OCTOBER 2017 FORBES ASIA | 29I
n Optoro’s 3 00,000-square-foot warehouse outside Nash-
ville on a stiflingly hot afternoon in late August, Susan
Cohan scans the bar code on a cardboard box holding
97 pink crocheted bikinis. The tops were priced at $27.99
and the bottoms at $19.99 at one of America’s best-
known big-box retailers. But the suits had failed to sell. Opto-
ro’s software tells Cohan to route the box to Bulq.com, a web-
site run by Optoro that sells in bulk to mom-and-pop dollar
outlets and online discount stores. The bikinis will fetch 2 0% of
retail, says Tobin Moore, Optoro’s 35 -year-old cofounder and
CEO. “People aren’t going to be buying bikinis in September,”
he notes.
Those bathing suits and the 5 0,000 other boxes of returned
and rejected stuff sitting in Optoro’s warehouse represent a
pounding headache for retailers and manufacturers. Of the
$3. 3 trillion Americans spent on merchandise in 2015 , they re-
turned 8 %, or $260 billion worth, according to the Nation-
al Retail Federation’s most recent figures. That doesn’t count
items, like the pink bikinis, that never leave store shelves.
As e-commerce sites like Amazon and Zappos force com-
petitors to match their free returns and full refunds even for
damaged goods, retailers are desperate to find a way to salvage
value from the stock that comes flooding back. Estimates of
e-commerce returns vary from 25 % of all goods bought online
to upwards of 5 0% for apparel.
According to Moore, Optoro offers the best solution. The
algorithms powering its cloud-based software suck up data
about prices set by other online vendors selling the same or
similar returned or overstocked items, and its scanners instruct
warehouse workers to route each item or group of items to the
channel that will recover the most cash.
The preferred option is sending returns back to store
shelves, but that’s only possible for less than 10% of the mer-
chandise Optoro processes. Retailers have already sifted outmost of the 2 0% of returns that they can restock (including un-
opened goods in pristine condition that are still part of the sea-
son’s offerings). The next best choice: either return items to
manufacturers or sell them directly to consumers on Optoro’s
discount-goods site, Blinq.com, or through online stores Op-
toro runs on Amazon and eBay, which Moore says can bring
in 70 cents on the retail dollar. One example in the Tennessee
warehouse: a wireless, rechargeable Solar Stone garden audio
speaker in the shape of a big gray rock that retailed for $ 12 9.99.
It’s destined for sale on Blinq.com for $88. 4 9. Optoro’s software
also routes goods to other channels, including recyclers and
charities.
Before he launched Optoro seven years ago, Moore says,
most big retailers relied on a hodgepodge of inefficient chan-
nels that funneled goods to a series of middlemen who in turn
sent them to discounters like Big Lots or Ollie’s Bargain Out-
let as well as to flea markets and pawn shops. Through the old
system, retailers sometimes recouped as little as 5 cents on the
dollar of retail sales. Often, they simply chucked returns in
dumpsters and paid to have them carted away.
Moore, tall and lanky in a white oxford-cloth shirt, navy-
dyed jeans and brown lace-up dress shoes, started Optoro’s pre-
cursor out of his Brown University dorm room in early 2004.
Ebay wasn’t yet a decade old, and he saw opportunity in help-
ing sellers list used goods on the site. For a 3 0% cut of the sale
price, he’d stand in as the vendor, taking care of everything
from product photos and descriptions to pricing and shipping.
He roped in Justin Lesher, a friend from his days at the Wash-
ington, D.C., all-boys prep school St. Albans, who operated out
of his dorm room at Penn.
After graduating that spring, the two moved in with their
parents in D.C. and went without paychecks for two years.
They ran the business out of an attic above the garage at
Moore’s house before opening a 1, 2 00-square-foot storefront inThe Point of
All Returns
BY SUSAN ADAMSHow Optoro is building a billion-dollar business helping companies
cope with America’s mountain of rejected merchandise.