Have you looked at warehousing in China? Have you looked at combining shipments with other sellers? Brian has a company that can help with all of those things. Maybe 20-50% in savings? The point I learned in this interview is that things are changing quicker than ever. You have to adapt and be willing to look at other possibilities in how you run your business.
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Here is transcript- It is automated so it is not perfect but it does seem to get better over time.
Brian: [00:00:00] A year. And then I started working for one of the largest state owned Chinese manufacturers. So the Chinese government, uh, doing their North American export market. And I was always trying to find, um, you know, bridging the gap between a US buyer and Chinese suppliers. And I was always trying to let you know, find a supplier that I could sell product into the u s um, and I tried things like, uh, oil like the, uh, the used oil that they use in fryers and McDonald’s. Like there’s a huge market for bio fuel for that. Um, I tried offering like China, China consulting services trying to marketing reports based on like the, the time I was having in China and nothing really worked.
Cool voice guy: [00:00:45] Welcome to the ecommerce momentum podcast where we focus on the people, the products, and the process of ecommerce selling. Today. Here’s your host, Steven Peterson.
Stephen: [00:00:59] Hey, wanted to take a second and talk about Gaye Lisby and, Garry’s, Amazon seller tribe and their daily lists that are put out. Um, and incredible stories that you can read if you go out and checkout a amazing freedom.com forward slash momentum hyphen arbitrage. I know that’s a lot to put in there. Amazing freedom.com forward slash momentum dash Arbitron and you’re going to get 14 day free trial, no money risk, no, no challenges. You don’t want it when you’re done, you get out. But imagine getting lists. I’m as grateful as like to call it mailbox money. I love that term. Mailbox money. It’s where you can work from your house, buy things online, have them delivered to you and then sell them on various marketplaces. But imagine you can have somebody else do that for you. So you want to buy time, you want to control what they’re buying.
Stephen: [00:01:55] Well, you take these lists and you can join multiple lists if you’re interested. And then you can segregate them for the merchandise you want and send them to them. They can make purchases for you on your behalf. Have it delivered to you or delivered to them for prep. Boom, sent into these marketplaces and you could sell. How about that? Wouldn’t that be awesome? I spoke at their conference and there were so many million dollar sellers just using online arbitrage. It’s still available. And again, 14 days, the only way you’re going to get 14 day free trial. So if you come through my link, I’m, it is an affiliate link. Uh, they do pay me. So I don’t want to mislead you in any way. Um, I would appreciate it, but I’d like to see you try the 14 days. I’ve had so many people that have joined, have so much success.
Stephen: [00:02:38] It’s very exciting to me and you know, quite humbling to me that they trust me to recommend this group and I 100% recommend this group. I’ve seen the results. These are great people that will also teach you to fish. This isn’t just a, hey, here’s the list. You’re on your own. No, this is, hey, here’s why that wasn’t a good deal. Or here, hey, there’s another opportunity and you get to their groups and it’s just a phenomenal group of people. Um, just great, great, uh, leaders in that group and these lists are phenomenal. So again, it’s amazing. freedom.com, forward slash momentum, I even arbitrage amazing, freedom.com, forward slash momentum. I even arbitrage, use that. Get two weeks free. Try it. You don’t like it, drop out, but give it a shot if you want to add that to your business. Welcome back to the ECOMMERCE momentum podcast.
Stephen: [00:03:28] This is episode 397. Brian Miller. Very, very cool story. I’m a, you know, first off, he’s so far away and, and, and you know, his story is just so interesting on how he figured out how to get there. Uh, had to find himself and it sounds like he found himself, but not as fast as most people would want. Right? They go, hey, I need to find myself by Friday. I got bills to pay. No, life doesn’t work that way. And it’s just so cool how, you know, he’s wrong, honest. And he talks about some of his successes, but he talks about some of his failures. And I think you got to realize everybody has failures and if you don’t think they have failures, they’re not telling you. And he talked about most people aren’t raw and honest with their, uh, what’s going on. And so I think that’s really smart, but then he gets into the technical stuff, his experience and he’s only 33, but he’s got tremendous experience working in manufacturing, uh, learning how it works, learning the Chinese language and then applying that in eventually in his own business.
Stephen: [00:04:30] And there’s a couple of real powerful statements that he makes, um, about, you know, earning money while you’re working for someone else, even when you don’t have that business idea that’s so smart, knowing that it’s going to come believing it’s going to come because you’re going to be successful. You just got to figure it out. I think there’s really a lot there. And then at the end he gives some more really solid advice. And so, you know, listen all the way through. You might want to listen to that part twice because again, very wise beyond his years, let’s get into the podcast. All right. Welcome back to the e-commerce momentum podcast. I’m excited about today’s guest. This is an early interview for me because it’s a late interview for him. Welcome Brian Miller from China. Welcome Brian.
Brian: [00:05:11] Hey, thanks for having me. Appreciate, uh, that I’m on the show.
Stephen: [00:05:14] That’s not the way usually introduced from China, Brian Miller, especially because you’re from Connecticut. Um, that’s a little bit of a leap to get from Connecticut to China. I’m sure there is no straight path in that story and I’d love to hear more about it.
Brian: [00:05:33] Sure. Yeah. Um, so I grew up my whole life in Connecticut and um, I actually graduated college during the Oh eight crisis. Oh. Um, and that was a pretty tough for everyone to get a job. Of course. Uh, what were you going to do? What did you study? I studied business at the time. I was a business man. He what?
Stephen: [00:05:55] What was it your dream before 2008 disaster.
Brian: [00:06:00] Ah, that’s hard to say. I was very interested in finance and Wall Street. I was always close living in Connecticut to a lot of people that worked in the industry. Um, so I was kind of always thinking about that. But to be honest, I didn’t really know what I wanted to do and that’s why I left the u s um, so I was kind of a lost, um, college graduate at that time,
Stephen: [00:06:23] you know, looking back, just thinking backwards, um, and a lot of your friends, um, and I know wall streets up and down, so I’m sure if they lost lots of them have gained. Do you have regrets when you think about it because you could have stuck it out and you know, did the a menial job for awhile and then eventually find your way when you think about it now from your, where you’re at?
Brian: [00:06:46] I’m not now. I mean during the journey, during some of the struggle of the up and down of starting my businesses, you could say that I was thinking, oh, it would be nice to just like, um, sit in, uh, in an office, uh, at a big company that’s pretty stable and life would be so much more, uh, let’s say less stressful. Uh, you can clock out at the end of the day. Um, so during some of those times I would say yes, but now that the business has proved to be successful, um, I think I’m very happy that I went the path that I went.
Stephen: [00:07:24] And we’ll get to get into a story. But thinking about your friends now, you’re 33, so you’ve got friends that have chose the other path. How many of them are happy in that life that you described? Um, Pre China in that big company, you know, no stress. Hm.
Brian: [00:07:41] You know, it’s hard to say because I think everyone’s biased. You know, they, they might say that they’re happy, um, doing those things and they might be, uh, but it’s hard to tell because I find a lot of people are not very, uh, raw with, with, with, you know, describing the, the truth of what’s really happening in their lives and what they’re struggling with. Um, so I would say a good amount are happy, but I still have a lot of friends that are not happy. They’re trying to find that business to start. Um, they’re trying to find that, that idea that they can kind of get out of that, that job. So I see both sides. Um, but I see a lot of people that are trying to get out as well.
Stephen: [00:08:22] It’s interesting you mentioned that. So a lot of people that the out they see is their own business. It’s not getting to a new company that’s a better company or what have you. They’re saying, I want some freedom.
Brian: [00:08:33] Yeah. I think for me at least, that’s the most valuable part of starting my own business was, um, even though I’m making more money than I did at my previous job, I would argue that that’s not the most value I get out of my business. The value that I get personally is the freedom that comes with it. Even though I work way harder than I did, I do what I love and I could, you know, take a vacation whenever I’d like. I could take a day off or entertain a guest when they come to China. Um, so that is something that I really, uh, appreciate of having my own business.
Stephen: [00:09:11] You know, it, it is interesting you say that. What it, the phrase is what I work 80 hours a week so I don’t have to work 40 hours a week or some crazy story like that. You know? It’s like, yeah, I guess that’s that I can relate right now especially. Um, all right, well let’s get into some of the struggles now. Let me just qualify this and say that Brian is an FBA seller. Okay. So he knows what he’s talking about. He’s got a vast level experience at his age. I mean, it’s very impressive to think, um, because I always say e-commerce are like dog years. You know, it’s a year in it. You’re, you’re, you’re really a long time in it. Um, so you’ve done quite a few things that have built you to that place. But let’s talk about, let’s talk about the struggles. Let’s start there because I think, I think people, and you correct me if I’m wrong, I think people think it’s a straight path. Boom. You get into college, it’s a straight path to you create a business. Maybe you stumble a little bit, but boom, it’s an instant success. I don’t know many of instant successes. I’m sure there are some. Um, I’ve not seen many. So you like most, Steve have had many challenges, many challenging businesses. So let’s talk about some of them.
Brian: [00:10:15] Yeah, I mean, to start off at least the FBA business, that’s, you could call it successful now, the first two years that a friend, uh, you know, me and a partner that started it, ran the company. We lost money both years. So I remember after the second year, we had, uh, lost $13,000. Um, and that was just the beginning of a lot of the struggle to start the whole business. But I was lucky at that time that I, uh, kept a job, a full time, you know, corporate job and that Kinda gave me the runway to, uh, learn while I was, you know, struggling to get it going. And also the runway that when we made mistakes, uh, it wasn’t so painful. It didn’t, it didn’t collapse the business because we were receiving a paycheck basically every month. So that was like a vital part to kind of get me going, I guess. Um,
Stephen: [00:11:12] wait, when did I want to think about that for a second? When you, uh, give advice to other people, what’s your advice now? I mean, knowing what you know, I mean, is it a, does Steve, of course I say don’t quit your job or what, what’s your advice?
Brian: [00:11:26] My advice always is try to create as much runway for yourself as possible. So runway could be, uh, working at a job while you start your business. Um, or even if you don’t have an idea, but you do want to start a business in the future. It’s save money with the intent that you’re going to launch a business at some time. So you have the capital, you have the savings, um, and able to weather, you know, the first year or two of, of storm as you, uh, encounter it. Because I think one of the most successful things for me to get started was when I started working at my corporate job, I was saving a lot with the intent of using that money at some time when I had my great idea to, to, to use it for business.
Stephen: [00:12:15] I think that’s very, preparation was key. I think it’s powerful because you’re, you’re what I think the point, and I’m sorry to step in on your beat, your point is right. If you have money and then you have the idea, you still have to have skills. So you know, if you don’t have money and you’re trying to learn those skills, all that takes time and effort. So if you have the money, then you can focus on learning the skills. I think that’s very, very smart. Um, and I have not heard it put that way, but I think it’s really, really smart to think about it that way. By building that up, knowing that something’s gonna come, you can work on all the rest of the stuff. Did you put in time learning other things to eventually get that idea?
Brian: [00:12:53] Kind of. I mean, when I was in China, I was always trying to trade something. So I was in China, uh, like studying, I studied Chinese when I got here and then I started working for one of the largest state owned Chinese manufacturers, so the Chinese government doing their North American export market. And I was always trying to find, um, you know, bridging the gap between a u s buyer and Chinese suppliers. And I was always trying to let you know, find a supplier that I could sell product into the u s um, and I tried things like, uh, oil, like the, uh, the used oil that they use in fryers at McDonald’s. Like there’s a huge market for bio fuel for that. Um, I tried offering like China, China consulting services, trying to marketing reports based on like the, the time I was having in China and nothing really worked. I mean when I started, nothing worked until, um, I got a friend to tell me a little bit about Amazon and we came up with an idea of a product that we wanted ourselves and that kind of we wanted. It wasn’t really available, uh, to what we wanted, um, as a product and we decided to make that product on our own. So the start of the business was kind of creating a product that we wanted ourselves and then trying to sell it to other people.
Stephen: [00:14:18] Now you said that that business sounds like it lost money the first two years. Is that normal? I mean, cause I think one of the challenges that I see is new sellers, they do that and it’s not successful now losing 13 grand. Um, is that not successful or is that what you should expect? Um, you know, given, you know, the competition in the marketplace?
Brian: [00:14:42] Yeah, I think at least Amazon is becoming a bit more, um, challenging and people are investing more money in the marketing of things to get products ranked, um, to the top of the pages to get reviews, whether they do them, you know, white hat, gray hat or black hat, you all need capital to kind of get that going. And, um, we were doing the same thing when we started. You can get, uh, you can provide an incentive for review. So that was, uh, a policy that was accepted. Um, so we were giving away a lot of product, uh, for reviews, uh, which was tos compliant at the time. Um, and after that it became incompliant to, to do that. But, but I think always to start and get the listing started and to get a reasonable amount of reviews that people trust the product. Uh, there is a substantial amount of investment, including the fact that you might have some quality problems when you first start working with the factory. So you might have some product losses. Um, you might have to, you know, fix product. Like you’re saying you’re helping some of your clients with. Um, so yeah, there’s a lot of things that are tough to see when you start. And I think it’s hard to kind of make money in the beginning.
Stephen: [00:16:00] Yeah. It in our pre call we were talking about, you know, different clients we have and to let me just think about this too, for sure of the seven, we have have rework responsibilities for us right now and that seems pretty normal even though both have had quality inspections done. Um, and yet you still have to re or tweak and, and some of it is improvement, right? You just figure something else out and it’s, or somebody else looks at it and it’s like, hey, why don’t you think about this? And you’re like, ah, never thought about that. And then, you know, it kind of makes sense. So it’s interesting. All right. So when you think about what you learn, um, from the manufacturing for the state of China, right. You know what I, what I envision is, you know, a lot of red tape can get cut because the government is the government. Is that the case or did you still have to, you know, pretty rigid set of rules that you had to follow
Brian: [00:16:56] a for specifically manufacturing for the Chinese government? Yeah. Yeah. Actually, surprisingly, um, the, the state own comp companies in China at least have a bit of leeway with their ability because they’re owned by the state. And so they can kind of do whatever they want, essentially. I would say it’s still the case. Yeah. Um, it’s getting, you know, people are arguing that it hampers competition within China. Um, and small businesses within China are trying to stop this kind of a monopoly on some of the industries. Um, however, it’s also a huge advantage when you look at their global expansion. So they are able to win projects overseas without worry about, uh, profitability, uh, and they can enter without thinking about, you know, whether we’re making money on these projects. So, um, yeah, there’s huge benefits, uh, in international expansion for some of these companies and they still kind of rule the markets that they serve in China. Um, so we always thought it as an advantage for us. Hmm.
Stephen: [00:18:08] And is there a particular, you mentioned a couple industries that they dominate. Are there any that you can name that would be, that we might be surprised by?
Brian: [00:18:18] Um, I would say, I mean for at least the u s listeners, cause I worked for the rail company, uh, in China, so all the company that basically built the high speed rail.
Stephen: [00:18:29] Ah, cool dude. That’s cool.
Brian: [00:18:32] Yeah. And, and surprisingly, I mean, Americans don’t really think much about using rail, but there are cities that have it. Um, metro systems like New York, like Chicago and, um, the Chinese are actually winning a lot of the, um, bids for new rail cars in the u s um, and they’re able to do that because they have such a large balance sheet that they’ve entered the market and basically obliterated everyone on price because they don’t care whether or not they make any money. Uh, within the first, you know, five years. They just want to build their facilities and take market share. And because they’re a state owned company, they’re able to do that. So you could see it even in the u s happening. Um, a lot of people probably don’t even know it, but they’re, they’ve won a New York, you know, they haven’t won New York. They’ve won Chicago, La and Boston. They’re all making cars for those cities at the moment. Um, so, so yeah, they’re, they’re powerful companies.
Stephen: [00:19:33] Fascinating. I mean, it really is fascinating to me because that’s a long play. When you think about your business, and I’m jumping around here a little bit, but I’m thinking about this, did that teach you anything? I mean, are you looking at the long play because you know, I understand what you’re saying. You know, advertising is becoming such a significant piece on every channel now, right? I mean, it’s expected that you have to run PPC or a just just advertising period on every channel. I don’t care. Even Ebay, I mean everything. Yeah, nothing sells anymore unless you run advertising. Are you looking more longterm then for your business rather than a short term? You know, pop an item out, get it to market fast, run as much as build as much market share, watch all the competition come in, it declines, move onto the next one. Or are you looking to build brands and say, okay, this has you know, capacity.
Speaker 4: [00:20:25] Sure,
Brian: [00:20:25] yeah. I think I’m more of a longterm thinker in the fact that um, I’m not looking to kind of pump and dump products and I have a unique advantage that I’m in China. So one of the advantages that I like to use on Amazon is that I can spend a lot of time with the factory kind of optimizing the product and doing that kind of thing of going and seeing reviews, you know, seeing what’s wrong with the product and really spending serious time fixing the problem and providing a better product than the other competitors. And I think by doing our products like that, that’s how we launch all of our products. I think they’re kind of a self fulfilling in the fact that you’re not competing on price and it’s a much more longterm oriented strategy. And I think my products will stay longer, competitive against a lot of the market. So that’s kind of how we approach Amazon as opposed to just finding a product and trying to launch it as fast as possible.
Stephen: [00:21:28] I think it’s really smart. Um, here’s a question related to that. So you’re really doing a lot of product monitoring yourself. So you’re looking at the companies, you’re making sure the legit, you’re making sure that they stay true to what they say. They don’t change, you know, stuff. Are you using inspection companies still?
Brian: [00:21:46] I, I, I don’t personally, it’s funny because when we’re here, um, we’re able to go to the factories on our own. Um, but I do know a lot of people use companies like Asian inspection who just changed their name recently. Um, and some other companies I’ve, uh, heard of and they’ve done really good jobs. I actually did an expense expense inspection for a friend with Asia inspection and I thought they did a really good job. So there are a good companies that do great jobs, uh, inspecting products within China
Stephen: [00:22:19] because the challenge is, is that sometimes even know. And I think we talked about this in a pre call. We have, uh, some of the clients have inspections and stuff still gets through and because it’s inconsistent over time, um, but that probably is the quality of the inspector. Right. So you’re saying that these particular companies that you see, are they, have they had longevity doing what they’re doing? Is that part of the secret?
Brian: [00:22:43] Yeah, I would say that. But I think also one of the problems is because a lot of sellers, um, they might not be, they might not have engineering backgrounds when they might not even understand their product well, that they kind of don’t even know how to tell the inspector what to look for. You know what I mean? So, um, I find a lot of the things that people have problems with is when they don’t understand their own products manufacturing process and since they don’t know that, they don’t know really where the problems can occur. So that’s why it’s always recommended, or at least I recommend, um, even if even if there’s no problems for a while, you should visit your factory once a, if you have the ability to, you know, once a year or twice a year, just to keep up with them and to see what they’re doing and to understand, you know, whether or not they’re changing the process and where the, you know, the faults of the product could occur. Um,
Stephen: [00:23:44] is there an opportunity with that? A,
Brian: [00:23:46] you mentioned the engineer, could I, I think you’re right. I mean, I think it’s like, oh yeah, this little do Hickey technical term I use moves this piece over here. Right? Is there an opportunity for someone who does have that engineering background to be, you know, you know, there’s gotta be a, obviously trust and respect and that kind of thing, but you know, to take that product and, and run it through and say, Hey, you know, let’s take a look at this. I mean, are there services like that or are you aware of any yeah, I’m not really aware of any, but what I do or I like to do is take advantage of the factory’s own technical capability. And by that I mean, you know, they have engineers usually or some type of technical people on their staff. Um, and you know, being able to communicate with that person or in my case I’d go to the factory and work with them to develop the product.
Brian: [00:24:39] And if you can kind of work with those people, they’re experts on those products cause they’re making them day in and day out. Um, and if you can get exposure to those people or connect with them on a more regular basis, I think it helps to, for you to understand the, the possibilities of your product. Um, and, and you know, they might do be doing it one way because you just said it to do it that way. They understood my Yankee term. Yeah, do it this way. But actually if you talk to them, maybe the engineer might say, Hey, have you ever thought about it doing this way? It will reduce your size and weight, it will function better. And you know, it’ll be cheaper to ship an Amazon or whatever. He probably won’t say that, but he might have some ideas to help you out that you never thought about unless you just talked to him. Um, so, so, so that’s really an important part. If you can, you know, connect with those people at the factories.
Stephen: [00:25:39] Now it kind of helps that you can speak Chinese. I’m assuming that’s probably a, a, a little bit of an advantage. Right. What, what about Steve who doesn’t speak Chinese, you know, and you know, it communication, uh, being a man is not as my best, uh, skillset. Um, I’ve been told, um, the question is how do you get an interpreter to understand? I mean, because that really kind of makes it complicated or our factories, um, the more sophisticated factories, do they have the, you know, English speaking people on staff? What’s your experience?
Brian: [00:26:15] Yeah, I would say if they’re a larger factory, they usually do because they’re doing so much, um, export business. Um, but it still is important to, uh, in some way. Usually their managers don’t speak or a higher level manager doesn’t speak English. Um, but it’s still important to like either have them in the email thread even if they don’t, you know, understand what you’re writing or on calls or at the meetings that you have when you do visit them. Um, because often the lower level managers that you talk with are sales managers. They don’t have a lot of like push in the factory. They don’t have a lot of power to, to make changes. So you still want to, even though you don’t have that, you know, a language connection with that manager, you still want to somehow always let them know that you’re there and that, um, that sales manager is like telling them everything that you’re saying. Um, because that’s really when push comes to shove, if there’s a problem, those are the people that are really helping out the people that are above those sales managers.
Stephen: [00:27:23] You mentioned, um, you know, not doing so hot when you first started, um, and trying to figure things out. And then you mentioned quality being one of your real secret, uh, sauce tools that makes you different. Right? That’s a way you can differentiate, not necessarily on price, um, because that really does help the review process. Organic reviews, right. Or a legit, uh, uh, legit reviews. Um, any other takeaways that you have, the things that you’re doing right now that you weren’t doing right? Being honest and then you wish you, you, you know, looking back, you wish you did.
Brian: [00:28:01] Um, Gosh, what do we wish we did better? Uh, there’s probably a million
Stephen: [00:28:06] things bust, you know what I’m saying? Is that basically, I mean, you know, there’s obviously something going right for you. Now you figured out something and clearly I get the quality thing. I think that’s huge. Um, anything else that just comes to mind that you can, you can offer to our listener?
Speaker 4: [00:28:23] Okay.
Brian: [00:28:23] Yeah. Um, I would say, um, maybe it depends on how big you are, but you know, you should, um, have some options to diversify your supply chain at some time. Um, I have not, which is kind of probably surprising people.
Stephen: [00:28:44] Well, so do as I say, not as I do.
Brian: [00:28:47] I’ve probably got three factories, you know, making everything. Um,
Stephen: [00:28:51] oh so three is not diversified.
Brian: [00:28:55] Uh, no, three is, but I actually don’t do it. I have only one factory that manages most of the production for most of my, the biggest brand that I have. And um, it is a huge risk. I would say once you get big enough, you should start diversifying, um, your supply chain. And, and I’m speaking to myself cause I haven’t done it because I’ve had so many late deliveries. Um, and so many issues with the smaller factory that I work with because of the problems that they have with cashflow, um, that it’s hurting my business. I’ve run out of inventory. Um, and I’ve had issues like that. So I would say once you get some critical scale, you should start looking to diversify your supply chain and also it will help you with seeing you whether or not you’re getting a good price and, um, it’s kind of a, a safety measure just in case one of the factories does not or it goes under or just starts giving you bad product. Um, so that’s one thing I could definitely recommend that we haven’t done even, um, that listeners should think about as they go forward.
Stephen: [00:29:59] I have not thought about cashflow from their side. It’s interesting you mentioned it because you know, this is a inventory heavy business. So cash flow is always a problem for us, but have not thought about it from the factory point of view. That’s very valid. Um, that’s probably the most logical reason to diversify because usually it’s a quality issue. You want to make sure that, you know, you’re keeping everybody honest and you know, quality. You can see the consistency, but you’re right. Um, that’s a big risk. Are you seeing because their costs keep rising, right? I mean, let’s face it, uh, labor costs in China have gone up at least. So I’ve read, um, so their costs are going up too. Are you seeing more cashflow issues uh, on the and the Chinese side?
Brian: [00:30:41] Yeah, I do. I mean specifically with my supplier I do see it. Um, and a lot of the things that you might not know is they also like, so they give you an MLQ for your products, but on their supply side they also have an MLQ. So it’s interesting to have that discussion with them, which is like your components for my, for my product. What are your MOQ is, cause I didn’t realize when I was making products, we have all different colors that we use. So you know, black, red, green for our products and we order like a few hundred of each one. And for those colors, when they make the plastic parts for our product, they buy 3000 units. Even if they only get a few hundred order for me and they’re holding inventory of my components. Now that’s because we’ve been working for so long.
Brian: [00:31:33] But because of my really, you know, small orders of different colors, I didn’t realize that I was putting massive pressure on their cashflow because their sub supply chain required such a high MLQ. Um, so this is something that you can, you know, if you see your factory delivering late, it sometimes could be because of this reason. They don’t have enough cash to buy all this stuff and it’s good to have these conversations so that you can find a solution together how to soar, you know, the inventory of the components out. Um, so, so yeah, it’s if they have the pressure as well,
Stephen: [00:32:13] how do you have that conversation? I mean, uh, because I think that I, I liked what you’re saying is, you know, because you assume that it’s, you know, quality you assume and shipping, you assume whatever. How do you, how do you have that conversation? I mean, is it because you don’t want to offend somebody? Right. And so how, how, how does that go?
Brian: [00:32:32] Yeah, this is, this is really challenging even for me because I find that Chinese factories are not open because of the fear that you might leave them or you might find another factory. And so they don’t like to openly talk about the problems they have, uh, in delivering your orders. And so this is one of the big challenges is that they’re always, you know, they’re always coming up with an excuse too, which is always almost not true. And I think the key is to try to build that relationship with the sales manager or the manager at that company and try to have more open, honest conversations and see if you can try and get them to open up about the root cause of the problems and you know, pitch it in a way that, look, you’re not going to get mad or you’re not gonna like find them or you’re not gonna go find someone else as long as you be open about it. And we try to find a solution to it. So I would say that’s the best way to approach it. But overall, it’s still hard to get them to give up. What’s wrong?
Stephen: [00:33:39] Well, they’re, they’re humans, right? We were talking about this in the beginning with your friends. It’s hard to get people to, oh, everything’s great, Brian. Everything’s great, right? When they’re, you know, ready to jump off a bridge. Right? That’s right. That’s the way we are. That’s the way we are. So why would their culture be any different? Right?
Brian: [00:33:55] Yeah. Yeah. But, but once you do get to that level, you can solve a lot of your delivery problems. Um, which, which I’ve done recently, which is I didn’t realize I do a lot of electronic products and I didn’t realize a lot of the chips that they were buying from me, they needed 3000 unit minimum. So if I ordered just over 3000, like 3000, 100, they’d order 6,000. Ah, so that, so that means like they had to hold like, you know, they’re, they’re holding, uh, 2,900 units that I didn’t realize they were holding an inventory. Um, so, so yeah, having those conversations can help you improve your delivery time.
Stephen: [00:34:36] Well, how’s that and relationship wise? Yeah. I was going to say, how did that help the relationship when you’re like, wait, you really care about me? No, I’m like, you, you’re actually caring about your manufacturer instead of trying to beat him in every place you can. Right. Because that’s nature.
Brian: [00:34:52] You actually came that I, yeah. And I think it’s actually important. I even offered, I mean people might say, oh, you’re crazy. I said, look, if we go over those levels where like you need to hold a little bit too much inventory, how about I help you just pay for the component price? Like his cost. So if his chip is like a $3 and he has to hold, you know, a few thousand of them, I’ll give them a couple grand for that inventory pressure. Um, so like a lot of money on my, like a deposit. Yeah, exactly. And that would go towards the next order. Right? So I’m not advocating that you should do it no matter what, but to improve the relationship and to improve your delivery times, it might be helping them out a little bit in that way. Um, so it’s something you could always think about
Stephen: [00:35:42] and especially when you find someone that you can trust that has been doing the work for you consistently. Right. And the quality is there because I, you know, obviously your quality must be really paramount to them too because they, you’re helping finance some of their business in essence. That’s kind of cool.
Brian: [00:36:01] Right? And I, and I also think being open to them about your business model too. So, um, one of the big problems we had was they were always delivering late on orders and they didn’t think it affected their sales because they were always selling wholesale in the past. Meaning if they get one wholesale order from one company, it doesn’t influence the next wholesale order that they get because they’re not related to each other. But when you sell on Amazon or when you sell online, if you don’t have inventory to sell, you’re not selling anything. So therefore you’re going to give them less orders in the future. Right. So someone that, a factory that has always been used to retail or wholesale orders might not know how much they’re or delivery as effecting their own sales. Um, so kinda teaching them how you’re not, not showing them how you’re selling, but letting them know how it affects their, your ability to give them more orders can help you, um, get them more on track. In that case,
Stephen: [00:37:08] yes, it’s because of velocity, right? Because in the past the wholesaler would buy it. They had put it on their shelves in their inventory and then sell it over time, door out the door with Amazon. It could be, how about this though? Don’t you worry, I mean this is, I’m sure what’s going through people’s mind that if you give away your business secrets, they’re just going to copy you and kick you out and just do it themselves. And I’ve seen that happen. I can think of one client that we have that the manufacturer now sells on Amazon.
Brian: [00:37:38] Yeah. Actually this is a big push that Amazon itself has done in China. So Amazon has a whole team over the past few years that have been filling up conference rooms with factories in, with Chinese people to get more Chinese sellers onto the Amazon platform because in the end they’re trying to compete with Walmart. So they want as many direct factories to their platform to sell for the lowest, you know, most competitive prices. Um, so yeah, they’ve been doing this and it’s definitely a threat to sellers like us because we can never, you know, offer a product as low as the factory. Um, and the logistics that Amazon set up, they have a logistics company and they offer this logistic service just to factories. So if you’re a Chinese factory, Amazon will give you guaranteed delivery times to FBA warehouses through their, um, logistics company. So yeah, this has been a push and I would say it’s definitely something that sellers like us should think about, uh, now and into the future.
Stephen: [00:38:46] Any advice on how to not insure cause there’s no nothing but any advice on how to minimize, um, that from happening to you? I mean, is that a real supplier trust? Again, I, it would, to me it would be a trust issue, right? If I’m honest with you and you know, and I say to you, you know, look, Brian, you’re a manufacturer on a, a retailer for lack of a better term. That’s my expertise. That’s your expertise. Let’s continue to partner. Um, and we both win. Is that, is that the best advice?
Brian: [00:39:18] Yeah, it’s uh, this is hard because I don’t really know the right advice. Um, I always see that if, if they’re going to do it, they’re going to do it, you know? Um, the only thing I can think of, and this is not really something you can choose, but, or maybe you could, if you can go after or purchase product from smaller suppliers with less resources, they’re less likely to go overseas on the platforms. So the suppliers that I buy from, you know, they’re 20 to 50 person factories and they just don’t have the manpower or the resource to, to be able to coordinate, you know, sales overseas on Amazon in that type of thing. But if you go against the, you know, you buy from a thousand person factory, they probably have a bunch of people that could do that.
Stephen: [00:40:10] And, and in a 20 to 20 and 30, again, their trade off is you might have to help them with cashflow. Okay. Correct. I mean, that’s where you win, right? That’s win-win.
Brian: [00:40:20] Exactly. Yeah. So I, for me, I always, I always go after people always would think that I’m going to go after the factories that Walmart buys from or the biggest shiny floors. And counterintuitively, I actually look for smaller factories that are between that size, 20, maybe 20 to 100 people. And the reason is a few things. The first is, since I’m a smaller purchaser as, as well, my business means more to them. So I’m a larger portion of their sales. Um, there’s less risk that they’re going to go around me cause they don’t have the resource to do it. Um, and they’re more willing to make product modifications with you, uh, because they’re kind of more hungry as a smaller supplier. They’re theirs, they’re scrappy and they’re trying to, uh, get bigger. Right. So, so I always go after those types of factories when I look to buy from them.
Stephen: [00:41:15] I think it’s really smart. Um, makes perfect sense when you describe it that way. All right. Since you’re not busy enough, you decide to get involved in a three pl company. So let’s talk about that. Um, what was your thinking there?
Brian: [00:41:31] Well, actually I kind of fell the whole thing. I, when I had left my job and went full time on my FBA business, I started consulting for other e-commerce sellers on how to manufacture in China and kind of bringing them through that process for their own business. And I had come across a drop shipper that wanted, that I had done some work for, I’d helped them set up a print on demand, a supply chain in China, and that’s printing a product as you received the order of it. Um, and he was happy with my work and he wanted me to set up a fulfillment center for him. So the basic idea was for me to basically buy product for him in China, bring it into a warehouse and inventory it. And then when he received orders, we would ship it out. So that was kind of how I started, you know, having this, um, idea or, and I thought it was an interesting idea and I started working, uh, to build it.
Brian: [00:42:32] Um, it just so happened that I built the whole thing and two weeks before we were about to launch it, he backed out of the deal. So I had, I had a warehouse in China, um, and an employee and I had a business, uh, like a Chinese setup business and I had no customers. So that’s, that’s how the whole idea kind of started. Um, and after that I reached out to all my friends who were any commerce and I said, Hey, I have this warehouse. Um, I can offer shipping services for you. Do you want to try it out? And that’s really how I started getting my first clients, including myself, but just shipping for myself wasn’t going to be enough. Um, so that’s how the idea was born.
Stephen: [00:43:17] Well, it’s grown. I mean, cause I’m looking through it. The site is easy. China warehouse.com. That’s the website. And that’s the services. Um, but you’ve really added some other things. So I still see you have that print on demand partnerships with other people, but the value added services, I think this is so smart, um, to be able to get all this work done. And it’s funny cause that’s what we require for our clients is we want all that work done before they get here. Don’t, don’t ask us to do it. We’re not good at this. Um, you can get all that stuff done in China now. That’s uh, do you see that, I mean in your experience, is that just happening more and more? I mean, you’re going to be like, oh Duh, of course Steve. But I mean just more and more it’s just like expected at these factories that this packaging is going to be done this way with these extra things. I mean is that just normal?
Brian: [00:44:03] Yeah, I guess a lot of it, people are becoming more familiar with Amazon’s requirements. So more factories are learning how to do it and open to help sellers do it. But at the same time, companies like me are filling the void as well. So there’s companies like me and other competitors of mine that are basically helping sellers to prep their product, store it, and then ship it to Amazon, to any Amazon marketplace around the world as the inventory is required. So yeah, we’re seeing more and more of, of these kind of shops open up in China rather than in the u s
Stephen: [00:44:41] is it hard to get space warehouse space in China? Is it expensive? I mean, relative, not to Connecticut, there’s nothing expensive compared to Connecticut, but I mean, if you compare it to, I mean our, or is that becoming challenging too?
Brian: [00:44:56] Um, at the moment it’s not bad. As long as you can move out of the big cities into more rural areas within the city, within, you know, larger cities. It’s usually the, okay. So in Shen Gen, we’re a bit outside the city. We can never afford anything close to the city. Um, and, but it’s becoming more challenging because as Shenzhen and big cities grow and more tech comes in, uh, the wages are going up. And also since wages are going up. So our cost of housing, so we see my company and other factories continually moving further and further and further outside of cities. Um, and this is a trend.
Stephen: [00:45:34] Are you able to take advantage of technology given where you’re at? Um, and if so, could you talk about that a little bit?
Brian: [00:45:43] Yeah, I would say one of the big benefits of being in Shenzhen, which is one of the tech centers of China, is there’s a lot of software companies that are building logistics software, uh, ecommerce software, ERP systems. And we’re able to use, we work with a local software company that helps us, you know, with the software that runs our warehouse. So there’s a lot of companies that are offering and, and Shenzhen itself is one of the largest,
Brian: [00:46:16] okay.
Brian: [00:46:16] Areas for FBA sellers in China. So there’s a whole ecosystem that’s been built up in Shenzhen that supports sellers, but also service providers like us in the region. So it’s really a really key place to be. Not only that, but it’s also next to Hong Kong, so the largest air freight hub in the world. So that really gives us a huge advantage when we’re offering our logistics services is the the ecosystem and also the logistics that comes from the region.
Stephen: [00:46:47] Have you found a sweet spot for the client? You know, your ideal client is not that you wish what you’re really seeing and that you’re really able to make a difference for. Because I think that’s really important, right? It’s, we all want that big giant client until we get them and then we’re like, oh crap, what did I do? But it’s just, I mean, have you figured out where like the reward for both of you, not just financial where you like, Hey, I really helped Steve. I mean, it really helped somebody.
Brian: [00:47:15] Yeah. I would say the, the best value that we’re starting to provide for people is,
Brian: [00:47:22] uh,
Brian: [00:47:22] sellers that sell in multiple marketplaces. So if you, if you only sell in the u s it makes the sense to just take that product, have your factory prep it, and then ship it right to FBA. Especially since the longterm storage fees are only kicking in after a year now. Um, so there’s not a lot of pressure to like sell through except for Q four. But where we really help is that if you sell in Japan and Europe and the U S and Canada and it’s very hard to measure your sales velocity. So instead of taking a whole container and bringing it to the u s and then realizing you’ve in order or you have to replenish your inventory in Japan, it’s cheaper just to leave it in China and then fulfill it to those regions as you require the inventory. So that’s really where we’re providing like the most value, at least for FBA sellers. Um, we do direct from China fulfillment, meaning we shipped direct from China to the end customer and we provide value for drop shippers in that case. So there’s Kinda two main regions where we’re really like really providing value to people.
Stephen: [00:48:30] Well, and it, it seems very interesting to me what you’re talking about because in, you know, and part of the background, you talk about this all in kilogram pricing where the way I understand it, right, I don’t need to take a full container. I can take apart a container. Right. Can you talk about that?
Brian: [00:48:49] Yeah. This is kind of the newest shipping method that people are using in specifically Shenzhen. And I’m surprised that more Western sellers don’t know about it. But basically what we’re doing is we take, we aggregate a whole bunch of people’s cargo and we charge a kilogram rate for the weight, either actual or volumetric that you ship. And that includes the import tax as well. And it goes direct from China to, and it includes everything all the way to the FBA warehouse. And so you can ship as low as a hundred kilograms and it’s still quite competitive because all of the port fees and all of those extra fees are shared amongst all the sellers. Um, and this adds a great advantage for small sellers that can’t like get enough volume to justify a container. But at the same time, even sellers that need to send over a container loads in order to be price competitive, have on a product, but they sell it through every six months. So they have to put up so much cash for that cargo and instead they can order smaller quantities and still take it advantage of sea freight and free up more cash. So there’s, I’m seeing people use it for two ways, smaller sellers and also even bigger sellers that don’t have a very quick sell through rate to free up cash for themselves.
Stephen: [00:50:23] One of the, I always described this with LTL from our place for example, um, we’re in Carlisle, Pennsylvania. And so what happens is they come and pick it up and then they bring it to a hub and then they wait at that hub until they get other Amazon, uh, products of filled a, the full, um, the full uh, trailer. Right? They want it full, then they bring it to Amazon and then, and so there’s delays with all that. Right. And, and you know, depending, does this same thing happen in what you’re describing, you know, cause I would be concerned about that. You know, it’s like, hey, you know, I got my hundred kilogram little box to you. Now it’s going to sit in a container. I’m going to wait until the containers fall or are we now at such a capacity that, you know, that just really isn’t a real additional amount of time.
Brian: [00:51:11] Yeah. Actually it’s not a problem just because of the volume. So there’s a couple, you know, days a week that they go out. And the beauty also is when they bring the container and they open it right up and they pass it usually on directly to ups. So from there ups will bring it to the end, a FBA warehouse. So it’s usually quicker and there’s less delays than if you ship by, uh, the traditional ship.
Stephen: [00:51:38] What you just said was everything’s going to Amazon, so it just makes it easier. Yeah, that makes perfect sense. As opposed to that hub handling all these other products to it. The other one that I have a question on because I’m always interested in this, is product sourcing support. Um, can you talk a little bit about that? Cause I think that that’s again, one of the bigger challenges. It’s, you know, everybody says they’re a factoring. We all know that they’re not right. There’s some are in some art, the lots of them are distributors that adds costs, that adds delays and that adds quality, a poor quality opportunities because you know, there’s another layer in there. Can you talk about that?
Brian: [00:52:16] Yeah. Um, I mean it’s, it’s tough to find who is a factory and who is not, but I also argue that it’s not always the most important, uh, part of the deal. I actually, people are surprised. I actually work with, I work with a trading company and I very well know that they’re a trading company. Um, but they do so much work that it’s worth it for me to, for them to take a margin. Um, so I wouldn’t say that it’s always the right play to work directly with the factory. However it usually, it usually is in most cases. What can a trade
Stephen: [00:52:53] in that description, I mean other than price, obviously you saying they get big volumes so they get a good price or there’s something that maybe most people don’t think about that they can do differently.
Brian: [00:53:03] Yeah, I mean, some, some trading companies do have a technical expertise. So my, my trading company has a technical expertise in electronics and they designed our electronic circuit boards themselves and they also designed all the mold stuff. Uh, so all the tooling for our products they designed and um, and they outsource, uh, they don’t outsource the assembly of the product, but they outsource everything else in it. Um, so they more or less trade. Most of my components they don’t make. Um, and, and I know that and they don’t have a big factory or anything. They just have a small office. Um, but they provide kind of technical expertise that I think is valuable. Um,
Stephen: [00:53:53] well you talked about, you know, like most people don’t have that engineering background, so that’s another place that you can look for expertise. So if you’re thinking about getting into the water bottle business, I’m always looking at my water bottle. Right. And you just don’t have the design capabilities. It might not be the manufacturer only. Um, especially cause that’s probably such a generic item. It’s so overwhelming. You might be able to find a trading partner that can offer some of that service too. Hmm. Do they charge for those services or is that part of the cost, you know, part of their margin.
Brian: [00:54:23] Yeah, it’s part of their margin. So they’re making a margin off me. Um, but I am okay with the price that they sell the final component to me for. And so I’m happy with, with the work they do. And I know a lot of other trading companies that are specifically electronic because in Chen, Jen is, most of the electronics in the world are made and those, uh, trading companies are so professional that it’s sometimes worth it to work with them, not only because of their design capability, but also because of the relationships that they have with the factories that you don’t. So they’re probably still going to get just as good of a price as you could on your own, just because of all the volume that they’ve bought over the years and the relationships they built. So it’s not always incorrect to say that that a trading company is always more expensive.
Stephen: [00:55:17] Well, I think it’s, I think that’s solid advice, right? They vet those factories for you if they’re, if they’re a good trading company, right. They’ve already, they’ve worked with them before. All that. Yeah. Okay. So what’s next? So, you know, you’re, you got, uh, uh, I’m sure it’s not smooth. Do you have a well running? Um, it depends on the day and it depends on the hour or probably in another hour. It won’t be well running. Um, FBA business, you’ve got this side business. Now that sounds like it’s getting more significant, uh, where you’re offering lots of services to other sellers. What else have you been thinking about? Um, or can you see an end game to this?
Brian: [00:55:53] Yeah, for me at least, there’s like two paths that I might wanna take. Um, one is to Kenyon Tin tenue to offer services to, uh, e-commerce sellers specifically in logistics, warehousing and kind of value add. So helping them with packaging or helping them prepare products or inspect products. Um, and I’d like to create kind of a ecommerce logistics platform where you can send it to us, China and wherever you want to distribute your product, we can help you do that. So that’s kind of my goal for my logistics company. Um, and in the future, at least for Amazon, uh, I’m looking at, uh, maybe purchasing, you know, an Amazon business in the future just because they sell at such low multiples and I can definitely improve them. So I think it’s, you know, at least for your listeners, maybe they don’t have to create one from scratch. Um, if they have some capital they could buy one. Um, and a lot of them sell for two to three times earnings. So if they know, you know how to make it better, uh, the payback period on those type of businesses are very quick. So I think those are two areas that, at least for me, I’m kind of eyeing at the moment.
Stephen: [00:57:13] Well, I think it’s smart because if you know the lane, like you know that you quality is your thing and you can cut through all the rest of that stuff, you can underperformed. Great Guy. Great, great. Sorry to fix those other issues. And you don’t think there’s so many things until it’s kind of from here time. Uh, as the story goes, I think about doing where you want to think about where you’re going to know all this stuff down. I liked, I liked that the contact [inaudible] where are you taught, where you going to go and then what actually happened. They could tell with the weapon and just figure out why Brian maybe it makes sense. Maybe it was outside of your control and at least you know going forward. So smarts back to the accountant. I always tell people that’s how you do a bunch of its okay. It’s historical until you factor in what things are going to effect you or Brian has taken that approach to his life. All right. Well this business side, obviously he’s having success. Very, very close story. So reach out to him Brian, several businesses where I see any fish warehouses, Dotcom, Brian it and he’s like find your warehouse, you can help. And I’m how there was competition to get to cast it.
Brian: [00:58:24] Yeah. I would say uh, two things. One is definitely try to choose something that you enjoy or you like or you have some type of passion about. Because when things do get tough and it’s really hard, it’s much easier to get through those challenges when you know that there’s a light at the end of the tunnel, but also that you enjoy the product or the service that you’re selling. So it makes it less painful during those times. Um, and the second thing I would say is just to write down, one of the key things that I think makes me more successful is that I have a to do list of the day of the week and then I have goals for like one year, five years and 10 years, all written down and they’re not just business goals. And if you have them written down and you know what they are and you can reference them when you’re in those times, you know that, you know, this pain is for that achievement that you’re working towards. So knowing what they are and knowing and reminding yourself of that, I think helps you through that really tough, tough time. [inaudible]
Stephen: [00:59:35] how much time do you put into that, uh, tracking and that kind of thing? Okay. Let’s give people some perspective. I mean, is it, you know, an hour a week? Is it an hour, you know, five hours a week. I mean, good to give it some perspective.
Brian: [00:59:48] Yeah, it’s interesting. I actually have a good friend where we make, we make a thing, it’s not even a term coined by me. I think it’s a term coined by Tim Ferris at the four hour work week where he had people create a dream line and it’s basically a, a document you can create it however you like and it holds you to what you want to do in your life, you know? And then in the near term, the in the far out, you know, 10 years from now and we share these things with each other and not only do, do we do that, but we kind of push these, push each other to achieve them. So we’ll ask each other how our progress on them and we’ll keep up to date with my friend on, on what I’m doing to get to that goal. And I think having that friend to push you and also just writing it down. I literally just keep it in excel sheet. Um, so it’s not anything I spend specifically a long time writing or putting it up, but I do spend time rereviewing it with my friend to keep each other honest. Um, and if you have someone that’s like a mentor or someone that you get along very well with that can understand you and your goals, I think it’s something that can really help push you to, to, to get to go get them. You know,
Stephen: [01:01:06] love it, dude. There’s, there’s no doubt. Uh, everybody’s nodding saying, okay, now I get why he’s having so much success. Um, and, and I’m sure you weren’t doing all that way back in the day and hence the reason you got into this place. It very awesome. Very cool story. Um, easy. China, warehouse.com reach out to Brian at Eg, China, warehouse.com and find out some more. Go check out his website because, uh, it’s pretty neat. Some of the things I love the idea about packaging. Most people miss that at, that’s such an opportunity. Um, very, very cool. I thank you so much. I wish you nothing but success.
Brian: [01:01:42] Yeah. Appreciate it. Thanks for having me on the show.
Stephen: [01:01:46] Great Guy. Great Guy. Great Story. Uh, sorry about that Brian. Um, I think, uh, I think there’s so many things to learn from here. Uh, as the story goes, uh, think about where you are in your journey. Think about where you’re going and then write that stuff down. Um, I like what he’s talking about, that dream line. I love that thought of actually tracking, you know, where you thought you were going to go, and then what actually happened and look at that Delta between and, and figure out why now maybe it makes sense. Maybe it was outside of your control, but at least you know, and then can factor that in going forward. So smarts back to the accounting is, I always tell people that’s how you do a budget. You know, it’s historical until you factor in what things are going to affect you. Or Brian’s taken that approach to his life and his business and obviously he’s having success with it. Very, very cool stories. So reach out to him. It’s a Brian at easy China, warehouse.com firstname.lastname@example.org and I’m at e-commerce momentum.com.
Cool voice guy: [01:02:47] Thanks for listening to the e-commerce momentum podcast. All the links mentioned today can be found at [inaudible] commerce, momentum.com under this episode number, please remember to subscribe and like us on iTunes.