In episode 54 of Everything is Up, Tammera Hollerich interviews Dennis Hoang, co-founder of Patturn, to discuss their innovative approach to managing returns for large brands and retailers. Dennis shares insights into the challenges of scaling their business, the unique culture at Patturn, and the entrepreneurial spirit that drives their success.
Tune in to this engaging conversation about entrepreneurship, work culture, and the future of retail management.
TIMESTAMPS
[00:02:40] Managing Returns for Retailers.
[00:06:04] Niche in Returns Processing Business.
[00:10:46] Scaling a Massive Warehouse.
[00:15:29] The Impact of COVID.
[00:18:03] Work-Life Balance and Flexibility.
[00:21:33] Entrepreneurial Spirit in America.
[00:26:02] Online Fashion Resale Website.
In this episode, Tammera Hollerich and Dennis Hoang delve into the challenges faced by retailers with a high volume of returns, with Dennis explaining how Patturn's software automates the inspection and resale of returned items across various channels.
Furthermore, Tammer and Dennis touch on the impact of COVID-19 on Patturn's growth, with Dennis sharing how their online sales model thrived during the pandemic. The conversation concludes with details on how listeners can explore Patturn's resale offerings on their website and reach out for potential business collaborations.
QUOTES
SOCIAL MEDIA LINKS
Tammera Hollerich
Facebook: https://www.facebook.com/TammeraHollerich
LinkedIn: https://www.linkedin.com/in/tammerahollerich/
Instagram: https://www.instagram.com/thollerich/
Dennis Hoang
Facebook: https://www.facebook.com/dennis.hoang.9/
LinkedIn: https://www.linkedin.com/in/dennis-hoang1/
Email: dennis@patturn.io
WEBSITES
Everything Is Up: https://everything-is-up.simplecast.com/
Tammera Hollerich: https://tammerahollerich.com/
Patturn: https://www.patturn.io/
Welcome to Everything is Up, a podcast about the real life stories of people who have created extraordinary levels of success. These are conversations with people who are constantly striving to take things to the next level. And now, here's your host.
Intro/Outro
Everything is up with Tamara. Joining me today is Dennis Hoang with Patturn. And Dennis, thank you so much for joining us. I'm very impressed with what you guys are doing at Pattern. So welcome, thank you for coming.
Tammera Hollerich
Thank you for having me on, Tamara. Pleasure to be on the Everything is a Podcast. We're doing some interesting stuff here, so I'm excited to tell you and your audience a little bit about what we're building here at Pattern.
Dennis Hoang
I love it, I love it, I love it. Okay, so I know that you started this business with your brothers, is that correct?
Tammera Hollerich
Correct. I started it with my older brother and my younger brother.
Dennis Hoang
Oh, so you're middle.
You're the middle. Yes, I'm the middle for God child. Of course, that's typically what happens. right okay so how did you guys get into well let's back up go ahead and tell the audience what pattern is and what you guys do because that's very interesting sure so what pattern is is we provide a service for large brands and retailers what happens is large brands and retailers get a lot of sales but they also get a lot of returns on the return side 30% of what people purchase is returned. So let's say if you purchase something on Amazon and you use it for like a week, it gets returned back to Amazon. But since you put it in a box and it can basically be anything, it's a nightmare for the Amazons and the retailers and the brands of the world to manage all those returns at scale. Let's say if there's a million sales a day, 300,000 of those sales come back to them. And then think about opening those individual boxes one by one. It's such a nightmare for them to manage. So essentially what we do is we built a software to automate that whole process. What happens is the Amazons of the world sends us all of their returns inventory on truckloads on a weekly basis. It's my job's team to essentially sift through that inventory. process it to essentially process it to inspect. Let's say, hey, is this good? Is this not good? And then it's our job to also resell it across a variety of channels, whether that's eBay, our personal website, Poshmark, any kind of like reselling channel, you name it, that's kind of what we're probably on. Our reselling channel we describe as gender, and we are one of the largest sellers on eBay to date. And it's focused on, our focus is mainly in women's fashion.
Wow. Okay. So that is a lot of information. So I'm going to break it down. Make sure I understand because I think when I saw that number, that 30% and I think about, um, Amazon's return policy, right? So I think that's what had them blow up so fast is yet one, the simplicity of buying it and having it drop ship to your door tomorrow. I mean, obviously, but then their return policy is so easy, right? There's really just not a whole, there's not pushback, there's not any of that. So When I think about that number at 30% and I think the number I read that you had shared with us was like 500 billion dollars.
Yeah, yeah. That's the total value of returns as of last year, right? So think about all the returns that return back to the Amazons of the world. That's the total value, right? But the unfortunate reality is maybe like $70 billion of it only made its way back into the market, meaning retailers and brands were only able to recover $70 billion, right? So there's still a huge gap to be filled on the return side.
Yeah, so when you guys are selling it, how does that work? Does it work as you guys keep a percentage of it, you give them a percentage?
How does that work? Yeah, sure. So there's two models. So, in one model, the Amazons of the world are like, hey, I just want to sell this inventory for dirt cheap, and I just want to get it out of my warehouse. That's when we take ownership of that inventory and resell ourselves. And then number two is, the Amazons of the world are like, hey, this inventory, I want you guys to process it for me, and then at sale, I get a piece of it, you get a piece of it for processing. So, those are the two models. Resale is one of them, and then being a processing center, being a processing center is another piece of the business.
Okay, so how on earth did you guys figure out that there was this niche that needed to be filled? And then for one, that's question number one, and then two, let's talk about how you guys scaled this. Because you guys are using, I mean, we're talking large retailers here.
Yeah, yeah. Okay, so how we got into the business. So historically in Asian culture, my parents were entrepreneurs themselves. So what happened was they started kind of like a small electronics repair shop. And you're based in Fort Worth, right? I am. Yeah. Are you familiar with Haltom City by any chance? Absolutely. Well, so back in the early 2000s, they opened up one of the very first kind of small computer shops in Haltom City. And long story short, what happened was, they started partnering with the HP, their business grew and grew and grew. And they started partnering with the HPs and Dells of the world. And long story short, they needed a software to help them track inventory and cost. And the problem was that gaining access to that type of software would have costed them millions. And for a small business, who has just millions? Who has millions? No one, right? So essentially, when As I grew up in the business, I figured out like, hey, this is how you do X, Y, Z, right? Just because historically in Asian culture, if your parents own a business, you're probably working on it during after school, on the weekends, during holidays, and that's what we did, right? So we learned how to do essentially returns processing for electronics. And maybe about in 2019, when me and my older brother Davis took on more of a management role in the company, what happened was that they were still trying to look for that software after after 20 years, right? We went to this conference, we essentially went to this cut to returns conference, and it was still the same thing, like, no one is giving access to any of their software, everything's closed doors. And what we did was we were like, hey, let's list out all the problems that we have in our business. And and build a software for it. And that's essentially what we did. It turned out it worked really well for electronics and then we found a niche in specifically fashion, more specifically women's fashion. And that's essentially when we made... That's when my brothers and I decided to make the full pivot and we are focused exclusively on women's fashion. So to give you kind of a scale of where we're at, We operate out of two warehouses in Fort Worth with a total of about 80,000 square feet. And we house roughly anywhere from 150 to 180,000 unique SKUs at one time. So unique SKUs is individual, so like each unique item plus its quantity as well. So like we have 180,000 unique SKUs, but that SKU could also have like 10 of that item.
Right.
Yeah.
Okay. All right. So as you scaled their challenges, where were some of the challenges that you guys had in scaling this big? I mean, a pivot is hard enough. But then to scale to 180,000 unique SKUs is Mind-boggling, actually.
Yeah, sure. So scaling has for us is interesting because we don't really control the type of inventory that we get. It's strictly based on the returns that that retailers and brands get. I can never say that, hey, I want 10 MacBooks. Does that make sense? Maybe on the forward logistic side we can say that, but on the reverse side, our inventory is strictly based on returns and we don't really control what comes back. We just have to figure out what to do with that item as soon as it lands in our warehouse. Scaling. Our software that we describe as Pattern helped us scale. Without Pattern, we wouldn't be able to do any of this. This is a purely data-driven industry, and if you want to scale well, you have to have a software. Another thing is space, right? A good thing we have about 80,000 square feet of warehouse to use, just because we're receiving almost two to three truckloads of inventory on a weekly basis. So two to three truckloads is roughly maybe 24 to 32 pallets per truck, and then that's stacked basically double. And then it's my team's job to sift through all those pallets and then add to our inventory to resell. But to give you a perspective of some of the reselling that we do, on average, we're able to sell an item we have a 60% chance of selling an item on across our channels within the first 30 days. So about 60% chance. So we turn inventory at least two and a half times per year. So we're constantly moving stuff in and out like nonstop.
Yeah. That's, I mean, it's impressive. I mean, that's what I was saying is as I was kind of searching for, you know, my guests, I'm like, This is very interesting because it's not like I have driven down I-30 or I-35 and seen a big warehouse that says pattern on it. But you guys are crushing it in this market. So let's talk going from working in your parents' electronic repair store, right? Pivoting, putting the software together, going into these, you know, now this massive warehouse and employees. Employees are an essential part of any business as it is growing, right? But they can also be fairly challenging. And, you know, when did you guys start? Did you guys go through COVID with Pattern?
We did, we did. And that's actually when we grew the most because our sales are strictly online, which is great, right? We don't have to, we don't have to man a storefront. Our customers are strictly online. So our business grew during COVID, which is, which, which made us very lucky.
Yeah. Well, that's, that's helpful. So the challenges came with COVID on, you know, having the employee base to help you grow, scale and, you know, build this, you know, amazing business that you guys are running. Talk to me about your culture that you guys have there at Pattern with your employees.
Awesome. So currently right now we staff 25 employees. And culture wise, honestly, we I describe it as work hard, play hard. Me and my brothers have built a culture to where we don't micromanage anyone. We don't believe in micromanaging. If you work for us, you should essentially know what you have to do each and every day. Right. And that's kind of the beauty of it. I never have to tell my employees what to do, they already know what to do on a daily basis. So a lot of times on a daily operation side, we're not really making any new decisions. We leave it up to them to make those decisions. So that way, it's just one less thing for me to stress about.
Right. Yeah. Okay. So warehouse work is tough, obviously. And we do have quite a few Amazon distribution centers here in the DFW Metroplex. And so you're competing with some of that culture too. You know what I mean? Yeah.
So I'll tell you about our culture on the warehousing side. I really don't think that we work our employees to death. I think that's the easiest way to explain it. Unfortunately, if you work for a large distributor like Amazon or one of those guys, they track your restroom use, they track if you're just standing still, they track if you're just taking a two-second break because you've been walking around all day. We're not like that. We understand that people are human. and people need breaks right so we don't treat i don't treat people like or excuse me we don't treat people like what i describe as a Like as a human slave just because it's hard work where housing workers very hard work and doing it doing it day to day is challenging and especially if you have metrics you have to meet yada yada yada. Of course, of course, our staff works hard, but I think there were but we don't we don't push a crazy pace because again. Everyone's human and everyone works hard, but we want them to, we want them to get off work and still feel like they have the energy to do whatever they want for the rest of the day versus going home and being like, dang, I'm so tired. I don't want to do anything else and have to rinse and repeat that for the next however long I stayed. I think that that's, that's not the culture. That's not a culture of growth that we see.
Nice. You know, um, I was very much hoping that that was kind of the mentality because, you know, I have a balloon company and with the balloon company, you know, I get a lot of people that have left Amazon to come play with balloons with us because of that mentality, because the warehouse work is a lot. And I just don't think people realize, you know, everybody, you know, Well, Amazon starts their employees out at such a high pay rate, and some of that's hard to compete with too because they are so massive. But they also, you're right, they treat the humans like robots a lot of times. And that's why I kind of wanted to pick your brain a little bit on just the warehouse side of it, strictly for the fact that These are people, and I do think that since COVID, they call it the great, what did they call it? The great, oh, it starts with an R. What is the word that they used? The great retreat, right? Where employees left the workforce and realized, oh, I have been in the rat race and I don't want to go back to that rat race. And so post COVID, it has, you know, as people are, you know, coming back into the workforce and people are going back to the office. And, you know, I think we've kind of settled down now some and kind of really gotten ourselves back into the workforce. But I do still think that the mindset has shifted tremendously since COVID. Do you agree?
I think so. I think that slowly but surely people are making their way back to the offices. But I also think that bigger companies need to adjust to people working at home as well. Just because let's say if like Let's say if I'm traveling from Fort Worth to Dallas, right? But I live in Fort Worth, right? I have, let's say my work day starts at eight o'clock. I have to wake up at six, get ready, get ready in 30 minutes, and then make my way to Dallas, which is about a 45 minute to an hour drive, which is a very common thing that people from DFW do. That's already two, that's already, I'm already spending two hours doing that, right? And if your role specifically needs, if your role exclusively needs a, computer, then in my opinion, if they get their work done, if they get their work done, as long as they get their work done, then they just do it at home, right? It saves that time to travel. It gives that time for that employee to, in theory, live their life, right? But people, on the other hand, disagree with that opinion, right? I get it. These big companies have built their offices. They've built their skyscraper offices and yada yada. And obviously, they want to utilize that. But if Like I said, going back to that idea of working for Amazon or working for a small business like us, you can get paid high, but expect to go home and just be tired the whole time. Or you can work for a small company like us and get paid a little less, but still go home and feel like you have a life.
A life, yeah, yeah, like you could. You haven't given everything at the office. You can go home and still give some to your family.
I know your family, your loved ones, maybe in a hot, maybe even a hobby. You can work out. You can make dinner. You can hit the grocery store and not feel like and not feel like you're tired by the time like you have to go to bed or even get home right now.
I agree. I think the word that I've heard thrown around a lot here recently is flexibility and not just the flexibility that the employer expects. the employee to be flexible, but employers being more flexible than, and honestly, you know, with a balloon company in the hospitality industry, you are at the mercy of the event and whenever that event is scheduled. So, you know, we do have some of that, but we are also the party people, right? So we, we're constantly setting up for a party, but it is, it is hard work. And, We're running all over town, and we're setting up for events. You can't kill your team either. Yeah, you can't. No, you can't. And call it business. I think we have evolved as a society beyond killing the employee for the sake of the dollar. And I'm glad to see that is coming, that we've made that transition. In the Asian culture, you alluded to, you know, if your family has a business, you're going to grow up in the business and, you know, you're going to progress that way. Talk to me a little bit about the culture and how that culture is, how you guys were raised in that mindset to give you that entrepreneurial spirit to kind of take this venture and run with it.
Yeah. Historically, in Vietnamese culture, if your parents own a business, it's one of a couple of things. So it's not, it's usually like, let's say in Halton City, like, let's say it might be a nail salon, or a hair, or a place that does haircuts, or maybe even a grocery, maybe even like a little smaller grocery store, convenience store, right? Growing up the business gave me the essentially the stepping stones of saying, hey, my parents made it work. I think I can make it work as well. But also, I'd argue that unfortunately a lot of people in Vietnamese culture don't... Let's just talk about people around my age. A lot of people around my age have aspirations to become a doctor, engineer, lawyer, or yada, yada, yada, don't get me wrong. Those are great careers, right? But sometimes their parents might be an entrepreneur with a very, very, very successful business at home already. that will probably make more than any other doctor, any other lawyer, or anything else have ever made across the many years that they may work in that business. Why not start at home, right? You already have this wild base. You already have essentially the keys to the kingdom. Why not take advantage of it? And that's what I tell my friends all the time.
Nice. Yeah, so that's the thing. If you go back and look at How America, our melting pot, we call it the melting pot, right? These various different diversities that have made up this culture. The entrepreneurial spirit has been alive in our country for literally almost 300 years, right? And on so many different cultural aspects, that is what makes what you guys are doing incredibly unique. Interestingly enough, I come from a family that had no entrepreneurs whatsoever. I was like, I swear, I tell my dad all the time, are you sure mom didn't have an affair with the milkman? Because I swear, I am literally just completely opposite from everybody in our family. But I feel so blessed to have said, OK, I'm going to do this because now my kids, my family, they have a foundation. If they want it, I'm building it for them. And then it can grow from there. And I think all parents that have that entrepreneurial spirit are like, I can leave a legacy.
Exactly, exactly. So I'll give you a little story. So back in the early, let's say during the Vietnam War, my parents came over here in their early 20s with essentially only the clothes on their back and maybe like Like literally the clothes on their back because they're escaping the Vietnam War during refugee times. They had no money, no language, no nothing, right? And then now almost like years and years later, now they're living that kind of quote-unquote American dream. All they travel six months out of the year, and that's all I want for them, right? And during that wartime kind of mentality, they have to figure out that it was either do or die, right? And he always has that do or, that's kind of what, I think that's what, I think that's why a lot of Vietnamese entrepreneurs do what they do, because a lot of parents around the time of the war, it's either a do or die mentality. And nothing ever prepped them for a time of war. And I don't think I'm ever going to experience that in my lifetime. And I'll never understand what my parents, you know, I'll never understand what my parents went through. But they have this kind of do or die mentality that says that, hey, like, nothing's harder than what I went through previously. This is kind of what I do here in the business is kind of a cakewalk.
Nice. Yeah, that's exciting. So you talked about your brother Davis and your other brother, smaller, younger brother. Yes.
Yeah. His name is Douglas. And we also, um, so my dad, my older brother and my younger brother, we all have our names start with a D. So my dad's name is Dai or my dad's name is Dai, which is a Vietnamese name. And then my older brother's name is Davis. I'm Dennis. And then my younger brother's name is Douglas.
Well, we have that in common. I had seen that and I was like, okay, that's cool. My whole family is starts with T's Tammy Tina.
Oh, cool. That's awesome. I don't meet I think this is the first like, like tea or kind of like same letter family that I've met. So I'm happy that we've connected on that.
It's very exciting. That's why I said, so what was your younger brother's name? Because I kind of caught that and I was like, okay, we have that in common. And it's really funny. We joke, you know, as adults and somebody will call me Tina and I just answer, you know, and they're like, and they're like, but that's Tamera. And I'm like, Yeah, yeah, yeah. But you don't understand. My mom went through every name and it didn't matter when she was mad. It was every, every name. And you just answered like you just.
No, ma'am. Yep. Sounds about right.
So funny. Well, Dennis, I am so impressed with what you gentlemen are doing with pattern. It is impressive, and I want to make sure that we are able to share and how people can get to your website. So share with us the best way for, you know, we have a pretty high female base of listeners, so I want to make sure that you share with them the website and that kind of thing. So website, where can we go to see the resales here?
Sure. So if you guys want to find if your audience wants to find the resale, they want to go to this website known as gender. So it's j e n d e r.io. I'll put I'll go ahead and put it in the chat right here. This is our resale website. And we sell everything and anything that you can probably find at a mall. So brands like Clarks, Skechers, Ms. Moos, Dooney & Burke, Earth Origins, Barefoot Dreams is a big one that apparently a lot of people love. We house the majority of mall brands on this website. We're currently in the redesign phase of it right now, but in general, you're going to find discounts of up to 50 to 90% off traditional retail prices.
detail pricing, that's exciting. Okay, so there's that. So ladies, if you're listening, it's gender, j-e-n-d-e-r dot i-o, and we'll get it scrolling across the screen for you as well if you guys are watching. But for those of you listening, you may want to just jot that down. And then with pattern, Because I do have a lot of CEOs that share this podcast. And if we do have anybody that's got a retail space that's looking for a way to manage those returns, how do they get in touch with you?
Yes, so they can reach out to me directly at my email. So my email is Dennis at pattern.io. I can spell it out and then also type it in the chat as well. So it's D-E-N-N-I-S at pattern P-A-T-T-U-R-N dot I-O.
Dennis, you have been such a pleasure to visit with today. We are excited. Like I said, I'm extremely impressed and very proud of you guys. So continued success to you and your brothers and best of luck. And thank you so much for joining me today.
Of course. Great conversation. I love talking about what we're doing here at Pattern. And honestly, it was a great opportunity to tell you and your audience a little bit about it.
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