Clover’s Certified Refurbished Strategy for Rent to Own Dealers and Consumers

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What if certified refurbished inventory could help rent to own dealers increase margins, reduce inventory risk, and offer premium products customers actually want?

In this episode of The RTO Show, Pete Shau sits down with Paul Adamson of Clover to break down how certified refurbished products are reshaping the rent to own industry. 

Paul explains how Clover partners with major brands like LG, GE, Breville, and Vitamix to refurbish returned products through a rigorous testing and certification process before they reenter the market. The conversation explores reverse supply chain management, sustainable retail strategies, rent to own inventory planning, product warranties, refurbished appliance trends, and how RTO dealers can deliver premium consumer experiences at lower acquisition costs. 

What You’ll Learn:

• The difference between “refurbished” and “certified refurbished” products and why the distinction matters in rent to own retail
• How Clover uses engineering, testing protocols, and brand certification to reduce product failure rates below many new products
• Why certified refurbished inventory can help RTO dealers improve margins while still offering premium brands and warranties
• How reverse supply chain logistics and return forecasting help maintain consistent inventory flow for refurbished appliances and electronics
• Which refurbished product categories are growing fastest in the RTO industry, including premium countertop appliances, room AC units, coffee systems, and nugget ice makers

Episode Highlights:

• 02:03 – What Clover actually does and how returned consumer products enter the reverse supply chain
• 05:13 – The real meaning behind “certified refurbished” and why testing standards matter
• 13:10 – How refurbished inventory can lower acquisition costs for rent to own dealers by 25 to 40 percent
• 15:09 – Why GE Opal nugget ice makers and premium countertop appliances are becoming high demand RTO products
• 20:24 – How Clover predicts return rates and forecasts refurbished inventory availability
• 25:31 – The engineering process Clover uses to identify hidden product defects and improve reliability
• 29:48 – How warranties work for certified refurbished inventory in the rent to own industry
• 46:10 – The next categories Clover plans to expand into, including TVs, soundbars, and premium coffee equipment
• 54:24 – Why dealer feedback loops could become one of the most valuable tools for improving refurbished product quality
• 1:02:30 – The one refurbished product category Paul says RTO dealers should avoid

Meet the Guest:

Paul Adamson is the Chief Revenue Officer at Clover Environmental Solutions, a company specializing in certified refurbished and remanufactured consumer products. With more than 30 years of experience in reverse supply chain operations and product lifecycle management, Paul helps major brands create sustainable resale channels while expanding access to premium products. 

Tools, Frameworks, or Strategies Mentioned:

• Certified refurbished product testing protocols
• Reverse supply chain logistics
• Detailed Manufacturing Instructions (DMI)
• Brand authorized remanufacturing systems
• Product telemetry and failure rate tracking
• Inventory forecasting based on retail return behavior
• Sustainable retail and circular economy strategies
• Warranty management systems for refurbished products
• L2 distribution partnership for the rent to own industry

Closing Insight:

“Consumers want access, flexibility, and value. Certified refurbished products can deliver all three when the process is built on trust, testing, and quality.”

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Episode Transcript

SPEAKER_01 (00:07):
Hello and welcome to the RTO show.
I'm your host, Pete Shao, andtoday I've got something special
for you.
I've got Paul Adamson here fromClover, and he's got some things
that he wants to talk to usabout.
And the truth is, I am beendying to talk to him about it.
We got a little we got a littlegap there when I got sick, and
so uh we didn't get caught uplike I wanted to.
And now I have the opportunity,Paul's right in front of me, uh

(00:29):
opportunity to kind of talk toPaul about everything that
Clover has to offer because I wedid meet in RTO World last year,
right, Paul?

SPEAKER_00 (00:36):
We did.

SPEAKER_01 (00:36):
We did.
So I there was a whole brand newbooth.
I was busy as anything because Ihad we had the live show last
year, so I kind of caught him inthe beginning and caught him at
the very end.
Now we're catching up becausethe truth is there's a lot that
he's got going on, including anew partnership with L2 to get
some things out to you, butwe're gonna talk about that a
little bit later.
Paul Adamson from Clover, howyou doing today?
How's everything going whereyou're at?

SPEAKER_00 (00:57):
Pete, I'm doing well.
Uh, unlike many parts of theU.S.
right now, I am uh above thelevel of freezing and not
impacted by snow because I Ilive in Texas.
So we we I can't even say thatwe got a little cold because
everybody would just laugh atus, but we got Texas cold.
And uh so I've been you knowsuffering in my short sleeve
shirt, and when I go outside, Iyou know put shoes on because

(01:19):
you know I could I could get alittle chilly outside.
So trust me.

SPEAKER_01 (01:23):
We understand.
We we definitely understand.
So Clover has something a littlebit special.
Now I've heard these things inthe past, but come run to own,
you've been here for a littlewhile, you've stuck around.
That means that you're serious.
Now I'm gonna ask you someserious questions because I
really want to get to that, butlet's let's start from the
ground up.
We want to know from the groundup, what does Clover do, and how

(01:44):
is it gonna, how do you expectit to impact the RTO industry?
Sure.

SPEAKER_00 (01:49):
Um, you know, in a in a few little sound bites, you
know, Clover is the returnspartner to leading brands,
right?
So um and I I know you probablyhave never done this, but
somebody in the audience hasbought something that they
didn't really mean to buy andthen they returned it.
And that's kind of where mybusiness starts, right?

(02:10):
So uh brands like LG, likeBrevel, like others, um, need a
partner that when a consumer isreturning a product, either that
they bought online, you know,direct to consumer from the
brand's website or throughretail, it has to go somewhere.
And we are the party that thentakes that product, does a

(02:30):
certified remanufacturingrefurbishment process and then
puts it back into the market.
Um, so we're we're really kindof saving, you know, doing a few
things, right?
Protecting their pockets, right?
Because that cost to handlereturns is pretty high.
Um, you know, as US consumers,we uh we return a lot of stuff.
Uh safely in the categories wetouch, it's typically about 10%

(02:52):
of what gets bought gets sold.
And and I think we're all alittle guilty of the occasional
I've had a couple glasses ofwine and I ordered that and I
didn't check with my spouse.
And so it's gonna need to goback.

SPEAKER_02 (03:03):
Um we need to put that as a definition in the
Amazon return box.
Too much wine.

SPEAKER_00 (03:08):
Too much wine.
Yeah.
Too much wine.
It'd probably be shocking howmany people would actually check
that box, right?
So um, you know, so you know,protect their cost to serve
those returns, you know,protect, you know, from a
sustainability standpoint,keeping stuff out of the
landfill.
But you know, truthfully, and Ithink this is where we've loved
the rent-to-owned space so much,is um giving a nut the next

(03:31):
consumer access to what we liketo call aspirational brands at
prices that they can afford.
Right.
So, you know, I uh you know, asa you know, kid of the 80s and
90s, um, there was definitely uhyou know a few cars that I would
always have wanted, um, youknow, or product, you know, a
new DVD player.

(03:51):
If Refurb had been a big part ofyou know the 90s for products, I
probably could have bought a DVDplayer earlier in life, right?
Then I was able to go afford it.
But it wasn't a thing.
And consumers are so much morecomfortable with it today,
right?
You're if you have you know anytype of mobility product, uh,
you know, an iPhone or some sortof Android phone, and it it

(04:13):
breaks during the warrantyperiod, if um, you're typically
getting a refurbished version asa replacement, not a not a new
one.
And so, you know, you've gotkind of this uh this group of
folks that have grown upunderstanding that to buy a
refurbished product is good, notonly good for their pocketbooks,

(04:33):
good for the environment, andit's just acceptable now.
And you know, when we thinkabout like rent-to-own in in
kind of this space where peopleare today, it's becoming even
more relevant, right?
Because consumers today, theydon't think in terms of like
ownership anymore.
You know, they think they thinkin terms of like access and
flexibility, right?

(04:53):
Everybody's got a stream, astreaming service, they're
subscribed to things, they haveset upgrade paths for their
product, and that's how thepeople, you know, people live
today.
And rent to own was doing thatbefore anybody else, right?
Giving access.
So it's it's it's actuallyreally cool to be part of this
space.

SPEAKER_01 (05:09):
All right.
So let's go back to the wordrefurbished.
Now, when we say that, just likerent to own, sometimes we've got
to battle that term.
What does that term actuallymean?
Because when some when usuallywhen somebody comes to me and
says, Hey Pete, I have somethingrefurbished, it means that you
were using something and it itit broke, it shut down,
something happened to it, didn'twork right, they returned it to
a manufacturer, it got, youknow, a fuse was changed out, a

(05:31):
board was fixed, a part was wasre you know, replaced or
whatever, and then it was sentback out into the retail world.
Is that how refurbished is, oris there more to it than that
term?

SPEAKER_00 (05:44):
So I I like to break it down, not to be too nuanced,
but between refurbished andcertified refurbished, right?
So um, you know, you canrefurbish a product at your
home, right?
If you probably every year whenyou pull your lawnmower out, you
go through and you change outthe air filter, you drain the
gas lines, um, you know, you mayclean the carb.

(06:06):
That's you are actuallyrefurbishing that mower, right?
Maybe changing out the blade, etcetera.
But you're not certified by thebrand owner to do it, right?
So that certification is reallythe difference, right?
It was inspected, tested to adefined standard.
Any of its worn or missing partsare replaced.
It's clearly graded, right, tothe can, you know, its

(06:27):
condition.
It has performance testing thatum is validated by our brand
partner, and then it's backed upby an actual warranty.
So when you think in terms ofcertified refurbished, what
you're getting is a product thatin a lot of cases has gotten
more attention than the originalnew version of it.
Because if you think aboutproduct coming down an assembly

(06:49):
line, human intervention mayhappen only one in a hundred,
one in a thousand units.
A certified refurbished product,every single unit is getting
touched the same way.
You know, in my world, my myworld's interesting, right?
I'm bringing order to chaos forproduct that's coming back from
these retailers, and I'mbuilding out you know, uh raw

(07:11):
goods, my raw good formanufacturing is somebody's
returned item.
And so I've got to, you know,create systems that allow me to
test it and certify it to thatoriginal standard that they can
then be proud of, right?
Because they're putting thatthat product name never changes.
It said LG when it went out thefirst time, it's gonna say LG

(07:31):
the second time.
So the consumer who's buyingthat product, they know it's
it's LG, right?
And it's a brand they trust,they've built trust in that
brand, and we can't harm thattrust.

SPEAKER_01 (07:43):
So help me out here.
I want to make sure I got this.
Walk me through a product.
So I have an LG, whatever thecase that is.
And we're today, let's just usean LG cell phone.
Not necessarily what you'regetting, but let's just say it's
an LG cell phone, right?
I have an LG cell phone, it'snot working.
I go ahead and do that service,right?
So let's say I get anotherphone, that's working, I'm good,

(08:05):
I walk away.
Can you describe to me whathappens to that phone and the
life of that phone as it goesinto whatever service area,
whatever LG you know provideris, what goes on with that phone
after that fact?
And then how does it end up atClover?

SPEAKER_00 (08:20):
Yeah.
So if you think about, and weand we can make it even
generically product-based,right?
So you are a consumer, youbought an item, you don't want
it, you feel it had an issue, itdoesn't meet your needs,
whatever.
You take it back to theretailer.
As far as you know, job done, Ieither have a replacement, I
have my money back.
That product then take is nowentering the reverse supply

(08:44):
chain.
Everybody understands forwardsupply chain, right?
You know, design and build anddistribute and everything else.
The reverse supply chain is I'mgoing from a retailer store to
typically a retailer'sconsolidation uh warehouse.
So if you think in terms of bigretailers, everybody knows
understands.
If you returned it to Walmart,it goes from a Walmart store to

(09:05):
one of five Walmart consolidatedreturn centers.
And they're they're they'rescanning that thing, it's moving
through its flows that wayWalmart can get credit on it
from the brand owner, and thenit's moving to its next station,
which is typically beingconsolidated with its brothers
and sisters and then sent to mefor its next uh steps in the

(09:27):
process, right?
And I'm receiving it, I'mverifying its condition at
receipt, and then I'm moving itinto an agreed set of testing
protocols, and then I'm alsoreplacing parts that need to be
replaced and getting it backinto the condition the brand
wanted it back in market as.
Mobility products, like youbrought up, cell phones, it's a

(09:47):
very interesting one, right?
Because that product can go backinto market as up to five
different grades, right?
There's a channel for all of it.
Like, you know, essentiallybasically new, slightly
blemished, you know, heavilyblemished, a blemish only on the
screen, but the rest is fine,all the way through to like
heavily scratched up.
Versus in a lot of the homegoods, if you think about uh the

(10:10):
nice thing about a cell phone isyou take that item, you talk,
you text, you put it in yourpocket, right?
It's hidden away.
If I were to sell you are-manufactured or refurbished
Vitamix blender that sits onyour counter, that has to look
right, right?
So a brand like Vitamix has verydefined criteria for the visual

(10:35):
and performance of that unit toensure that you're gonna be
proud that it sits on yourcounter.
Other brands may say, I'm okaywith one that is good to sit on
the counter, and I'll takeanother grade that they're gonna
want to put it away in thecabinet in between uses.
Still fully functional, looksgreat, but you know, when you're
walking by it, you can see somescratches.

SPEAKER_01 (10:56):
Now, is is Clover so Clover is the one that does the
testing.
So when it comes to you, you dothe testing, and when I say you,
I mean Clover, uh, and then theygive you access to the parts to
replace, refurbish, and thentest.

SPEAKER_03 (11:10):
Yeah.

SPEAKER_01 (11:11):
So we have somebody that is somewhere out there in
the ether testing this.
Now, to just make sure thatwe're all on the same page, this
is a certified technician.
This is some, this is not Bobthat we just got, you know, the
other days.
He's certified in whatever youknow model and brand that he's
servicing to make sure it's100%, correct?

SPEAKER_00 (11:32):
Yeah, I mean, the way you build trust, you know,
with consumers in a refurbishedproduct is by having a very
rigorous process, right?
So our we have, you know, justin the US, not even including in
our in our Mexico facility,we've got about 50 engineers.
And when a product is going tobe brought into production, the

(11:54):
they are doing the completereview of their product.
They're building what we call aDMI or a detailed manufacturing
instruction with visual aids andthe complete bomb for the unit,
right?
So when that product hits thelock the production line, there
is a process that is defined forhow you test it at the front of
the line, how you blow thatthing apart into all of its

(12:15):
components, where where they gofor all their separate testing
and cleaning and certifications,and then how it comes back
together to be built into arefurbished sellable product.
And then it gets you know newlabeling and packaging, um, you
know, clearly defined asrefurbished, right?
Because what we don't want to dois we never want to consume, you
know, confuse a consumer becausethat's a that's a terrible

(12:38):
experience.
If they think they're buyingnew, you know, you're gonna tell
once you open it, it's not, it'sdefinitely it's not new, right?
Typically different packaging,right?
You don't find you know moldedstyrofoam in a refurbished
product because that's you needbig expensive molds, and you're
not doing that for your therefurb side.
So you want to make sure you'rebuilding that trust at all

(12:59):
stages and it is clearly definedas a refurbished unit.
So that, but you want a greatout-of-box experience as well.
That consumer needs to feelconnected to that product that
they paid money for, right?
Or they or they you know theyrented because they want to make
their life better because of youknow the product that they got.

SPEAKER_01 (13:17):
So, you know, in the rent-on industry, we want we're
always looking for the bestprice because obviously a rent
home is going to be a little bithigher for the services that we
include in the agreement, youknow, the free delivery, the
free service, you know, theability to pay over a certain
amount of time, the same ascash, you know, whatever the
case is.
So what is what in in apercentage base, what is the
difference between one of yourcertified refurbished products

(13:40):
and the same thing that came outof the factory brand new?
Is it 25% difference?
Is it a 30% cost difference?
What what what is it on and Iwant to say maybe across your
three to five most uh usableSKUs that you think rent zone is
gonna use, what would you saythat the percentage savings is
on a brand new product versuswhat we would get certified

(14:01):
refurbished?

SPEAKER_00 (14:03):
Yeah, so you know the operators in in the RTO
space are gonna see a 25, maybeup to a 40% you know delta
between new and that certifiedrefurbished, still with a
warranty, still with a greatout-of-box experience for their
for their buyer, their consumer.

SPEAKER_01 (14:21):
Okay, so what is what is, and let's, I mean, and
you I don't know how many youhave, because I know you have
quite a few.
When I went to the booth, therewas there was quite a few things
over there, man.
But let's say we're talkingabout the top, you know, five
things that you have.
What can as an RTO dealer, if Iwent to Clover, what are your
five best-selling items that Iwant to put on my counter that

(14:43):
you say not only are they namebrand, not only are they
certified, but these areprobably the hottest sellers
that we have going on right now?

SPEAKER_00 (14:50):
So yeah, I look at it in a from a bucket standpoint
of you know, not everyrefurbished product you know
needs to generate a contract,right?
Some is for traffic, some isjust going to be an attachment
sale.
Um, we had some of the buyersfrom the last show that bought
them as a thank you for closingout a contract.
Um, and so those thank you forclosing out a contract were kind

(15:12):
of an entry-level neutral bulletblender that you know that from
a cost standpoint, they couldstep into for you know sub-20.
Um, very nice, you know, fullcolor packaging, great consumer
experience, and it's a greatthank you at the end of the day.
Um, you know, the other piecesthat I think are impactful that
we're seeing great traction onis our GE Opal Countertop Ice

(15:36):
Makers, right?
Because it's an aspirationalbrand.
It has um it is a great productthat somebody's gonna want in
their home, right?
Everybody loves that littlesonic nugget ice, right?
At the end of the day.

SPEAKER_02 (15:47):
That that is the now the crack that's going around.

SPEAKER_01 (15:50):
I mean, when people want something really, really
bad.
You know, it used to be likeTickle Miomo.
Now it's like the ice machine.
My wife's even talked to meabout it.
Like it's those little thoselittle cubed icy.
I hate to say it, but I use ittoo at work.
It is so good, though.

SPEAKER_02 (16:02):
I agree with you.
Paul Paul's got Paul's got thedeals.
Paul's got the deals, guys.

SPEAKER_00 (16:07):
Yeah, it and it's a great product, right?
And being able to take advantageof that is a huge thing.
So GE Opal Ice Makers.
Um, the other thing that I thinkis a great you know, benefit to
the RTO space is uh room AC, youknow, because um you know folks
you know they want uh airconditioning when it's important

(16:29):
to have air conditioning, right?
What you don't necessarily needis air conditioning now, but
come June, July, August, you do.
And so being able to providesomething that is can be a
shorter term rental period um ata better price point, I think is
a huge win for RTO because youknow it's it's a it's a strong

(16:52):
product category.
It typically has a higher MSRP.
Being able to save money on thefront side allows them to maybe
change up the economics for thatrental period, you know, that
whatever that uh rental rate isgonna be, um, and still deliver
a great product to theirconsumer.
So, you know, the the otherpieces, and we've had some, I'm

(17:13):
not gonna call it mixed reviews,but really it's depending on, I
think, geography is our floorcare items.
You know, one of the fastestgrowing categories in floor care
is uh floor washers, so itemsthat can vacuum and essentially
clean the floor at the sametime.
Uh typically have you knowbuilt-in heaters, so they're
applying hot water, you know,with detergent to the floor to

(17:35):
do your cleaning.
And we've seen some of the RTOspace loving them, saying it's a
great product, and others arelike, eh, you know, they they
forget to clean out the unit,then it comes back, and yeah,
now I've got a I've got my staffcleaning that thing before they
can rent it again.
So, you know, I think for uswhere we're gonna spend most of
our time is in that premiumcountertop appliance space,

(17:59):
right?
So um, you know, the nugget icemakers, uh the higher-end
espresso machines, um, some ofthe more durable home items, so
room ACs, so portable or windowACs.
Um, and then we're gonna belooking to bring on additional,
you know, call it, you know,just um attachment sale items,
you know, some of the blenderproducts that work really well.

(18:21):
Um, you know, for us, we arewe're Vitamix authorized
reseller for the uh refurbishedproduct into the rent-to-owned
space.
And so being able to give agreat value on a$700, you know,
countertop blender, it you know,that it can be purchased for
several hundred dollars off is,I think, a big win.

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(19:02):
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(19:22):
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(19:43):
When you say the wordrefurbished or certified
refurbished, it means to me, inmy head, this is the way I see
it.
There is a certain supply thatcomes back, like you said, maybe
10% that comes back.
So if I sold 100, I would get 10back.
Now, let's say that I've got afew dealers and I'm standing in
front of a few dealers andthey're like, hey man, I really
like this product.
I love the ice machine.
My wife told me that I got tohave that.

(20:03):
I love the giveaway idea, I lovethe room AC, I love the espresso
machine.
Now, let's say that catchesfire, right?
Everybody's excited, everybodywants to buy it.
But how is the supply versus,you know, if I wanted new, and
I'm just saying, and whether youbuy containers or you buy
shipments, you know that it'sgoing to be manufactured and
sent.
That's the way it works.
With refurbished product, thereis no guarantee that it, you

(20:25):
know, if let's say it's likeToyota, it's just a great
product, it doesn't come backvery often.
What do you do in that sense?
I mean, how do you, how do youjudge what's going to be bought
and how much supply you have forthe demand that you could be
creating?

SPEAKER_00 (20:38):
So um we do a lot of work you know with our clients
ahead of time, right, tounderstand what is the their uh
their forward-looking 12-monthsales plan by SKU, by channel.
And we have the information tohelp us understand by retailer
what their average return rateis by category.
And so we can actually predictand forecast out what their

(20:59):
returns are gonna be all the wayto a single SKU level.
And we also know the returnpatterns.
We know when returns areheavier.
I mean, easiest thing to relatethat back to is room ACs come
August, September, October.
I'm getting 85% of everythingI'm gonna get in a year in that
period, uh, with probably 50% ofit just coming in September.

(21:21):
But you know, other items areless seasonal, right?
I mean, a neutral blender hasrelatively consistent return
rates.
Um, but we also know becausehey, they sell at Costco, they
sell at Target, they sell atWalmart.
We know which ones have a longerreturn tail, right?
So Costco, very much in favor oftheir warehouse members.
You know, if you have an issue,they're gonna they're gonna take

(21:43):
that product back a year downthe road, two years down the
road, wherever.
So I've seen that.

SPEAKER_01 (21:49):
I don't know if you've seen that.
I think a lady returned to melike nine years later with a
receipt, and you're like, lady,stop it.
Exactly.

SPEAKER_00 (21:55):
You know, and I look, I I can't hold on to a
receipt for a week.
I don't know how these peopleare able to hold.
On to a receipt for that long.
But you know, they they'retaking care of their warehouse
club members.
And so we're able to map and bevery realistic about what we
believe can be sold into thechannel.
Because what we don't want to dois we'd never want to, you know,

(22:16):
have a dealer stuck.
Right?
Hey, I was relying on you, Paul.
I was relying on Clover to makesure I had this amount of
product for my stores thisseason, and you came up 50%
short.
You know, that that's a leaves areally bad taste, you know, in
somebody's mouth when you'restarting a relationship.
And you know, so yes, we don'tcontrol sales or returns, but we

(22:42):
have enough legacy informationto say consumers are pretty
typical, they're gonna returnthis much across these channels.
We're gonna have this base to gowork from.
We already know all of ourrecovery rates, you know, by
SKU.
I can tell you, hey, thisproduct yields this much
sellable product at the end, umwithin probably five percent

(23:05):
accuracy.

SPEAKER_01 (23:07):
Wow.
Yeah, that's that's that'spretty good.
Well, my qu the questions that Ireally have that's that's
worrying me, okay.
Let's say that you have aproduct, and it's it's good.
It's a good product, and I'm notgonna mention any names, any,
you know, it just is what it is,it's a great product, and you
have a good steady return flow,whether it's uh refurbished uh
because of non-use or youactually have it broken,

(23:29):
whatever.
But so now that it's there,where does Clover fit into the
this has a particular highfailure rate, regardless of the
fact that I'm bringing it backand I'm doing a 100%
certification, and then now it'sone and now it's back to where
the the manufacturer's specs areand I'll put it back out there.
But the failure rate is stillregardless, is still kind of

(23:49):
high, right?
So you say 10%, maybe this onehas a 20, 25%.
Where does Clover say, wait aminute, you know, even if we
refurbish it back to there's achance that, you know, one in
four coming back, that's alittle bit too high?
Or what are the thresholds forthat for you to say, you know
what, we don't want to put thatout there at rent-to-own because
you know they do have a tendencyto take things.
Certain things do come back andthey get re-rented, right?

(24:11):
Even if we do uh something likeyou we try to we will add that
time, try to do our own cleanupand make sure it works, but
we're not as certified as someof the guys at Clover, so we're
gonna put it back out there.
There's a high failure rate,it's just gonna cost time and
money to go back through there.
Where is that line drawn whereClover says, hey, you know what,
this is probably not going towork?
Or how do you get notified thatthis is one of those items that,

(24:34):
hey, is starting to have a veryhigh failure rate?
How would that work in thissituation?

SPEAKER_00 (24:40):
So break it down into a couple pieces.
One, um, because of thecategories that we work in, they
tend to be longer life in field,right?
So um, while your tablet phoneor laptop gets changed on a very
regular basis by the brandowners, um, you know, an air
conditioner, you know, mighthave originated in 2020 and is

(25:04):
still the current model that'ssold.
So, you know, the longer it's infield, the longer you find any
of the issues.
So, you know, that said, um, wetypically have visibility to, if
we break this down into what wecall the known knowns.
So that is they, you know,they've already known about the
issue.
Hey guys, just look for this.

(25:24):
When this happens, you need toreplace this part.
Great.
Thanks for that, you know, headsup.
Then there's the known knownunknowns.
Hey, we've been hearing thatthere's an issue with this.
Could you help us figure outwhat's going on with it?
And then where we come in, and Ithink the greatest benefit we
bring to our brand partners ishelping to identify the unknown
unknowns.
Right.
So through our testing, weidentify this is we see this

(25:48):
failure, and it's not just a onein a thousand.
We're seeing it one in ahundred, one in sixty.
So that's when our engineeringteam gets engaged, right?
So we can divert product in theflow.
Now, what does that really meanfor a consumer?
Ultimately, what it means is weare essentially creating a

(26:08):
better product throughrefurbishment than new, right?
So actual failure on newproducts, we they've gotten
good.
Even your cheap product today isrelatively reliable, right?
Not necessarily for you knowyou're not gonna get uh a
washing machine that lasts 20years like when we were growing
up, but you know, you are gonnahave for the most part product

(26:31):
that is sub-4, even sub-threepercent actual failure rate.
Refurbished product is typicallysub-1.2, right?
So because we're weaning outproduct that shouldn't go back,
and part of that could just bebecause we're evaluating it, how
heavy was its use during itsperiod.
Oh, yeah, this this hasobviously had some use, but no

(26:54):
matter what we replace on it,not going to be the best thing
to go back in the channel.
Or this is two generations back.
You see that a lot in windowACs.
You know, the only thing thatchanges is a couple codes in the
model number.
And that's just really tellingyou when was the design for that
product brought to market.
But they you still see themgetting sold.
But we're like, uh, the design'solder now.

(27:16):
It may be less efficient.
Uh, we're typically looking forendemic failures.
So our team, our BI team, isconstantly monitoring all the
quote unquote failureinformation that we capture.
It's really telemetryinformation, right?
So we take product, when itmoves into the testing process,
we make it so it's less humandependent and more automation

(27:40):
dependent.
Right.
So, as an example, people,everybody understands a vacuum,
right?
They've had a vacuum in theirwhole life in their homes.
You know, when you talk aboutvacuums, a lot of times your
suctions, uh, you know, one oneof the uh standards is related
to what what they call waterdraw.
It's like how hard can it suck,right?
How how bad does my vacuum suck?

(28:01):
Or how good, right?
At the end of the day.
So we have we know thestandards.
So we can performance testsomething at the front of our
line to determine the use ofthis.
We can look at its, you know,basically its running amperage
for the motor, you know, todecide, you know, is it off spec
and weed that stuff out rightaway so it doesn't go to a

(28:22):
future buyer.
Because again, the worst thingthat can happen is that new
buyer, that refurbished product,has an out-of-box experience
that is less than worthy.
Because at the end of the day,that may be their first time
buying a GE Oval ice maker.
And now they're like, oof, thisthing's a little tough to set up

(28:44):
or it's making a weird noise oryou know, whatever.
They're they're never gonna buya GE product again.

SPEAKER_01 (28:51):
Well, I mean, that's kind of rough on the RTO dealer,
too, because you're gonna belike, well, I got this product
that doesn't work.
You sold this to me, and lookwhat's happening, look what I
got to go through.
Uh, I don't trust you.
Even if everything else I getfrom you is new, now I've got to
worry, is it all gonna be thesame, even if it has nothing to
do with the RTO dealer?
Which leads me to this part now.
So I know that warranty isdifferent with new product,

(29:13):
right?
New product.
I mean, I just you know, my wifegot a car not that long ago, and
we you know, 10 year, 100,000,whatever, whatever.

SPEAKER_03 (29:20):
Yeah.

SPEAKER_01 (29:21):
When you do a recertified refurbished, I don't
think there's a 10-year, 100,000mile refurbishment uh title on
it.
So, how does it work?
If I'm an RTO dealer and it'ssitting on my counter and I'm
looking to sell that, does it gofrom the date that I receive it
in?
Does it go from the date thatit's sold?
And how long does that warrantyout there before I can, you
know, not make a claim on it?

SPEAKER_00 (29:43):
So RTO is similar to any of our other uh
business-to-business channels.
So what we do is the clockstarts when we ship it to our
partner, and that and that magicnumber is a year.
Now, there's a 90-day warrantyfrom the time they first push it
out into the market.
So if at day 360 they finallyrent that item out, it still has

(30:08):
90 days of warranty beyond that.
So it's 90 days in theconsumer's hand.
We give like one year of runwayfor the rent-to-own uh dealer to
get it into market.
So it should give them plenty ofcoverage.
The beauty is returns happen onthe refurb side within the first

(30:28):
30 days, over 93% of the time.
So, you know, it's kind of oneof those things where it's it's
good at breakfast, it's gonna begood at dinner, right?
That type of thing.
You know, you don't have toworry.
Um, and again, that you know,from a failure rate being you
know less than a third of whatnew product is, the dealers are
gonna be in a really good spotspot with the warrant from a

(30:50):
warranty perspective.

SPEAKER_01 (30:51):
No, I've had I've had a couple of good situations
and a couple of bad situations.
So I'm not gonna mention thebrand that I'm gonna talk about.
There's a couple brands outthere, but I've had some new
product that come in, and man,you know, it's it's it's either
bad in a box or bad within thefirst week.
And you try to get a hold of thedealer and it's just like
pulling teeth.
Uh, you know, it's it's justdifficult.

(31:11):
You finally get it done.
Um, and it just seems like ittook way more time than it
should have.
A lot more was gone into it toget that done.
If something happens, let's saywithin the first 90 days, I've
got this ice maker out there, itit either works or something
happened, whatever the case, andnow it doesn't.
It gets brought back to me.
What is my position and what doI need to do?

(31:32):
Because that plays a big part inwhether I'm going to carry a
product or not.
Can I get it taken care of andcan I get it taken care of with
enough time for the customer tobe satisfied?
Because let's say I don't haveanother one, right?
I mean, if I have two, three,it's great.
I can just take it, swap it out,or I could just take it and say,
hey, use this one until.
If I don't, right, because let'ssay I'm trying it out.

(31:52):
I I I bought five differentitems from you, none of them are
the same thing.
Ms.
Jones comes in and now it's notworking.
I need to get that back to heras soon as possible, which plays
a huge part in the rent to ownbecause our service is built
into the agreement.
How does that work?
How do I get a product in thatmay be malfunctioning for
whatever particular reason?
What happens then?
Is that a call back to themanufacturer?

(32:13):
Is that a call to Clover?
Do I call a Paula, you know, onthe bat phone and be like, Paul,
this is this ain't happening,man.
What's going on?
Help me out.
Like, how does that work out?

SPEAKER_00 (32:22):
I mean, I do keep a red phone on my desk just for
these emergencies, but um yeah,and you alluded to it earlier,
right?
We announced a partnership withL2 specifically because they've
been engaged in the RTO spacefor so long.
So, you we are, I'm gonna callit in the in the arc of rent to

(32:42):
own, we are just young, right,in our engagement with the
space.
Um So we wanted to partner withsomebody that could handle the
distribution, it knows the theplayers and the dealers really
well, understands their needs inorder to offer the best overall
experience for the dealers,right?

(33:03):
Again, I go back to the trustpiece.
Our job is to ensure that theconsumer's trust in the brand is
never impacted.
L2's job is to ensure that thetrust the dealers have in L2
can't be impacted.
So when it comes to that batphone part of it, right, it's
gonna be L2 that's gonna bemanaging that piece, right?

(33:25):
They have they already have thesystem set up for doing that.
Um, and so I think that's gonnabring the best value is you
take, you know, we're you know,Clover's 2,000 plus you know
employees, right, processingmillions and prom millions of
units a year.
L2 is laser focused ondistribution into the
rent-to-owned space.

(33:46):
So take what we're great at,take what they're great at, and
it should be an amazingexperience for the dealers.

SPEAKER_01 (33:53):
So what I was reading here, it looks like some
of the some of the main productsthat we're carrying through L2
is the portable ACs, um, thevacuum cleaners, the stick
vaccines, uh, the LG, and and Idon't know if I'm saying this.
Is it Tinoco, Tynco?
How is it?

SPEAKER_00 (34:08):
Yeah, it's Tineco, yeah.

SPEAKER_01 (34:10):
Tineko, there you go.
I got I'm learning, guys.
I don't know that one.
Yeah.
Uh I actually own one.
I don't even know how to say it.

SPEAKER_00 (34:15):
Um, nice.

SPEAKER_01 (34:17):
Blenders and juicers uh from the Neutra bullet, and
you got some countertopappliances from GE.
Now, when it comes to orderingthose things, now that you're
through L2, because usually Iwould give them a call and say,
hey, I need a couple laptops,need a couple gaming systems,
what do you have on, you know,what do you have on deck?
They would say, Hey, listen,I've got this one with this
spec, this one with this spec.
You know, I you can order two,ship out.
I mean, what does it take to getthose orders done?

(34:39):
If I was to call L2, is it ashipment amount?
Is it a certain amount ofpieces?
How does that work?

SPEAKER_00 (34:45):
And that's part of why we wanted to partner with
them.
They're much better at doing ummixed product shipments than we
are.
Our warehouses are very much setup to do full pallet or single
piece, not mixed pallets ofproduct.
And so L2 is going to be takingstocking positions on the
product so that um, you know,kind of the day-to-day orders uh

(35:07):
just fulfill it.
The larger ones, they will thenbe tapping in and we'll be doing
direct shipment out of ourwarehouses for them on that
product.
So I think it really covers thebases really well because it
allows them to continue on therelationship side, you know,
managing the the dealerrelationships, providing them
not only, hey, I'm calling for acouple laptops and a couple of

(35:29):
displays, hey, could get acouple GEOPA icemakers on there.
I need three portable ACs.
Now you get one palette comingto you and it has all that for
the dealer.
And that's such a betterexperience, right?
Um, and and that's what weneeded to be able to tap into.
You know, our portfolio productthat makes sense for the
rent-to-owned space isn't asbroad, right, as a distributor.

(35:53):
So I think it's gonna work outreally well.
You know, the L2 guys know thespace really well.
We know our industry, and we'regonna give great product that
they can then distribute andsupport.

SPEAKER_01 (36:04):
Well, I'll say, I mean, you do have a great
partner.
We've we I've seen L2 around foryears and years, and we've done
business, a lot of businessthroughout those years.
So that brings me to my nextpoint.
I haven't known Clover for yearsand years, though.
So where does what can you giveme a little history on Clover?
Because you know, a lot a lot oftimes what people don't want to
do is say, hey, I see somethingnew, but we've seen people go to

(36:26):
trip.
We've seen people go to the RTOworld, they've been there a year
or two, and then what happens?
I don't know.
You know what happened to thatguy?
I don't know what happened tothat guy.
And you know, might have had agood idea or whatever, but I can
always tell you it takes about24 months to really break into
it.
And some people just don't havethat staying power.
What is the history of Clover?
Where does it come from?
How long has it been inbusiness?

(36:46):
What are we looking at when wesay Paul is the chief, well,
chief revenue officer, right?
Is that the CRO?
Is that what they call you now?
The CR.
So you know, best of all, howlong, what's the longevity of
Clover?
Where has it been and where isit going?

SPEAKER_00 (37:01):
Yeah.
So, you know, they we arecelebrating our 30-year, 30th
year in business this year.
Um, the Clover business haschanged dramatically over the
years, right?
So there's, I'm gonna call ittwo ways to look at our
business.
You know, we are the full nameis Clover Environmental
Solutions.

(37:21):
At the end of the day, we'rehelping companies, you know, uh,
you know, properly receive anduh manage and dispose of
commercial and consumerproducts.
One of the biggest things thatwe do is we have a sustainable
imaging group.
So our sustainable imaging groupis the world's largest

(37:42):
remanufacturer of ink and toner.
So every private label brandthat you can buy at Staples,
Office Depot, Walmart, etc., weremanufactured.
That that came from us.
Um and it just ends up back onour retail shelf.

SPEAKER_01 (37:58):
Anthony, do you have any do you have any toner that
you need?
I got the hookup.
I got the hookup over here.

SPEAKER_00 (38:03):
I got you covered.
Got you covered.
Yeah.
It and you know, it and so youthink about the um the pressure
in that space.
You know, Clover history comesout of uh you know managing
products that are you know havea lot of IP around them.
Um and so you know theengineering that we have built

(38:23):
internally and the automationthat we've built springs from
that.
The um the consumer product sideis uh been in place for about 12
years and really branched outinto these adjacent spaces in
2023 through an acquisition of acompany that had been around

(38:44):
since 2002.
So there's a long history ofperforming at a very high level
across these consumer productsthat people are already shopping
today, but they just don'trealize you know where it you
know where it came from.
Uh you know, when when you lookat you know a product and you're
like, oh, I didn't realize thosewere interchangeable.

(39:05):
You know, one says it's supposedto be from you know uh Honda,
but it's going in in Acura.
Oh, okay, that's right.
They're related companies.
Similar to us, right?
You know, we are really um thethe uh the horsepower be behind
a lot of remanufacturing thatgoes on here uh in North
America.

SPEAKER_01 (39:24):
You know, there's something that's going on right
now, and uh, you know, somepeople follow it, some people
don't.
It is what it is.
The tariff situation has gone upand down and up and down, and
right now I think it's down, andI think they're trying to figure
out how to get back up.
I have no idea how that's gonnawork out.
But in the in the choice of thatsituation, when you have brand
new product that has the tariffsand stuff like that, how does

(39:46):
Clover react in thosesituations?
Is it something, is it, is it abetter ball game when you hear,
you know, everybody's going,God, 20%?
What are we gonna do?
Is that where Paul goes, yeah, Igot you?
Or is it it eventually comesdown to you like, no, I don't
want none of that.
So I mean, how does that affectthe business?
How does it affect an RTO dealerif somebody says, hey, now we

(40:07):
got a 20% tariff on whereverthese things are coming from?
You know, because you're gettingit on the back end and providing
the parts and the check or therefurbishment certification, it
it does your margin get better?
Does it go from 20, you know,20% to 25% difference, or is it
the same and it kind of ebbs andflows with the brand new price

(40:28):
of the product?

SPEAKER_00 (40:28):
So, you know, a couple things.
We'll talk about you know theimpact of tariffs.
So, you know, my my teams areboth on the acquisition side,
right, business development, andthe sales side of the finished
product.
And, you know, the biggestmessage we could bring to the
brand owners who weren't alreadydoing refurb or remand was
you've already paid for theproduct to be here.

(40:50):
Why wouldn't you want to figureout a way to monetize it again,
right?
Sunk cost.
It's already here.
Let's transform it and build asecondary channel for it.
Especially when tariffs arehigh.
You already paid a bunch.
And maybe even your containercosts were probably out through
the roof as well.
Not as impactful if you'rebringing a whole bunch of
Nintendo Switches in thecountry.
Super impactful if you'rebringing air conditioners in the

(41:12):
country, right?
From a container sidestandpoint.
Absolutely.
So it it becomes more important.
I would never say that a anindustry is recession proof or
you know, volatility proof.
But you if you think aboutreturns, refurb, reman, when

(41:32):
when the when there's tighteningup of an economy, people want to
figure out a way to save money.
Refurbished products make moresense, right?
They see it as a value add.
I can still get the product Iwant, I get it at a reduced
cost.
Times are great, and people arelike, I got a bunch of
disposable income.
Well, they buy more, more stuffgets returned, and you still

(41:53):
have buyers that want to do theright thing, right?
I mean, Gen Z loves refurb.
They understand the value ofsustainability.
They look at it as hey, I wantthe flexibility of partnering
with a comp a brand that has thesame thoughts as I do when it
comes to what we're gonna do toyou know uh manage our place in
the world.
So, you know, tariffs notnecessarily a bad thing when it

(42:17):
comes to the refurb side.
When you talk about pricing, wetend to uh essentially do
everything as a percent of thestandard retail price.
Now we take into account do ourpartners have a map policy or no
map policy?
Because at the end of the day,if they don't, well, we need to
make sure what's the real pricethis product is selling for new.

(42:38):
Yeah, it they may say, hey, it's$3.99.
Yeah, I'm finding it everywherefor$249, right?
So that's the price we're gonnago off of.
Um, but the gate, the thought isvelocity, not gouging.
You know, for us, the you know,the benefit to our clients isn't
just in creating new revenuestreams.

(42:58):
It's also the access to the datathat we give them related to the
consumer experience of thatproduct, right?
Every every return at the end ofthe day, in theory, is because
something was wrong.
They made a maybe it's just theymade a wrong buying decision,
but also it could have been theydidn't understand how to set up
the product.

(43:19):
You know, it didn't meet theirexpectations from a performance
standpoint.
Well, does that mean you need tochange your listing online for
that product and how youdescribe it?
Um, for me, you know, I got myglasses on, I take them off, I
have a hard time seeing you.
You know, I go look at labelssometimes or instruction
manuals, and one of the bestfirst feedbacks I give to my
clients is your stuff's printedin six-point font.

(43:41):
Like even my glasses on, I'mhaving a hard time seeing that.
So the ability to give themfeedback on their product,
usage, you know, basicallycondition after you know being
in the field for one monthversus six months versus you
know a year, that's highlyvaluable.
So we help them understand.
And the fact that the productthey're getting back, there's no

(44:03):
better way to inform yourdecision for your future product
than looking at the productthat's getting returned.
And so for the consumers in therent-owned space, we're going to
help de-risk them from aninventory standpoint from a cost
during times of volatility,right, in market prices.
You know, yes, you could see itcreep up a bit, but at the same
time, we don't creep if it goesup 20%, we may be going up 2% or

(44:27):
3% right on the sale price ofthat product.

SPEAKER_01 (44:29):
Okay.

SPEAKER_00 (44:30):
Um, yeah, because again, keep the product moving
is more important than trying tooptimize the recovery dollar.

SPEAKER_01 (44:39):
Hey everyone, it's Pete Chao here from the RTO Show
Podcast, and I want to tell youabout a company that's making a
real difference in therent-to-owned space, WoW Brands.
I've seen firsthand how theyapproach marketing.
Let me tell you, it's not justabout ads.
WoW Brands builds completedigital ecosystems designed
specifically for therent-to-owned industry.
Their e-commerce and leadgeneration strategies are built

(45:01):
to bring qualified leads.
And did I mention that they areactively working with the
rent-town industry while alsobeing members of APRO and Trib?
Listen, these folks arepassionate problem solvers.
They don't just slap somethingtogether, they design, build,
and scale the kind of digitalretail tools your business needs
and your customers actuallywant.
So if you're serious aboutgrowing, reach out to WoWBrands

(45:23):
at WoWBrands.com.
I trust them, and I think youwill too.
So what categories then isClover getting into?
Because when we're talkingabout, you know, at the end of
the second quarter, going intothe third quarter, you want to
know what's coming up, right?
You want to know what to be ableto pre-sale your customers and
say, hey, I heard this wascoming down the pipe.
This is not something that youwere able to get last year, but

(45:44):
this is something that you canget now, right?
So I'm going to push thosesales.
I'm going to try to put it in myflyer.
I need to, you know, go in likereally 12 weeks out from Black
Friday.
I need to know what am I goingto put in there?
How am I going to design it?
What looks good.
Is there anything that comes upwhen Clover says, hey, this is
my lineup?
How do you know what's coming upnew?
And do you are you expandinginto new spaces where Clover can
say, hey, this is not somethingthat we had before, but we're

(46:06):
getting there now?
I mean, you let me know.
Where how does that work?

SPEAKER_00 (46:11):
Yeah, so we have um kind of what I'll call our home
base of categories we work in,right?
And so, you know, that'stypically floor care, premium
countertop appliance, homeenvironment.
Um, and where we're growing isin home automation and uh some
kind of general consumerelectronics, right?

(46:32):
So I'm not going to be the RTOdealer's best friend for Xbox
and PS5s, but where we aregrowing into TVs and sound bars,
which, you know, after going toRTO world, I did see that there
was a bit of a a need on thesound bar and sound equipment
side specifically.

(46:53):
I felt like that was a bitunderserved and there was a lot
of folks very interested in itthat would stop by our booth.
Um the other pieces, you know,looking at that TV space, what I
don't know yet, and this is partof why I'm very excited to go to
the Trib Show here.
What was it less than a weekaway?
Um, to understand what size TVsare people most interested in in

(47:15):
the R in the RTO space.
You know, is it just 55?
You can have a more standardset, or do we want all the way
up through 85s and heck being atCES this year, right?
120 inch TVs are coming.
Right.
God, yeah.

SPEAKER_02 (47:30):
I I wish I I wish I could.
I don't know if I have a wallthat big, but I wish I could.

SPEAKER_00 (47:35):
Yeah, I at that point just get an ultra short
throw, you know, projector.

SPEAKER_02 (47:39):
You know, you know, I so I so agree with that too,
but yeah.

SPEAKER_00 (47:42):
And that is, and that's another category, right,
that we're looking at.
And I I I go there almost from awanting to learn more.
You know, I it's veryeducational to me.
Omaha was super educational uhthis past year.
And every time I go, I get abetter understanding of what the
dealers are hungry for, right?

(48:03):
Things that they know that theywould love to have, you know, uh
in their inventory.
If I can de-risk them from a sta cost standpoint, maybe they
want to take a better positionon it that you know, because
they don't feel as uh thatthey're really going out on a
limb so much.
And then I can turn back to mybusiness development team and
say, hey, who are we talking tothat fits this need, that this

(48:24):
space, right?
So then we can go to a potentialclient and say, not only can we
handle the returns, but look atthis amazing channel that is
available for you to sell yourproduct into.
And I think that's been for usum such a positive because so
many brands, certain brands,they just don't want they don't
want to see their product backon Amazon.

(48:45):
They don't want to see it oneBay.
But telling them that, hey, I'vegot this great offline channel,
you know, that hits a newconsumer base that essentially
gives them an access point, anentry point to your product in
your brand, they go, oh, that'ssuper interesting to me.
Because either they haven't soldthere historically, or they just
see it as an underserved channelfor them.

(49:08):
So we can bring that to them.
So, you know, TV soundbar,right, is gonna be, you know,
one area we're looking atheavily for everybody.
I don't picture that you know,things like home automation, you
know, you're not gonna, youknow, I don't think the dealers
are gonna want, you know, um,you know, smart locks and stuff
like that.
Probably not a big mover forthem.

SPEAKER_02 (49:27):
Um maybe Yeah, we well, you don't want to be,
yeah, when you're renting aproduct like that, you don't
want to say, well, my lockfailed and somebody walked in my
house.
You know, that's your fault.
Take away from that one.
Yeah.

SPEAKER_00 (49:38):
Yeah, and it and if yeah, and if the contract ends
badly, you know, then you gottago collect a lock off a door.
Right.
That just sounds terrible.

SPEAKER_01 (49:46):
You know, I mean that just that is a bad thought.
That is a terrible thought.

SPEAKER_00 (49:50):
Yeah, but we're we're gonna keep spending you
know pushing into more premiumcoffee products.
You know, I think that's areally aspirational brand.
Coffee is such a big categoryfor people.
Um, it's a money saver for theconsumers to be able to say,
hey, I've got this coffeeaddiction, you know, and you
know, hand of God, I do as well.
Can I just spend$2 a day to fillit versus$7 a day?

(50:14):
And that's a huge win.

SPEAKER_01 (50:16):
Yeah.
No, I uh well, I agree with thatbecause listen, right now the
cost of everything is going up,and the further that it goes up,
the more, you know, what we'regetting paid is just not
following with.
Unfortunately, that's just theway it goes, and we've got to
find a way to negotiate ourpricing as best as we can.
And that's usually eating athome, you know, going to the
grocery store versus going to uhthe you know the restaurant down

(50:38):
the street, and it makes adifference.
So, how long have you been withClover?

SPEAKER_00 (50:44):
So Clover uh bought my company in 2023.
So I was I I was an addition inJune of 2023, uh, you know,
coming from a company that Ididn't start, but I I uh was a
uh partner in uh starting backin 2017.
But I'm I'm a reverse supplychain nerd.

(51:06):
I've been doing this now for 33years.
Um, it's all I know.
My poor wife, you she we can'tgo shopping without me being
like, I don't know that brand.
Hold on, let's go look at that,you know.
And so she's usually that's tooexpensive.

SPEAKER_02 (51:20):
I can get that somewhere else, babe.

SPEAKER_00 (51:21):
Oh, that's the worst part.
I literally will always be like,I'm sure I can figure out who
does the refer for them.
Let me go, you know, let me andshe's like, Can we just not buy
it new?
Please, can we just not buy itnew?
I'm like, okay, fine.
You know, but it it's such anexciting space because it's so
different, right?
Everything that we're doing, youknow, checks all the boxes,
right?

(51:42):
Good for your pocketbook, goodfor the planet, good for people,
right?
And so check, check, check.
I mean, I'm not saving babies,I'm not trying to say anything
like that, but what we are doingis we're providing a valuable
service to our brand partners,but also to the consumers that
get to take that product next.
And I think that's probably oneof the most important things,

(52:03):
right?
So, you know, the rent-owneddealers, we want to help them
reach younger customers, right?
The ones who care about, youknow, sustainability, you know,
it's kind of built in their DNAnow that they align with brands
that are sustainability focused.
We want, you know, to be able togive them really good premium
brands to put in the stores.
We want to help them protectthose margins.

(52:25):
And if it makes sense, tell asustainability story.
Right?
Talk talk about the fact that,hey, what you've just bought or
rented, here's how it got toyou.
Right.
And starting with the fact that,hey, you know, it it's all been
tested.
It has a warranty.
You can be confident in it.
You know the brand's only goingto choose a good partner because

(52:47):
they care about their brand.
I think that's I think that'sthe win.
I really do.

SPEAKER_01 (52:52):
Well, you mentioned earlier that you know you have
to be able to have some feedbackand it goes back and forth
between Clover and the dealer,uh, as far as uh whoever it is
that's selling to you, whetherit be LG or GE or whatever the
case is, and you go back andforth and say, hey, this is
something that we've seen comingup, or they come to you and say,
hey, this is probably an idea ofwhat we can think of because of
this part, whatever the case is.

(53:13):
Where did that work the same waywith the RTO dealers?
Because sometimes, you know, oneof the things that makes a
dealer feel more secure aboutthe products that they have is
being able to go back to themanufacturer and say, Listen, we
beat it up probably more than alot of other people do, or at
least we get the feedback fromit because we do get returns.
There are some people that buynew, it doesn't work, they throw
it in the trash.
They don't ever say anything toanybody, they'll tell their

(53:34):
friends or whatever.
But if we're doing constantreturns or we're we're in
contact with that customer everysingle week, bi-weekly, monthly,
we have that relationship.
And if it's not working right,believe me when I tell you,
before they make that payment,they're going to let us know
hey, this ain't right.
So is there a line that goesback and forth between the R2,
you know, dealers, the the onesthat are on the front lines and

(53:55):
Clover or L2 or however it worksto say, hey, we see something in
this product and it might itmight need to be addressed, or
is that not something that isavailable?

SPEAKER_00 (54:06):
Um, Pete, you might be on the payroll soon.
So shame on me that I've notthought about that one.
That is so like we we haveservices that essentially scrape
uh reviews, um, you know, and umand NPS scores and everything
for the products that we touch.
What I don't have, and becauseso much of what we sell either

(54:27):
goes through a marketplace orgoes through you know into a
value retail or et cetera, wedon't get a feedback loop like
that.
But to have access to somethinglike that, we could formalize in
a way that you know maybe it's amonthly or a quarterly, you
know, put push to the dealersthat bought product to give
feedback on it would bemonumental.

(54:49):
Like my I know my brand partnerswould eat that up because we
could then turn that intoactionable engineering projects
either internally or back withour brand partners.
And you're right.
I mean, I I'm the toughesttester of our product, right?
You know, I'll have stuffshipped to my house.
I think my wife's tired of howmany blenders we have, how many
vacuums, etc.

(55:10):
Um, but it's because I want tomake sure that what we're
putting out, and it's alwaysblind, right?
I don't tell my teams that I'mordering one in.
I want to know what what was myout-of-box experience and can I
find something wrong with it?
But having a you know a directconnection with the the dealers
that's huge.
Yeah, I'm I'm gonna be figuringthat one out over the next week

(55:31):
and you know, talking to theteam that you know while we're
with L2 at the booth next week.

SPEAKER_01 (55:35):
Well, I mean, it it's it's something that we've
had to, you know, and some otherdealers have done it, and I know
it resonated well with peoplewho are taking in products that
they're not 100% sure of, to beable to say, listen, um, I don't
know exactly how this is gonnawork.
I don't know how this is exactlygonna land, but if I have
somebody's ear to know that Ihave a say and maybe it's it's
going this way or it's goingthat way, and we can change that

(55:56):
to be better off for thecustomer, better off for the end
result for the payoff in threemonths, four months, ten months,
whatever the case is, you know,whether it's uh you know,
whether it's a hotline, whetherit's an email, I know that the
dealers felt so much better inbeing able to say, hey, I've
I've had three of these andthree of these consistently,
like right at day 31, you know,whatever the case is.
And I'm not saying that's that'sit, but you know, whatever the

(56:18):
case is, they they can say andthey they see it because it can
possibly go out and come backand go out and come back.
And so it gets worn and utilizeduh in different ways by
different people.
And then that same productfinally comes back and they say,
Man, I I remember cleaning this,I remember doing this, it
indented here or stopped there.
Um, and being able to say, Heyguys, this is something that's

(56:38):
really, really important to us.

SPEAKER_00 (56:40):
So, Pete, let's pull on that thread for a second and
put you on the spot.
So, what do you think is betterfor the dealers?
Um, kind of a dedicated emailthat would could go with every
product, a little sticker on theoutside that says, Hey, you if
you ever have any questions,concerns, and want to give
feedback to Clover, send anemail to this or a monthly
survey that we would send out tothe dealers that bought product

(57:01):
to say, hey, to give feedback.
What what do you think wouldresonate better?

SPEAKER_01 (57:04):
I'm gonna be honest with you.
So it's made up of a lot ofsmaller dealers.
So, unless you're literallytalking to Aaron's or Rena
Center, you have so many peoplethat do so many different
things.
So out of a few thousand stores,you have a big RTO dealer would
be like a hundred, right?

(57:25):
Or two hundred.
That's not you know the same asthe rack and the errands where
you're in a thousand mark.
So if I had to say, I would sayboth.
I would say if you can set up anautomated system to drop on the
first day or the last day ofevery single month just to send
out that that thing for the theRTO dealers that let's say if I
have one to five stores, I mightbe running around and doing 10

(57:48):
different things every singleday, and it just might not be on
my mind.
Doesn't mean that I don't meanto call, but it means that I'm
just very, very busy.
And if I can get back to it andsay, you know what, I have this,
I didn't do it last month, butthey reminded me with this
email.
Boom, let me get it.
Then you have people that have,you know, a larger amount of
stores where they have officetime that they can sit back and
say, hey, I've got these threeguys that have said this three

(58:08):
different times.
I want to reach out right now.
And, you know, maybe maybe it'sthe case that it's just a
dedicated email and you get youget a response back, you know,
like, hey, this is Paul Adamson.
I am looking at this and I willget back to you within 48 hours,
whatever the case is.
Um so that you you have thatredundancy regardless.
If they're never gonna hit youup because they just don't find
the time and they get the email,they can do that from home.

(58:31):
They can do it when they have,you know, easy time in the
office, when they get in thereat 7 a.m.
or they're staying late tillnine.
And then you have the guys thatare, you know, uh, because you
have certain dealers, RTOdealers that have the guys that
are, you know, they're in therefurbishment department, right?
So they might have, if they have20, 30 stores, they might have
somebody or one or two dedicatedto just doing that and they see
it.
And if they have a phone numberand that it's not their email

(58:53):
that you're sending that to,they can call you directly.
So that would be my solution toit.
Um and I think the more avenuesyou have, the better it is.
Now, you know, at the end of ayear, and you know, you can say,
hey, we're getting more emailsand we're getting calls, or
we're getting more calls andwe're getting emails, and we
want to, you know, we want to upthe ante on one or the other to
make it more efficient for thedealer.
That's what I would go.
But I would definitely try itboth ways.

SPEAKER_00 (59:15):
Okay.
No, that's a great point.
And I'll I'll get thatimplemented very quickly because
I love that, right?
That direct feedback is soimportant.
Yeah, it's it could be a gamechanger.

SPEAKER_02 (59:24):
Well, that's what we want to do.
We want to make it, we want tomake it good, Paul.
I mean, I'm just saying, youknow?
I know.
I mean, I want to get akickback, Paul.
I'm looking for an ice maker.
I'm just saying.

SPEAKER_00 (59:34):
So paraphrase that.
My wife's looking for an icemaker.

SPEAKER_02 (59:38):
Yeah, your wife is definitely looking for an ice
maker, but my wife is definitelywatch this and be like, You did
you did you get the ice maker?

SPEAKER_00 (59:45):
That's the only thing that's gonna come out of
it.
She's like, ice maker?

SPEAKER_02 (59:48):
Um, I don't know anything you said but the ice
maker.

SPEAKER_01 (59:53):
So, real quick, because you know, coming into
the end, I mean, we have thesediscussions and it's always
about how do we get better, howdo we know what we're getting
into and is it good for thecustomer, is it good for us, is
it good for the margins, right?
We always want to carrysomething that's good for them,
but also good for the dealer.
It's got to make sense for usand for the community that we
serve.
And it sounds like you know,Clover's trying to check off a

(01:00:14):
lot of those boxes and whetherwe do some things that are got
feedback or get into somethingthat has feedback.
I think the idea of partneringwith L2 is a very good idea
because they are well knownwithin their RTO space and they
can serve us very, very well.
So I think that's a great thing.
I want to ask you some quickfire questions and I want to put
you on the spot.
Now, I'm not gonna throw in mywife needs an ice maker yet.

(01:00:35):
But um, you know, if you were tosay, and this is just an honest
question, uh, what would yousay, you know, is the biggest
upside for using Clover rightnow?

SPEAKER_00 (01:00:45):
Quality products, right?
So when you're when the dealersare gonna explain certified
refurbished, they they will havea confidence that it's backed by
a company that's been doing itfor 30 years.

SPEAKER_01 (01:00:54):
Okay.
Most misunderstood metric whenit comes to having a certified
refurbished product on yourcounter.

SPEAKER_00 (01:01:03):
Oh, the probably the total value prop for that
product, right?
So you are able to save money onyour per your original purchase
as a dealer.
So you've de-risked yourselffrom an inventory position.
You've got a great story to beable to tell the next generation
of buyers, you know, so they'regonna be focused on uh the
sustainability side, the overallnarrative of that brand for your

(01:01:25):
standard.
You know, I'm gonna call it usGen Xers or others that maybe
are not as first, you know,driven by the sustainability
equation.
We like a good deal, but you'reable to provide a good deal.
So when you're thinking aboutchecking the boxes, you know,
this is a product that sits onyour counter that is understands

(01:01:47):
the reality of the market today,which is there's a lot of
pricing pressure on people,right?
You know, people are feeling thethe the kind of the extremes of
the cost of products in general.
So you're helping themunderstand that this is a better
valued product, it has the samequality, they can feel
comfortable in the fact that thebrand has anointed this company

(01:02:08):
to provide this service, and atthe end of the day, they're also
helping to create a better worldby buying a refurbished or
remanufactured product.

SPEAKER_01 (01:02:18):
Okay.
What is, in your opinion, onecategory of refurbished product
that maybe somebody in therent-to-owned industry should
avoid?

SPEAKER_00 (01:02:28):
Oh, oh, that's interesting.
Um, I would look at um thingswith large battery packs.
So uh, you know, e-bikes, um,portable power stations, unless
they're buying them directlyfrom the reefer uh from the
brand certified partner, um,only because uh batteries

(01:02:51):
degrade at different rates andyou can end up with a lot of
challenges around that.
Um so uncontrolled batterymanagement is still a huge, you
know, huge challenge in thespace.
Um the other part around that ismeeting the requirements for
shipping a uh a rechargeablebattery these days is much more

(01:03:11):
complicated.
And so what you don't want to beis the receiver of a pro product
that was shipped incorrectly.

SPEAKER_01 (01:03:18):
I can tell you right now, there's nothing like a
lithium-ion battery fire.
That thing is unbelievable.
Yes.
And last but not least, questionthat I want to ask Paul Adamson,
the C R O of Clover, what is onecategory that you would say you
should double down on?

SPEAKER_00 (01:03:36):
Uh as a dealer, um, I would probably focus pretty
big on premium countertopappliance.
That coffee space, there's areason everybody's moving into
it, and you could capitalizeupon it.
I would, in my my world, I wouldget uh lean into semi-automatic
espresso machines over fullyautomatic.

(01:03:58):
Less things that can go wrong,uh less complication for your
consumer.
Um, but you know, there's theBrevel product is amazing, other
brands as well, and I think itwould bring a lot of value to
your consumers.

SPEAKER_01 (01:04:12):
Well, guys, we've tried to uh get get Paul to
shook up a little bit, you know,knock Clover around a little
bit.
They seem to be doing all right.
They think he's done hishomework a little bit.
I don't know what happened.
You must be on the bad phonebecause you changed backgrounds
real quick on me.
I need to know what happened.
You did it so fast.
I don't even know what happened,but I want to do something I do
appreciate you being on today.
Paul, it's been great to haveyou on here.
If somebody wanted to reach outto Clover and make that choice

(01:04:34):
and see how you are, do theycontact L2?
They contact you.
Can you give them a little bitof information for that so that
they can uh find out where youguys are at and start utilizing
it?

SPEAKER_00 (01:04:43):
Yep.
So if they're gonna be uhpurchasing product for the their
their stores, it'll go throughR2.
Um if they just have generalquestions about you know refurb,
refurbishment, remanufacturing,the standards, I'm more than
happy for them to reach out tome or a member of my team.
Um, you know, I don't know if Ijust need to rattle off my email

(01:05:03):
address or if you'll post it atthe end in the comments.
We're gonna do both.

SPEAKER_01 (01:05:06):
So if you want to give us an email address, we'll
post it down on the lower third.
That way everybody gets tounderstand one way or the other.
We know how to get a hold ofyou, but go ahead.

SPEAKER_00 (01:05:14):
Sure.
So Paul.addamson, soa-d-a-m-s-o-n at cloveres.com
and happy to address yourquestions.
Love the engagement.
And if you want to be uh I willcall it a guinea pig for general
feedback from the rent-to-ownedspace, would love to hear that
as well.
And what would work best for youfor giving that feedback?

SPEAKER_01 (01:05:34):
I tell you guys what, it looks like clovers.com
because that's actually what Ithought it was, and I got
corrected, you know, and so it'suh Clover Environmental
Services.
But Paul.addamson atClovers.com.
Guys, I'll tell you as always,we do appreciate having Paul on
here.
I can tell you what, I've seenit.
If you guys have an opportunity,make sure you stop by their
booth and take a look at them.

(01:05:54):
If not, give them a call.
See if you can reach out onemail and maybe they can send
you a little bit of a lineup sothat you can have an idea.
Of what they do and how it canserve you.
I'll tell you guys as always, weappreciate you being here.
And Paul, make sure that youcheck us out on Facebook,
Instagram, LinkedIn, YouTubewhere you're gonna see this.
Paul, I want to tell you, I doappreciate taking your time.
Let me kind of throw a couplejabs at you.
And I'm gonna tell you guys asalways, get your collections low

(01:06:17):
to get your sales high.
Have a great one.