Season 1, Episode 25

Preventing Returns and Negative Feedback with Sajag Agarwal

The quality control process can be a black hole. Even with inspections, issues can easily slip through the cracks.

We talk to Sajag Agarwal about how to create a quality control process that actually works. And why you need to create these procedures to minimize returns and negative reviews.

Show Notes

Transcript

Chris: Hey everybody. This is Chris McCabe, one of your co-hosts and I’m here with Sajag Agarwal of Movley. How are you doing today? 

Sajag: Hey Chris. I’m doing great. Thanks so much for having me on here today. 

Chris: And we’re thrilled that you’re participating with the conference this year. Today’s topic is of tremendous interest to me, preventing returns and bad reviews. A larger discussion of quality control, based originally on your own experiences with your brand and some quality control issues that you had . Why you need to be testing product, having quality inspections of product , getting the human element to be, not the weakest link in the chain, but the strongest link. And also just managing the feedback loop between you, your customers, making sure that your products well-represented and you’re taking care of any potential hits to the image of that product, that brand before it becomes a bigger problem. As we all know in Amazon land, sometimes a couple of buyer complaints multiply to several and it can be a slippery slope. So I’m really happy that we’re talking about this today. Maybe you can just start us off, how Movley got started. I thought I’d just let you introduce yourself and talk about how you got into this world to begin with. 

Sajag: Yeah, thank you. So I actually used to be an e-commerce seller. So I started e-commerce about 10 years ago and I originally started with eBay. I was doing wholesale products on eBay, buying in bulk on eBay actually, and reselling individually on eBay. And then I ended up starting to buy bulk from China directly, reselling it on eBay. And that business started growing really quickly and it was very profitable, very quickly. We were netting six figures and it was a pretty cool thing. But after that, I was like, Hey, you know, selling all this junk from China and I feel like I could be making a brand out of this. I can make way better stuff. And, I could actually make reliable cash flow. So I’m not dependent on just how the tides are feeling today. Actually more like a real business. So that’s when I started my ecom brand. I started getting into Amazon originally because, ebay was really good. Some of the products that we were selling in our industry, and our niche, we were already at the top of search results for a lot of the keywords and our sales were pretty capped. Whereas on Amazon, the sales were like 50 times higher, a hundred times higher in terms of what the possibilities were. So we ended up launching the brand, starting it on Amazon and that brand grew really quickly. But as we were building it, we just had a lot of problems. Back in 2017 I ended up moving to Shenzhen, China for six months and we started having problems with quality control with our products breaking. So when we launched the business, originally, our best-selling products were 4.8, out of five stars. I was so confident in the product, we were selling really good stuff and and then it got to 4.7 and then after a couple of orders, all of a sudden we started having a huge amount of quality control problems. So now our 4.7 star product became a 4.3 star product.

Chris: Right. 
 
Sajag: We spent a year building up the product, building up the reviews and getting things going from a 4.7 to a 3.8 product, in a matter of like six months. And, it was so tricky because we were trying to save it. We were trying to spend more on ads. We were trying to sell more at a loss just to be where we can inflate the reviews by getting more positive.

Chris: Right. Try to cover up the negatives by adding more positives. 

Sajag: Yeah. By increasing the sales and things like that. And in general like on Amazon, Customers who have a good experience. 1-2% of them will leave a good review on your product, but customers have a negative experience the stat is like 66% of them will leave a negative review. 

Chris: It’s like the reverse flywheel, right. Instead of the flywheel you’re always used to hearing about positive reviews, better sales rank, more visibility, easier to search on Amazon, better sales, on and so forth. You were stuck in kind of the reverse version of that. 

Sajag: Exactly. And the scary part is this is not even a story about , we didn’t follow the process. We didn’t do things right and do quality control inspections because the thing is we were doing quality control inspections. We did things by the books. We were working with quality control providers from order number one. And every time we ordered it was a pass pass, pass, pass, pass inspection. And then we started having defects and stuff, but we still have passed inspections. Why are we having these problems? And the tricky thing is , at any given point in time, when you’re running a brand, you have 3, 4, 5, 6 months of inventory. So, a lot of times you’re not finding these defects, these reviews until 20 days, 30 days after the customers bought the product. So at any given point in time, we might have a month or two of inventory in production because your supplier’s lead time is say 60 days.

Chris: Oh of course, yeah. 

Sajag: They got 30 to 45 days of shipping for sea freight. Now that’s even longer because sea freight is a mess. And so you got 30 to 45 days for that. And then you keep your inventory in stock for probably about 45 days. 30 days is generally is too short because Amazon fluctuates so much. 

Chris: Yeah. What was the initial process that your brain went through when you first started seeing some of the negative reviews that had some consistency? And you knew you had a real quality control issue. 

Sajag: My first brain instinct was , okay, let’s talk to the suppliers. Let’s figure out what the problem is. And we talked with the suppliers. And they were like, yeah, yeah, we got it. We got it. We’ll take care of it. We’ll even give you replacements on the next order. And we were like, okay, great. And then, We ordered some more inventory. I air shipped it just to expedite and make sure everything was good. And we got that inventory and then we still have the same problems. And it was becoming a little bit worse. So this process went on back and forth between the supplier. We still doing quality control inspections, still passed inspections. But it just got worse and worse and worse. 

Chris: Right, right. Whatever solutions they put into place weren’t effective and they didn’t tell you exactly what they were, right? 

Sajag: Yeah. I don’t even think they put solutions in place. And during this process, also we cycle between inspection companies because we were like, okay, this inspection company gave us a passed report. Why are we getting passed? Clearly there is a problem. So we had sent two inspection companies to do the order. Get passed every time. So we were just operating in this black hole and , this business and our best selling products are literally going down the drain right now. And that’s when I decided, okay, Hey, I need to go move to China. And I lived there for six months and I saw that it was there. We opened an office there. We hired a couple of full-time people there. And I started doing my own inspections and started visiting my factories, building relationships with them, and then I started noticing, really simple things like, this product doesn’t work. We’re having a two, 3% defect rate on arrival. And this is clearly illustrated right here on this inspection. How for inspection companies didn’t find it. And we were working with some of the best inspection companies in the business. And I started catching the problems and during the time I lived in China, the orders that we were getting, started increasing in quality. We started out not having those quality control problems. 

Chris: You figured out the weakest link in the chain, whether it was on the manufacturing side or the quality control, the quality in the inspection companies, basically letting you down. 

Sajag: Yeah, exactly. 

Chris: I was looking at your website. And I saw the kind of bad reports slash no oversight of one inspector was one of those top five things you need to watch for, for this kind of trouble. Right? So a lone inspector, who’s not really being observed or monitored in terms of the quality of their performance by their boss. And then the reports themselves being limited. Right. 

Sajag: Yeah. And there’s just a lot of process problems with inspection companies. And that’s when I realized I need control over the inspection process and how it’s done. 

Chris: If somebody’s first question was, well, I can’t go to Shenzen like you did. What would you suggest as an immediate step or series of steps as a replacement for that? 

Sajag: That’s a good question. You don’t necessarily need to be in China. If you can, that’s fantastic, but there’s a lot of ways around that. So first of all, having somebody to translate on the ground can really be helpful. And I always like to look at it from a relationship point of view, right? You want to build relationships with your factories, with your suppliers. A lot of people just go on Alibaba. They’re like, Hey, I want to buy a thousand units, you know, maybe a couple more units in the future. What’s your price? And these are my specs versus , relationship-based approach would be going up to that guy, being on the call with the person and also having maybe a translator there if necessary. And walking them through a presentation, this is my company. This is what we do. This is why we started, this was my origin story. And this is what we’re looking for. As far as a partner, we’re looking somebody to partner with the long term. We’re starting with this, but we’ll build it to this. And we’re looking for somebody to build it with . Right. And that has a completely different approach. So that’s number one, number two,

Chris: communication, better communication. That’s prepared in detail in advance, right. As opposed to just winging it. 

Sajag: Exactly. Yeah. You really have to think about it as a process. And then the second thing is taking that into account and an understanding that you really need to vet your suppliers and you really need to vet, what they’re doing. We have a bunch of questions you can ask your supplier, what kind of quality control processes do you follow? Do you have machines for your quality control processes? Things like that. If you have a translator yeah. A lot of people want to use a translator and they’re like, Hey, I don’t trust the translator and stuff like that. You don’t have to put them in a position where you have to trust them. You’re just asking them questions and they’re giving you answers. There’s no benefit for them. Right. They’re not taking commission or anything. So you already found the supplier. You just have a translator jump in on the second call or something like that, or just ask really technical questions. So that’s a good way of doing it. But when you’re talking with 10 different suppliers, All 10 of these suppliers, these specific set of questions, you can get a really good idea remotely. This is how the products produced. The side of the products QC has done and things like that. And then you can create your own quality control plan. And then you can go to the supplier that you liked the most and say, follow this plan. And then once you have that plan, you can give that to, Movley, you can give that to your inspector and then you can make sure that, Hey, in the production process, this plan is being followed. They’re executing this after production. Those same tests that you do in the production process, you can do that on randomly selected units in the final shipment. So you can make sure that is done properly. And the inspectors can do that at the factory lap, but the factory needs the lab. It needs the machines, and we need the engineers to work with, to run the machines ,where the inspector could watch and record a video or whatever, and report those results to you. But if the factory doesn’t have a lab, then how are you going to do that? And, there’s no way they’re going to produce it consistently. We had a customer came in and they were like, Hey, can we ship these samples to a lab? Because the factory doesn’t have a lab. The thing is that if the factory doesn’t have a lab, they have no way to measure what is good quality, what is bad quality. So, even if you take it to a lab, one unit passes the other unit may fail. On the next order, you’re still gonna have problems, so it just increases your cost because now you’re paying for lab tests. You still have no consistency. Whereas the supplier that has good processes, good consistency. And you negotiate that the way that manufacturing has done in your respects into your contract, into your agreement, then you have control over your production process. 

Chris: If you’re launching a brand or launching additional products to an established brand. It’s not that, that you just want to appear organized when you’re dealing with those types of companies and those operations, you want to be organized. Because then you can show them, not that you’re confident that it’s a good product, but that you know what you’re doing so that if they’re going to play games, you’re not just going to say, well, sure. Insert this into the process and take this out. If you think it’s a good idea. I mean, you’re telling them what’s a good idea, right? And you’re telling them what you need. In order for them to work with you and to create a good product. And if they think there’s wiggle room, they’ll take it right. Give them an inch. They’ll take a yard. 

Sajag: Yeah, no, that’s definitely huge. Two key points real quick, if you don’t know if it’s a good idea, that’s why you wanted to have your 10 suppliers, because then you have all of them to ask them each, is this a good idea? Is this a good idea? See all the responses and compare and you can get a pretty good idea really quickly. Who knows what they’re talking about? Who cares about your business and who doesn’t or who just wants to think you’re just another customer to them. So you can gauge that pretty quickly. And a lot of people, think, Hey, my supplier has a incentive to produce good quality products long-term because, we’re both in the same boat and that’s actually really untrue, I’m going to walk you through that. In game theory, your supplier has a complete, direct incentive. As a supplier they want to charge you the highest price as possible cause problems for them and have the lowest production process possible. So the lowest quality products that you will buy, the lowest cost products that production. 

Chris: Lower materials costs, lower labor costs, whatever. 

Sajag: Exactly. They want that spread to be as much as possible. On the other hand, you want the exact opposite. You want the highest quality products, the highest production costs at the lowest possible price. So those are directly opposite to each other. So no matter what boat you’re in, it’s a direct competition right there.

Chris: A metric opposition. Two different ends of the spectrum, right? 

Sajag: Yeah. Just basic game theory. And that is illustrated. I’ve seen it personally with my friends. I’ve seen it personally with clients we worked with. We have customers reach out to us and they’re like, we don’t do quality control inspections. We don’t need it. Yeah. And, and if you don’t do quality controls at some point in the process that you just ship your products directly from China to Amazon, and you don’t do any QC, most insurance companies, if you get product insurance for your product and someone of your products messes up or, harm somebody or there’s a loose screw that comes out. Your product insurance company probably has a clause in there that you have to be doing quality control inspections. 

Chris: Yeah. Yeah. If they’re worth their salt yeah. Right. 

Sajag: Actually quitting your own product insurance coverage a lot of times with some carriers if you don’t have a good process in place, whether it’s Movley in China or it’s someone in the us doing it at a three PL or whatever.

Chris: Yeah. I mean, we’ve seen that in what we do, helping people appeal a listing take down, appealing for reinstatement. What you said a moment ago, there’s sometimes shipping to FBA from China’s sight unseen. They’re not getting, that’s why I mentioned pulling random samples and opening them up wherever you are to make sure that they meet the specs that the manufacturers agreed to. And if you’re not checking up on that stuff. And if you’re not staying involved and you’re shipping sight, unseen FBA, Amazon starts figuring out that’s what you’re doing. And you have no concept of the quality of that product. And that’s why it’s leading all these complaints, which of course is one big reason why we wanted to make sure we had you guys involved in this conference. Right? I mean, it all kind of connects together. Not shipping sight unseen. Of course. I ended up helping them write in the appeal letter. We’re not going to just take their word for it, or assume that everything has been built or created, manufactured, according to the specifications in the beginning, because what if they did swap something out on you and you weren’t aware of it? What if something did change over time? Maybe not everyone hasn’t had seven years of success and perfection and the 8th year you’re talking about in that example, the eighth year is one of multiple defects and failures, but some people just kind of start tuning it out. 

Sajag: Yeah, no, it’s huge. And when you don’t have the processes in place, you can’t control what you can’t measure.

Chris: Completely agree. And that’s an awesome note to wrap up with too. See you here in Boston through the Seller Velocity Conference, which we’re really happy that you’re involved in and you’re coming to our Boston show. 

Sajag: Thank you so much for having me on Chris and excited for the Boston.

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