LIMITING RISK

My number one concern when importing is limiting risk. This is everything to me. You can have three or four good import deals and then have one or two bad import deals and lose all your money. It is really important that you begin with a mindset at the start of the process of avoiding risk.

 

Pre-Selling

My first strategy for limiting risk is pre-selling. As an importer, people will look at you like a three-headed monkey. They say, “What do you mean? You go all the way over there to China and you deal with all these Chinese people?” Yeah, you do. These people will never be importers: they are scared of the process, they don’t understand it and they’re not going to be part of it. For this reason, it is usually easy, especially if you have a great price, a great product, and great quality, to go out and pre-sell, if not all of what you import, at least enough of what you import to avoid any risk.

 

We import hand dryers that blow your hands dry, such a romantic business… We got a quote on them and it was a fantastic price: they sell for about $400 each and we were buying them for $50. The quality was outstanding. We had the factory send them labeled and branded. Because we were known as an importer, they went above and beyond and actually branded the samples they sent us to our brand. Oddly enough, next door to the building we were in at the time was this company called Sani-Clean. They basically go in and clean toilets for a living. A very romantic business as well. Anyway, they had 30 trucks and they maintain a problem most people don’t want to deal with, meaning the restrooms inside their businesses. They maintained the restrooms including the supplies. We knew they used hand dryers and they were paying wholesale anywhere from $250 to $350 for a hand dryer and would sell to the retailer for $400 or $500 when somebody needed one. We went to them knowing we were going to sell our hand dryers for $295. We went to them and said,

 

“Hey, we have these hand dryers. We want to buy a bunch of them. Would you be interested in co-oping a shipment with us? We can get them for you for $150 a piece.”

 

That was way less than half of what they were paying for the hand dryers, so I got a commitment from them to buy one-third of the container at three times what I was paying. The container came in, I dropped it at their place and unloaded one- third of the hand dryers off the container, they gave me a check. At that point, I was absolutely even. The container moved over and dropped behind my dock and dropped off $65,000 worth of absolutely free merchandise into my warehouse.

 

This is what I mean about pre-selling. This is the number one way to eliminate risk in importing. You have to find bulk users.

 

Another example: we wanted to be in the key cabinet business, so we put up a website and the key cabinet business did okay. The thing was that there was a lot of competition. There were 100 different sites online selling these big key control boxes, and we were just one of them. In this particular market, we had a ridiculously good wholesale price. It was so good, in fact, that we didn’t want to reduce our price down to just become the cheapest in the market because it would make our quality look poor. Here’s what we did instead. We were selling a key box everybody else was selling for $200 that we were buying for about $12. We figured that all the other guys were paying about $100 for that lockbox. It was way smarter for us to not compete retail head-to-head. It was better for us just to go out and sell the lockboxes directly to all the other websites for $55 apiece. I made my four- or five-times markup – or at least my three-times markup – and I didn’t have to ever mess with having to deal with retail customers, selling individually.

 

The best part was that the product became much more of a consumable product at that point. Once you get that base established, now you can direct mail all the locksmiths in the country, which we did. You can go to the locksmith supply companies and sell them wholesale. You can go to trade shows for apartment complexes, for car dealerships, and for big arenas, and we did all that. You basically pick the low-hanging fruit first. You’ve just got to find bulk customers, and it’s not that hard to do.

 

If you have a few samples you can send out to your bigger suppliers, that’s a risk-free proposition. Even if you’re going to retail, it’s a great way to help get rid of some of your slower-moving inventory. The only problem is that if you’re retailing online and you’re selling wholesale online, you’re sort of straddling the fence a little bit, and the wholesalers may not like you very much. You’re competing with your clients and that sometimes ticks them off.

 

Dry Testing

Dry testing is another way to limit your risk. It is basically seeing if a product is going to sell before you buy it. There are two kinds of dry testing, but we don’t do pure dry testing because I don’t think it’s very ethical.

 

You can do this on the Internet very well. You just go out, put up a website, and begin to sell something. Some guys will do it and just be out of stock of that thing, but I don’t think that’s a good idea because you’re being deceptive when you do that: you never really had it anyway.

 

Instead, for most things that you’re going to import, there’s already a domestic supplier of that thing. Let’s say that it’s lockboxes. I’m going to sell lockboxes and I know I can buy lockboxes for $12. To buy them wholesale in the States, they’re $100 apiece but everybody’s selling them for $200. I’ll put up a Web site selling lockboxes for $125, just to see how many I’ll sell. If I sell some, I’ll go buy them from the other company for $100 wholesale and fulfill my orders, but only until mine get here. It’s a great way, rather than saying,

 

“I know what I think. I think these widgets are going to sell. I’m going to go ahead and invest a bunch of money, buy them, and bring them in. When we get them in, we’ll put up a website, and then we’ll see if they sell!”

 

That’s just dumb. The better way is to know that you have a market before you ever get started.

 

Samples

One of the things that I like to do is make sure that I get more than one sample. I’ll ask for a dozen or two dozen samples, and I’ll be willing to pay extra for them if need be. A lot of the time, I’ll have five or ten suppliers out there, and I want to send them a sample along with a letter. I want to get good photography. I want to get everything together so that they’ll give me a buying commitment, so I know whether or not I want to import. It’s also a good way to check consistency from a manufacturer. I’ve stumbled across a couple of bad items when I did that once, and that was just in the sample lot.

 

Stateside Prototyping

Another I which can save you a lot of time and money, I call ‘Stateside prototyping’. A lot of people try to get their prototypes made in China. You try to draw a drawing or give them a spec if you want something built a certain way in China. You’re trying to explain it to them, and they’re trying to understand what you want. I always joke about it. I say, “If you send a drawing of a football to China, they’ll send you back a baseball. If you send them a baseball, they’ll send you a baseball.”

 

The best thing for you to do is to get designers to build your prototypes in the States if that’s possible. If you can’t build a prototype, then maybe there’s one for sale already. You can buy one and send it to them, and ask them to make one like it.

 

However, there are patent laws and trademark laws that apply. One of the worst things that you can do is get a container-load of something here that violates a patent. If you get the merchandise here, you just can’t sell it, and you have no choice. If you start to sell it, you get is a Cease and Desist. At that point, that merchandise is absolutely the worst merchandise you can have because you’re not even allowed to liquidate it. You just have to destroy it, and you have to pay to have it destroyed. It’s the worst possible problem that you can run into.

 

What I suggest you do is build your prototypes on the States side, send them to China, and say, “Make me an absolute duplicate of this.” They’re fantastic at duplicating things. They’re not very good at creating things from concept.

 

Later on, as you get savvier, you’ll learn how to walk in anywhere, look at an item, and tell you within five or ten percent what that thing costs in China. It’s a blessing and a curse. If you go shopping with your wife, you’ll say, “I’m not buying that stupid thing! It’s three dollars in China!” She’ll say, “Yeah, I know, but this one’s $150 and it’s pink!”

 

The good thing though, is that once you learn what stuff costs in China, you have this real big advantage. The guy I worked with that was huge in the home décor market would go to the Atlanta market, which is a wholesale market selling to other stores. He would go out into stores and find a vase or a knick- knack that was at some store – maybe even in the thrift shop – that was popular 30 years ago. He would just polish that thing up, put it out on the shelf for sale, and take orders from it. If a lot of people ordered, then he would go buy it from China. If people didn’t order it, he would write a letter back to the ones who did and say, “You ordered this, but after some internal testing, we realize it’s probably not going to be a good seller.” He was seen as a hero for protecting them from a bad seller. Also, though, he was able to have a big display of stuff in his showroom.

 

This is what I call “the sticker method.” You can actually scrape the other guy’s sticker off the bottom of the product and set it. In order to do that, you have to know your market and know your business well.

 

Those are some ways that you can limit risk. Limiting risk is a theme here, because the main part of this is that you can make a lot of money. However, if you don’t take some of these steps – or all of these steps – to limit risk, you could really get caught with your pants down and get broke real fast.

 

THE IMPORTING PROCESS

If you’re going to do this yourself and really be in charge of the process, there is a way you have to go about importing.

 

1: Limiting Risk

First of all, you have to do your product research. You have to know where your market is. You need to do some price testing and some elasticity testing and to how much stretch there is in the amount of money people charge. You need to know the high, the low, the in-between.

 

You also need to research quality. What features are needed, what features will people just not live without? One time we were bringing in shrink-wrap machines and we didn’t have a knife that cut off the shrink- wrap. People didn’t want our product. It was a new feature that another manufacturer added and it basically made our stuff obsolete. We had to close out a bunch of heat sealers and order new ones.

 

If you ever run across a situation like this, the best thing to do is get rid of the product you have as quickly as you can for whatever you can get out of it. If there is a major development in your technology market, it will quickly become the industry standard.

 

2: Sourcing

The next thing to do is find a source of quality manufacturing and get a sample from them. You want to physically see an exact representation of what you will get when you get your order, the understanding being that the sample is what will be in the container when you get it.

 

3: Negotiation

Next you want to get your quote for the product. You will negotiate this a couple of times. You will get at least two quotes, probably three quotes, during the negotiation process.

 

4: Customization

Once you have done this, you want to customize your product as much as is allowed. If you are importing small quantities, this is the downside: you typically can’t get as much customization work done. If you are importing a container of something from China, you can get them to brand it for you almost always for no additional charge.

 

5: Ordering

Next you are going to actually place the order. Write the spec, place the physical order, and get all the paperwork in place.

 

6: Money

You need to decide how you’re going to pay for your goods, and it’s going to take a little guts to send your money out there.

 

7: Freight Forwarding

You will deal with freight-forwarders and getting all the freight documents done. You will deal with your documents. Everything is done in China based on a bill of lading and a set of documents you have to have in order to receive your freight.

 

8: Damage Control

Lastly, we are going to talk about damage. At the last step of the process, what do you do if your freight comes in damaged or unusable for some reason?

WHAT TO IMPORT

It is not as simple as saying: “These are the best things to import.” What is best for you to import depends on your own particular skill set.

1: Commodity Products

Commodity products are things like lumber, concrete blocks, carpeting, and whatever, things that people use up and fundamentally buy based on price, or things they buy a lot of at a season period of time.

 

When I was in business with my Chinese partner, one of the biggest items we brought in every year was artificial Christmas trees. How many houses in America have an artificial Christmas tree up at Christmastime? Probably 95%, right? The downer is that there is an established price for those. An eight-foot Christmas tree is worth, say, $47.20. There are so many of them out there and they are fundamentally the same doggone thing; one is not a whole lot different to the other. They have that established price and the markets are driven by price.

 

If you’re selling bamboo flooring, it will have an established price of X dollars per square foot. People buy it in massive bulk because tons of people use it, and I would imagine the margins in bamboo flooring are extremely tight. Does this mean importing commodities is a bad idea? No, it doesn’t. It means that if you are going to import commodities you’re going to be a different kind of importer. The kinds of people who import commodities are typically people who look at importing as if it’s a stock trade. They can go to China, buy a million dollars worth of hardwood flooring with practically no risk, knowing the hardwood flooring is already sold by the time it lands here for $1.2 million. They can make a 10% or 20% return on their million dollars in 60 days. If you trade stocks, that isn’t a bad return.

 

There is the ability to import like that, but here’s the downer to that: in a commodities business you have to have the best price possible. If you buy wrong, you’re dead in the water. If you buy for more than the market, it is a zero sum game. It turns that profit margin upside down. Also, if you have a quality control issue, you’re dead in the water. If the boards are supposed to be 4 inches wide and they are 4.15 and it doesn’t fit anybody’s blueprints or floor plans anymore, you have a million dollars worth of firewood. The commodities import business is not my favorite kind of importing for these reasons. Also, you make such a low margin that it is not worth your time unless you are investing $1 million or $2 million at a time. It is hardly worth making 10%.

 

There is one way to make money in commodities and a good friend of mine does this. He brings in Freon for one of the largest automotive supply companies in America. It is a commodity, but he made the relationship with the factory and got that locked down. He then went to the automotive distributor and said, “Look, I can get you Freon for $30,000 a container. If you are willing to put up your letter of credit, your money, and take the risk, I’ll go all the work for you for 8% per container. I’ll handle all the importing for you.” He had a track record of being a successful importer. They wouldn’t just let Joe Anybody do this. These containers come in and there is $100,000 worth of Freon in a container. He makes $8,000 per container and they bring in several of them per month. This is zero risk to him.

 

There is a downer to that model: they could decide to screw him out of the equation and go directly to the source. However, if they’re smart, they won’t do this. The importer does a lot for quality control, and most of the retailers get the benefits of using a good importer who has a relationship with the factory. And of course, they’re scared to lose their money, too.

 

2: Gifts And Décor

The gift and décor market is a huge market. It could also include the fashion market. As far as gifts, décor, and clothing go, basically you need to have good taste or somebody with good taste, possibly a designer.

 

However, good taste to you may not be the good taste that sells. I was working with a home décor importer who sold all of his stuff to Walmart. I think I have a pretty good eye for design, so when we started working together I started bringing him designs of all these really high end candles and things I’d seen in New York at Bloomingdale’s and Bergdorf Goodman and all these high end department stores. Every time I’d bring something in, he’d go, “No, no, no! It’s all wrong.” I was getting all of my design ideas from high-end magazines and going to very expensive stores in New York, Europe. I’d bring in these fantastic, and he’d say, “All wrong, all wrong, all wrong.” Finally, I was so frustrated that I said, “Look, they have this here, here, and here,” and showed him the different stores. He got frustrated with me and he said, “You don’t understand. Only 5% of Americans have really good taste. We sell to everybody else.”

 

He knew his market. He knew exactly who his market was, and he knew they would buy the Jeff Gordon NASCAR candle long before they would buy a fancy, beautiful, frosted candle that looks like a cake.

 

The upside to home décor is that the margin is sick; it is ridiculous. The margin is sick and you’re probably looking at a purchase price of anywhere from eight to ten times your money. That is cost of retail.

 

3: Niche Markets

Niche markets might be hobbies. This is something where you have specialized knowledge of the industry. Maybe you are a model train builder and you know there is no real branded track. Maybe the trains are branded, but the tracks are not. I don’t know: I’m not a train guy. I’m just making this up. You may decide that the price you are paying for your model train track is ridiculous. It is, say, $10 a foot and you may be able to find it in China for .50 cents a foot. You know you have a market there. You can bring in the product knowing pretty much what the market is based on your specialized knowledge.

 

One of the best examples I’ve seen of this is a guy who used to work for Ford Motor Company. He was one of the guys who designed the little keyless clickers for locking and unlocking your car. I used to have a building next to this guy and every couple of days I’d see a 40-foot shipping container back up to his back door and they would unload it. The entire contents of those containers were keyless door clickers for cars. He sold them to car dealerships, to automotive parts companies, and so on, as a replacement for when you lose your car clicker.

 

Basically, these things sell for $150 to $200 a piece from the car dealer. This guy would sell the replacements to other people who would sell them for $50 or $60. He got anywhere from $12 to $20 wholesale for them, and he was paying $2 to $3 per clickie. He knew his market, and he knew his product. He found all of these different places, non-traditional places, to sell his goods. He sold them to retailers and to parts suppliers. He sold them to car washes, so when you’re walking through the carwash watching your car get washed and you go to check out there is a rack of these little key clickies. He sold them to locksmith companies. He’s getting anywhere from $12 to $20 wholesale and he’s paying $2 to $3, so there’s your margin difference.

 

4: Business To Business Goods

I had a company for a while called Cleveland Equipment Company. We had tapers manufactured for us, which is a piece of packaging equipment, and liquid fillers and heat-sealing equipment to shrink-wrap products with. All sorts of packaging equipment, which is real niche B to B stuff. I was able to get my one-third of wholesale buying price and still be ultra-competitive in the market.

 

I was selling directly to end use consumers. We did this via the Internet; we did it via trade shows. We had a repping network that went out and showed our products to other people. You want to become prime: this is your ultimate goal. This means you are the source for everybody to get their products from. In heat sealers we became a prime vendor, which meant we always had the product in stock and our stock was good. We had a lot of good quality control testing, we had a lot of units out in the field, and we knew that everything we had was good.

 

Here’s what happens when you’re prime: your market becomes global. We sold equipment to England, Germany, South America, Brazil, Iceland, Canada, South Africa, Australia, New Zealand, and all over the place, because we had kind of odd products for which there was a specialized need. We would bring in a piece of equipment for $700 that we retailed for $3,700, and that was a pretty normal market.

 

If I bought that same piece of equipment from the States, I would have paid $3,400 for it. Imagine this now. There are a lot of guys out there competing with me. They’re paying $3,400 for a piece of equipment and trying to sell it for $4,000. Well, I’m beating their brains out at $3,700. Once I come into the market at $3,700, they have to reduce their price to match me or they won’t sell any. But they’re already on a slim margin, so now they are making $200 or $300. What can they spend on marketing to get a customer? Practically nothing. I could spend $1,000 per customer in marketing and still make way more money than they do.

 

5: Lead Generation

I never used to look at products that were low dollar or very, very inexpensive little pieces, but I’ve since been corrected.

 

In most businesses, if you’re not already selling your products online, you will eventually be selling your products online. This is where lead generation tactics can come in.

 

One company I know imports guitar picks from a guitar pick factory in China. Their guy buys all the extra guitar picks they have that are overruns. He sells bags of guitar picks on eBay and he doesn’t make a lot of money on this, but if you’re going to buy guitar picks, you really want to buy them from him because he’s really cheap. But who buys bags of 1,000 guitar picks at a time? People who own guitar stores. He has used the picks to build a business of people and now he wholesales strings to them. He brings in guitars and musical instruments. He got them as a customer and now he can sell them all sorts of other stuff, so although he doesn’t make any money to speak of on the picks, he makes a ton of money from acquiring the customers. He’s grouping people based on a certain need. He is building a list of people that would probably want something else he has. That’s smart.

 

6: Importing To Rent

Importing to rent is another big market right now. We met a gentleman in Canton Fair in China who imports oxygen generators. A lot of people who have problems breathing have this little machine they can use that helps generate oxygen for them. Social Security and a lot of medical plans will pay a rental of a couple of hundred dollars a month to rent the machine for the patient, but they don’t want to buy them because they are quite expensive, around $4,000 or $5,000. This guy goes to China, buys the machines for anywhere from $500 to $600 a piece, and comes back to rent them for the same $200 a month. In three months, he’s in the black.

 

Plus, guess what that gives him? It gives him marketing money. It gives him much more money to spend to acquire the customer than his competitor. His competitor is 18 months down the road before he breaks even. My guy breaks even three months down the road. Who wants the customer more? There is no question that he wants the customer more.

 

In China, you can often buy a piece of equipment for about the same amount as a monthly rental in the States. You get a company like Home Depot, and they have a concrete finisher that rents for $50 a day, let’s say, which is $1,500 a month. The concrete finisher in China is probably $400. In less than a month’s time, it’s paid for.

 

There are guys going over to China, buying a piece of equipment, and then building a business around it. They then sell it as a business opportunity. They may go buy a power-plumbing snake. Those things are usually $2,000 or $3,000 in the States, but in China they are $300 or $400. So they package that plumbing snake along with a business operations manual, some ad slicks, and the use of a brand name, then they sell it either as a business opportunity or a franchise agreement to be ‘Mr. Super Rooter’ in their area. There’s another company that goes over and imports these floor steam cleaners that clean grout floors. Instead of just selling the piece of equipment, he sells the piece of equipment with a Grout Genie franchise thing. He’s able to put together all the pieces.

 

One of the cool things about importing things from China is when you can take something you’ve imported and add other things to it that add value. Then your customer is not just comparing apples to apples. You’re keeping them from saying, “This guy has the same piece of equipment over here for $20 less.” It doesn’t matter at that point. They are more buying into the business opportunity than the piece of equipment. It doesn’t even have to be a piece of equipment. It could be that you have a wholesale source of cell phone covers, and you get a pushcart in a mall filled with cell phone covers. You’re the direct importer. It gives you advantages. You’re building continuity and residual building.

 

7: Parts And Raw Materials

China does a massive business in materials like chemicals, stone, and granite countertops. A perfect example is a guy I know who imports aluminum extrusions. This is a big word for aluminum trim, the stuff that goes around a dry erase board, for instance. They’re on almost everything you pick up. Aluminum extrusions in the States sell for an average of $3 or $4 a pound. In China, they charge about $1.25 a pound for extrusion. Well, this guy had the greatest business in the whole wide world. You talk about a risk-free importing business. He would go to other manufacturing businesses and say:

 

“Hey, my name is Paul. I know you’re buying a lot of aluminum extrusions right now and I know you’re paying about $4 a pound for them because I know where you are buying them from. “What if I could get you all of your aluminum extrusions for $2 a pound and cut your price in half? Would you have any interest in that?”

 

He didn’t get a lot of nos. He would take their samples, send them to China, and China would send him back samples of the extrusions. He would take their order at $2 a pound, have it secured and locked down in a purchase order, and then he would tell them it would be six to eight weeks to get delivery. They were fine with that because they were saving half. All they have to do is plan out a little bit more.

 

He would take the order, deliver it, and then they would set up what’s called a JIT (Just In Time) Inventory. After the first order, after they saw everything, the quality was good and it was going to be okay, he would say, “Okay, let’s set up a Just In Time Inventory for you. How many extrusions are you using and when do you want them?” They’d figure out they were using one container of extrusions every two weeks, so he would place orders six weeks out, eight weeks out, whatever, and every two weeks they were getting another container of extrusions in the back door. Every two weeks he was getting another check. You call on that business one time, basically. The rest of it is just maintenance. No one ever says, “Hey, I really think I’d like to go back to paying $4.”

 

8: Services

Another great area in the import trade is services. Sometimes these are service and product tie-ins. Sometimes it is a product matched with a service. This is one of the coolest ways of importing I have found in a long, long time.

 

I met a guy on an airplane going to China not too long ago who was an importer of trophies. I said, “Oh, you import trophy parts,” and he said, “No, I import finished trophies.” This was his business. If you have ever seen a trophy, the parts came from China. Most of the time they make the parts, but they assemble them and they do the engraving here in the States, then they sell them. But this guy has a factory in China that not only manufactures the trophy parts, but will also have each one assembled and custom engraved. He does this based on his orders that he gets from big Fortune 500 companies. They do a lot of plaques: a company like 3M may give him an order for 10,000 plaques to go on their distributors’ walls. The labor in China is less than a dollar a day compared to labor here. Figure in the equipment costs and the engraving equipment: a lot of times, it will blow your mind.

 

We were asking about granite countertops one time. The equipment you had to have to finish out the granite countertops once you got them here was going to cost something like a half a million dollars. I had a client who was building giant condos and every kitchen in every condo was exactly the same size. We needed the same piece of granite for 1,100 condos. I said, “What would you guys charge us to finish out this edge, cut the hole for the sink, and cut the hole for the drain?” The guy looked at me and said, “Oh, no charge.” They took the hole, they cut out a sink, and they made marble cutting boards and sold those as a separate product. The bottom line is that they are laughing at me all the way. They’re thinking, “What a dummy! We get a totally free thing for cutting the hole out.” For me, it was a matter of not having to invest a half a million dollars into equipment and have everything sent to me perfectly cut to go into the job.

 

I know another guy who exports truck engines to China to use Chinese labor to completely rebuild the motors. Once they’re rebuilt, they put them back on a container and send them back to the States. The labor to rebuild that engine in China is something like $200 instead of $5000. Even with the shipping there and the shipping back, he is still saving money.

 

There is another place I’ve seen doing the same thing lately: a dental laboratory here in the States that is becoming very, very big in a lot of the cities. When you get crown work, bridgework, denture work, and all that, they take all the molds that the dentists take, FedEx them to China, and in a matter of two weeks or so they are FedExed back to the States. The cost of raw materials inside a crown or a denture is almost nothing. It is almost all labor. They are able to build crowns, bridges, and dental work in China for .10 cents on the dollar versus the cost of a wholesale dental lab here in the States.

 

The good news is that once you’ve secured the vendor, you are virtually in a no-risk situation. Most of it is prepaid. Importing doesn’t always mean 40-foot containers and $100,000 worth of stuff at a time. As a matter of fact, it is pretty easy to buy almost anything in China $5,000 to $10,000 at a time. You will have to wait because your freight will be a little slower and your freight expense will be a little higher because once you start shipping less than container loads, the freight goes up quite a lot. However, many of the factories over there will sell you $5,000 to $10,000 worth of something. You don’t have to go over there and buy a 40-foot container of everything you look at.

WHY IMPORT?

One word: Money.

Importing gives you an incredibly unfair advantage. In the buy low/sell high business, everybody knows that the money is made on the buy side. If you could buy a new Mercedes Benz for $5,000 a piece, could you make money? Of course, you could because there is a market. There is an established market for practically everything. We find the established market price and if we can buy that product for less than the established market price and get it to market, in front of the eyeballs of the people who are the potential buyers, we pretty much win the game.

Old Navy is a good example of the benefits of importing. Old Navy is a clothing retailer. Most retailers sell a pair of jeans for $40 after paying $20 for them from a designer, from a U.S. company that had it made somewhere and gone through all the steps. Old Navy figured out that if they could import the jeans themselves for $2 or $3 a pair this would give them an amazing amount of money to spend on marketing. This is how they can run all those cool commercials and run all those great, big stores in the really high traffic locations. They have an unfair advantage over the other clothing retailers as they have the margin to market and the margin to advertise.

Marketing

If you don’t have a margin to market your products, it is very difficult in today’s marketplace to win. Everybody is marketing very heavily. The Internet has created an entire new breed of people who know how to market. I would venture that 20 years ago you could count all the great marketers in America on two hands. Now, there are hundreds of great marketers. It takes marketing dollars to market, so you need margin to be able to spend marketing dollars.

If a product has a lot of price elasticity, you could sell it for $5 online or you could spend the same product for $20, and spend $10 on marketing. In this case, I would choose the higher price and spend the money on marketing. I would absolutely dominate the competitor; I would crush them. There is no way on earth that they could get in front of the eyeballs that I could get in front of. This is the reason I love the import business so much.

 

The Consumable Market

The import business consists of real merchandise and with merchandise that is consumable, you can often do the work one time and make money for a long time. If you start selling consumable things that come from China to the U.S., the same customers will come back to you and buy month after month after month after month.

Believe it or not, at some level most things are consumable. Spark plugs are consumable, obviously; tires are consumable. Believe it or not, to a distributor, to a wholesaler, microphones are consumable. They’re not consumable to an end use customer, sure: you buy one microphone like we are talking on now and it will last you a lifetime. However, for the music store where I bought this, they sell 30, 40, 50, 100, 200, 500, or 1,000 microphones a month. This is a consumable thing to them: they will run out and need more.

If you are importing correctly and choosing your markets wisely, you will find markets where you can set up a relationship one time, begin to bring products in, establish customer relationships on the U.S. side (or wherever you are), and then consistently, every month, just deliver those wholesalers or retailers more and more and more goods.

 

Working With Retailers

There is an absolute gazoodle of money in importing when you get it right. There are billion-dollar and multibillion-dollar importing companies. The gentleman who bought my company sold a billion dollars a year worth of home décor, chachkis, stuff that you set around your house. They had a 40-foot section inside every Walmart store in the country.

A lot of retailers are there buying directly now. Bass Pro Shops is one. You can’t be more American than that: “Let’s go bass fishing.” Pick up some of the Bass Pro Shop stuff and I challenge you not to find “Made in China” on the back. They have buying offices in Guangzhou and Shanghai now and Hong Kong. The big retailers are turning onto the fact that they can go over and buy, but there is still a service you can provide to them. They aren’t able to buy all of their stuff themselves, and they never will be able to.

There is also another whole rung of wholesalers and retailers out there that are not billion-dollar a year retailers like Bass Pro Shops, Garden Ridge, and multi-hundred-million-dollar companies. They don’t have that ability and they’re stuck with buying things at markets in the U.S. where they can only make a 50% margin or so.

Margins

As an importer, you are typically looking to buy products at one-third of their U.S. wholesale price. For instance, let’s say we’re selling a $40 pair of jeans. We have to wholesale that $40 paid of jeans to the retailer for $20. We want to pay no more than $6 and that is called FLC (First Landed Cost). In other words, the $6 should include the price of the materials, the initial warehousing, the freight, and the duty. You want to be in at about $6 on a $20 wholesale item as this gives you the ability to do something.

The stores are paying $20 a pair for the jeans and selling them for $40. If, for whatever reason, this particular purchase doesn’t perform well or there is a minor flaw in it or whatever, it gives you the ability to sell it for two times your cost to a liquidator. This means you still double your money on a bad batch.

The other thing is that when you’re selling for $20, you are typically going to have to wait to get your money. You can use a factoring company who will advance you money on your invoices. If you need to find out about them, look up “invoice factoring” at Google. There are some good invoice factoring companies that, as soon as you ship your product to your customer, will go ahead and cut you a check for 80% or 90% of the purchase price.

However: here’s the drag. They will charge you 2% to 3% per month interest on that money until the retailer pays you. You have to realize that when you are selling to the end use customer for $20, you are going to have what we call “cost of money.” You will have a cost of money expense; you will have some returns unless you have a ridiculous return policy. There are other costs involved too that will not allow you to keep all of that $20. The worst-case scenario, if you import based on this rule I’m giving you, is that if you had to you could sell the jeans for $6. You could dump them to Big Lots or Dollar General Store, flea market vendors, or somebody who would give you $6 for them.

While the importing business is risky sort of, if you understand the last part of the importing business which is liquidation, there is not a lot of risk in the business. If you’re going through all the checkpoints, making sure you know how to buy, what to buy, and you’re following the points being laid out here, while you are risking your money sometimes and sometimes other people’s money, you do have that Plan B.

Buying at a third of U.S. wholesale will work in most markets. You should try to make it work everywhere you are, if you can. In some cases, like the commodities business, for instance, there is no way on earth that will happen. You will bring in for .80 cents and sell for a dollar. However, for the most part, if you are going to end use, this is what you want to do.

CHINA IMPORTING SECRETS

IMPORTING FROM CHINA

We’re going to get into how to import from China.

Before we go any further, I want to make a couple of quick disclaimers. First of all, I am not an attorney and am not able to give any sort of legal advice. If I describe past personal experiences, don’t take these as legal advice. Everybody’s situation is different. If you have a legal question, you need to seek out an attorney and get their opinion and take their advice. Secondly, I am not an accountant or tax professional, so if I mention taxes or tariffs or anything like that as far as goods coming in, those laws and things change regularly. I am sharing personal experiences from my importing career. It doesn’t mean it applies to you.

 

What you really want is just the raw information; you want to know what to do and how to avoid mistakes when you begin to import from China.  Well: here it is.

 

MY EXPERIENCE

I started importing before I went to China. I had a candle manufacturing company where we manufactured a ton of those little inexpensive candles. My company was partially bought by a Chinese importer and we started importing the glass that we put our candle wax into. At the time we were paying about .60 cents a piece for glass. We imported the glass for something like .16 cents a piece.

 

I saw the benefits immediately of importing, but I had a partner who was a giant importer, so I didn’t need to learn all the ins and outs of it. A few years later, as I branched out into other manufacturing businesses and got out of the candle business, I needed equipment and supplies. I started selling a lot on the Internet and was thinking, “Man, it would be cool to direct import some products and sell them online.” But I was too big of a chicken to go to China by myself.

 

Finally, I talked a friend of mine into going with me on that first trip. He had never been to China either, so I don’t know why I thought he was going to help. The very first trip I went to China I was there for three and a half weeks. I ended up buying nothing, I was so doggone confused. I was more confused when I left than when I got there. I came back feeling really foolish after having spent all that money and time, so I started developing a little system: if I went back again, what would I do?

 

My system involved how to get the best sources, how to get the best prices, and things like shipping and duties. I documented it all, so the next time I went back to China, I had my homework done. I began bringing in a few products that I was using in my own business; I brought stuff in for personal use and I brought stuff in to sell.

 

I eliminated products based on things like the marketplace being too small or the competition too big. Eventually, some patterns started to rise and I developed a system for buying winners predominantly. Everything I have purchased has not been a winner, but I have figured out how to make money from the losers.

 

PLAYING THE RISK

There is an inherent risk in importing, if you don’t know what you’re doing. It comes from many different directions. It comes from a tax and tariff perspective; from agents and guys like that trying to screw you; from buying incorrectly and buying for too much. If you pay too much for the products you import, they may be worthless when you get them here. You have to take this seriously as a business.

 

The upside to the importing business is that I have met very few importers who have been importing for more than four or five years who are not very, very successful. You don’t meet a lot of people who have become importers without becoming successful. You meet a lot of people who become importers for a minute, lose all their money, and then go away. It is a little bit like stock brokerage or commodity brokerage: if you don’t know the rules and how the game is played, you can get beat up pretty good.

 

This book aims to give you a strong education in importing; a strong education in how to reverse risk and put it back on the sellers and other people; and even how to use other people’s money to start your importing business. Even if you don’t have a lot of money to invest, if you have the knowledge and connections, typically speaking there is more money out there than there are knowledgeable people to run a business like this.

CHAPTER 1: UNDERSTANDING YOUR GOALS

Accept the fact, we can never achieve everything. That is why we make sure that we create specific things in life in order to reach that goal. Setting a goal is what help will you move forward. Goals can either be long-term or short term.

Goal is nothing without understanding it properly. You can never achieve or succeeds without knowing every tiny details of your goal. Be sure to know what your goal is and understand about it.

  • Create a goal base on your interest, passion, mission, purpose or role in life.
  • Be real! Don’t create goals when you’re dreaming. Goals must be realistic.

Goals can be define base on problems, fears and desires.

Problems

Problems can be one of the reasons in setting personal goals. Problem is defined as situation wherein you don’t know how to act, answer or do it right away. A problem can be cause because of different reasons. It can be from your personal: physical appearance, your attitude, your emotion; your surrounding: better or bad surrounding, how you people treat you, and so on.

A typical girl can affect her goal when she have a problem with her face. If a girl is pretty obsessed on how she looks and she might found something in her physical appearance she did not like, most likely her goal would be on how to change that particular appearance of hers. Because of that particular problem, she set a goal just to make her appearance please her.

Because of these issues, a person set goals in order to get rid of the problem.  Of course, nobody wanted to have a problem right? That is why most of us create goals in order to have a step by step process and orderly get rid of the problems we have.

Fears

Fear and Pain are both strong emotions that you can’t endure long. Fear can be triggered because of the past experience you have. That kind of emotion brings you a lot of pain and suffering and you just want to get rid of no matter what.

You have a broken family. When you were a child you’ve always seen your parents argue about something and come to a point that your mother cries and cries and cries. As a child you don’t understand what happen. But as you grow, this situation keeps on going within your family. Now that you know what it is, you feel emotions of both of your parents most especially to the side in which you feel that has been betrayed. You grow old to be a fine man wherein you’re in a stage where most people get married. You fear marriage! You fear it because you don’t what to experience when you were still a child.

Because of fear, a person set up a goal base on that particular emotion. He doesn’t want to experience that kind of situation where he feels a lot of pain and suffering. He’s goal can be either (1) don’t get married or (2) learn to be a good parent.

Desires

Desire is a strong feeling of wanting to get or have of something or a situation you want to happen. It’s like your yearning to have something or situation that you want to experience. The stronger your desires have; more likely, you’ll set goals because of that particular desire.

A person all his life wanted to have a two-storey house with a pool. He’s desire grew and grew and as he got old, he has been found of collecting house photos, especially that of two-storey house with a pool.

Because of that desire, he set a goal to create a two-storey house with a pool of his own. He create a long-term goal in order to achieve the house he wants. He create a step by step process and track every process of development.

Other Examples

Emotion plays a big factor in creating ones goal. The strong your emotions are towards a particular situation, the more likely you want to set a goal to. Below are some of the factors that will affect your goal setting:

  • Pride – you don’t want help from others and because of that, you set a goal to achieve a certain task with any persons help.
  • Provoked – a person provoked you that you can’t do that particular task and you want to prove him that he is wrong. Now you set a goal just to achieve that certain task.
  • Jealousy – you want to be like or want to have something with the person you know. And because of your jealousy, you set a goal to achieve what the person have that you want to own.

Draw From Your Own Experience

I have been involved into a lot of businesses. Those business got profit little by little. I have experience little problems along the way and luckily figure out a way to solve those problems. I get the profit I wanted. All is well until…

There is a particular business I get into that turns out pretty well. Most of the profits came to this particular business. But there was a point in my life that I wanted more. Though I already have enough on what I wanted, I became greed and wanted to ask for more profit.

When greed overpowers me, the business fails. People file legal issues against me. That turns out that I have to spent a lot of money to repay those legal issues I have. It came to a point that I don’t have anything left.

That fear of losing everything I have set me into a certain goal. A goal wherein don’t what to experience being penniless again. And that strong emotion about fear helps me with the achievements I have right now.

 

Analysis SEO

Search engine optimization, also known as SEO, might sound confusing but with a little practice it can become something that is more than easy! Search engine optimization is important for online success. It helps you rank highly on search engines and if anybody it going to buy your product, click your ads or even give you a donation they absolutely have to be able to find your website in the first place. Most people do go beyond the first search results page and rarely beyond the second page. Do yourself a favor and make your webpage more available to potential readers with SEO.

SEO involves writing articles with keywords in the proper place and with the right amount of keyword density. Search engine optimization can be accelerated with backlinks, tags and even social networking. You have to pay more attention to how your articles and content are being written!

How To Analyze

Using analytic tools will help the savvy webmaster judge the effectiveness of his or her search engine optimization. Analytic tools can show exactly what keywords searchers used to locate the webmaster’s site. This allows the webmaster to tailor his or her SEO strategy even further and focus on those keywords that have proven most effective.

Tools To Analyze

Webmaster Tools

You can check out a service like Google Webmaster Tools, which can easily handle much of the SEO work for your website or blog. Google wants you to be successful, because your earnings are their earnings. Therefore, you can trust their tools to do a good job for you.

Webmaster Tools is free. Most credible search engines actually offer these free of charge to the website owner. These beneficial products allow you to optimize your site in several ways, including raising your ratings on the search engine providing the service. Search engines sometimes prefer that you use their tools, and take it into consideration with your ranking.

New Picture (1)

 

Hubspot’s Marketing Grader

Hubspot just recently updated their Website Grader to Marketing Grader which focuses on a company’s online marketing strategy. It checks for the following:

  • Blogging
  • Social Media
  • SEO
  • Lead Generation
  • Mobile

New Picture (2)

SEO Moz Pro Tools

Unlike other tools which focus on a specific function such as keyword research, site analysis, SEOMoz provides this in on package. It both have Free and Paid tools that you can choose from.

Free Tools:

  • Local Marketing – Get Listed
  • Social Analytics – Followerwonk
  • Link Analysis – Open Site Explorer
  • SEO Toolbar – MozBar

Paid Tools:

  • Mentions Tool – Fresh Web Explorer
  • Search Engine Rankings – Rank Tracker
  • Keyword Optimization – On-Page Grader
  • Keyword Difficulty – Keyword Difficulty

New Picture (3)

 

Woorank

Woorank breaks and provides detailed results. It shows how your website shows and provides a feedback to make it better and SEO friendly site. It provides the following information:

  • Visitors
  • Social Monitoring
  • Mobile
  • SEO Basics
  • SEO Content
  • SEO Links
  • SEO Keywords
  • SEO Authority
  • SEO Backlinks
  • Usability
  • Security
  • Technologies

New Picture (4)

Exit Strategies for Your Business

In this article there are five (5) crucial exit strategies available for most entrepreneurs.

1-The Modified Nike Maneuver: Just Take It

One most beloved passageway procedure of some advance thinking entrepreneurs is basically to drain the organization dry every day. Rather than reinvesting money in growing your business, in lifestyle companies, you keep things small, take out a comfortable chunk, and simply live on the income. Money in the wallet is no longer money in the business. If you’re in a business that must spend to grow, taking out too much money can hurt you down the road. If you think you’re in business for the lifestyle, minimize your dependence on other investors and structure the business to allow you to draw out cash as needed.

2-The Liquidation

One exit strategy is simply to call it quits, close the business, and call it a day. If you liquidate, however, any proceeds from the assets must be used to repay creditors. The leftover gets isolated around the shareholders- -if there are different shareholders, you need to verify they get their due.

3- Selling to a Friendly Buyer.

If you’ve become expressively attached to what you’ve built, even easier than liquidating your business is the option of passing tenure to another true believer who will preserve your legacy. You can also sell your business to current employees or managers. Often in this kind of sale, the seller finances the sale and lets the buyer pay it off over time. The purest friendly buyout occurs when the business is passed down to the family. If you decide to go this route, you’ve got a lot of planning to do before receiving out.

4- The achievement.

You see, the individual making the procurement choice is once in a while the holder of the procuring organization, so they don’t feel the ache of securing cost. Assuming that you pick the right acquirer, your quality can far surpass what might be sensible dependent upon your wages. Yet procurement has its dull side. Provided that there’s a terrible fit between the acquirer and obtain, the consolidated organizations can self-destruct. Provided that you’re considering procurement your exist system, make yourself engaging to securing competitors, yet don’t head off so far as to you cut off your different alternatives.

5- The IPO.

There are millions of companies in the U.S., and only about 7,000 of those are public. And many public companies weren’t even founded by entrepreneurs but rather were spun out from existing companies. If you’re the principle entrepreneur and have done a great job protecting your honesty, you’ll make some money, too. In short, IPOs are not only rare; they’re a pain in the backside. They make the headlines in the very, very rare cases that they produce 20-year-old billionaires. But when you are beginning your company, believe them just one of many exit strategies.

 

 

Sell it LIKE CRAZY Get the crazy buyers Perry Belcher

How to Gain Sales Momentum Perry Belcher shows you how to introduce yourself and gain sales momentum. How to increase sales and to increase your profits. Selling something that is crazy! Increase your sales to the right prospects! If you can find some Gain Sales momentum, you need to stay working on it!

How to gain sales momentum,
Selling,
how to gain sales,
how can I improve sales,
ways to increase sales

Product Marketing Triggers Influencing Buyers

Product marketing and Promotion Perry Sales pitch and marketing strategy from the success coach Perry Belcher. This sales training is how to create a great offer, how to sell, and how to write a salesletter.  A marketing consultant can have a great advantage once they learn this.
Make a great pitch, and create the perfect tripwire. In marketing and sales you can think of your tripwire as your cheese or bait. This is what the customer will want immediately. They want to find out more, or find out how they can join too. This is their buy in. They are immediately drawn to the offer you present, and immediately triggered by your sales pitch or sales introduction by your tripwire.

Prospecting techniques,
Sales training tips,
Sales training,
Prospecting techniques,
Sales prospecting ideas,
Sales prospecting training,
Tips on sales techniques