Their excess assets, turned out to be three corporate jets that they wanted to dispose of because they weren't the current model and they wanted to upgrade to a more current model. Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 105 of the Resilient Supply Chain Podcast. I'm your host, Tom Raftery. What you just heard wasn't a punchline. It was the result of a very common process applied at ridiculous scale. Surplus inventory, idle equipment, empty buildings, overbought materials. In uncertain times these assets don't disappear. They quietly turn into financial drag, operational noise and sustainability risk. Today's conversation is about what happens when companies stop sitting on surplus and start rerouting value across the organization instead of writing it off. Not vertically within silos, but horizontally across supply chain, finance and even marketing to recover value that would otherwise be written off or dumped. To unpack this, I'm joined by Gordon Zellner, CEO, and founder of Evergreen Trading. Gordon helps organizations convert excess assets into usable capital often by linking them to media spend they already have. In this episode, we talk about why excess is inevitable, why traditional disposal is often the worst option, and how rethinking value can unlock both financial and sustainability wins. Gordon, welcome to the podcast. Would you like to introduce yourself? Good morning Tom, and thank you. Yes. My name is Gordon Zellner. I'm the CEO and founder of a company called Evergreen Trading. Okay, and who or what are Evergreen Trading Gordon? Evergreen Trading is a financial services company that works with corporations global and domestic in helping them convert their excess assets into usable capital. And it turns yesterday's challenges and problems into today's opportunities? Okay. And we'll get further into the business model in a minute, but tell me the origin story, Gordon. How did this come about? Well, I actually got introduced to this business model as a client. I was in a marketing career for consumer packaged goods company. And we had excess inventory that was the byproduct of some over optimistic sales forecasts, and we used that excess inventory through a company similar to mine where we sold the company or we sold the inventory to them a value that was far greater than what we would have been able to achieve if we had sold it directly into traditional disposal marketplaces. But the nuance is that we got paid in a media currency in lieu of a cash currency, and that's how they were able to pay us a greater value because it was in a, category that they had a particular expertise and a leverage in. So we got more value than we would otherwise in the form of media. And when I say media, I mean all forms of media, tv, radio, digital, billboard, all consumer facing media outlets and channels. And as a company that uses media in their business model, this was valuable to us. Right. And so I, got introduced to this business that way as a client. I saw the benefits of it. I spent a good chunk of time, approximately 15 years working for that company. And then as life will have it, I made some moves and relocated myself and decided to start my own company doing this. And I've been doing it for almost 18 years now. Wow. Okay. Very good. And let's start with the big picture, Gordon. Why do things like surplus inventory, empty warehouse space, or idle equipment end up being such a drag on the bottom line and on the company's sustainability goals? Well, all businesses create some degree of excess. It's just the nature of decision making and the imperfections of human beings. And the inability to perfectly forecast the future. And you don't wanna have a culture where people are so risk averse and so protective that they're not maximising opportunity. Hmm. But when you try to maximise opportunity, you're gonna stub your toe occasionally, and so there is excess. Right. And whether it's mis forecasting demand on a particular product, which leaves you with excess food inventory that has a code date or an expiration on it, and the clock is ticking, or whether it's you're relocating your distribution facilities to better optimise your logistics planning. And the warehouse that you used to have in Des Moines, Iowa is no longer relevant because you're centralised everything to St. Louis. And so there's always assets that you are turning over and trying to maximise the value of. The challenge is often the timing of when you're doing that may not coincide with when that asset has its maximum value. And if you're using a real estate example, you know, you may decide you wanna be out of that warehouse in Des Moines, Iowa. And the market, the real estate market in Des Moines may be fairly depressed at that moment in time. In which case, you may have a book value of that asset of $2 million and you put it on the market, and hope to achieve your book value because that way you don't have a financial impact. But the marketplace is coming back to you and saying, the best price is 1,500,000, and you're in a position where you have to make a decision. Do I hold onto the asset and keep depreciating it, and hope that the market value goes up and eventually those two lines cross and you can get out of the asset with zero financial impairment. Or do I move forward and sell the asset and take that $500,000 loss? Or in our case, we provide a solution where we will close the gap between the 1.5 and the $2 million valuation. But we do so by tying in another part of the supply chain process, which is media purchasing, where we have a particular expertise and a unique advantage, and we're able to close that gap on behalf of that client. Do you have any concrete examples you can talk to of, you know, when this this happened for a company? Yeah. on the sustainability side, a lot of times this excess can end up in landfills or being disposed of in ways that are not optimal in terms of recycling or sustainability because those often generate the least amount of return on investment. And those can be costly initiatives even though they're good for the world and good for the environment and good on a lot of other metrics, they may not be the best from a financial metric. We had a global telecom company who reacted pretty strongly when COVID hit. And their reaction was that they essentially went out and bought half a billion dollars of PPE to help protect not only their office staff, but they had retail locations, et cetera. Because it was a new concept, they weren't the most knowledgeable in the procurement of that. And what they realised later in the process is that hand sanitiser, because it's largely alcohol based, is a deteriorating efficacy and alcohol breaks down over time. And therefore the usefulness of this particular hand sanitiser was declining, and so they had a perishable asset that they didn't even realise when they purchased would become perishable. They ended up with close to a hundred million dollars of PPE that needed to be disposed of rather quickly. Well, the other complication they didn't anticipate was that because it's alcohol based, it goes into a whole different category of treatment because it's a controlled substance. And there are only a handful of vendors who can handle this type of product and take it in and quite frankly, recycle it and recapture and utilise the alcohol and run it through a process where they separate the alcohol from the rest of the chemicals and they were able to reuse it. It was quite a, surprise to them'cause when they just went out and bought it, they didn't really anticipate all the complications that would come along with it. So we were able to provide them a solution that we took on all of this responsibility and we were able to guide them through the process to a much more sustainable and financially beneficial solution. And is this challenge for companies, is it worse in uncertain times as we're in now, or is it kind of a constant? It's a constant I find that in uncertain times, companies often don't know which direction things are going, so they tend to just freeze Hmm. and when they freeze, they don't necessarily take action and make decisions. And they also don't know, well, maybe things are gonna come back and maybe I'll need all of this excess. Uncertain times tend to be, I call them shoulder periods. You can have boom and bust and then you have this sort of shoulder period. And during those periods I just find that there's a corporate paralysis that causes companies to not necessarily acknowledge what's excess or not necessarily have the appetite for addressing it at moment. So it's a constant, it's really just a matter of how they view it. Based on the sort of macroeconomic read. Are things going well or are they slowing down? And talk to me about the media side of this, because we've only just glanced off it. We haven't really gone into any depth. How are you accessing this media purchase for your customers? How are you getting good pricing on it? You know, tell, tell me all how that works. Great question. So our currency essentially that we use to facilitate our client relationships is media. And we take the topic or the concept of media as a procurement area and, we put it through metrics and we quantify it and we define it. So it's very measurable and very definable. Now the media category or the media world is a world that's largely managed through a brokered network. And those are the advertising agencies that most companies hire to help them in the procurement of their media. And as a broker, they perform a service. They purchase things when budgets are approved by the client, they don't take any risk in the procurement process. They represent your money into the marketplace and they get paid a fee or a commission for providing that service to you. We are fundamentally different from a business model standpoint in that we don't approach the media market as a broker. We approach it as a principle. And as a principle, we go in and we make investments in the media market ahead of our clients' demand. We put our capital to work and we put our capital at risk with the media suppliers. But in return for that risk, we are getting, let's just call it below market costs. We're achieving that because we're fundamentally taking a different approach to the marketplace. In effect, we're buying media futures and we're taking the risk associated with that. And that's the biggest risk profile for my business, is properly deploying our capital into the media market so that it aligns with where my clients need to pull through, and where they need to use the media currency I pay them, And what kind of media are we talking about? Pretty much all kinds from television to digital video to outdoor billboards, to audio or streaming audio, radio. Pretty much any or all media. And we work both in the direct manner by which we purchase directly from the media vendors. And we also work through programmatic processes, which is another way that media is purchased these days and is gaining in popularity and application. And what would you say surprised companies most when they tried this for the first time? That's a great question. They were surprised at how well it worked because everybody inherently has a natural instinct to say, Hey, I'm giving up something, or I'm selling off something that's my excess or my problem, or my piece of real estate or my capital equipment that I don't need anymore, and Gordon's company is telling me they're gonna give me something that's in effect, shiny and new and, the same quality that I would get otherwise in media, the same amount of media, the same pricing, the same commercials, everything the same. And on the surface, people have a, they have questions. Hmm. our process is very methodically laid out. There are a lot of checks and balances. There are a lot of quality control steps. And so we make sure that the expectations are met and that all the metrics are delivered. But I think the biggest surprise is when after we've purchased the asset and after they've run the media with us, and they sit back and they go wow, that really did work. It overcomes their feeling that it's almost too good to be true. So we love that because most people come in with a healthy, let's just say suspicion or, uncertainty. And, and that might mean that they start small and they grow once they've proven that it can work for them. It's really the part of the, business model and my job that I enjoy the most. It's sort of, overcoming the suspicions and proving that it can work and it does work. And what kind of results have companies seen, from taking this approach? Our business enables companies to be more sustainable and be more proactive in their sustainability objectives without incurring the financial cost. Because the leverage or the incremental value that we create can be used to satisfy the additional costs of sustainability. And so we often refer to ourselves as kind of a corporate recycling program because we're taking your excess or your, formerly productive, assets and that are not as productive today and we're recycling them back into a value that is greater than if you dealt with it directly. And a value that's in the form of something that you can use and drive your business, which is consumer directed media. So it's kind of a circular process that we really feel very proud about and are very excited about, and it helps fulfill a lot of sustainability goals. Okay. Yeah, sure. And what happens to this inventory that you take in whatever it is? That's a great question. We, we get a wide variety of things. And that's kind of the, fun part of our job and the creative side of our job. We did a large global liquor company. Their excess assets, turned out to be three corporate jets that they wanted to dispose of because they weren't the current model and they wanted to upgrade to a more current model. Wow. I for one, have never been in a corporate jet, never owned one, never flown in one. But for some people this is important. And the market was just not robust at that point. So there was a significant financial impairment if they moved, within the next six to 12 months. So we did a transaction where we bought these corporate jets. Even when, after we bought them and owned them, I didn't ride in them. I was tempted, but I never did. So that's, that's just one example. People moving in and out of different IT equipment, different technology platforms. You may have server equipment or laptops or, you know, hardware associated with your former technology architecture? We do a lot of inventory products where companies make too many of the blue ones and everybody wants the red ones. We end up helping them with the blue ones. Similarly, when companies discontinue products or they launch new products that may or may not succeed, they often get extended or overbought on the components, the ingredients, the packaging, all of the things that go into making the product. So we do a lot of, programs with companies who have excess, I'll just call it ingredients. We do a lot of work with quick serve restaurant chains who either have restaurant locations or run limited time offerings. And the one thing I know about any kind of promotional activity or limited time activity, there's no such thing as a forecast that you get right. You either are too high or too low, but you're never exact. And most companies don't wanna under forecast because they don't wanna run out. There's a natural bias to over forecasting. Sure. Well, when you over forecast, especially if it's a limited time offering, you end up with extra. And we become a home for that extra. We handle it and we, manage it again, providing the financial bridge to the value that they paid. So there's not a, write off associated with the extra product. We worked with a, convenience store, global convenience store chain. They had a significant extra inventory of K-cups. K-cups obviously for coffee. And they were going to, quite frankly, just landfill them. And we took them on and we provided them or resold them to a vendor who literally breaks down the K-cups, harvests the coffee and reuses the coffee in a blended form and then recycles the plastics. We took something that was gonna end up in just landfill, and were able to use it in a, very sustainably conscientious way. And I gotta ask, what happened to the three jets? We resold them. They got, they got resold it. It was really funny because it started out in January of that year as one jet and then in like, I don't know, February, they said, well, we have another one. And then by March they had a third one and they hadn't mentioned them. You know, they, it was very linear and I would walk around our company and I was like. In January, I would say we bought a corporate jet. That's pretty cool. And then the second one, I would say two jets. And then the third one I said, we're almost an airline. And It was interesting. I'll tell you one thing, corporate jet, you gotta think long and hard. They are really expensive once you own them, to maintain them Mm-hmm. And to keep them current of all of the regulations. It's not just the cost of buying one that, that's important, but boy, we ended up owning them for, I wanna say about four or five months. And we worked through a airline broker to help us resell them. What we do is we find the clearing price for asset. Right. We don't sit with our, our arms folded and say, well, we must have this price and we're gonna wait. We try to get the best price, but we also don't wait forever. So at some price, these assets all sell through. But the amount of expense that we incurred in those four months, just maintaining them Yeah. and we didn't know a lot about them, so we were just basically doing what we were told by the experts, It was a great learning experience, but also very successful on all fronts. How do you measure success then? Revenue? Carbon avoided? Some other metrics? We're in a client service business, so quite frankly, we measure success by client satisfaction. We have a saying in our business that kind of ties back to one of your earlier questions when you ask, what was the most surprising thing? We don't call them a client until they do the second transaction. The reason we don't is because a lot of times the first time they do it, they have, as I described earlier, apprehension, that cautious optimism that we think this will work. We believe it, it makes sense, but we've never done it before. And so we're gonna, go into it and see how it goes. 95% of the time it goes really well. You know, I don't know, 5%, who knows what happens, but generally speaking, we have a very, very high success rate. And it's that success rate that fuels the next transaction Right. Because companies don't just have one problem. We become a tool, that once they realise it works, they become comfortable using the tool and they use it again. So really our form of measurement is the second, third, fourth 17, we have one consumer products company. We're on our, I think our 47th addendum. It's not that their business is problematic, but they're a big global, successful CPG company and they generate a certain amount of excess and rather than disposing of it, they call us and they run it through, we work on it. We, provide two key benefits to all of our clients. The first one is. We take over the, workload for disposing of the assets. So there's an operational value, But the more important one is we provide a financial benefit. They get a better value from us than if they dealt with it directly and then tangentially, but important in this particular podcast is that financial value can enable more sustainable choices and decisions. And that's really the core of, of our value proposition. Gotcha. Yeah. Makes sense. And do you find that the finance teams or the sustainability teams are more receptive to this? Or are you dealing with either or both? Really both. Probably the biggest challenge we face is bringing the different functions together for a coordinated solution. But the supply chain people are very much part of our target because they tend to have a good idea of where the redundancies are or where the excesses may exist and the financial implications of those circumstances. And then obviously the finance team is the, other side to that coin. They're the ones who are saying, well, yeah, we know we have this problem, or you've identified, we have this excess. Well, let me tell you what that means financially to us. So they, those two sides are really, or those two functions are really the, core of who we try to target and talk to. Fair enough. And you've said companies shouldn't obsess over whether efforts are small or big. Just do it. expand on that. When talking to companies, or people where their, primary mission is achieving certain sustainability metrics, they often will ask us, well, do we measure, our sustainability impact and things like that? And we don't we kind of just approach it from the standpoint of it's the better thing to do now, let us help you manage the financial impact of it. So I think I had shared with you sort of the Nike slogan. Just do it. Just, do it. Let us guide you to how we can help you do it and address the financial negatives that might go along with it. But let's do the right thing and let us coach you or counsel you on how doing the right thing doesn't have to cost you money. We just are kind of all in on doing more of it and not, debating it or wrestling with it. And I think most people wrestle with it because there's a financial implication, Sure. And that's the challenge, Yeah. if you could give supply chain leaders one key takeaway, what would it be? That they don't have to settle for an approach that I call the vertical approach, when the horizontal approach may accomplish more value and help deliver against their objectives. Obviously everybody understands the difference between vertical and horizontal. My version of that is the vertical approach is if you have a capital equipment problem, because you've decided to retire certain machinery and it's still on your books for more than what the market is willing to pay. The vertical approach is just talking to people in the capital equipment world, and just trying to resolve it in a very, straight line category specific way. The horizontal approach would be to say, what more interesting or or diverse ways might be available to me to create value that may or may not just be in the capital equipment vertical, but that I could apply to this circumstance? And we operate very horizontally across the corporate structure because in that example, the capital equipment people or the manufacturing people, would need to bring the finance people in and we would create a kind of a proposal for how we could solve this problem financially. But then they're gonna need to bring in the media and marketing people to understand that our currency has implications beyond just the capital equipment and the finance people. It's really the one thing I would say is, think horizontally, not vertically. It feels a bit like a Ferris Bueller lesson. Life moves pretty fast. If supply chain leaders don't stop and rethink how they use their assets, they could miss it. Absolutely. And I don't know where I picked up this phrase, but I use it a lot. If you always do what you always did, you'll always get what you always got. So if you want something different, you gotta do something different. So, open your mind up to those possibilities. And because we understand that our business model is a little different, we are very respectful with people's time and we try to get to the point quickly and try not to spend time chasing something that may not work for a particular organisation. But opening the mindset and considering what could happen or what could be done as opposed to just staying with sort of the tried and true traditional approaches, is the only way you're really gonna create incremental value. Yeah. And it is not just that your business model is different, it's also your company structure is different. You have a you have an ESOP structure. Yes. see, do you see that influencing your approach to value and sustainability? Well, it, it's an interesting question. I suppose I could, if I really wanna get esoteric, I could say we recycled the company back into the employees. An ESOP is basically, we, we sold the company to the employees and we did so for a lot of reasons. we're a pretty conscientious leadership team. We do care about our people, we do care about our environment. Obviously these things are important components to any kind of sustainability philosophy or aspiration. And we're also in an industry that's unique enough that it's really important that our people stay with us a long time because they develop unique skills that are not that easy to just go out and find in the open marketplace. So we really wanna encourage longevity and continuity because we, we have a unique product and a unique business model, and people who know how to use our business tool and use it well, its important for us to hold onto them. We are pretty proud of being able to do that for our employees and I think our employees are pretty happy. Super great, lovely left field. Question for you, Gordon. If you could have any person or character, alive or dead real or fictional as a champion for supply chain sustainability, we'll say, who would it be and why? Oh boy. That's left field alright. That be out of the stadium. That is a great question. I, you know, truthfully, I, I'm surprising myself with this selection, but it checks a lot of the boxes that you mentioned. I would probably say Bill Gates, Okay. because Bill Gates is a perfect example of somebody who was the, ultimate capitalist and obviously was very instrumental to something that changed the world, which is pretty impressive and made a lot of money doing it. So, you know, he was as capitalistic as anybody. And he's taken that success and that platform, and he's done a tremendous amount of positive. As he's taken his brain and his money and he's redirected it to a lot of world problems through his foundation. I think that's very impressive and aspirational. Great. Gordon we're, we're coming towards the end of the podcast now. Is there any question that I didn't ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to be aware of? I think the important thing to understand about our business is we're not a perfect fit for everybody. Everyone out there is not our target market. We can provide incremental value to companies that already purchase consumer advertising or consumer media, and we're gonna tap into that spend to help satisfy, or solve other challenges that exist in the corporate environment. But we go through a pretty extensive Q&A, due diligence, evaluation process, which really culminates in a feasibility assessment. And we wanna know that any given client passes our feasibility checkpoints before we make a proposal and build a relationship with them. We, like to think of ourselves as the best or, or very close to and we aspire to that. But our process is one where we check the boxes before we go forward, and so we would just ask that anybody we talk to understand that and know that we're very careful in how we deploy our tool to make sure that it's gonna work Okay, great. Gordon, if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them? Well the first place they could go is to our website. www evergreen trading.com. So it's fully spelled out. Evergreen trading.com. And then in addition, I believe there's a contact methodology through the website, but also anybody could feel free to reach out to me directly. I'm a very engaged CEO I'm not an ivory tower CEO. And my email is g Zellner, Z-E-L-L-N-E-R. So first initial, last name@evergreentrading.com. The website first, and then if somebody wants to reach out. And if for some reason I don't respond, it's 99.9% because it went into junk mail. Um, I am very attentive and responsive. So if that doesn't work, don't think I'm blowing anybody off. It's because I didn't receive it. And there are other methods and phone numbers and things on our website. Okay. Super great, Gordon, that's been fascinating. Thanks a million for coming on the podcast today. You're welcome and have a great rest of your day. Okay. Thanks everyone for listening to this episode of the Resilient Supply Chain Podcast with me, Tom Raftery. Every week, thousands of senior supply chain and sustainability leaders tune in to learn what's next in resilience, innovation, and transformation. If your organisation wants to reach this influential global audience, the people shaping the future of supply chains, consider partnering with the show. Sponsorship isn't just brand visibility, it's thought leadership, credibility, and direct engagement with the decision makers driving change. To explore how we can spotlight your story or your solutions, connect with me on LinkedIn or drop me an email at Tom at tom Raftery dot com. Let's collaborate to build smarter, more resilient, more sustainable supply chains together. Thanks for tuning in, and I'll catch you all in the next episode.