Startup FloorFound helps manage furniture returns and resale for online merchants. FloorFound Founder and CEO Chris Richter joins Yahoo Finance Live to break down how retailers can reduce their waste and help the enviorment by recycling used goods.
JULIE HYMAN: Returned discarded merchandise is a big multi-million dollar problem around the globe. And that's especially when you're talking about heavy stuff like furniture. Our next guest started a company to try to deal with this issue. It's called FloorFound. The founder and CEO, Chris Richter, is joining us now. So Chris, basically, you guys have a system where you help retailers, as I understand it, with this returned merchandise. If I buy a couch and I want to send it back, sometimes they don't know what to do with that merchandise.
CHRIS RICHTER: Yeah, that's exactly right. E-commerce returns, in terms of impacting pollution is a big issue, as we all know. About 15 million metric tons of carbon emissions is created every year by e-commerce returns. And about 4 billion pounds of e-commerce returns is flowing to landfills. And one of the big offending categories is oversized returns. And that's the category we chose to focus on. About 9 and 1/2 million metric tons of furniture flows into landfills every year, which represents about a third of the content of landfills in the US. So we really wanted to target helping retailers wave their magic wands and make that returns problem go away.
MYLES UDLAND: You know, Chris, I'm curious about some of the logistics around this and, I guess, the opportunity that maybe exists to right-size this. If I go on Wayfair, I can order a couch. And it might just show up through UPS. But they're not exactly equipped. Like, the guy driving the truck down the street who shows up every day, he's not exactly equipped to bring a sofa in. So what are some of those challenges that you're working with some of these partners to try to make this easier, both on the retailer side and the consumer side.
CHRIS RICHTER: Really difficult, and we really wanted to focus on making it economically efficient for these retailers to be able to recover returns. Unfortunately, many of them are forced to make the decision to put a sofa, a dining table, other types of oversized items into a landfill because it's just not economically efficient to bring it back. Because you're correct. We are talking about having to send a freight truck, having to send a couple of folks out to a house to put a loose sofa into a freight truck. It's not like putting a small item into a UPS or a FedEx label and sending it back.
And so, the way we've tackled this is really two things. One, and the first important piece, was we wanted to build a nationwide network of returns processing centers so that we could bring down the length of haul that each of these returns has to go to somewhere between 25 to 50 miles because the challenge that many retailers were facing was having to pick up a sofa from a customer in California and bring that sofa all the way back to New York, about a 1,200-mile journey. So we're now reducing that to 25 to 50 miles for these returns round trip.
And then as they flow into these warehouses that we're operating through partners for the retailers, the key is to be able to intake them and grade them, what condition are they in when they come back from the consumer. And we're finding about 95% plus of these items are in great, sellable condition and able to be resold to consumers who really want to support sustainability.
BRIAN SOZZI: You know, I have about 25 seconds left here. Is there one change you would like to see furniture makers make to make their products more recyclable friendly?
CHRIS RICHTER: Sure, I think many brands are now designing for life. And I think investment in the right materials is important. But I think also optimizing for packaging. And we're learning great insights from the returns data about how retailers-- how brands can optimize packaging to assure that as more of those drop ship e-commerce shipping happens, that items are damaged less frequently and leading to fewer returns. So I think that's an important area to lean into.