Tuesday, September 23, 2014

Portland Oregon Import Export Start Up Seminar

If you live in the Portland, Oregon area, on October 25 I will offer and all-day intensive international trade start-up seminar at Portland Community College.
45743Sylvania Campus / SCB / 20309:00 AM-04:50 PMSa25-Oct-2014 thru 25-Oct-2014
Instructor: John W Spiers 
Notes: One hour lunch break. 
Tuition: $79.00 Fees: $0.00 

Please bring recorders or anything you like, I provide handouts and after-class follow-up by email.  I look forward to meeting with you personally!

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Ham Radio Renaissance

A week ago on a street corner in Seattle a man walked up to me and asked if I knew what a ham radio was.  I said sure, and we talked about the pros and cons, and he recommended I visit arrl.org.

My father was a radio man in the WWII Navy, so over the years I heard some things about radio, and then I read this today:
There are many, many, many ways to make a radio out of household items. Way too many to list them here. Suffice it to say that with all the wires and old electronics laying around, making a simple radio receiver is pretty simple. Just like the foxhole radio, these pretty much only receive. They can also be made to use power from the signal itself so they don’t all need anything else to power them.
Power from the signal?  Shades of Tesla!  I recall in my youth being able to alligator clip a set of army surplus headphones to the metal springs of my (army surplus) bed and listen to the radio, something my father had set up, but I had no idea how it worked.  I think he said "crystal set" but who knows.  I just assumed beds played music.

A few days later a car stopped at an intersection with all passengers face-in-screens.  The back window was rolled down where a devotee of McDonalds had a face lit-up for zombie effect.  I said "put that away" and he gave me the most venomous look, like a crackhead who had his smack snatched.

Instead of entertainment being shovelled in, like fast food, there is entertainment in being apart of the process of creation of content.  Ham radio.  Sing alongs.  Pot lucks.

Just sayin.

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USA Attacks Syria

It is a war crime to attack a nation which is no threat to you.  It is lunacy to do so to help terrorists.  So I guess that makes our military leaders criminally insane.  At least the ones who do not resign.

Part of the lunacy is we are backing Kurdish rebels, who are fighting USA trained and funded ISIS, which means we will necessarily need to go to war next with either the newly reconstituting Kurdistan or Turkey.  Which ally will we betray next?

Kurdistan has better basis and feels more strongly about independence than Ireland ever did.  And now comes their chance.    Their country consists of about 1/3rd of present day Turkey, and parts of Syria, Iraq and Iran.  Clearly their tactics are to arm and train, compliments of the USA, and fight strategically and defensively until such time as they can strike and make solid gains on the field.  There is not longer any country called Iraq, USA created a failed state there, os the Kurds have a solid base.   They may get some Syria out of this fight.  There are unlikely to fight Iran, but in any event, with those Kurds it is always pleasure before business, so expect them to fight Turkey first.  When that war starts, which ally will we betray then?

This may be sooner than we think, for here Turkish security forces are rebuffing Kurds retreating into Kurdistan homelands from USA funded and trained ISIS attacking Kurds.

When you can lend credit there is no rational limit to what craziness you can get up to, and it seems this opportunity attracts crazies.

Our generals are notorious liars, (see Colin Powell re: My Lai, soldiers left behind, Iraq) and certainly mere politicians (flag officers are nominated by the president and voted on by the senate.)  War makes their post-military careers unbelievable lucrative.  This was never meant to be in USA, indeed, we were once structurally unable to have a standing army, the bane of civilians.

If we get into WWIII, the history books will show USA started it.  We all want to know who is the next Hitler?  Obama?  Bush?  Clinton?  (Our next two options for president.)

It's not a question of who is the next Hitler.  The question is are the American people any different than the German people?  Clearly not.

Shouldn't we just bring our troops home and buy what we want from these countries, and sell them what they want?

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You Extending Credit

Stockman has also panned Alibaba IPO.  He is far more qualified to critique it than I.  Check your pension statements and see how much you got.

When the crash comes, people will need things.  The banks will not be lending credit, because they won't have it either.  This will be good, because it will take usury out of the equation, to some degree.  But you'll need to extend credit to customers who can pay you back, just as others will to you because you are producing.  No one will charge the other interest, the way it was just 50 years ago in business.

Produce something people need (that advice is no help, I know) and you'll be in business.  These will be good times, as small businesses will be in a bull market.

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Monday, September 22, 2014

Trade Shows and Branding

You'll hear every trade show tip include "branding" as critical.  But as a start-up, no one has heard of you.  Money spent on promotion of brand is wasted.  Don't even bother with a logo.

Brand is built organically, one sale at a time.  To have first rate customers buying from you is to advance the brand in the most leveraged way.  To offer ad allowances is to leverage the customers' brand with your own.

All thought of trade shows should focus on orders, the only activity that advances the goals of the business, and necessarily, enhancing the image, or brand.  Money elsewhere spent is wasted.

Here are some tips with which I will argue...  here dealing with non-customers:
Siskind offers up two strategies in his report: “presumptive disengagement” and “conciliatory disengagement.” Here’s a closer look at both.
I say the booth itself constitutes "the approach.." so the next step is "qualification".  Is the person with whom you are speaking a buyer, as defined as ready, willing and able to place an order?  With this in mind, let's look at the next point...
The first part is to refocus the prospect’s attention from business to a graceful conclusion. Siskind suggests saying something along the lines of, “I am glad we had the opportunity to talk today” or, “I am looking forward to getting your feedback once you have received the initial order.”
Well, how about "I came here to sell, why are you here?"  That is what should be in your mind as you speak with people. Assuming you have a qualified buyer in front of you, and if your original focus "Here is our MOQ FOB which will meet all of your needs, don't you agree?" does not lead to an order, then you solicit feedback.  From solid feedback you advise the buyer you will look into making the changes recommended and get back to the buyer.  Next.
The next step is to take full ownership for the disengagement. You could say something like, “I know you are anxious to see the rest of the exhibition.”
No.  Why be manipulative?  We are all busy, and all these things assume wimpy buyers.  Real buyers are tough, and want to be matched in toughness.  Your success depends on going toe to toe with tough buyers.  How about, "I'll call you at four o'clock on Friday your time in two weeks to report what I have found."  Shake hands and turn around and walk away.  Next.
The final step—the proposition—could involve giving the visitor a promotional gift, which allows you to thank him or her for stopping by and gives the offering real value and is a tangible symbol that the conversation is complete.
Real buyers see that crap and wince. They know if they place an order with you they have to pay for the ten thousand geegaws you gave away.  That is false economy waste.  Crap is real value?  The tangible symbol the conversation is complete is the back of my suit.  Which a real buyer will not notice because he has turned and left as well.  How did we get to this place that people hand out crap ti simulate something important happened?  How about, instead, make something important happen?
Conciliatory disengagement. This approach should be used by exhibitors when they are stuck in a conversation that won’t produce a viable sales lead.

No. Your attitude is "I came here to sell, why are you here?" If you discover the party is not a qualified buyer, then you hand that person copy of your MOQ FOB and desire he study it and come back when ready to place an order.   Next.  The only alternative is when you discover the person is press, at which point you snatch one of the half dozen articles you've prewritten, each with a different slant, and a money quote, and say "I am busy right now, but feel free to use this, and email me any quesitons, this press release is unique.  (Meaning the writer can slap a by-line on it and be assured won't get embarrassed when another writer puts up the same content.)  An enhancement is to have  $50 bill in the envelope with the article and a note saying there is another one of these if the article gets published, and you get a copy.
The first step is acknowledgment.  For an established customer, it may be along the lines of, “Thanks for dropping by this afternoon. I am really pleased to know that we can count on your ongoing business.” While to those your product can’t help, you may say something such as, “It doesn’t look like we have a solution that will address your concerns.”
Hang on, to old customers you show new products, and new customers old products. You either get an order, or if not, why not? You end the conversation with "I'll study your objections and get back to you with what we find." Next.
The next step is the invitation. Exhibitors want to be polite and leave themselves and their products open for opportunities in the future. So, for the visitor the product currently can’t help, exhibitors may want to suggest they stop by the website from time to time to see if things have changed and if new products and services are being offered.

I cannot think of anything more insulting to a real buyer.  Visit our website?  How about "I'll work on your objection and report back what we find."  Next.
The third piece is the reality check, where exhibitors explain to the visitor why continuing the conversation won’t help either party. This all wraps up with a call for action where the exhibitors sets up a plan for the future, such as suggesting meeting for coffee after the meeting or providing contact information so the visitor can reach out if wanted.
Wow.  Again, why did the conversation not end in an order, or solid feedback?  If you realize continuing the conversation will not help either side, then the conversation is over.  The plan for the future is either changes which will elicit an order, or nothing else.  They buyer came to buy, the seller to sell.  If that does not occur, then the meet was wasted, or raison d'etre delayed.  For both the buyer and the seller the order is the thing.  Nothing else.

And within this focus, do as much on the floor as you can.  Don't put off anything for later that can be done now.  If the buyer has merely a logistics question, that can be answered by phone within a few minutes, jump on the phone with him there and get the answer.  Be as productive as you can while you are there.  What can be done later that cannot be done in booth, on the spot?

No cards. The orders should have all of the contact info, and if no order, no need to exchange cards.  Unless someone will be doing business with you, do not give out your business card.

No chairs.  No trade show booth should have chairs, either for you or your customers.  If people need to sit, let them sit in a coffee shop.  Shows are too expensive and too short to provide for rest and relaxation.


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Get The Hegemon Out of Fire Fighting

Over 70% of the firefighters in USA are volunteer.  They are every bit as well trained as the paid city millionaires, they just don't demand payment for doing the right thing.

A house burning down is not a market event, so it has no market response.  It is a disaster, so it needs a charitable response  Obviously, there is more than enough charity out there to meet the need, but in most cities the hegemon has suppressed people's charitable impulses, and made fire fighting a venal, money grubbing activity.

Meanwhile, back at the ranch, there was no problem with ranchers fighting their own fires until the Bureau of Land Management showed up.
Lyons looks out over a plot of BLM land--studded with sage brush. Ranchers have been grazing here for decades, and they say they've been fighting fire just as long.
The story goes on to a happy ending, and that is the Hegemon backing off.  Any time you can get the Hegemon out of any activity, all improves.

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Wealthy Chinese Want To Flee

The algae is always greener on the other side of the canal.

People make much of how some many rich Chinese want to get out of China, and go elsewhere, say Singapore.  At the same time rich Chinese want to get out of Singapore, and escape to China.
Singaporeans were the second-most eager to flee home, with 23% planning to relocate in five years, followed by 20% for the U.K. and 16% for Hong Kong. Indian and American rich are the least likely to move, with only 5% and 6% of respondents saying they would relocate.
The top reasons Chinese cite for moving abroad are better educational and employment opportunities for children (78%), economic security and desirable climate (73%), and better health care and social services (18%). Hong Kong is their top destination (30%), followed by Canada (23%).
But for all those money drain, China is also on the receiving end: It’s a top destination for Singapore’s high net-worth individuals, with 30% saying they want to move to the Middle Kingdom.
People always think a new place would be better.  But your job is to grow where you were planted, not take the money and run.

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Sunday, September 21, 2014

Pricing Strategies In Product Design

So you have experienced what makes you suffer, acknowledged it, found joy on working on the solution, you have taken your solution and tried to buy it (yes, of course, BUY) from those you'd expect to be your customers for your idea.  Those target customers told you it is a good idea, but does not exist.

So now you have to make a sample of your idea, to discover the costs and make a sample to test the idea and price.

Price is never the issue at the specialty level.  The new iPhone 6 averages say $400.  They'd sell more at $10, and less at $10,000.  But $400 is the optimum price point.  You are only designing enough into your product to get enough orders to cover the supplier's minimum order requirement,  profitably, in a workable amount of time.  Say something like this.

Add a monitor later.  Stick with a computer.  See from customer feedback what they think of the computer, and find out what people hook up as a monitor.  That will tell you much about what to do next.

A fundamental is to design what you are designing, a test of your hypothesis.  Age quod agis. Organic, gluten free bread mix is a test of organic gluten free bread mix.  You'll get reaction to the product based on what you are testing.  If you also make it "kosher" you've lost control of the variables, and no longer (in the measure you added "kosher") are testing the market for organic, gluten free bread mix.  Your results don't tell you much, one way or another.  Of course, if it is your intention to test orgainic, gluten free and kosher, then very good.  But people often add on goodies hoping for new market and in the process ruin their test.

Each iteration makes money or gives clear information of how to do better next time.  The result is a upward spiral, excelsior.  When you add on too much to test, too many variables, you've left money on the table, the version that would have sold.  You dissuade customers who may have bought more simple, and thus added to your knowledge base by their feedback, not to mention added to your customer base.

You foreclose too much customer feedback by overdesigning. Don't overdo the design and leave money on the table and miss out on feedback.  Just enough design to create a product that will generate enough orders to cover the suppliers minimum in a workable amount of time, profitably.  Along these lines, the one constant in criticism of me by people who have gone on and started businesses is that I should emphasize how little it actually takes to compete on design.

Sigh... I say this in my book, I say it in my classes, I don't know how much more I can emphasize it.  I think the problem is our books are full of stories of HUGE SUCCESSES so people are conditioned to believe their product must be huge design effort to be a huge success.  Nope.  Boeing started tiny.  Apple started tiny.  Most happy people got to a place and stayed where they want to be in business.  No one writes about happy people.

Having said that about design strategy, we get to a tactic - design to price points.

Part A ...

Your specialty product is more roundabout in production and distribution than a commodity item, therefore it costs more to produce.  Keep this in mind as we consider the fact that every industry has price points, collective wisdom as to what people are willing to fork over for what.

Say gift and housewares...

4.95  9.95  19.95   24.95  29.95  49.95  295.00  595.00, etc...

Clothes  20 50 100 250 500 1000

Beef Chow Yuk  2.95   4.95  7.95   12.95   29.95

These are simply price points people find acceptable, and thus do not slow down the thinking process about price.  A gift item at $17.50, people have to think about that.  Better $19.95.

Clothes are much more emotional, so rounder numbers can work, but the point it the price point.

Food can be the wildest.  Sure you've ordered that $2.95 beef chow yuk, and spent a week regretting it.  The $4.95 is not much better, but if it's take out window, you know where they are saving the money. You'll find it on a good restaurant at $7.95.  And at a fashionable restaurant at $29.95, all free range grass fed beef, house-made noodles, duck fat for cooking, and so on.

That $12.95 price point is the pop-up restaurant, the kids who are trying a new recipe, working out of a hole in the wall like the $2.95, card tables and folding chairs, but using the same ingredients as the $29.95.  And cleaning up.  I hope this makes sense..

So you build your item to price out at a standard price point...  Your item may normally be a $7.95, but your mess of beef chow yuk has free range beef, grass fed, hand foraged chanterelles, in-house made noodles, so it is price blind.  No one knows what the price should be.  But it meets the criteria: testing what you are testing, not leaving money or design on the table, designing to price points.

(As a side note, one reason the restaurant business is so alive and creative is there are no intellectual property rights in that field.  Monsanto is trying to sneak in with patents on ingredients, and being strictly NonGMO is a way to fight back.)

You are not gouging the customers, the price is fair.  The customers are getting a very good deal, for they get excellent food and are not paying for ambience (and you are not risking the cost on ambience to sell with your unproven dishes.)  Don't end up with expensive ambience and no customers to pay for it.

Part B ...

What is the mark-up in your industry, cost to wholesale?  What is it wholesale to retail?

Say cost to wholesale is keystone (roughly, depending on the definition, doubling.)  and say wholesale to retail is the same..

So if the price point at retail is $100, then your wholesale price is $50, and your costs are $25 landed.  Depending on freight duty, etc, you probably have abut $22 to play with in the cost of the item.

So them within the contraints of

1. testing what you are testing

2. not leaving money or design on the table

3. designing to price points

You decide what you can put into the product.

Now, that mess of beef chow yuk may be normally $8 a plate, but since you are using free range, hand foraged chanterelles, in-house made noodles, yours may be at the $24 price point.  But it meets the criteria: testing what you are teesting, not leaving money or design on the table, dsigning to price points.

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First MH -17 Studies In - Putin Did Not Shoot Down Malaysia Air

I've always admired marxist writers for getting their facts straight, if not their recommendations.  Here is a straightforward analysis of the facts in relation to the downing of the Malaysia Air flight over the Ukraine, perfor,ed by marxist trained engineers.    Admirable work. The evidence demonstrates the Ukraine air force shot down Malaysia Air. Qui bono?

The USA is strangely silent about what USA satellites saw, the Brits unforthcoming with what the black boxes say, and what evidence the Ukraine had has been destroyed.  The big unknown is what the Russians know, and no doubt they are waiting for the West to present some nonsense story, and then have to back track based on Russian counter proof.

The people on the left who believed "if we just had the right person as president" are matched by the people on the right who say if we can just get rid of this president" and both are delusional.  This madness is top to bottom, left to right.  Changing the dear leader is not going to help.

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Saturday, September 20, 2014

Boeing Statement on Export-Import Bank Extension

This warning from Boeing:
"Congress has left thousands of small, medium and large U.S. exporters and their workers in limbo until the middle of next year and this will likely negatively impact U.S. sales to foreign customers. We will continue to press Congress for a multi-year reauthorization of Ex-Im."
They would say that, wouldn't they?  In capitalism, corporations are happy to ruin their customers: example 234,813,092,229 is Boeing's ExIm antics harms their domestic USA airline customers.  Who cares?  Where ya gonna go?  There is no other USA airliner builder.  There are no business setbacks that cannot be bailed out.

Their business model is on life support, and the other ExIm welfare queens are, as reported here variously, will not make it even with ExIm support.

One big argument is they do it, so we need to do it too!  EG,
New Delhi: ICICI Bank Limited, India's largest private sector bank, today signed a framework agreement with The Export-Import Bank of China (China Exim Bank) for USD 1 billion. Under this agreement, China Exim Bank will consider providing short term and long term credit lines to ICICI Bank for financing purchase and import by the latter’s clients of Chinese products and services. The credit lines may also be utilised to support the cooperation between Chinese and Indian enterprises in natural resources, energy exploration and construction contracting projects.
Wait...  if China extends ExIm loans to India, how come we extend ExIm loans to China?  Why not everyone just finance their own commerce?  Why not, because Chinese State Owned Enterprises (SOE), like USA SOE, Boeing, General Motors, Fox News, simply could not exist without the running bailouts.

On the other hand, USA companies ought work these programs as much as possible, China ExIm bank financing, since they are deleterious to China.  Once upon a time we were producers, not welfare queens.  But capitalism breeds welfare queens.

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