Zac: in.

Jason Padovani: Okay, cool.

Zac: My name is Zach Montgomery with War on Retail. I'm the founder of War on Retail. I've been in liquidation for over 15 years. This podcast is built by liquidation. We're a reseller podcast geared towards teaching people about liquidation and beyond. Today we've got Jason Padavani with Smart Source Wholesale. And the theme of the day is buyer transparency, what buyers think they're getting, and what we sell them as brokers. So that's kind of what I want to get into is. What, as a buyer, I have an expectation of a truck. You as a broker are explaining the truck and somewhere along the way there is a disconnect. How do I fix that? As a buyer, and we'll just jump into Dollar General, how should I set my expectation as a buyer versus you the broker what you're telling me? A lot of times I think buyers hear one thing even though you tell them another and they get the truck in and now they're immediately upset with you. How can we How can we stop that?

Jason Padovani: Yeah, well, I mean, it does go back to the way to avoid that is setting the proper expectation. And that's literally something we drill down so hard on all of our loads, specifically since we're talking about you brought up Dollar General. That's a great one to start with just because of the seasonality in Dollar General and the pricing structure that they utilize. And I think that, you know, and I literally say the same thing that every customer probably about 20 different times a day with there's a reason that when they go with that lower price point that there's going to be more seasonal. That's like their way of, you know, some type of concession, if you will, in my opinion. Right. So out of the 17 different dollar general facilities that we've been managing and working with now with customers, ⁓ we literally, I don't know, probably 40, 50, 60 loads in the last 20, 30 days, maybe less, I mean, give or take. But the point is, is we haven't had literally I can't even remember a customer that was upset with us because we literally worked so hard on setting an expectation. So when all customers ask a super similar question is, it gonna be heavy and seasonal? They are asking these questions and that's the opportunity to set the expectation. So we're saying, listen, typically around the months of November to say May-ish, it's gonna be that lowered price point you see of 3,500, 45, maybe even a little bit north of 45. and then it creeps maybe in June or July back up to the seven, eight, nines, you know, all the way back until it circles around again, say in the next October. So it's safe to say it's roughly like a six month cycle, you know, and when you have that lowered price versus the higher price. But again, with that lower price comes, yes, you could get summer, you could get Christmas, you could get Halloween, you could get Valentine's. And I never... We say seasonal, but then to take it a step further, it's gonna be, we've had customers that got summer and Christmas together, Christmas and Valentine's. we don't know, no one knows unless you bring that load in. And that's one point that we try to drive home is that unless that load is brought in somewhere, that is the only way you could guarantee anything about that load, anything. Other than that, that's why setting the expectation is so important. Saying, listen, it could be 70 to 95 % seasonal. Period. And that's it. And then we'll have customers say, well, do you think I'll get at least 20 % non-seasonal? And then you really got to watch those types of questions just because you just circle back on setting expectation again and say, listen, here's how it is. I don't want to tell you what you want to hear. I know that's what you want. This is how the load is. And literally, we have not had one issue. I've been upset customer over dollar general. And it's because I'm so redundant.

Zac: Yeah.

Jason Padovani: in the facts that I put on the table for them. But I also try to provide strategy at the same time, saying, listen, with a lot of customers that buy these, the strategy play is to pull out what you can and use now. There's probably gonna be something, right? Use it for now, and then you're gonna store it for later. That's the win on these, right? Not all people can do that, and I get that, but that's where you can make a win, because I wanna get the rhetoric of, ⁓ they're bad now because they're seasonal.

Zac: Yo. Yeah.

Jason Padovani: Well, no, is there an opportunity? How is there an opportunity? And how do you execute that opportunity? And that's one of the suggestions that I just gave is pulling out what you can use now and storing the rest for later. But that's an explanation we give a lot. I like to get away from the rhetoric I see online and I hear people talk about like, stay away from Dollar General. They're heavy and seasonal. Like, yes, but that's not bad for everybody. That could be a turnoff to some, but it's not a turnoff to all.

Zac: Yeah. Well, think that's a good point. think I have a note here, and it's almost a question, but you've already answered it. the question was, what do most new buyers misunderstand about liquidation? And I think you nailed it without meaning to. I think a lot of new buyers are under the assumption that liquidation works for them. And in reality, we need to work with liquidation. So if you're going to buy these lower cost loads, especially Dollar General, you have to be willing to get creative on how you get rid of it. And if it's not, if you only have the space to move product that's ready to sell now, I don't think Dollar General is for you. Because you will have to store some of that summer stuff or that Christmas stuff or that Halloween stuff to get the recovery you want out of it. If you're just looking for something, what is Dollar General now, 3,500 or four grand? Do you think you can?

Jason Padovani: Yeah, correct.

Zac: I mean, you can't even answer that question, right? Because that's the buyer, this is me being a buyer, right? The buyer goes, do you think I can still make money off the stuff that's not seasonal? Right, and you can't answer that because you don't know what's gonna be on the truck. And a buyer's not willing, usually, to say, hey, I'll give you extra thousand bucks to bring it into your place and look at it for me. They want it shipped raw and direct. And I know a lot of the issues that we had was people always want it raw and direct until they get it raw and direct and it's not great. Or it's just not good. And I'm like, okay, well you wanted it raw and direct, I'm making $300 off you. I gave it to you, I gave you what you're asking for, and then now you're upset with me because it was raw and direct and it wasn't what you were hoping for. So, no, I think, especially in the lower cost loads, that's what your budget is, you have to be willing to do the work and get creative. And I don't think it's unrealistic to think retail buyers would buy Halloween.

Jason Padovani: Right. Yeah. I totally understand what you're saying there.

Zac: in March or May or April, whatever month we're in now. If you package it right and you get creative, I think at any point during the year, you can sell all of the seasonal stuff. You just have to be willing. think people just, I think that's a misunderstanding. They think it's gonna be easy every time. And they get a little pushback when it's not super simple. They don't have all this season stuff in here. We're getting rid of stuff Dollar General does not want anymore. And that's the thing people gotta realize, or any retailer, we're getting rid of the unwanted goods and so it's not always gonna be super, super easy.

Jason Padovani: Right, yeah. I mean, that's when the strategy is definitely, especially with these lower cost loads, I think sometimes the biggest point to drive home is that there's a reason that it's usually lower cost, right? And we need to make sure, I mean, for lack of better term, I think sometimes people think that it's just a good deal, which would be nice, but it's usually not the case. Like, Dollar General's not pumping out 95 % non-seasonal at $3,500. And that's, you know, so, but yeah, for sure.

Zac: Need to use a little bit of comments, even without the disclaimer of seasonal, I think it's important to use a little bit of common sense when you see trucks on the market below value. Why is that? Ask yourself that question and then ask your broker. And that's something that we're talking to lot of people about. It's if you talk to a broker and their sales tactic is the loads have been great, no complaints so far, it's probably time to try someone else.

Jason Padovani: Right.

Zac: I tell people to find us an educator and not just a broker because an educator will sit there and explain to you the risks involved in the load and they'll tell you if the load's gonna work for you, you know, for better or worse. know, there's some loads, people might call you, how many times do you think someone calls you for a dollar general but then you end up selling them something else because the dollar general doesn't fit their-

Jason Padovani: It can happen. mean, that's why we there's always that every phone calls a discovery call, even a customer who it doesn't matter if they're a new customer, a current customer, whatever it is, it always turns into a discovery call because it may be, you know what, maybe we're finding out this isn't right for you. But we just had one of these the other day, know, FC super tight right now. And I said, the guy, the customer brought up something else and I said, OK, well, then let's look at that instead, because that may work for you. So it is, I mean, every call can turn into a discovery call. It doesn't matter if it's a new customer or someone that's bought from you 30, 40, 50 times. But yeah.

Zac: So now you're moving on to Dollar General. I know you're at Wholesale Week up there right now. What are you pushing? What's your main, I know you got your Target, we got Target GM, we have Target high piece count stuff. ⁓ We've got, I know you're still pushing the Amazon stuff out of Texas, is that right?

Jason Padovani: Hmm. It is, yeah. So I'd say like right now, isn't, this is something, I'm going to talk about something right now that we haven't really publicly talked about at all. Something that we're going to push a little bit at the conference this week, but we've been doing a lot of mixed loads where we've been offering customers almost like an a la carte option where out of Florida, we can do toy, electronic, food, LPN, FC, ⁓ a little bit of essentials, but essentials are kind of light right now. But the point is, is that mixed category. I know it's not, I'm not a, I don't want to reinvent the wheel here. And I know I'm not the first person to do that, but it's been working well for customers and they like knowing, they're like, ⁓ well give me two food, two FC, three LPN, one electronics. And they like that. They like knowing what they're going to get. So that's a big priority is we're going to keep pushing that. It's been successful ⁓ and showing it to them before they buy. has been another ⁓ thing that we try to do whenever possible. ⁓ always possible, we always try to do that. ⁓ yeah, mean, out of Texas and now out of Alabama, we are doing, I don't think they're a true 48. I think the box is about 43, 44 inches that we're doing, ⁓ an LPN, NFC or an LPN-FC blend ⁓ with good liquidation. you know, definitely a good opportunity. And they don't have food or clothing, which a lot of customers ⁓ these days. And then we have customers that do like food and clothing. So that works out. So we can just do food or we can do clothing at the same time. I would just say, I'm not, I don't want to say I'm solely focused on unique situations, but unique buys is where, you you're going to say, listen, here's something a little bit different that you're not seeing a million times on the internet every week. And we push a lot of common stuff. We do, but I'm also focused on unique buys. Like the a la carte we talked to, we just talked about, or like, you know, the blends, the LPNFC blends, which I think is some other things we got coming down the pike. ⁓ You know, we do a decent amount of food lately. I mean, you know, food's not that crazy original, but ⁓ yeah, I mean, it's been good. So just things like that, you know, but, ⁓ and I would say just, again, ⁓ everybody's really big on, you know, as time passes, like we mentioned again, just knowing what they're getting and...

Zac: lot of food on the market.

Jason Padovani: really, we hear from a lot from customers like, I tried this and this doesn't work. I tried this and this doesn't work. And it's, it's really digging in. And like you said, ⁓ you know, you don't want to buy from a salesman, you want to buy from an educator. And that's, couldn't agree more with that. I, know, if I could like that statement a thousand times, I would, because it's so true. ⁓ It's just, there's so much truth to that. So it is super important that we dig in and we ask those questions so that they know what they're getting. And then that prevents an upset customer when it comes down to it.

Zac: What do you think, ⁓ if a customer had to ask a question to vet a supplier towards you or anybody else, what do you think, I mean I'd say top question, probably top three questions, I'm a new customer, I just got into the industry, I have my retail, I'm set, I just need my product. What top three questions would you suggest somebody ask a broker, you or anybody else, to vet them properly? Whether that, you know, we're worried about Scammers on the market a lot of people just run away just straight up running away with the cash, which is what I consider a scam And then I'll ask another question here in a second, but it just came up with off the top of my head but um Top three questions to vet a supplier to feel comfortable knowing this person's legitimate

Jason Padovani: Mm-hmm. Yeah, I mean, I think every customer has a right to know, know, one, do you have this product sitting? And I can, you know, I mean, that's a pretty straightforward question. There's not a whole lot that branches out with that question that, you know, are you selling this? I think it's a question. mean, it's it's a question not we get. I think it should be asked more often and saying, you know, is this they don't want something like we don't want something that's brokered 10 times. And of course, like so that I think that's a good question to ask. Do you have this product? Have you seen this product? You use this product? ⁓ What's success or what are the pros and cons? Because I think it's by you either having possession or not having possession, you can answer those questions. mean, that's like the basis of wholesale. If you don't know anything about it, then that kind of crashes things right there.

Zac: There's lot of guys in the market that have never laid eyes because I mean to broker something theoretically there's no barrier to entry. If you know someone with product and you know a customer who needs a product you can broker a deal. The issue that I run into with people is it's guys who've never laid eyes on the product at all. I don't care if you're direct shipping it but if you've never bought a Dollar General truck and you've never processed one yourself or an Amazon truck or whatever how are you going to accurately sell that to somebody else if you don't know the work involved. So you're kind of like, it being on the floor is a huge selling point. Obviously it doesn't have to be on the floor to be a legitimate deal. I think there's a huge value to brokers whether it's you're buying in such volume to get your costs down, which it used to be a thing. I don't know if it's still a thing now, but it used to be we bought blocks of Lowe's or blocks of Dollar General and by buying blocks of 10, 20 trucks, we got our costs down.

Jason Padovani: Right. Right.

Zac: you know, $500 to $1,000 a truck and that's where our margin was made, was on the buying power. ⁓ And then there's connections that you have that I don't have as a broker. You've developed people and relationships and there's sometimes you get the cream of the crop before the market does because you move so much volume for your supplier. So there's a huge value to brokers. You know, it's just customers asking the right questions. I don't wanna say they're gotcha questions, right, but...

Jason Padovani: Right.

Zac: You mentioned your Gaylords out of Alabama, right? The four foot Gaylord is no longer a four foot Gaylord anymore, right? And that's not you, that's industry wide and it sounds like you're at the very least saying, my four footers are 43 inches, which a lot of times I feel like you have to drag that out of a broker. You have to specifically say how tall are the Gaylords? Now you gotta ask how thick are the Gaylords? And then you also have to ask, are they square or are they octagons?

Jason Padovani: We're done. Right.

Zac: Right? And so these are the kind of questions I think people need to know, you don't think to ask. Someone that says, hey, I got four footers on my floor. You know, most buyers don't ask that question. And I think they should. As a broker, it's like, know, when you have an octagon, it's not as popular as a square. And so you're less likely to like, proffer that information. So the buyer has to know, you know, what's the quantity of food, what's the, you know, the.

Jason Padovani: Right.

Zac: the quantity, what's the percentage of food, what's the percentage of clothing, that kind of stuff they should be asking on Amazon trucks. When you do an FC, this is a question that there's some debate on, some people that I've talked to. So you have your processed Amazon LPN blend, right?

Jason Padovani: Correct.

Zac: When you sell it, what's the percentage of LPN to FC?

Jason Padovani: I'd say 70, we strive for like 70, 30, 70 % FC. I'd say about 220, I'd say is a number we strive for pretty much. that's another, mean, you talk about the three questions, I think it'll track there, it would, Peace Count would be in that question. You know what I mean? Do you have it? Is it your product? Where's it sitting? And then also, then you get into the nitty gritty of, like you just said, Peace Count, pallet height.

Zac: How many pieces are in a pallet? Roughly. Over.

Jason Padovani: And then, I mean, there's not a whole lot else to talk about just being transparent, but yeah, go ahead with what else you were saying.

Zac: No, when you say 70-30 LPN-FC, we have 220 pieces in the, let's do 200 just to keep the numbers around. 70-30, so you're saying there's roughly 140 pieces of FC, 60 pieces of LPN when you do the math that way, 200 pieces, obviously a little bit more. So I've talked to some people, I mean, we haven't had anybody like that on the podcast, but some guys go, well, I had a debate.

Jason Padovani: Mm, sure. Roughly, yeah, correct.

Zac: for a minute, was 50-50, but then the customer got it it was a similar bill to yours. And they go, no, no, no, the volume is 50-50. There's 50 % of the pallet is FC and then 50 % of the pallet is LPN. I'm like, that's not correct, right? Because when I go to sell it, I need to know how much LPN I've got in my pallet versus how much FC I've got in my pallet. How often do you think buyers actually buy

Jason Padovani: Yeah, sure. Right. Right.

Zac: Uh, corroborate is a terrible word for that. Uh, check their piece count. So, you tell me there's 200 pieces in a pallet across the load. Now that's an average. I'm never gonna hold you to it, right? Like, I always tell people, give me a little bit of a variance, because there's sometimes there's bigger pieces in the pallet, but over the course of the load, we're saying there's 24 pallets. That should be right at 5,000 pieces. How many times do you think a buyer actually checks that? Or just assumes the broker is telling them the right number?

Jason Padovani: Mm-hmm. would say that it depends on the buyer. When there's a buyer that's more experienced, they can, I don't want to say eyeball it, but they have an eye to see it a little quicker than others and they check it to like an extent. And then like sometimes with newer buyers, they'll, you know, they'll more take your word for it until I think there's evolution of a buyer when they're new and then they start to be like, okay, well, Let me understand this a little bit more. And then they start to look at it a little harder. And that would be my opinion. So I'd say in my, again, it's my opinion. I'm not saying it's fact, but I'd say newer buyers are checking less and then more experienced buyers. They're checking more, but because they're experienced, they don't have to look too hard. They kind of already can see things with a good eye. Yeah, for sure. Right.

Zac: They can tell when you can, you know, when it's off, it shows up. I mean, my point is like, it's so important. I think a lot of people assume their price per unit when it comes to the bin store model. you know, listen, five years ago, six years ago, it didn't matter. Stuff was so cheap, you just dumped it in the bin. Your LPN was less than a dollar. You know, I'm talking to someone last week and he mentioned that he was charging a lady $3 per unit on LPN. was like, man, that seems high. And he's, no, we'll do the math.

Jason Padovani: Bread. Yeah.

Zac: on a five foot Gaylord of straight LPN, it's 350, about 350 pieces, you're paying about $1,000 a Gaylord, give or take, it came out to $3 a piece. I don't think that people always do that math and are confirming how much they have in each piece for their bin store. mean, that dictates what day you should start on, $12, $8, whatever. ⁓ But peace count matters, it's a weird industry. We charge a flat rate per pallet. you know what saying, not a flat rate per piece. Whereas I think most every other industry out there, if I'm gonna buy a Stanley cup, I'm gonna pay a price per unit on those cups. Whereas liquidation, we're all just kind of chill with, oh, LPN's $400 for a four-footer. And not really knowing exactly, I mean unless it's manifested, but we're not, you know, it's just something that's just been on my mind lately ever since I heard that price per unit on LPN.

Jason Padovani: Right. Right.

Zac: It's just an odd industry. We're all just kind of cool with going, okay, well, I'm paying this much for five footers. That's what people, when they call me up, they go, I need some LPN, I some five foot LPN. And you tell them, you your price is $800 a pallet. They go, sold. Okay, I didn't tell you anything else. didn't tell you, you know, you didn't ask anything else. You just cared about your price per pallet. And I think that's a problem that, you know.

Jason Padovani: Right. It's a huge problem. Yeah, it's a huge problem. You need to make that that piece count. I mean, you know, there's been instances when, you know, they've come out less or sometimes they come out more, which obviously more is the issue. But ⁓ it is. mean, I think everybody goes through the growing pains of that. But that's a super important question. Even when customers don't bring it up, ⁓ you know, we bring it up because, again, that goes back to setting the expectation. Like, you got to know a lot of customers do ask piece count. because it's an obvious question, ⁓ maybe not so obvious as it should be, but it is an obvious question, but that's super basic. You gotta sell the piece count for sure.

Zac: Well to get back to you, you're in a unique spot. I know you work really closely with the guys that process your Amazon, your FCLPN. So you probably have an updated, you're on the ground a little bit more than most brokers are, I feel like. From your posts and everything I know about you, you're a little bit more on the ground looking at the product, whereas a lot of guys, this is another common industry thing. You you call me up, hey, I got 10 loads to move. How many pieces per pal? You tell me 250, right? And a lot of brokers go, okay, well, I can probably say 275, that sounds a lot better, I'm not gonna get in trouble with it, right? But you sold it to me, and then I brokered it at 275, I'm a little, I increased it a little bit, right? Not too much where I should get in trouble, but a little bit. The problem comes when that load gets three times broken, and then four times broken, then five times broken, then every broker added a little bit of a... a smidge of a lie to it, you know what I'm saying? Just to make it sound a little bit better. That 70-30, 60-40 sounds better to me, right? Like, it's not that far off, because most people don't call you out and check on it, which is another reason, you it's really important to find a good educated broker, but also, like, you want to find the guy who's, as I want to say, closest to the source. Finding the source isn't always like the biggest thing. But a lot of these brokers, to get the sale done, little lies just add up to where the end consumer ends up taking the hit because, you know, if I lie a little bit, then you lie a little bit, then he lies a little bit. You know, down the road, it adds up a lot. ⁓

Jason Padovani: It does. And I mean, like, I understand what you're saying. I don't partake in that just because it...

Zac: ⁓ no, and I'm not saying that at all. We talked about three and four times the dangers of that because a lot of times the guy, and sometimes, mean to be honest, listen, the guy third down the road didn't realize that there was a lie and then he looks like an idiot.

Jason Padovani: Sure. Yeah. it's yeah, it's terrible. I mean. Right.

Zac: So it's just really important to know your broker and then to verify. Trust but verify is, it's a fair thing to do. There's nothing that says I shouldn't count every third or fourth truck at least 20 % of my product. It's my due diligence as a buyer. If I'm not doing that and I'm just trusting Zach, trusting Jason to tell me the right stuff and I never check down the road and then my business isn't making any money, I can't really blame Jason and Zach. Jason might, 220, it's been 220 for two years.

Jason Padovani: Thread.

Zac: And then all of a sudden, like, through a heavier LPN period, now it's 170. Well, if no one tells the broker, Zach or Jason, a lot of times we really heavily rely on customer feedback in order to go back to our supplier and say, hey, listen, we've been selling this, we sold some Target a few months ago, and we got asked to push it. We pushed it based on, these are the parameters we pushed it on. There's this much clothing, there's this much soft lines, this much of whatever.

Jason Padovani: Right.

Zac: customers were getting it, giving us pushback and saying, no, no, no. What we're seeing is twice the amount of clothing or twice the amount of soft goods. And so without that feedback, we can't go back to our supplier and get it fixed and then advertise it correctly. you know, it's important as a buyer, I think, to give your suppliers feedback in a constructive form. I think, you know, this is a question maybe you can answer, maybe some feedback you have.

Jason Padovani: All

Zac: How many times have you gotten a call, trucks on the way, trucks delivered at 10 a.m. You have a call by 10.05 and they're going, this truck is garbage, it's dog shit, everything's broken. And I'm going, you unloaded that really quickly and you processed it with some speed I've never seen before. If you could go through all 26 pallets and tell me it's all broken, like send me your staff, because I need some people that work like that. You know, how often? It doesn't sound like it happens very often now because you're doing a really good job of preventing that, but it has happened to you. There's no way it hasn't. You said you sold 2,000 trucks last year. Zero chance you didn't have any of that experience last year selling some truck.

Jason Padovani: Mm-hmm. Yeah, sure.

Zac: Talk about that, how frustrating that is for a broker to get that phone call knowing if you just unloaded the truck and you went through some of it, it isn't always as bad as the first two pallets off the truck.

Jason Padovani: Yeah, it rarely ever is the whole load, you know, if there's an issue, the whole load like that. ⁓ You know, it is tough and things are always going to happen. it's, know, like you see here, people are naive to think that it wouldn't happen. It's going to happen, especially when you're moving volume. But yeah, I mean, it's ⁓ sometimes customers could be quick to jump to conclusions. know, sometimes qualities can change from load to load and things like that can happen. I would say, I know, if I had to take a wild guess in 2025, less than four times. I mean, but, and I honestly mean that, and that's a pretty realistic number, which I think out of, what does that mean? I'm like 98 % effective. You know what mean? So at the end of the day, yes, it's tough. We'll take a load back, we'll replace it, we'll give...

Zac: Yeah. Yeah.

Jason Padovani: or we'll give credit palette credits or something like that. ⁓ we're, and that's all that, I mean, that's all that happens from it then. It's either, they could go a couple of ways. If someone opens a truck, they're like, it doesn't look good. You know, all this, it could either go with, okay, I went through it and it's not as bad as the first couple of pallets or something like that. Okay, you know, pretty much end the conversation and they're happy. ⁓ They might've just been upset with like a pallet or two or something. But there could be instances where, you a good portion of the truck couldn't be up to their expectation. then you have to go down the road and say, okay, ⁓ you know, we'll send you some free pallets or you could send it back and we'll send you one that, you know, maybe this one just came out lower quality, which could be possible. It's not, know, obviously in this industry. But again, ⁓ that would be, I don't want to stray from the question you just asked me, but the way that, how do, sure.

Zac: You know, how do you, so how do you combat that a little bit? Just to pause you while you answer. How do you combat the customer who has the expectation of, okay, if a pallet is bad, I deserve a credit or I deserve a replacement because not, it's not like to be fair. mean, when I first got into the business, that wasn't even a thing. You get a bad truck, you took it on the chin, you moved on. This is liquidation. We are buying and selling liquidated goods.

Jason Padovani: Okay.

Zac: But today's expectation is, know, I'm not happy, I need a credit. $200, $500, $1,000 credit because those two pallets were shitty. Now there's some trucks where no pallet should be shitty because they're a processed, you know, it's a processed load and this is the expectation. But when it's raw and direct, how do you set that expectation where they don't come back to you every single time going, oh hey Jason, last time, you this pallet wasn't good and you gave me a fresh one. How do you combat that where you set their expectation of, you set their expectation so well, sounds like, but then I hear you say, you know, you'll offer that credit. I'm just curious as, you we were in the same business, how do you protect yourself against that? Because I know your margins, like the margins on this stuff, they aren't that great. People think we're making, you know, boo-coo blocks on every truck when you're not. So how do you protect yourself in that situation?

Jason Padovani: That's a good question. mean, that's a big, I would say that's a gray area of, and I use this example a lot. If we have a certain load program and we sell to customer A that is happy with it, and I know we sent, obviously it's not the exact same load to customer B and say one's upset and one's not. So the first question I ask myself is I say, okay, why is it that this customer it worked for this customer and then it's an issue, some type of issue with this customer. That's a really base question that I need to ask first. And then you need to dig into it and say, okay, was it a quality issue? Was it a miss expectation issue? And then how can we fix it? Like, what is the resolution? Because it's not always like you said. don't, I get it. Back in the day, we talk about that too. There was more chin taking of. You just, you know, you don't get anything and you're just taking it and you'd figure it out, whatever. At the same time, I don't want, it's a line between making sure the customer knows that we're there to help out without, you know, how much risk do we mitigate then is the gray area. Because if you're mitigating all the risk, well then there is no risk, right? So it's kind of like, it's a gray area of saying, you know, what is gonna help you out or how can we, resolve this, but with also setting the expectation of this can be possible and you need to take on or you need to realize a certain amount of risk yourself. So it's a constant, there is no set answer to that. think every situation is its own examination and we just need to say, okay, what was wrong? What was the expectation? Why was the expectation not met? What can we do to help out? What is reasonable? What is a compromise, keyword compromise that we can do. it doesn't mean this, you know, we shouldn't be doing this on every load because the load should come out meeting both of our expectations, right? So, you know, every situation is different. I would just say sometimes, you know, we'll, you just got to look at it. And sometimes it's a couple of pallets. ⁓ I think, again, this sounds like a crazy statistic, but I think maybe Maybe twice last year, we took back a load and sent another. But I mean, like, these are super rare instances. But when they do happen, sure, it wasn't good. Okay, we'll bring it back to Texas, bring it back to Florida, wherever. And then we'll either send you something else out. And that goes a long way with the customer. it's, I don't want them to. Yeah, for sure. I'm not, listen, I want to build a stable business myself. And I'm not going to build a stable business by having unstable customers.

Zac: Yeah. The kind that you're willing to take a pass of.

Jason Padovani: So that's just not how it works. So if I need to help out or something happens and we need to contribute and say, okay, we'll give you a credit, we'll give you a couple of pallets, we can replace the load, we can help out this way, or I have this other deal that I know we talked about and you're potentially interested in, and guess what, I'll sell it, maybe a thousand or two below cost, we can go that direction. I just think it's, businesses need to work with other businesses to come to a conclusion that makes sense. And I would say 98 % of our customer base, if an issue were to happen, there's a lot of reason and rational conversation that takes place. And they know that I don't feel personally that our customers are out to ⁓ grind us and try to get what they can out of us. I feel that when issues happen that they are sincere ⁓ issues that can be rectified. ⁓ it's not, I don't feel like we were. we've ever been taken advantage of. Maybe, you know, a few times you're there, but I'd say it's super rare. We take our customers' ⁓ displeasure seriously, and then we work on them as a team with the customer without feeling like we're being grinded. And you gotta help out while creating that mitigated risk expectation. It's a tricky situation, and there is no set answer. But, yeah.

Zac: Yeah, no, and that's fair. think you said compromise and that's a huge word when it comes down to it because I, you know, I think we're the same boat. I don't think the majority of the loads that we've sold that we had an issue on were necessarily because the quality of the load was poor or the items or whatever. I think it came down to communication between us and the buyer. And that's what the kind of the theme of the conversation is, is where did we go wrong in explaining it? and where did you go wrong in hearing what I was explaining? And nine times out of 10, when those few issues would come up, that's where the issue was. The issue wasn't usually in the quality of the goods. We explained the quality of the goods. It's returns, it's grade A, whatever, grade B. You got what you paid for. Maybe I didn't explain that well enough to you. Maybe we sold you C-grade product, and for whatever reason, I didn't explain well enough what C-grade product would deliver like because you're used to everything being in a box and this came all unboxed or maybe you didn't hear me correctly and your expectation was here and I didn't do a very good job of setting it where it should be here. think that's you know the compromise in those situations you're not always going to get the outcome you expected as a buyer because it was a missed you know miscommunication between everybody and I think buyers When you see people get blasted on Facebook, and it's one of my biggest pet peeves, you know, you gotta come to a resolution with your broker also that works for everybody, and a lot of times, nobody's gonna be happy with how it got resolved. Like, it got resolved, I wanted Jason to take the whole load back, and Jason goes, you know what, no, this isn't all my fault, the load's not all bad, five pallets will suffice. Jason's probably like, really should've gotten, you know, two pallets would've been half, would've, shh. should have made you happy. The buyer's like, nah, I want a whole load. But you gotta compromise to keep those relationships intact. Because you don't wanna burn a supplier by being that paying buyer that's unhappy with anything you can do. And you don't wanna be the asshole broker who's not willing to do anything either. Because there are some genuine times, like you said, where it's rare, and this is one of my last few questions or last few spots to talk about. Your record as far as it sounds like for complaints is, know, Jason 99 and complaints are one, which is really unheard of in the industry, in my opinion. And I think that boils down to one, you're obviously educating your buyers really well ahead of time, but you're also, sounds like, focusing on specific programs and hammering those programs home versus grabbing every load that anybody throws at you. So how do you vet your programs? I see, I mean, it seems like you have like a core five or six programs that you're pushing. And then I'll see you post a different one here and there, but I see you posting a core, you know, few programs. How do you go about vetting programs with your supplier? Well, I'm not giving away anything pertinent, but like, how do you go about saying, okay, I'm comfortable stamping my name on this as Smart Source Wholesale to where I know I won't get complaints from buyers.

Jason Padovani: Sure. Sure, yeah, I mean, that's a good question. That's actually gonna, that's kind of a cousin of something I was gonna bring up, a cousin topic, if you will. But ⁓ with the situation that ⁓ we have in Texas and now we started in Alabama, ⁓ I wanted to position ourselves so that we had as much hands-on, and that's how we're doing the vetting, to answer your initial question here, is we are, we're being as hands-on as possible so that Essentially, ⁓ when you look at it from a 360 degree view, it's here's what we can offer you. Like you're literally looking at it on a video, like a Facebook or a WhatsApp or a FaceTime chat, or you're coming to the warehouse and you're looking at it. So literally, there's so little that can go wrong. know, like if I'm letting you touch it or you're seeing it and this is what you're getting and here's the peace count. Like there's very few things that can go wrong and yet super, super low risk. it's again, that's again, say it for the 30th time, that's partisan expectation, but that's how we're doing the vetting. And the situation that we're in in Texas and now the situation that we're in in Alabama, literally these are relationships we developed. The Alabama one is newer, but the point is that we have become

Zac: nothing else you can do at that point.

Jason Padovani: We're working with the partnership that we have to say, you know what, we're gonna bring the product in and then Smart Source Wholesale, we're gonna touch and breathe and smell everything that's going on here. We're gonna do the sales, the marketing, the invoicing, ⁓ whatever it is, we're gonna bring the customers in. We're literally taking control and managing the situation with the partnership that we built in that warehouse. And that is how we're doing the vetting because we're literally in the trenches and we're not, mean, like, you know, whether someone wants to call you a broker or not, it becomes a relationship where now you're basically the marketing selling, you know, this is our product arm instead of I'm just somebody selling something I've never seen before. So it's, you know, it's, changing the game. And that's why we're having so few problems of things we're doing out of Texas and now out of Alabama because We become, we're in it and we're doing it and here it is. You like it, great. If you don't like it, let's find something else. But there's no surprises and that's what it's coming down to, no surprises. No surprises equals 100 % setting the expectation. ⁓ If you don't sell the expectation, you're selling a problem and that's it, period. So.

Zac: Yeah. I like it. No, that's impressive. like the, you know, it's super when you can show someone, especially in liquidation, yeah, there's so many unknowns. When I can touch the product and I can feel it, there's no excuse now when I get it that I should have any complaints. And I think it's super important that people take the time out of their day when there's a seller like you that's offering to come, like I will let you see it. It is on you now to take the time out of your day. fly to drive at least the first time or two and go view it, go touch it. Like once you've developed the relationship, avoid that. You don't have to go through the load every time. But it's your business, take the time out of your day to go invest in it and make sure what someone says is actually true. And you're going above and beyond with all of these programs to do that, which is super unique and rare for people. I mean, I want people to understand how unique that is on a broker standpoint.

Jason Padovani: Right.

Zac: because most people don't have the ability to show you what they're selling. If I'm selling you a Target truck or an Amazon truck that I don't have on my floor, I've got to get permission from someone else to let you into their facility to do that. that one, for most brokers, they don't want that because then they're separated from the deal and it makes people a little nervous. ⁓ That's a huge opportunity that you're giving people that I don't think very many people in this industry are able to do or even willing to do.

Jason Padovani: Right. Right, well, and then that just comes back to the whole Alabama situation, which is nearly identical to the Texas situation, these are companies that have come to us and said, hey, ⁓ we know you have a big buyer base, let's work together. We'll give you all of our walk-ins, we'll give you all the call-ins. You can basically, let's do this together. It's not that they don't want to deal with customers, it's that...

Zac: You know.

Jason Padovani: they want to deal with the warehouse operations or the behind the scenes stuff. And they're like, good, you want to deal with all the customers? ⁓ Manage them, send the invoices, do the sales, do the marketing, all that stuff. And then that's where the real synergy takes place because it's more of a relationship. I'm never flipping stuff blindly, ever, ever, ever. So, I mean, that's where the benefit comes in for sure. And it's not just, I mean, It benefits me to help the customer, but overall it's benefiting the customer and even customers we've had sales with previously when I'm like, hey, why don't you come in, we got this now in Alabama, we got this now in Texas, like come and check it out. They're like, oh no, you know, we trust you, Jason. We've done this before. I'm like, no, like literally, come and check it out. Like, I'm just, I thought that I won't sell it to you, but like just come check it out. Like I don't care how much you trust me. Come look at it, you know? So, right.

Zac: Yeah. I'm proud of what I'm selling, which is huge. mean, there's so many, again, hearing that, you don't hear it very often. At least, again, I think I come from back before, I mean, before COVID was a whole different beast than it is today. I'm not used to hearing someone genuinely want to show the product off. Like liquidation, I think we're seeing a little bit more of this trend of transparency, but liquidation hasn't always been that way.

Jason Padovani: ⁓ no, yeah, for sure.

Zac: There's still a lot of big portion of it that's not that way. Where I don't want you to see what I'm selling you because the top looks really good and the bottom looks like shit. So it's unique and it's really cool. I think people should really take note of this that you're willing, not even willing, you are encouraging people to come out to a facility that's not yours, obviously that you're partnered with, which is really big. Because a lot of these contract holders, like you said, their skill set is processing. big undertaking to process all this freight and to process it in a way that's quality for buyers. So they've entrusted you, it sounds like, to go out and sell and represent their product in a way that's fair to them and to the buyer. So you have no risk of them circumventing you and going around to these buyers, which it's huge that you've developed that relationship as well, because that's super important where you don't have to worry about your customers when they go to see these guys.

Jason Padovani: Mm.

Zac: them stealing your clients. They're too busy processing this freight and making sure that it's quality for your people.

Jason Padovani: Oh yeah, no, it's a very tight knit relationship to where, you know, we're embedded together. It's almost like a marriage that we've created in these partnerships. Cause it is a part, it becomes a partnership to where we're helping each other. We're both creating a successful model to where we have a partnership with the warehouse. We have a partnership with the customer. Everybody's respective and reciprocative of those. And everybody's getting a chunk of what they want. The product, the customer. you know, the sales and it's coming together and you've created this, you know, serendipitous symmetry of the way that it's happening. And that's, it works, you know, so.

Zac: That's great. ⁓ I'm super pumped at what you're doing. I think the space really needs somebody like you in it I think you're moving a lot of volume. I think you're doing it the right way Which is really incredible and you're educating people along the way. So I think you should be really proud of that ⁓ And I just keep hoping you keep selling and keep doing good

Jason Padovani: Thanks, man. I appreciate it. Thanks for having me. I always want to just get it out there. I think it's important that conversations like these happen just because there's a lot of miseducation, misunderstanding, it's podcasts like these and discussions like these that can really turn on light bulbs and create understanding. And a lot of people don't have enough conversation. So it's definitely important that situations like this happen. So I appreciate it.

Zac: Yes sir, we'll talk to you soon I'm sure. Thank you so much.

Jason Padovani: Cool. All right, bro. Thank you.