don’t think any brand does that, so…
165 00:22:12.680 ⇒ 00:22:13.350 Robert Tseng: Yeah.
166 00:22:13.960 ⇒ 00:22:17.019 Eric Joo: Some, some, some do, some do.
167 00:22:17.020 ⇒ 00:22:17.560 Robert Tseng: Okay.
168 00:22:17.560 ⇒ 00:22:18.170 Eric Joo: Yeah.
169 00:22:18.500 ⇒ 00:22:25.559 Eric Joo: But, I mean, that’s… but that’s… that’s like, you know, you have Xi and Timu, right?
170 00:22:25.560 ⇒ 00:22:26.000 Robert Tseng: Yeah.
171 00:22:26.000 ⇒ 00:22:45.999 Eric Joo: Where they control that, like, they’re in that quick delivery, they’re that on-demand kind of, like, create… demand creation platform. Yeah. And so that’s their bread and butter. That’s how they know that they can pay a little bit higher for their product, you know, cut their margins. Also, you see with, like, Inditex Zara, that’s their model, right?
172 00:22:46.000 ⇒ 00:22:58.189 Eric Joo: They know that they’ll pay a little bit higher because their net margin, their sell-throughs are better. Yeah. That’s their business model, and, you know, unfortunately, a lot of American brands, really, and retailers have not figured that out.
173 00:22:58.850 ⇒ 00:23:02.079 Eric Joo: But if you build that in, you know, it’s a game changer.
174 00:23:02.280 ⇒ 00:23:09.820 Robert Tseng: That’s true. Yeah, the fast fashion model. Huh. Do you… do you see… do you feel like more retailers will head in that direction? Like, I… I…
175 00:23:09.820 ⇒ 00:23:23.310 Eric Joo: I don’t see how you don’t, because, you know, you need that tool in order to do better as a business, and those businesses that don’t have those tools will be dinosaurs. You know, those guys are the guys that’ll…
176 00:23:23.310 ⇒ 00:23:30.600 Eric Joo: Kind of fade away, because they don’t have that insight into what really makes their profits at the end of the day.
177 00:23:31.080 ⇒ 00:23:31.680 Robert Tseng: Yeah.
178 00:23:33.630 ⇒ 00:23:41.170 Robert Tseng: Yeah, no, that’s interesting. We haven’t worked with an apparel brand in a while, like, I think that’s, that’s interesting.
179 00:23:41.170 ⇒ 00:23:45.589 Eric Joo: But, I mean, it’s true of any, any, I think any, any retailer.
180 00:23:46.220 ⇒ 00:23:51.529 Eric Joo: Right? I mean, it could be toys, it could be… I don’t know. It could be pretty much anything.
181 00:23:51.530 ⇒ 00:23:52.180 Robert Tseng: Sure.
182 00:23:52.440 ⇒ 00:23:53.110 Eric Joo: Yeah.
183 00:23:53.300 ⇒ 00:23:54.060 Robert Tseng: Okay.
184 00:23:54.410 ⇒ 00:24:07.640 Robert Tseng: Cool. Well, I mean, I’d love to try to be helpful for you, too. I don’t know what you’re looking for in terms of, like, your… in your role goals, like, is there any… I would love to hear if there’s anyone in my network that I could… I could connect you to, like, kind of what… what… what are your… what’s… what’s kind of looking ahead for you?
185 00:24:07.640 ⇒ 00:24:18.619 Eric Joo: Well, if you know anybody with a lot of textile waste, that’s really what I’m looking for today, and then, you know, eventually I’ll need somebody to help me tie some data together, but right now I need physical product, and then, you know, waste…
186 00:24:18.620 ⇒ 00:24:23.309 Robert Tseng: Are you talking to Goodwill? Like, who else are you talking to, trying to just get, like, an ICP in mind? Yeah.
187 00:24:23.640 ⇒ 00:24:28.950 Eric Joo: I mean, it’s all of those guys, like Goodwill, anybody that does resale,
188 00:24:29.050 ⇒ 00:24:44.129 Eric Joo: Sorters Collectors, you have Salvation Army are another big one, you know, I mean, all those kinds of guys, but also, you know, if you talk to any brands, retailers that are like, hey, we have this pain point of what to do with our post-retail experience, kind of, or post-retail environment.
189 00:24:44.390 ⇒ 00:24:45.020 Robert Tseng: Sure.
190 00:24:45.170 ⇒ 00:24:47.739 Robert Tseng: Yeah. Okay. Yeah, I’ll definitely keep that in mind.
191 00:24:48.970 ⇒ 00:24:49.740 Eric Joo: Alright.
192 00:24:50.450 ⇒ 00:24:57.999 Robert Tseng: Alright, great meeting you, Eric. Yeah, if you come to New York next time, just give me a shout, I’d love to grab coffee with you or something.
193 00:24:58.150 ⇒ 00:24:59.020 Eric Joo: Sounds good, thanks.
194 00:24:59.180 ⇒ 00:25:00.030 Robert Tseng: Alright, take care.
195 00:25:00.030 ⇒ 00:25:00.580 Eric Joo: Take care.
196 00:25:00.580 ⇒ 00:25:01.160 Robert Tseng: Bye.