Sustainable Supply Chain

Unboxing Sustainability: LiquiDonate's Impactful Approach to Excess Inventory

August 14, 2023 Tom Raftery / Diz Petit Season 1 Episode 342
Sustainable Supply Chain
Unboxing Sustainability: LiquiDonate's Impactful Approach to Excess Inventory
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Show Notes Transcript

Hey everyone, in this episode of the Digital Supply Chain, we dive deep into the innovative world of sustainable returns and inventory management.

Ever wondered what happens to all those returned goods and excess inventory from retailers? Too often, they end up in landfills. But, Diz Petit and her platform, LiquiDonate, are changing the game. They're all about matching that surplus to nonprofits in need, creating a win-win scenario for both retailers and the community.

Diz shares the inspiring genesis of LiquiDonate, born from her early days at Postmates. We touch on the staggering statistic that 80% of returns end up in landfills, and how LiquiDonate is determined to reduce that number to zero.

We also discuss the fantastic tech behind LiquiDonate, their growth plans, and their mission to create the largest global database of nonprofits and schools. And for all the retailers out there, Diz has a special message about the multiple benefits of partnering with LiquiDonate, beyond just sustainability.

Tune in to learn about this unique solution in the retail landscape, blending tech, sustainability, and heart. A massive shoutout to Diz for joining me and for her relentless passion to make a difference.

Got thoughts, questions, or want to learn more? Reach out!

Also, check out this episode on YouTube. And don't forget to share this episode with friends and colleagues. Together, let's make a sustainable difference in the world of returns! 

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Diz Petit:

the retailer knows that product is just going to end up, at the landfill because most retailers know exactly what's going to happen to a majority of their products, especially when 80% end up at the landfill. We automatically can route that product from the customer's home to a nonprofit. And that cuts out a product going a thousand miles back to a distribution center to ultimately be landfilled to going 10 miles into the hands of someone who actually wants and can use that product.

Tom Raftery:

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Digital Supply Chain podcast, the number one podcast focusing on the digitization of supply chain, and I'm your host, Tom Raftery. Hi everyone and welcome to episode 342 of the Digital Supply Chain Podcast. My name is Tom Raftery and I'm excited to be here with you today, sharing the latest insights and trends in supply chain. Before we kick off today's show, I want to take a moment to express my gratitude to all of our amazing supporters. Your support has been instrumental in keeping this podcast going and I'm truly grateful to each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like minded individuals who are passionate about supply chain. Supporting this podcast is easy and affordable with options starting as low as just three euros or dollars a month. That's less than the cost of a cup of coffee and your support will make a huge difference in keeping this show going strong. To become a supporter, simply click on the support link in the show notes of this or any episode or visit tinyurl. com slash dscpod. Now, without further ado, I'd like to introduce my special guest today, Diz. Diz, welcome to the podcast. Would you like to introduce yourself?

Diz Petit:

Of course. Well, it's nice to be here, Tom. Thanks so much for having me. And like you said, my name is Diz. My pronouns are she and her. And I am the co founder and CEO at Liquidonate, a tech company that matches all of the excess inventory in the world with nonprofits.

Tom Raftery:

Wow. Okay. That sounds great. Let's dig into it a little more. So let's, actually, let's, let's step back a bit. What's kind of the genesis of LiquiDonate? What made you wake up one morning and say to myself, you know, I think I should start LiquiDonate?

Diz Petit:

Yeah, well, it was definitely over a long period of time where the idea had time to simmer and build and work through a couple generations before or rather ideations before moving into what it is today. And so prior to starting LiquiDonate, I was the 15th employee at Postmates. So I joined Postmates in 2013 and started out running our customer service team, our sales team, helped to start our launch team helping to launch 15 different cities for the company and then started our business development team, signing the first 500 restaurants to the platform in a world where third party delivery was not the standard as it is today. So definitely experienced a lot of interesting challenges trying to grow that space. And then I was the product manager for the merchant tablet, where which is the third party tablet that all companies are still using today where I would actually go work shifts at the restaurants and determine, Hey, like when this button needs to be pressed, it doesn't make sense for the restaurant employee to press this button because they're wearing gloves. And so maybe we need to make this a physical button more than a virtual button that's on the screen. And so that was a really interesting time learning and helping to build that. And then ultimately, my now co-founder of LiquiDonate and I, we were working together at Postmates. And we built two products in the food security space because that's really what Postmates did was we delivered food for the majority of the work that we did there. So we built a product called Food Fight and that enabled restaurants to just press a button on that merchant tablet and have us come pick up their excess food and take it to local shelters in 800 cities around the U. S. And then we built a second product called Bento which is still around today. And what bento does is that it enables people who don't have access to a smartphone to text the word hungry, to a specific number and receive a free meal from the nearest Postmates pickup restaurant. And that one, we won the time magazine invention of the year award for. And building those two tech enabled food security products really showed my co founder Chai and I that we could use technology to solve some of the most difficult problems that are facing the world today. So once Uber acquired Postmates, we decided to leave and start LiquiDonate, where we took on the problem of returns and excess inventory from retailers. So that we could be beyond food, just completely category agnostic to taking all of the excess of what people don't need, but it's still a new and like new condition and matching it with the nonprofits and the folks who really, really need that product. So we're, we're excited to be where we are today. And it definitely was an iteration of ideas over time, and you know, as a startup, we're still even iterating today.

Tom Raftery:

Sure, of course. Yeah, yeah. And walk me through the process. So if I have inventory, excess inventory of any kind of, well, I guess, I guess let's even step back even before that and what kind of things do you take in? Is it food? Is it electronics? Is it cosmetics? Is it clothing? Is it all of the above? Is it, you know, what is it? What are you taking in?

Diz Petit:

It's all of the above. We have certain categories that are really, really popular. Technology is one. The other category that's really popular is furniture. So we're the national donation partner for Room and Board. And with Room and Board, you know, a lot of their products they make are sustainable and they care a lot about the environment, but when a fairly expensive product gets damaged in transit or returned because it isn't the right fit for the customer, you know, a lot of times those products were ending up in the landfill. And with us now they're able to take those items and actually get them donated directly to a nonprofit. So with us, we're completely category agnostic. We do have, like I said, a few categories that are more popular than others but we can handle, we can handle anything. I mean, we've moved truckloads of chocolate. We've moved sushi kits to teach people how to make sushi that we're sitting in a, in a warehouse costing someone egregious storage fees. It really doesn't matter. The weirder, the better.

Tom Raftery:

Okay. Okay. And let's say I have this massive inventory of, I don't know, fly swatters or trying to think of something, trying to think of something out there and I want to get rid of it. I want to, and I don't want it to go into landfill. So what are my next steps?

Diz Petit:

So you would contact LiquiDonate and we would give you access to our donation tool and our donation tool can be accessed either through our website where you log in, you tell us the product you have, the quantity, the address that the items are sitting at and how they're packaged. So if they're in a box, if they're on a pallet, if they're individual items, if they're on a truckload, doesn't matter to us. You just have to let us know. And then what happens is that you click submit. And our matching algorithm is going to find the best fitting non profit for that product. And then after the non profit accepts the the order, It then gets moved into the third component of our product, which is actually handling the fulfillment. So then we'll contact you once we say, Hey, we have a nonprofit that wants the product. We have someone who can come pick it up at this date and time. Does that work for you? Your warehouse manager says, yes. We come get it and we take it to the nonprofit and then we automatically transfer the tax receipt to whoever at your company wants the fly swatter tax receipt.

Tom Raftery:

And how are you making money?

Diz Petit:

And so then in this situation, the retailer would pay us. So, for the, the fly swatter situation, which I love the funny example. Admittedly, you're paying storage fees, you'd be expecting to pay transit fees if you were going to landfill it. And we also make the assumption, based on talking to the retailers who donate with us, that you've tried every other avenue to try to sell your product, right? So, at this point, you're like, we have to get rid of it, it's costing us money to keep it here. So we're assuming that there's, you know, storage fees and, and all of these costs that you've already incurred you've already purchased the product, so now you're at a crossroads. What do we do with this product? And so you find out about Liquidonate and you're like, okay, wow, they can, they can move a standard size palette and get it donated for what our current price is for that is $87. And for all of the retailers we've worked with so far, that's been cheaper than what their fee is to store it or to transit it themselves. And so, of course, there's like some additional policies that go into the pricing model. But with LiquiDonate, the retailer is paying us to help them match and move the product because not only is it cheaper, to have us do the match and the move, but they also get a tax receipt. They can use it for their sustainability reporting. We provide points on ESG metrics so that they can help to improve their ESG reputation that are mapped directly to SASB and GRI. So there's a lot of side benefits, but the pure cost benefit of using LiquiDonate comes at the point where we're actually matching and moving the product as well.

Tom Raftery:

Okay. And the ESG points is that around like zero waste and donations?

Diz Petit:

It is. It's around the social piece. And the environmental piece. So we're doing pretty extreme landfill diversion for a lot of the companies that we're working with because the alternative to using LiquiDonate is typically landfilling it or incineration. And if we dig into the returns piece, which is where we spend a lot of our time focusing on, 80% of returns end up in the landfill after they've been transited back to a distribution center. The retailer has paid handling costs. They have a storage facility that is keeping these items, and then eventually they're paying to transit them to a landfill and then paying a landfilling fee. So the lowest price that we've heard from retailers and from our research is that it's $11 to handle the cheapest return from a customer. And that's absurd. It's expensive on top of the on top of the price of the refund that they're giving back to the customer. They're then paying money on top of that. But the biggest crime is that it's ultimately ending up in the landfill. And so what we do is we stop that process at the customer's home. And so when the retailer knows that product is just going to end up, at the landfill because most retailers know exactly what's going to happen to a majority of their products, especially when 80% end up at the landfill, we automatically can route that product from the customer's home to a nonprofit. And that cuts out a product going a thousand miles back to a distribution center to ultimately be landfilled to going 10 miles into the hands of someone who actually wants and can use that product. And it's just such a, it's such a more like elegant and streamlined solution to the problem that we're oh, we just are really excited about having been able to build this. And we're grateful to all the nonprofits that are participating in accepting these products and just ultimately, like keeping them out of the landfill. It's just, it's incredible.

Tom Raftery:

Fantastic. So, in terms of collecting from consumers who would be returning goods, what decides whether a good from a consumer can go back to the original vendor or is going to landfill? So, let's say, for example, I've ordered some clothes from, I don't know, a pair of jeans from Levi's or a pair of sneakers from Adidas or Nike, and I try them on and they're the wrong size and I send them back. Right. In that scenario, do they go to to an N G O via you or do they go back, you know, when, when, when is it, when do they go back versus when do they, when are they thrown out and landfilled,

Diz Petit:

Of course. So, the thing that we like to promote, not only for the nonprofits who are, who are benefiting from these products, but also for the retailers, is that our product is able to give them choice. And so they get to choose what happens to these products. And so, the, the number from the National Retail Federation is that 80% of returns go to the landfill. That means 20% are able to be resold or liquidated or recoup the cost of that product in some other way. And we aren't interested in that 20%. We want them to recoup their costs if that's what they want to do. And so in those situations, what happens is that the retailer at the retail level, whether they are using their own return service or they have contracted out to a third party return service, they're actually able to set business rules that every time this product is being returned for this reason. Based on the customer's information that they provided upon the refund flow, do X with this product. And so they can do it at an extremely granular level. So for those Adidas, like, maybe they don't want to accept any products back that have been worn, you know? Like, you tried them on, they're like, okay, well, if you tried them on, then we want to donate them. In that situation, it would trigger our system using an API to determine where to match that product.

Tom Raftery:

Okay. And what kind of scale can you take back of goods? You know, if I have a fleet of a hundred Humvees that I ordered and I don't like the color of them and I want to send them back.

Diz Petit:

Well, we would love to get a car donated. That would be amazing. I'm sure that our nonprofit partners would be very excited about that. But, as far as scale goes we can handle any quantity. The sushi kits, the sushi making kits I was talking about earlier, we had 937 boxes of those. And it's such an odd thing, but we were able to find two non profits that wanted to split them. And they were going to help people who were in domestic violence situations, who were living at a shelter, you know, learn how to cook a new cuisine for one of the nonprofits. And then the other one was a similar use case, but not for DV. But regardless you know, 937 sushi kits. We handle truckloads of chocolate that then get matched with nonprofits who were doing food distribution for the unhoused or for low income college students. And so but also we handle these individual returns, right? So, for example, like, we work with a very popular pillow company, and every once in a while, the pillows just aren't a good fit for the client, and so we're able to match those pillows directly with a non profit that wants to wants to claim that and provide it to their members. So those everything from the individual one off instant return all the way up to something in bulk we are able to rehome it.

Tom Raftery:

Fantastic. And how do you find the nonprofits?

Diz Petit:

Yeah. So we have a nonprofit team. And so we have a part of our company who's specifically focused on building out our nonprofit database. And so we're building the largest database of nonprofits and schools in the whole world. And that's our goal. And we feel very confident that we can do it because of the connections that we all have with nonprofits. I've been an activist since I was 16 years old and a lot of the folks who are on the nonprofit team who are constantly communicating with the nonprofit partners, the schools those folks also have worked in nonprofits. They've had non traditional tech backgrounds, which is something that we love and just being able to work directly with folks who have those direct connections has made it really magical to build and grow our nonprofit network. We already have over a thousand nonprofits that are using our services and we know that we'll be able to grow that even bigger as, as time goes on. So yeah, a lot of preexisting relationships, quality marketing campaigns, and building products and features in concert with the nonprofits to make sure that they're getting what they need from us.

Tom Raftery:

Sure, sure, sure, sure, sure. Since I was laid off last year I set up as self employed and haven't been particularly profitable, so how do you decide the veracity of a non profit because, like I say, I haven't been particularly profitable.

Diz Petit:

So we use a 501c3 status. So, we run everything through the, the federal database, and then we also use a third party validation service, because we do know that the tax receipt piece is something that the retailers are really excited about in most cases. So, I'm sorry to, to hear that, but we yeah, we we do have, we do have a 501c3 requirement.

Tom Raftery:

Sure, sure, sure. Yeah. Bit of a facetious question, but I just thought I'd throw it in anyway.

Diz Petit:

All good. I know it's been, it's honestly, we've been interviewing for full time roles at LiquiDonate and it's honestly like heartbreaking to talk to so many really talented, amazing people who have been laid off in the past year or two and how difficult the job market is. And so when we only get to pick like one person for these jobs, it's actually terrible. Just makes you feel really bad because you just want to take everybody but you know, once we're no longer a startup, maybe that'll be a little bit easier. But for now, we're, we have to stay very connected to our budget and all of those things. But yeah it's, it's just such a rough time for everyone.

Tom Raftery:

Yeah, yeah. And. You're obviously based in North America at the moment. Are there plans to, or are you already outside of North America?

Diz Petit:

So we're in the U. S. and Canada, and we definitely have plans to expand internationally. So, I mean, we have a very ambitious goal to be as big as, as Uber and Amazon on the return side. And that means that we have to grow internationally at a pretty aggressive tick. So we have plans for it, but nothing to be released yet.

Tom Raftery:

Okay. Any other future plans you want to talk to?

Diz Petit:

Wow. Future plans. I mean, we, we would really love for, retailers that are using returns platforms like Loop and Return Go and Zigzag to let us know that they want these features because we are building in concert with these return services and with some of these early retailers were able to really make sure that we're customizing the product for them. And as someone who was early at Postmates, And talking to the restaurants that were kind of the early adopters of using third party delivery services, you actually get quite a few benefits of being one of the early adopters as, you know, in that case a restaurant and in this case a retailer. It's like, you get to tell us, like, well, we want X, Y, and Z. That's like, okay, well, we're building that right now and therefore we can actually make these updates and these changes that could be specific to their brand that as the company grows and inevitably gets larger, that type of attention and features like those product features, like are not necessarily going to be prioritized in the same way they are now. So I think I think that's an interesting opportunity that had I not been at Postmates, I wouldn't have really noticed. But I see it every day when we talk to a retailer and they're like, well, our dream is that nonprofits get, you know, that, that the same nonprofit gets all of our products or, you know, whatever their dream is. And we're like, okay, well, like we can actually, like, we can build that. And you know, a few years from now, if things continue to go well for us, that will not be the case.

Tom Raftery:

Sure. Sure. And I mean, you mentioned reverse logistics platforms. It occurs to me that, you know, they might be a good almost marketing arm for you.

Diz Petit:

Yeah. I mean, they have so many products and features that they want to market of their own that we're, you know, we're a newer player to the game, but when we do talk to the CEOs of these return services, these reverse logistics companies, I mean, they're like, wow, we always wanted to build a donation flow, but we just never got around to it. And it's like, yeah, like we're a hundred percent pure donation flow. Like that's what we do. That's our bread and butter. That's our API, like you can integrate with it today. And that's always really exciting to know that most people had these intentions originally. And it's difficult to figure out how to do it. But I think we're the right team at the right time to be building it. So we are happy to work with them on making that happen.

Tom Raftery:

Nice. Nice. Some great partnership opportunities there, obviously. Yeah, absolutely. How do you then handle the, the logistics in terms of, you know, picking up that from picking up that pair of runners from someone at home versus picking up those 100 Humvees or crates of flyswatters or whatever it is from wherever.

Diz Petit:

Oh, wow. I love these examples. So we, we don't expect consumer behavior to change. I think that's one of the things that is pretty standard, right? So when you make a return online and you expect to be sending it back to the distribution center, what, what do you expect will happen?

Tom Raftery:

So for returns I've done, it's been a mix. In some cases, they send a courier to collect it. In other cases, they send a, they email a sticker and say, put this on the box and bring it to your local post office, distribution center, well not distribution center pickup point or whatever.

Diz Petit:

Yeah. So in North America, I would say in the U. S. It's very uncommon for them to send a courier. So we most of the time expect that we're going to get a shipping label. And so what we do is that when a return service is integrated with our A. P. I. And the return is triggered, we determine from our matching algorithm what is the best fitting nonprofit for that? And we actually surface a shipping label for that nonprofit. So that it's able to go directly to the non profit versus to the distribution center and in a majority of cases The customer doesn't actually know that there's a difference then most of the time they're not even looking at the to address They're just like okay. I'm returning this. This is this is what's happening to it. No problem And so in those cases we we utilize shipping. And then in other cases for the larger products, we use integrations with third party logistics carriers. So companies that are doing a lot of really interesting stuff with making sure that the products that are LTL. So like less than a truckload that are being shipped around the U S they're actually taking that extra capacity from those companies and they're selling it off to companies like ours so that these trucks aren't moving around without full loads. And I think that's been a really fascinating piece to be, to be a part of is like, you know, we don't want to buy a whole truck, a semi truck for one pallet or two pallets. Like that's just bad environmental play. It's expensive. And so when we can just buy space on these other trucks that are already transiting in between these areas, that's also been a really fascinating part of what we do is integrating with those companies that are selling that space using third party logistics.

Tom Raftery:

Okay. Okay. And if Liquidonate were not there, what? What does, what would companies do in its stead? Are there alternatives? Are there competitors? Are there, you know, what are the alternatives?

Diz Petit:

So I mean, the main competitor is the landfill. So like I said, 80% of the returns end up in the landfill. That's more than half. It's a huge, it's a huge amount. And so we really want to take that 80% and get it down to zero. So the landfill is our, our number one competitor.

Tom Raftery:

Okay, great. Diz, we're coming towards the end of the podcast now. Is there any question I haven't asked that you wish I had or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Diz Petit:

No, I think we've covered everything.

Tom Raftery:

Cool. Diz, if people would like to know more about yourself or any of the things we talked about in the podcast today, where would you have me direct them?

Diz Petit:

They can email me directly at diz at LiquiDonate. com and I'll respond or I'll get them connected to the right team member that can. And then we are at LiquiDonate on all of the social medias.

Tom Raftery:

Fantastic. Liz, that's been great. Thanks a million for coming on the podcast today.

Diz Petit:

All right. Thanks, Tom. It was a pleasure to be here.

Tom Raftery:

Okay, thank you all for tuning in to this episode of the Digital Supply Chain Podcast with me, Tom Raftery. Each week, over 3, 000 supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose our guests or a personalized 30 second mid roll ad. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn or drop me an email to tomraftery at outlook. com Together, let's shape the future of the digital supply chain. Thanks. Catch you all next time.

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