Hello...Need Your Advice John

I have a problem I hope you can offer advice on. As a former student of
yours, I am currently importing gemstone globes with a partner of mine. We
are importing from Hong Kong. He is funding the business (nice) however I am
in charge of all the sales and marketing. The profit margins on the product
can be incredible.


Here's my problem: Originally we thought our manufacturer was one of the
only ones making these. We are finding out this is not the case. Actually,
there are several companies making these and they all vary in quality.

***Naturally, apparently these aren't your design..therefore they will be all
over. In any event, it is key that your supplier is the best in quality..as
in lowest defect rate, ships on time, makes good on errors, etc. As an
aside, see how financing is over-rated? You've gone ahead without first
getting a customer, and now you've run into difficulties. Save time and
money...get your customers first.***

It seems when I call someone who is currently buying these from another
source, their price they buy them for is much cheaper than we can import
them. It seems like everyone wants the lowest price and is not very
concerned about quality. There are many fakes that exist with this product
(ours are genuine).

***Isn't selling someone else's designs awful?****

Markup on these items for a retailer is EXTREMELY profitable.

***This thinking causes problems...perhaps it is most useful to consider the
profits of a retailer "none of your business", because, in effect, it has
absolutely no bearing on your activity. Profits reflect risk, and retailers
have far higher risks than us. If you dwell, and misconstrue, retailer's
profit margins, you are getting false hopes going... profits margins are a
minor consideration, and if anything, the problems you follow with here may
be founded in this thinking.*****

To give an example, if they purchase a 13" gemstone globe from us at $495,
they can easily markup and sell it in their retail store for $2,000+. But it
seems like every retailer out there is price shopping to save another $100
(even though they're making 3 x's the profit already). How do I compete?

***By recognizing the retailers are keen on fat profits. Therefore, your job
is to get them fat profits.***

In other words, how do I focus on my product, with my price schedules and
not let the competition affect me? How should I approach the retailers?
Our target markets are Jewelers, Gift Shops, Interior Designers. How do you
do this with the crystal you have imported (since there are many competitors
out there)?

*** I am not sure there is a way using other people's designs. you must
create your own jewelry, even if you have only design ideas while others
actually do the creative side of executing your ideas into designs. Consider
selling less product to better stores, and in so doing making as much money
as you would anyway. how? By sourcing with the best suppliers, buying only
first rate product, and selling only to the top stores. These top stores pay
top dollar and then take 5 and 6 times markup, not just 3 and 4. (But that
is none of your biz, right?). But to answer your question, I do it with my
own designs, so I have none of the problems you are experiencing.***

We are also retailing these on the internet and are one of the lowest priced
on the net (www.importsdirect.net) and are doing ok, but my partner seems to
think if we built another website and put them at full retail (for what
retail stores are selling them for...$2,000+) we would do better since the
quality perception by the consumer would be enhanced through the higher price
(these are gemstones).

***Nothing will stop you from having 2 sites, one discount and one full price
for same item. But I am always surprised why people put the time and effort
into the net when there are stores beggin for new designs...with the new
price comparison software you will have to be the very lowest to compete.
Why not put one on eBay and Amazon Auctions and yahoo auctions and see what
the market really thinks price wise for the items?***

He also thinks we should focus on the internet retail site rather than try to
get wholesalers or retailers to buy. What are your opinions on this? What
marketing methods might you recommend?


I know this is a lot of questions, but any assistance you can offer would be
greatly appreciated. I feel like I am stuck and am having a hard time
penetrating the market.
***Yes, I can imagine, this is why I specifically argue against the approach
you have taken, because EVERYONE yields the same result when you try to sell
items "off the shelf" from overseas, and there is not much that can be done
to help the situation. You are compensated based on the value you provide;
you best hope for compensation is competing on design, not on price. ****

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