Productizing The Product Process

Sourcing has become a much bigger issue for brands as the pandemic continues to close down China and back up the pipeline, as well as loading docks and ports across the world. So scaling might seem difficult at a time like this. Not only scaling but making new connections and finding new opportunities feels almost impossible. Ben & Oliver want you to rethink that. With Checkpoint International, they've templated the processes for sourcing and are leveraging the incredible quick postal system in China to their advantage. Listen in to hear how Oliver gets his food delivered to him during quarantine and why these guys are onto something when it comes to growing your brand.

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Michael Maher  00:00

This is The Longer Game where we talk about the future of retail. Retail is constantly changing. And if you haven't noticed that over the past couple of years, you might be dead. So might want to check your pulse. I have two guests here on the show with me today. This is the first time we've actually had three people on the show all together, which is interesting. And so you guys are pioneering in that way, at least with this small podcast. We have Ben and Oliver from Checkpoint International. And I'm gonna allow them to talk more about their company what they do, because it's so unique. And there's a lot behind sourcing when it comes to anything that goes into any retail chain, whether it be brick and mortar, whether it be an ecommerce store, Amazon, walmart.com, it doesn't matter. You know where it's going. It originates from somewhere. And Ben and Oliver have pretty much made themselves experts on China on demand sourcing. So Ben and Oliver, co-founders, welcome to the show. Tell us a little bit more about how you guys got started with Checkpoint International. And you know, what's led you to become these experts, to be the experts on sourcing it? And what the supply side of things?

Oliver Knack  01:16

Yeah. Thanks, Michael. Good to be with you. 

Benjamin Gardner  01:19

Thanks, Mike. Oli, do you want to get started? 

Oliver Knack  01:21

Yeah, sure. So, I mean, Ben and I both come from a manufacturing quality control sourcing background. I've been in the Greater China area. So originally in Taiwan, and then and then mainland China, since 2012. And, yeah, originally sourcing capacity sourcing automotive components, and then in third party quality control, so an inspection, inspection business mainly, so basically helping importers to check their products that they get manufactured, not just in China, but all throughout Asia, originally, originally more traditional retail supply chain, so importers that would supply to the likes of Target, Walmart, those other big box retailers. And then in more recent years, more and more, obviously ecommerce, Amazon sellers, and direct to consumer brands.

Michael Maher  02:26

Is this something that you would go to school for? How do you get into something like this?

Oliver Knack  02:32

No, you can definitely go to school for that, I think it would come on to probably just general supply chain, or their, you know, like engineers. In the field of engineering, there's definitely like quality engineer,

Michael Maher  02:46

So they're defining the pathway of how stuff gets from one place to another. Is that what a quality engineer would look like?

Oliver Knack  02:53

No, no, no, that'd be more supply chain. Quality engineer would be more sort of probably on the manufacturing or product development side. But supply chain is about the sort of movement of the goods from manufacturing right through to the warehouse, or even to the end customer to the point of sale, I would say.

Michael Maher  03:16

My degree in college has nothing to do with what I'm doing. Now I got into school and kind of just wanted to get out. And I was very fortunate to be able to go to college, I went somewhere that was close. And that was the cheapest place. And I ended up majoring in Asian studies, which is very, very broad. And I did it in Asian studies, because I took Japanese for such a long time. Not fluent at all. But I went to my advisor and said, What can I get with like, what's the quickest thing I can do? And I said, Well, you can just kind of do a general fine arts major, of course, super useful in Asian studies is a great like, Sign me up. And I had been undecided for the first two years. So I got a woolen and worked my way up at Starbucks and ended up hating it and started an ecommerce business really just selling kind of generic items going to a trade show like a traditional mom and pop shop might do but spend a couple $1,000 on some fashion watches and some other things like that. Started selling on eBay, then launched on Amazon with you know, was able to leave that other full time job and pursue entrepreneurship full time. And then, you know, got into the services side in 2016 helping brands to, you know, to grow their ecommerce presence specifically on Amazon. So I took a very non traditional path and that's one of the reasons why I asked you that is you know, I think I found things are things found me or God just put things in my life in certain places and I picked them up. I did not go to school to be an entrepreneur, which is now a degree that you can get there was not a degree when I was going to school so a lot of things have changed. So I was just curious. You know how you might get into something like? 

Oliver Knack  05:03

I mean, in my case I did. I did an international business degree and at a major,

Michael Maher  05:08

If I've been smart, I would have double majored in asian studies and international business. I was not smart at the time.

Oliver Knack  05:14

Yeah. So I did a double major international business and Mandarin Chinese. But in terms of like actually working in this industry, it was kind of a random sequence of events that led me here. And I don't think we probably have time to go into all those details. Ben has an interesting origin story as well. I mean, Ben is an OG of China manufacturing, he's been in China, he's probably forgotten more about manufacturing than I'll ever know.

Michael Maher  05:38

Ben, tell us a little bit about what it's like to be an OG of manufacturing in China.

Benjamin Gardner  05:44

Well, it goes back a while. I started, I did a study abroad in college. And I decided to start a company that sourced from China back in 2004. And since then, I've been doing that to different capacities. And yeah, so Checkpoint is a venture Oli and I started that basically leverages, the experience I have on the ground with manufacturing and selling through tier one retailers and online retailers. And all these quality control background. So yeah, I mean, through the years, there are a lot of stories, some of them I've forgotten, probably for a good reason. One of them that stayed with me, probably also for good reason. And yeah, it's been, you say, where can you learn this stuff, a lot of the stuff you can't learn other than just by jumping in and doing it. I guess by being an OG one of the things you can't really go wrong. When there's no real bright way of doing it. You know, you just got to, you got to jump into things. When I first started, things weren't established, there weren't so many people like me, running around Shenzhen doing what I was doing. So there was it was just kind of like, Give it your best effort. And you know, understand what the customer wants, and try to connect the dots, and then putting the pieces together. There was no textbook to follow.

Michael Maher  07:27

Or do you see a lot more Americans or more Western people in Shenzhen now than you did you know, almost 20 years ago?

Benjamin Gardner  07:37

Definitely. I mean, to be honest, there's not a ton, especially because of the pandemic like we're not,

Michael Maher  07:43

Sure. Oliver's not going anywhere right now. Oliver is currently on locked in and going back into to China, everyone, just in case you're wondering. He's on Day 12. He said things could be worse. He's actually doing all right. So,

Oliver Knack  07:59

I'm doing okay. 

Michael Maher  08:01

You're live, I can see that. You seem like you're healthy. So that's good. 

Benjamin Gardner  08:06

*inaudible* I think for the foreign community in Shenzhen, there's probably more teachers than there are people in terms of foreign.

Michael Maher  08:22

Oh, okay.

Oliver Knack  08:24

I would have said it probably peaked just before the pandemic, but definitely, through the pandemic, that number has reduced a lot and now increase, like increase. Yeah, I think there's a lot there's definitely a lot less foreigners in China now than there was just before the pandemic, but I would say just before the pandemic, there was a lot more than there was, you know, less 10 years ago when I got here.

Michael Maher  08:53

Okay, so Checkpoint International, is unique in that from, you know, what I've heard Ben say, and Ben, I think you really described it best was, you've crit, you know that you know, the process of what needs to happen from manufacturer to getting to a retailer, let's say that the sales side of things is totally different. But you know, exactly what needs to happen. And you've created a new model of doing business on that supply side. So why don't you tell us a little bit more about what those processes are and how you changed the business model, and why it now can work for you know, a lot of times people say everybody's my client, which isn't really the case, and you can't really please everybody or serve everyone. But in your case, it seems like that could be a lot more true than say someone who has a, you know, a health food bar, you might say Everyone's my clients say, Well, no, it's not what about the person's eating Cheetos, they're not your, you know, they're not your prospective client, they're not looking for the healthiest thing. They just want the most delicious thing. So tell us a little bit more about the services that Checkpoint International provides and how you've been able to, I guess, productize them.

Benjamin Gardner  10:19

Oli you want to go, do you want me to go? 

Oliver Knack  10:21

Oh, you can go. 

Benjamin Gardner  10:22

Okay. So as you said, we broken down like key steps of the sourcing process. And it's on our website, so people can see very clearly in writing what we think are the key steps, or we're always open to feedback. But these ones seem pretty solid at this point. And at each key step, we offer a specific service to address that step. So instead of a traditional sourcing company relationship, where you might have an agent that takes a certain commission, or might have a relationship with a factory, which isn't necessarily a bad thing, by the way, those are fine. They're very traditional, they've been going on for a long time and made people successful. But when you're talking about ecommerce sellers, or possibly promotional product sellers, that are doing smaller volumes, something 1000s of pieces, or hundreds of pieces instead of 10s of 1000s, when they're dealing with 1000s, or 10s of 1000s, and not hundreds of 1000s or millions of dollars, you kind of need to recreate the services for that demographic of importer. And with a lot of modern technology and infrastructure improvements. We've put together a way to do that very inexpensively for smaller importers. So for example, we'll take we're based in Shenzhen, we'll take a product sample from this is one of the services we offer. There'll be suppliers in China, possibly the customer reaches out to them, possibly the customer hires us to reach out to them. And we get a sample and we'll bring it into our office. And we'll check it against criteria that the customer has provided, will video record the whole process and send it to the customer. And we can give them feedback as to this meet your requirements or does not meet your requirements. And they can see tangibly like this is the work that was done. And this is how it was done. And maybe they'll have some feedback themselves based on actually looking at it themselves. And we've come up with different things along the way that leverage either video for sending to the customer video for doing interviews with suppliers or checking certain things at suppliers using local shipping and China. So for, let's say, a mass production. The reality is we're not necessarily good for every importer. We're not good for importers that are doing large products. So let's be importers product is like a shoebox size or smaller. So it could be you know, tennis balls, it could be lighters, it could be glasses, I'm just looking at things around my house right now *inaudible* to be all small. And so if people send something like that to us, what we'll do, when I say send something like that to us. For mass production, after mass production, we want to do a sample of the mass production and test that sample. So we'll do a video call with the supplier and ensure that we're getting a random sample, we have some proprietary means to do that to ensure that they're not swapping out products, but we're actually getting a random sample. So through a video call, we'll get that they'll sign up.

Michael Maher  13:42

You've got the client, your client on the call as well. Right?

Benjamin Gardner  13:46

They certainly can be but don't have to be. But that's a good point. You never know. 

Oliver Knack  13:52

Because it's gonna be the middle of the night generally for the US.

Benjamin Gardner  13:56

They can be, put it this way. It'll be one in Chinese and two be the middle of the night.

Michael Maher  13:59

So probably not. Yeah.

Benjamin Gardner  14:03

We'll be more than welcome. Anyway, so we'll ensure that we're getting random sample because of like the infrastructure in China, you can get things sent really quickly, really fast. Just to put some ideas in there. Like if we're doing 30 40 pounds, let's say a 40 pounds. I'm guessing 40 pounds from a manufacturing center in Guangdong Province to Shenzhen also in Guangdong Province, you're looking at less than $15 for like one or two day delivery.

Michael Maher  14:31

How far away is that?

Benjamin Gardner  14:33

Um, I'd say within like a six hour drive. 

Michael Maher  14:38

Okay, wow, awesome. 

Benjamin Gardner  14:40

You can even like to put things in perspective a sample, getting a sample from Shanghai to Shenzhen, which is a two hour flight. You're looking at less than $3 overnight, two days. Something like that. It's ridiculously cheap. To logistics in China is unbelievable. We have in the States, we have a lot to learn. It's also I'll take a big step back, there's also 1.6 billion people in China. So there's economies of scale there, but not as solid. Logistics is quite, quite developed in China. And there's many companies that offer it. So anyway, we're putting together I'm giving you a very long answer here. But,

Michael Maher  15:18

No it's fine, we were here to learn. 

Benjamin Gardner  15:21

We're putting together a bunch of sort of changes in the world, between technology, infrastructure, buyer profile, and redefining what a sourcing agent does. We don't call ourselves agent, we call ourselves optimizers. Because we're not trying to take the relationship that the customer has, the customer now can use an online database, or we can help provide direct relationships to the people that are selling the product, we have no saying that they do their own negotiations, we can definitely give them advice. But we don't want to step in that a lot of times that customer wants to they feel like they have control when they're negotiating price. Keep that control that's on you. We'll just help you along the way, at a low cost for key services.

Michael Maher  16:08

How many people work for CheckPoint International?

Benjamin Gardner  16:13

Well, in the management, there's four, then there's other people that are doing the, actual checking,

Michael Maher  16:21

Okay, cool. So it's not just, I imagine in order to scale, you'd have to have more people than just you and Oliver.

Benjamin Gardner  16:30

Oh, yeah. Scaling is, because we're kind of making this into a cookie cutter model. Scaling is, it shouldn't be tough, because we're not teaching people all these skills. It's like you're doing this, this is how it's done. It's very much like a fast food chain, where this is the service you're doing. This is how you do it. This is the service. And the inputs are coming the same way. Because we're asking meeting with the customers to like, give us definitions of like, what Pantone should this be? Where should your logo be, using like numbers, not like ideas, like it should be around the top left corner, but like, specific numbers know, it's two inches to the left? And it's, you know, three inches from the top? You know, that kind of?

Michael Maher  17:11

Yeah, okay, well, you're probably using millimeters, right? Or centimeters?

Benjamin Gardner  17:17

Sure. Well, for the US guy, probably not. But for ours,

Michael Maher  17:21

You convert it, you'll convert it.

Oliver Knack  17:23

It depends. Yeah, it depends. *inaudible*

Benjamin Gardner  17:28

Whatever people want.

Michael Maher  17:30

Are there some manufacturers that have paired themselves to be more? US centric? I guess, in that way?

Oliver Knack  17:38

Yeah, we've seen clients which, and even in the past, I've seen clients that define the specs in inches, like in Imperial and, the manufacturers work to that. I mean, they're definitely more proficient in metric. But if they, if they receive a spec in, that's not metric, the work to that. And that's actually a key point. Which is something that we also sort of drill down on with our services. And something that we encourage and educate our customers on is like, being precise when ordering from manufacturers. You know, time and time again, you'll hear importers, especially like, you know, first time or new ecommerce sellers. Let's say I bought a sample and then I placed an order, and then I got the order and there was nothing like the sample. Yeah, invariably, because they haven't defined a spec or aligned on a spec or a quality standard with the supplier. So, you know, normally the sample normally the samples that ascent produced, you know, they might not even be made from the same factory, like, Sure, they're also like, just sample making processes that you know, they'll there's a sample department and then there's mass production department. So

Michael Maher  19:07

Maybe just like hey, there's like, here's a sample of this product, but there's like 10 different variations of the product that are in the quote-unquote sample pile.

Oliver Knack  19:16

Yeah, exactly. And I've been actually visited, you know, trading companies where they even have like, on their on their wall, like saying, like, get the order from the customer and then go and shop it out to three factories for the best price. So like the person that sent you that that sample is definitely not the person who's going to be making the product. So like for example, and so going successful. Having a successful production starts at like being specific and being precise in what you're ordering. And we have actually liked to help that we've made a tool, which is available on our website, we call it the PO bot builder. But basically, it's a tool that allows a buyer to, to break down their product into specific details. So like measurements and colors and, graphics, like how the product should present.

Michael Maher  20:20

Because right now if someone were to go to, like, when I think about Amazon, I think about three or four kinds of sellers, there's a reseller, there's private label sellers. And then there's more traditional brands, brands are having to get more involved, I think, in the supply side of things because they're stipulating. This is our product, this is how we want it to be manufactured, we have a certain level of quality that we want to hit, we have a brand that we're trying to create a great name for. Resellers are not really involved with that, they're just going to the brands and saying, hey, you know, the brands or whoever is the distributor, they might be on the supply side of things, but the resellers aren't really there. But there are a ton of private label people that are going quote-unquote, direct to China. And Alibaba has been a big website where people could go, when I was selling, there was another website called DHA, I don't know if that's still around. But there's, you know, a couple of different websites that people can go to, and quote-unquote, source product from. And there are a lot of FBA gurus, I don't like that word. So I'm using in kind of a derogatory way. But there are a lot of FBA specialists or, you know, will help you get your Amazon private label started. And they're telling you about this system. And you know, the part of the system is go find your product on Alibaba, see if you can sell for more and then and then place an order. And there's so much more to it than that. And I think people are being sold short, or they're, they're not getting the full picture when they think oh, I can just go in order whatever I want, on Alibaba. And for one of the main reasons is what you said Ali is, you know, people need to be more precise. And with your PO builder, you're now putting questions in there that people had no idea even needed to be asked. And you're saying, Here's if you want a product, here's that's going to be in good quality, and that's going to help you have a good reputation, and you're going to get good reviews on this product. Here are the questions that you need to be asking. And I've noticed that you know, in running my agency, Cartology, there are a lot of times where someone comes to us and says, you know, hey, we put our product on Amazon, and it didn't sell. And I'm like, Yeah, it's so what's the question? Like, I wouldn't expect your product to sell just by putting on Amazon, there's all these different specifications that turn into this holistic process of, you have to, you know, understand how backend keywords work, you have to understand how SEO works on Amazon, you have to understand what the consumer is focusing on? Are they focusing on text? are they focusing on media assets? What's working really well right now? Is it infographics? Is it video? How are you getting products in front of consumers that is there's this whole litany, this whole list of attributes that you should be focused on attributes in your case, or I would just say, different aspects of the marketplace for Amazon that you have to really be specific on. And if you're not intentional about those things, you don't succeed and what you're doing for the supply side is saying, here's how you can actually be successful and succeed, as opposed to, oh, I'm looking up an iPhone 13 case, cool, I found the one I want, and I'm gonna purchase 1000 And then you get something you're like, this isn't what I ordered it all. Now, what do I do? Yeah.

Oliver Knack  23:57

Yeah, 100%, you hit the nail on the head, I mean, the seller can't be an expert, every element of, of bringing a product to market. So I mean, they really need to consider where they show where their time is best invested on developing that expertise, like product ideation, marketing, you know, the advertising like getting, like once they've got the product on the web on the on Amazon, or whatever platforms, they're selling on being able to sell the product. They, they need to understand like, at a high level, how the supply side works, but that's where like, we come in to, like, actually manage that as experts in the field so that they don't have to worry about that. They can control it, they can manage it, but they don't have to go into the details. Because you know, we're there, we have a team that does that. They can focus on you know, actually growing their business.

Michael Maher  24:57

It's interesting because that's exactly how we pitch services to brands, as we say, we manage that entire Amazon channel for you, we'll tell you what we need from you. And we'll report back to you on what we find. And what we think the next step should be. It's ultimately going to be your brand, but we're managing that for you. So you can focus on product ideation. So you can focus on new channels, so you can focus on, you know, hiring all the things that go into building a business and make it successful, or taking some of that off your plate and just becoming that team for you. And that's one of the things that I think has changed over the past. Definitely decade is a lot of people, I would think, would start a business and think everything needs to be in house like we have to do everything in house like you think about a big design agency or big creative agency. They're, they're thinking we have to be able to do everything in house, or do they just, they have a lot of stuff in house, but they also have offshore, people that they're sending a ton of stuff to, and it's coming back for they still are doing a lot of things in house. And one of the ways that I've seen a lot of businesses grow is partnership. So saying, Hey, we don't handle the advertising. For our website, we hire a PPC agency to run Google ads. And then we have a social media agency. So there's, there are all these different compartments now that people are specializing in, instead of just going and working at a company and saying, I'm the brand manager here. There's now all these different pieces that are coming together. And you are a piece of that an important piece of that puzzle. That's allowing someone to say I don't have to have an internal sourcing department, I cannot go to Checkpoint International and say, I want to sell this item. What do I need to do? 

Oliver Knack  26:50

Exactly. Well, much, 

Michael Maher  26:53

Much cheaper. So the price point for a lot of your services are, I remember when Ben and I initially discussed and talked about Checkpoint International, I mean, super, super affordable. We're talking about, you know, in some cases, a couple 100 bucks for certain services.

Benjamin Gardner  27:10

No, it doesn't. I think the highest service we offer is like $130.

Michael Maher  27:14

Okay, so there you go. So I'm even, I'm even overstating it. So that affordability piece, I believe is key. Because it can, it can get expensive, especially with the traditional way of assertion sourcing agent working, which is based on percentage, so they're giving you a price, but their percentage that they're making is built in, or they start really generating more revenue for themselves, is in higher quantity, which incentivizes them to want to get higher quantity, which means that people who are wanting to do smaller things or start off a smaller venture, it can really be a non starter for them.

Oliver Knack  27:53

Definitely on the sourcing side, that's the case. And then on the quality side that by design. I mean, that was a key point on how we started this business is like, it's pretty commonly known that people you know, you see on the forums, it's like a you need to get your products inspected before they leave China. And there are there inspection companies out there that do that, they'll send an inspector, but that's gonna generally cost you 300, you know, $300. Give or take for an inspection. Now, for the ecommerce seller, you know, $300 on an order that may only the total value of the order may only be, you know, 2000 to $5,000, it's a significant, it's a significant cost. And so for a lot of people, you know, they just simply don't see that that cost is worthwhile, and they therefore go forego the inspection, which obviously exposes them to a lot of risk. So that's sort of how we came up with with the product checking service was like, How can we offer something that's going to give them a level of product protection without costing $300. And that's how we tapped into this idea of, you know, with the well developed, you know, domestic logistics network, as Ben was explaining before, we can utilize couriers to bring the products to us where we can check it at a much lower cost than having to send an inspector on a train out to a factory potentially staying a night in a hotel. Where there's a fundamental cost there, which is why the inspection costs $300. Now,

Benjamin Gardner  29:42

but wait, what's not, but wait, that's not all. When you have an inspector that goes to a factory, in the middle of wherever they are, away from the head company away from the customer, it's industry standard. I'd like to say that this is the exception to the rule. But it happens so often that there's a production, which is borderline. And because of relations between that specific inspector and the people at the factory, whether it's free lunch, or whether it's a little bit of money, or whether it's a gift or something extra, where they're earning what we say, well, but it's, you know,

Michael Maher  30:31

It happens in so many different industries. 

Benjamin Gardner  30:34

I mean, China, you know, it's things like this in China probably happen at higher and lower levels. But we can't be so surprised in America, like, we're not immune to this kind of stuff. Doesn't happen at that level, as much. But certainly, it's not possible. The only problem is there is that you got one inspector who really, you know, every day, they're doing an inspection at different factory for different clients and different products. And, okay, if they just let this one slide here, they don't understand that the other men, there's a customer who may be is like, you know, a single mom, and is putting their savings on this. And if it doesn't go, well, you're gonna have a huge impact. Whereas if you take those goods out of the factory, into a really unbiased environment, that's video recorded, that inspector has zero incentive to do anything, but just report what they say. 

Michael Maher  31:28

Yeah, yeah. 

Benjamin Gardner  31:29

So it makes the inspection much, much more honest. And, you know, for that alone, it's a better way to inspect, let alone being much more sustainable from an environmental standpoint, and practical from a labor standpoint, I'm not having to physically go to all these places. And that's why I said, we don't do big products, because if you're gonna send like 50 inch TVs, 

Michael Maher  32:00

or chest of drawers or something like that, it's gonna be good.

Benjamin Gardner  32:03

That, not a good product for us. But things,

Oliver Knack  32:05

Generally speaking, ecommerce products are in our wheelhouse, because they have to be compact and, they ultimately have to get sent to the customer in the US, by the same means that they're getting sent to us through the domestic courier.

Benjamin Gardner  32:24

Promotional products fit that bill as well, because promotional products are usually kind of handheld and easy to carry around. But we're putting on the ecommerce channel first. So yeah, I mean, the things that we're doing for many reasons, I mean, Oli's been in this, he was a CEO of one of the larger quality control companies in China for several years. I've exported millions of products into the top retailers in the world. So we have a lot of really firsthand like, this isn't stuff that you learn in a book like we're writing the book. And we've taken that to a very practical defendable business model. To help this sort of new entry of a retailers, resellers that kind of didn't exist, or maybe they existed, but in a really Mom and Pop sense, back in the 70s 80s 90s. And those people weren't necessarily sourcing directly from overseas.

Michael Maher  33:23

A lot of people that are ecommerce, they may never, if they're not getting a sample the product, they may never touch the product. That's okay, as long as they know what the quality is like. But if they can't guarantee quality, like Oli said that that opens them up to a lot of issues potentially,

Benjamin Gardner  33:41

Well think about, think about sending something over like let's say someone, let's say a importer gets three different samples, which is pretty common. It's not overstated at all, sometimes we get more. So three samples from three different suppliers. Let's say they ship them all to the importer. Well, that's going to be like $50 eats and shipping, depending you know, let's say 40 to 100. Plus, depending on what the situation is with logistics, it could take a week to two weeks, who knows if something gets delayed. So you're looking at like a time investment and a money investment. You don't have to make, when you use Checkpoint that'll get those products in a day or two, give you like a video recorded review based on your actual specs in a day or two. And at the end of the day, if the customer actually wants to see those products will consolidate them into one shipment and send them over.

Michael Maher  34:33

Okay, cool. So what I think when the pandemic happened, it changed a lot in retail, notably, you know, exploding ecommerce growth. And when I say exploding, I mean 12%, you know, before March 12% of all US retail goods were sold ecommerce and that percentage jumped up to 16 just within a couple of months, so within that quarter, and it had only been growing by about a half a percent each year for the past decade, so what looked like eight to 10 years worth of growth happened overnight. I've also stressed that, you know, majority of products are still being sold in retail stores, they are just more there's a greater adoption of ecommerce. So that's one of the biggest things that we saw was it was a bigger adoption of purchasing and ecommerce and Amazon, you know, has a very large like 40% of the ecommerce market. So that was a big change. Seeing people adopt that from a from a supply side or or PC side or whatever you think, just from checkpoints, viewpoint, what's the biggest change that's happened since the pandemic?

Benjamin Gardner  35:49

Unpredictability of lean times,

Michael Maher  35:52

Okay. And why is that?

Benjamin Gardner  35:58

Well, on two sides, one side is the manufacturing side, because certain components might be slower to arrive or not be able to arrive. So you have to redesign the product with different components. That's the manufacturing side of them. On the shipping side, there's a lot of containers that are going over to outside of China. And a lot of people like either because of stimulus money, or because they don't want to deal with like COVID, potentially getting COVID. Over the last few years, maybe not so much anymore. They didn't want to like, bring back the containers. So like, there were ports and like domestic shipping companies where they just didn't have enough workers. And containers weren't coming back. Or containers weren't getting cleared off of ships fast enough. So you have like a backup of ships at the port. And so those two sides, one on the manufacturing side, and one on the shipping side, both contributed to make, like unstable lead times.

Michael Maher  36:57

Yeah, I mean, there's still, I can't go anywhere, with Oli is in China. But Ben, you're back here in the States. Correct?

Benjamin Gardner  37:06

I am in Canada right now. But,

Michael Maher  37:09

That's kind of like a US state. Close. Yeah. So I can't go anywhere without seeing help wanted sign. So, have you seen anything change in that regard? Have you seen any kind of pickup in, you know, ships being able to dock and actually get stuff off the boat? Are we still kind of dealing with things at the height?

Oliver Knack  37:33

I think I mean, the shipping situation has definitely relaxed a little bit in the last couple of months. I think they've cleared most of that backlog. I mean, particularly it was particularly around LA port. And I think also from what I understand, in the more traditional retailers. They, warehouses are full in the US. I think that you know, post COVID, there was all this demand, and they placed a lot of orders, warehouses filled up and then going into 2021. I think demand reduced and supply has increased. I mean, yeah, so that what I understand is that, that warehouses are full, like retailers are sitting on a lot of stock in the US right now.

Michael Maher  38:35

Maybe they freaked out a little bit in order a little bit too much they over forecasted potentially.

Oliver Knack  38:42

We could be a factor. Yeah, it could be a factor. But I think just yeah, the initial, you know, it's kind of, I still don't quite understand it. Like you would think that when the pandemic hit, people be worried about their job and less likely to spend their savings, but it didn't seem to be the case. People were just buying stuff like crazy. Yeah. But then I think probably into 2021. Maybe the demand reduced a little bit. While retailers were still stocking up.

Michael Maher  39:17

On things that have gone up now and 2022 on certain things, I mean, namely like a lot of food, staples, but even products where they can't like, Ben was saying you have to re-engineer product, because you can't get a certain piece of something. And so that cost is going up for that product. And it seems I don't know what people are actually spending for that could be a factor to why there's also still build up now.

Oliver Knack  39:40

Yeah, and another factor would be like in 2020, the retailers would have placed a lot of those orders, you know, more than you know, six to nine months in advance based on normal conditions. Okay, and then a lot of brick and mortar stores were closed for long periods. of time, and a lot of those retailers didn't have significant ecommerce channels to get those goods out. So, you know, they're continually receiving more stock and not having any way to sell it out. Would have compounded that. And, you know, that's what we see now is a result of that. Yeah,

Michael Maher  40:22

So Checkpoint International people. I'm talking to the people in the audience. Now you guys know, Checkpoint International is the name of the business, you can definitely find them on their website at checkpointintl.com. But Oli and Ben, where, if someone wanted to reach out to you guys directly, or wanted to connect with you, wherever they were, they go, obviously, Oli would be a hotel in China. Nine days from now, *inaudible*, and then you quarantine yourself for 21 days. So it actually would be at least three weeks, then I can see what. Yeah, where can people find you? Where can they reach out to you?

Oliver Knack  41:02

Yeah, so on our website, www.checkpointintl.com. We also have a Facebook page, LinkedIn page. And you can also find Ben and my LinkedIn's, through the homepage as well.

Michael Maher  41:18

Go and well, we'll link a lot of those into the description of this video as well. But we've enjoyed having you on and by, by we, I mean, again, myself in these two pictures. There's nobody else here. Oh, my wife's upstairs, technically. So I guess we've enjoyed hosting you in my office. But you guys provided a lot of in depth information on the supply side, I would say for any brands that are listening, anyone that's wanting to start a brand, anybody that's wanting to get into selling, especially in the ecommerce side, there's a lot more to the supply side than you think. And of course, you could always find a test product or small quantity, not worry about getting something checked and just kind of, you know, figure out how are how am I going to make this work? How am I going to do this ecommerce thing. And so it's a test, I would say, think twice about, you know, how you get started, maybe take a little bit of extra time to prep and utilize a service like Checkpoint International that, you know, Ben said the highest service might be $130 and actually find out can this product be quality? And is this worth investing in. Because in my mind and my perspective brands, especially when it comes to ecommerce, but even more specifically on Amazon brands are the ones that are going to be successful. resellers are becoming less and less because it's a race to the bottom on price. And there are a lot more retailers or brands that are starting to take over their own presence because resellers have not, you know taken care of reviews or things like that they've just kind of said, well, you know, it's the brand's product isn't good, it's not our fault. And private label brands are really kind of slapping their name on other label or on other products that are already out there maybe not necessarily caring so much about the specs of something, it's about, you know, generating more sales brands have a really unique story to tell. And that's why we love working with brands specifically because they have, they want more equity from the customer, they want the customer to invest in their brand, both emotionally but you know, and financially. And so they've got a lot more on the line. But they've also got more opportunities to tell that story. And people are starting to care. I believe more about that story. It's not just, you know, I only drink Coca Cola. Now there's plenty of other options for people to find something that they like whether it be based on costs, whether it be based on a branding appeal, or what the brand supports any of those things. So people there's a lot more to sourcing and supply side of things than you think. So make sure you're taking that into consideration when you are thinking about starting or growing a brand. Thanks Ben and Oliver for coming on. We appreciate having you guys.

Oliver Knack  44:14

Thanks very much, Mike.

Michael Maher  44:16

All right. Well, that's been The Longer Game where we talk about the future of retail. That's the end of the show. Goodbye.