A student inquires...
On your HK seller comment –... the world is changing – and their actions are not so different then those I have ready about by the founders of numerous Asian giant companies – so I think if those guys are smart enough to move into the right differentiated products, willing to work hard, and a little lucky – they might be on to something. We’ll see.
***Drucker made the argument one can innovate in design or distribution, nothing else. The internet has lowered the cost of communication, which has made everyone's world easier on the business side. The conservators can lower prices easier, faster and the innovators can get new ideas to market faster.
The internet smokes out the false conservators thru price comparison information. With more people getting lower prices on commodities, more peple have money left over after the transaction, meaning more disposable income. We innovators in design in turn find more customers who spend their newfound disposable income on our products. New needs to be seen and touched, I doubt we'll see the intent mean much to us in sales.
Do you do the Asian sourcing show circuit at all? Do you find them a good way to meet suppliers? I did spend part of a day at the Canton fair last October – seemed to be a good opporty to meet suppliers.
***Sure, they are fascinating... I meet suppliers AT shows, and sometimes find them there... but usually find the supplier first, meet them at a show, which also let's me have a look-see at the competition.
Monday, February 25, 2008
Visiting Shows
Sunday, February 24, 2008
How About eBay From Hong Kong?
And I am asked...
What are your thoughts about the internet as the retail channel? To what degree do you think it will replace the channel of sales reps and brick and mortar retailers?
*** I think we ought not worry one way or another.... I think we ought to sell TO internet retailers, never sell on the internet ourselves... I sell TO amazon.com, but not ON amazon.com. Just treat them like any other customer, and then it does not matter what the future holds, we'll be there for every change....***
And, related to using the internet as the channel… In the product I am looking at – I’m finding more and more individuals working out of HK – putting on them on eBay, etc. and shipping directly from Hong Kong. Incredibly, it seems to be working – the very low prices on the product + the international shipping still seems to be competitive with US-based deals (where, I presume, the sellers are looking for more traditional 100%ish mark-ups). I have some ideas about how to compete – but it is an interesting phenomenon and curious if you are seeing the same.
***Planning to move to Hong Kong? Planning to live in a one room apartment with 4 others so your expenses are so low making a few bucks a day is worth while? Even if people in USA are presently, temporarily listing on amazon and shipping direct from hong kong, it will only take hours for people in hong kong to spot the opportunity to cut the american out of the deal... better you develop your own product for stores you serve...***
Student Wants Views On Biz In China
My comments are between the *** ***...
Hello John,
I have some questions and concerns about getting a trading business going. Right now, my good friend (A Chinese local) who has a background in studies of world trade has decided to start a business with me. Our biggest problem is that we are not even close to having the sufficient funds to register capital for a company (American, Chinese, or otherwise).
***Money is never the problem in business, the only problem is getting customers. I am not sure what "register capital" means, but why bother forming a business before you have customers?***
The good news is that we are interested in the renewable energy sector and my partner has good connections with a prominent solar business in his hometown of Tianjin.
*** I am interested in renewable energy too. I am on the listserv for http://www.nanosolar.com/ because I hope to install their solar panels on my roof soon. But I'd never go into that biz, since I have no passion for it. Have you reflected whether or not you are making the error of organizing around a resource, and not around an opportunity?***
The owner of that company has agreed to allow us to export products abroad, and would give us access to wholesale pricing and free-reign to trade any of her products.
***Please understand it is not remarkable that a businesswoman would allow customers to buy her products. I recommend you move away from "feeling lucky" and get to "makes sense."***
Once we are registered, we could begin to locate buyers.
***Why not locate buyers first?***
Our selling strategy is to start with the U.S market and solar businesses in South Carolina and other states. The owner of the solar company is currently only doing business domestically within China.
***Certainly an english-speaking agent in china is a benefit to an importer in USA, but why South Carolina? Would you not be better off to merely consult the Directory of US Importers for solar panels and then contact those USA companies with specs and prices? Your pitch would merely be "we can deliver solar panels at 68 cents a watt, and believe your company will buy from us. Is this true?" Don't even try to sell yet, just get all the cards on the table. Find out if so, and, if not, why not?***
Our financial woes have forced us to think creatively about what process we will use to get ourselves going. I recall you saying that a good entrepreneur always starts and proceeds with “low-risk”. We do not want to look into getting a bank loan or borrowing money from other sources.
***You have no financial woes. Your problem is you have no customers. Mustn't confuse the two. Yes, entrepreneurs are paid in part to eliminate risk. Now here is that part you need to unpack...
If you have no customers, you need no money...
If you get any money before you have customers, you'll spend it on things which are unlikely to in any way serve customers...
If you identify customers, any money spent thereafter will likely be allocated to please customers...
"Customers" are likely to be just one USA importer, who neither needs nor wants your opinions on the USA markets. ***
My partner has proposed that perhaps we could get our feet wet by working directly for this company as an export broker. That is, exporting under the umbrella and name of the company. This would be a way to also secure a visa for me after my contract expires with my current employer (a school). This would also be a way to gain valuable experience from working hands-on.
***You go to work for the company, say Tianjin Solar, under its umbrella, and set up export customers in USA, and of course you'll be paid after you get the customers lined up. You succeed in getting your feet wet. Your visa expires, you get the boot from China. Tianjin Solar has no need to support you. The USA solar panel importer continues to do business, and has zero interest in talking to you. Nix-nix on that.
Instead, how about you first meet the communist party official who issues visas. Tell him your plans to export from China, but make it clear it is only plans so far. Next, lose the partner that suggested you go to work for Tianjin Solar. Next find out if there is market in USA for Tianjin Solar, on your own, right now, by asking (see above).
If not, move onto another project, hopefully something you are passionate about.
If there is USA market, what is the business worth? Visit bankers, the Visa-meister, and anyone else who matters... tell them what their money is worth to you, the visa is worth to you, etc, and prepare to negotiate within bounds. Your partner is the Visa-meister and the banker (if you need one). When you talk to the boss at Tianjin Solar, you do so as a customer, not as an employee. You don't need friends to do business in China, you need partners in your success. Friends are for after work.***
After we earn enough money to make the funds for registering a company, then we can go from there.
***We? You mean you and the visa-meister? When you have customers in the USA, you'll tell the "company registerers" what a registration is worth to you. It is either do-able or not... leave off hope and luck and gratitude and help. Don't ever get in a position where you depend on your private expectations of fair dealing after the fact with you a mere guest in China. Make face to face "if, then..." deals up front with people who matter. My experience is the Chinese, especially the communists, honor their agreements and commitments, but are not interested in paying out to people who deal in mere expectations. And in any event, any money will be flowing thru your hands, so why let anyone else touch it. You are best positioned in China if you are the paymeister.
Yes, one does usually get ones feet wet when using an umbrella, but why be out in the rain at all? Focus on the one value you can provide, reeling in a USA importer as a customer, and then see if that is worth keeping you around, at a price that is worth you staying around. You can know this in advance. Why bother getting hands on anything else?***
Student Wants View On Michelle O
Folks,
A student was alarmed about Michelle Obama based on a newsmax article noting Michelle O said her husband's candidacy was the first time she felt proud to be an American. I responded...
***
Thanks for the note... I don't get too interested in the elections since the fix is in, Hillary will be the next president. Obama is a socialist, which is enough to disinterest me.
It does not surprise me a black woman would say her husband's success at attracting support would be the first time she felt proud to be an American. One can be glad to be an American, and at the same time not proud. You may have been not proud of America when Clinton was president, although still glad to be american.
Sure the Obamas have done well in America, but under rules that are inherently discriminatory, robbing the Obama's of full pride in their achievements. How can one be proud of success gained thru affirmative action? His success in the election so far is just him as he is, something the Obama's can be proud of. It wasn't given to them, it cannot be taken away. (Of course, any chance of actually becoming president is nil, but that is another story).
As for association with Farrakhan, his views are "separate but equal" ... blacks can go it alone, they don't need a hand-out or a hand-up... something many white folks believe too... views orthodox Jews and the Amish share and believe in for themselves. Fear of Farrakhan is merely liberals' fear blacks will escape the welfare plantation.
As for USA being attacked on 9-11 in retaliation for our activities in the middle east, Osama Bin Laden, the CIA, the 9-11 commission, Paul Wolfowitz, US military intelligence and countless others agree, it was in retaliation for our activities in middle east. Neither Farrakhan nor the CIA says it was the right thing to do, just why the terrorists did it. Indeed, the one fellow prosecuted for the 1993 truck bomb attack on the world trade center explained all of this in open court in 1994, and assured the judge and jury it would only be a matter of time before the world trade center was destroyed. It took eight years for them to mount a second attack, for the same reason. (Privately I think people who murder and blow things up do so because they like to, their "reasons" are just excuses).
The newsmax writer is disingenuous... Ms. Obama said she felt proud of USA for the first time in her life, and USA's activities in WWII were well before she was born. And certainly USA did not enter WWII to save the Jews, and nobody, especially the Jews, believes that.
One of the things I see happening, is the media is corporate controlled, and big govt and big biz work hand in hand. But providing exciting entertainment such as newsmax and fox, etc, we are diverted from the essential tasks of family, business, etc. It does not matter if you are pro-left or right, either way one gets sucked into giving time talent and energy to the politicians. For example, you are taking a business class from me, and you wrote me on politics. As the teacher let me ask, given the problems you perceive, what is your "why don't they just....?" question? If you happen to love politics, is there a product or service that you might provide that would make the world a wee bit better? If we can't do anything about one thing, then we ought to work on something we can do.