Hi John,
I have question~ I'm going to India for a vacation in about 1 week. While I'm there, if I decide to buy any jewelry and textiles in large quantities
***Of course, I would buy nothing without purchase orders from customers here in USA, unless you would be completely happy to own for yourself everything you buy in India...***
.
On Jul 17, 2008, at 9:35 PM, amy wrote:
what is the best way to ship it back to the USA?
***How large are your quantities? You can carry it, mail it, express it or ship it... the cost/benefit all depends on weight/cube of the shipment.***
I met a man a few weeks ago who works for a company in Seattle called Expediditors.
***Best in the biz tight now....***
He said do not go the standard mail way. He said when I first get to Delhi, find a freight expediting company who I can set up an account. When I'm traveling in Rajasthan or where ever, I can have my goods shipped to Delhi by the supplier or by me, then have the freight forwarding company ship everything back to the United States at the same time.
***Very good advice... but I would say you actually post the goods to Dehli, since if the goods do not arrive, you'll have no suspicions of the agent.***
1. What is the best way to ship large amounts...jewelry, clothing, textiles...ect..
***What is large? Your Expeditors man would be able to get specific...***
2. If I do arrange to have things shipped back by a freight forwarding company,will they take care of all the legalities of the exportation of the goods. I won't need to get a license, they will have it, is that correct? What sort of stuff should I be prepared to know to export?
***Yes, the export agent would handle all of the details... so you need to know nothing... he'll need dated invoices and packing lists...***
3. When I land a try and receive my goods once it gets to seattle, what sort of stuff will I need to show the customs/duties guy?
***A bill of lading, copies of invoices and packing lists... but again, you can have a customsbroker talk to your freight forwarder in Dehli, and they can make it seamless. Again, you must consider the cost/benefit analysis...***
Will I have to show a business license?
***No.***
4. If I bring large amounts back in my luggage, will I have to state to customs what it's for, will I have to claim it?
***Again, I don't know what "large" means here, but Customs does not care what it is for, customs cares what it is... you must declare (claim) everything you have acquired overseas, and customs will charge you duties and otherwise enforce the laws. They have no concern as whether or not you are in biz, it does not matter. You do run the outside risk, if you have a wide variety or items, which would be time-consuming for customs to verify, that they will just seize it all and tell you to get a customs broker to file a customs entry to get it into USA. Probably not, but anything can happen.***
Should I have my business license with me in India and going back through customs coming back into Seattle?
***No one cares, it does not matter...***
Thanks for answering my questions! Your great!
***My advice is never buy anything without a signed purchase order for the goods you are buying. It is normal to do so, and the alternative is just too risky... IN this specific instance, what you see in India will be new to you, but not to any professional buyer in USA. By all means enjoy a visit to India, it will be inspiring... but the cold hard facts are your customers are in USA. The only opinion that matters in business is expressed on a signed purchase order.***
Friday, July 18, 2008
Questions Before a Trip To India
Why Cuba Is Poor
Certainly the US government action to embargo trade with Cuba contributes, but this is nothing compared to Cuban government action. Things are improving, wherein the government is lightening up on restrictions on property. Now people will be able to lease land from the government to farm, in an effort to avoid starvation. The catch is, there sill be a tax, but how much is not mentioned yet. The Cubans do not need government help, government intervention is what has made them poor. Cubans need freedom.
Thursday, July 17, 2008
Brits Get Rich In China
There are a total of 7 segments, and each feeds the next, so just start with #1 above.
A closer title might be BRITS SPEND A FORTUNE IN CHINA AND GET HOPES IN RETURN, since all three subjects spend massive amounts of money and show no return before the series end. All three are acclaimed successes in the series since they have huge orders.e.
Orders are not sales, sales is not revenue. I hope the producers do a follow up to see if any eventual revenue ultimately covers costs for these businesses.
The film follows three Englishmen in China, two who want the cheapest source for manufactures, one for pillows, one for kitchen and bath fixtures. The third has invented a power saving device, and anticipates US$500 million in sales his first year, each is pursuing “millions in China.”
The delightful part of the film is where we see the interactions and adventures of the Brits in China. It ll rings so true. The films are wonderfully edited and produced, not like some people we know who are putting up hand made films on on youtube.
There are some problems though.
The premise of the film is high risk/ high return... all or nothing. I saw at least three kiss-of-death elements common to all three stories...
a. huge ambitions for specific goals in a fast changing world
b. large sums up front
c. foreignors trying to manage the Chinese
These three elements are unnecessary and none of the players has sufficient resources to execute any of the three let alone all of the three..
The editors assert there are few winners in trade with China... obviously untrue. The vast majority are of those who trade with China are winners. I know thousands personally myself. Apparently there are winners all over the world at the small biz level. By far most of int’l trade is at the small biz level, and in that case it is all low risk, high return. Since these films are premised in “big money up front for bigger profits later” they have no benefit to the small biz international trade. In fact, I’d say they are misleading inasmuch as one may think this is the only way to do biz in China, and the only option is to compete on price. There may be few winners among those who go about it as featured in these films, in fact I would say there are no winners among these types.
Of course, there are others ways to thrive in business besides competing on price, as I outline in m book and classes.
the heroes in the story naturally take on Chinese partners, so to speak. It seems to me the Chinese counterparts in this series are stereotypical of Chinese, but not typical of Chinese. I recognize the kind of biz partner each has acquired, and they are the kind I would run from. But in any event, they are nothing like the vast majority of Chinese I have dealt with in the last 35 years. it is almost as though the producers winnowd through enough stories to get to the kind of Chinese partners prejudiced people might expect. If this series purports to represent typical Chinese at business, then it is a libel.
Of course you get what you deserve in a partner, and please do not view the Chinese in these films as typical. I am afraid that some people may be put off the idea of trading with China given what these films present. (In fact, even with my very limited understanding of chinese culture, I saw so many misunderstandings and missed signals I could write ten pages on those alone. I would l esteem a critique of the films from a Chinese national on this list for what they saw in the films.)
The film covers three biz people Tony, Vance and Peter. The narrator says “Tony Caldera’s business has been ruined by cheap Chinese imports.” This statement is of course nonsense, because Tony Calderas business has been ruined by Tony’s poor management. Countless people have faced cheap imports and thrived nonetheless.. Tony’s response is to move to China where it is harder than England in hopes of doing better. I see problems ahead. Vance expects to get rich knocking off high end fixtures and equipment in China, and get lowest price by opening his own factories. Cecil has an invention, and expect to make billions taking on a Chinese partner who will market his products all over China.
All three make the fundamental mistake of trying to control matters in china. they have neither the skill, nor is the direct intervention necessary to achieve the goals they seek.
All three have partners to who they entrust large amounts of money. The film makes clear in all instance these investors have overpaid for what they get. Not mentioned but inevitable is the question of how the money will be recouped.
(It won’t, these efforts will fail, none of these Brits have any rights in China, the building will go surplus and pass to the Chinese. Same story going on over the last 30 years... why people still fall for it, I don’t know.)
The funny thing is, if their plans have merit, it could all be accomplished without investing a dime in China. I personally know a pillow importer who is doing quite well in China, without having invested a dime. She has been doing that for the last 20 years selling in usa, and doing exceptionally well at the small biz level. She leaves china to the chinese, and there is more than enough to do dealing with usa markets for her to bother with managing the Chinese.
But fundamentally all the plans are flawed because although they all invest considerable mounts of money, none have the buying power and resources of the big biz who can and will undercut them toot sweet.
Another fundamental error is, upon discovering they have been ripped off, the Chinese persuade each investor their money is being put to good use for the greater good of the poor village, and each succumbs to this argument.
The villagers do not need a English investment in a bathtub factory, the Chinese villagers need freedom and the rule of law.
I watched these films as three lessons on how to do it wrong.
A final point, these are not examples of Brits doing biz in China, these are examples of Brits being filmed doing Biz in China. If the cameras were not rolling, the outcomes may have been very different. Even as it is, the outcome is “much money spent, much hope ahead.”
I would like to see a follow up on all three to see how they fare. The pillow fellow, if the order for 400,000 pillows at $3 million was valid (and not just a clown getting into a video) then $7.50 a pillow, even fob la, will not cover the rising costs that manifest after these films were made.
A better way for these people to trade with China is Vance keeps his money and goes upscale at the small biz level in UK and euro zone. Peter sells his invention in uk, and has the chinese manufacture and sell in china with royalty to Peter. Tony, keep his money and sell upscale pillows in uk, buying pillows from Chinese makers.
I think these films mischaracterize trade with China, and do not claim to explain small business, so I won’t criticize the films for that. But I do not think they represent China and the Chinese well, especially as it pertains to how China is getting rich.
2012 Update:
In fact the BBC did do a follow-up in 2012, and here is a link to my comments on that.
Video Defense
Earlier we had discussion of videotaping your encounter with police, and in at lest one instance a police officer arrested a citizen for taking a picture of the officer, even though there is no law against it.
I received a demand for $60 from a parking lot owner for nonpayment of fees. Strange I though, in fact I recall not havng enough money and overpaying. Also, I happened to be videotaping something at my car a few minutes after the time mentioned in the demand for nonpayment, and the film shows no notice of nonpayment on the windshield. My camera is time and date-stamped, in any event the video shows the lot and the position of the sun.
Make a long story short (too late) the parking lot company sent me a notice they have voided the penalty. Perhaps with computer memory so cheap, we ought to walk around with cameras on all the time.
Congenial Anarchist
After reading this article, I know why I find anarchy so congenial... my career has been
under the law merchant, and the rules are naturally developed
contract, free association, exile in case of violation, and private
money.
It was interesting to see the Kings introduced the chaos... by
forcing associations, in violation of free association... I would
mention these merchants forming the Law Merchant were speaking Latin
in those centuries, which did facilitate matters... but in small biz
int'l trade, I have no recourse if someone overseas rips me off, and
the reverse is true. There is no such thing as international law, as
one attorney told me.
On the other hand I have never been ripped off in 35 years at this,
nor have I ever had to retain an attorney for business. In the
absence of laws, relationships are everything. In the absence of
laws, one is more careful. Where laws exist, perspicacity atrophies.
The stickiest of all issues in int'l trade is the money exchange, and
this is 100% private law. And one of the safest best places to
exchange money is Hong Kong, where private companies issue the currency.
The accident of being in int'l trade at the small business level has
made any idea of any government a complete non-starter for me. It
gets clearer over time to me why govt hates small biz.
Wednesday, July 16, 2008
Not a Prediction
China can and will do anything to keep the world steady until they have had their Quincincera, aka Summer Olympics, and then they will not care. At that point, USA will be on its own, and our "leaders" know it. In the meantime the meanderings on the markets, etc are just so much stealing what is not nailed down until the Chinese finish their party and take the gloves off.
China will then begin to take its place in the world order, and play second fiddle to no one. The hamiltonians need China more than China needs the hamiltonians. Organizing around China will be a big feature when Hillary is president come January 09.
One of the new ideas from the Hamiltonians is to outlaw shorting stocks, especially Fannie mae and freddie mac. Aside from its role as market honesty enforcer, shorting is also a way to preserve your wealth.
If you have $50,000 in Fannie mae stock, and you cannot afford to lose your money, and the volatility scares you, there is a very cheap insurance called, shorting. You own $50,000 long, and you short $50,000. Bet both ways, and no matter what happens, your wealth is preserved.
If they in fact outlaw shorting, they will actually outlaw preserving your wealth. If they do so, what it really measn is they made sure you lose, and their friends win.
Tuesday, July 15, 2008
Here Is the Problem
This fellow rightly states NAFTA has only done harm. True. Then he calls NAFTA a "free trade agreement." Free trade means no government rules and regulations. NAFTA has 14,000 pages of rules and regs. How can NAFTA be "free trade?" It is not.
The fellow makes no recommendations for improvement, probably because he cannot even use terms correctly. Mexico does not need rules and regs, it needs freedom.
Here Is the Problem
This fellow rightly states NAFTA has only done harm. True. Then he calls NAFTA a "free trade agreement." Free trade means no government rules and regulations. NAFTA has 14,000 pages of rules and regs. How can NAFTA be "free trade?" It is not.
The fellow makes no recommendations for improvement, probably because he cannot even use terms correctly. Mexico does not need rules and regs, it needs freedom.
India Gets a Thumbs Up
A woman in the UK reckons India spot-on when it comes to delivering the goods.
A Student Presses
Hi John, thank you so much for kindly answering all the questions I've put to you in the chat and by email. I've asked about it before but I'm interested in your view about how to combine the work with travel, and how much it is possible.
On Jul 15, 2008, at 6:35 AM, D wrote:
Hi John, thank you so much for kindly answering all the questions I've put to you in the chat and by email. I've asked about it before but I'm interested in your view about how to combine the work with travel, and how much it is possible. Perhaps others may be interested in your answers since the international element, or travel, appears to be one of the main reasons people get into this from what I've heard anyway.
*** Yes, it is a good topic, I'd be delighted to develop it ... travel is the #1 reason people want to be in international trade... travel is the #1 complaint of people in international trade... careful what you wish for... (one the other hand, that tells me there is a product or service needed to solve this problem...) there is an entire generation of anglophone who have been malinformed as to how business happens. They beieve the 80s finance, 90s dotcom and 00s housing booms are normal.***
My questions are about creation of product, because we're both in agreement that this is by far the biggest challenge.
***The most important thing is customer, the hardest thing is product...***
To me the rest seems pretty straight forward, so I won't really have many questions about that going forward.
***Good, just remember, talk to customers first... Everyone says "customers first" teaches that, writes about that, celebrates that, but it is all talk. Exactly how does one put customers first? What does "customer first" actually look like? Well, first, you make sure the first thing you do, once you have a problem to solve, is go talk to the people you would expect to be customers. All other business advice is "Customer is king, to serve your customer, get a business plan, finance, market research, biz card, logo, stationery, offices, business licenses, and pick a hot product or service, study your competitors. Of course all of this is important AFTER you have customers, and a waste of time BEFORE you have customers, because it is customers who tell you how much and what kind of everything you need. Everyone talks customers first.but no one does anything about it.***
- You mentioned that being an importer and an exporter is difficult due to the workload. So it would not be feasible to set up an office in my country and another or simply spend an equal amount of time between the two? I'd like to spend time in Spain and Japan. Couldn't I find the best company in the world making a particular product in one of those countries, offer to export it for them, and then do the importing in the UK (my base)?
***Of course, anything and everything in life is possible. But it is not me or you who would decide if this is feasible, it is your customers. I bet there are 1000 people either japanese or spanish at the small biz level doing exactly what you propose. Not because they imagined it, but because their customers require it, and the entrepreneurs passion is the product, and desire to please the customers. In big biz there are both top people doing this as in oversight, and low level people doing this as gophers. In my 20's I was 2 months a year overseas buying and 2 months a year around usa selling. I was a buyer, which is a gopher. Now I guess I am a self-employed gopher.***
- Is being an export agent, a middleman that doesn't take ownership, more conducive to this kind of lifestyle - travelling around, spending large amounts of time in different countries? I know from what you said in the book that it would take a lot of time to get into that position in a particular industry.
***Yes, do you see you are trying to organize around a lifestyle? The harsh reality is about the only people who do the work you describe are soldiers. ***
- I recently spent 8 months in Italy and got to know the language and consumer preferences somewhat. Could I go to another country, say Japan, immerse myself in the culture and do research into current products and consumer preferences, then create products for the Japanese market?
***The #1 restaurant in Shanghai is run by a 30 year old brazilian woman who speaks no chinese. Three languages are spoken in the kitchen, nobody knows all three. anything is possible. ASk your customers this question. Ask Japanese customer "Could I go to ... Japan, immerse myself in the culture and do research into current products and consumer preferences, then create products for the Japanese market?" You can anticipate their questions and their objections, I am sure.***
Or is it so that I only have sufficient knowledge of the UK market (i.e. most products in the UK are designed in the UK)? If I simply came up with the idea whilst living in Japan for a few months and contracted designers in Japan, would that be sufficient? Or does it still require inside out knowledge of Japanese culture (which would take years of immersion) and consumers to design products for Japan?
***Passion trumps knowledge. Knowledge can be hired, that why we contract designers to get our passion on paper. I have no particular criticism of your ideas, it is the orientation that I think confounds you. I understand you have a particular lifestyle and arrangement you would like, and the work to support it. the work is secondary. I think you will have difficulty as long you as you follow this method. I think you should forget about what the future might look like, and get to solving problem for which you have passion.
You have gifts that for whatever reason you are subsuming to an ideal of some sort. If you were to develop these ignored talents, exercise those passions, you would produce something that made you happy, and the ideal lifestyle would follow. It may not be what you say you now seek, it may be better. Or perhaps it will be the same thing, but you will be happy doing it, since you are doing it right.
It seems to me your orientation is about you and your situation. I think that will deny you access to thriving in biz, because in the measure you are not customer oriented, you will not develop what they will buy. In effect, you will deny the rest of us the good of your contributions.***
- You mention that there are successful importers in all countries, Sweden for example, however importing to Sweden and Rome is a different matter. On the other hand it's the same to sell to Seattle as it is to Miami. Would I really face massive difficulties expanding sales from the UK to other european countries?
***The point in that spiel is USA is one large relatively easy market, so much so the euros are trying to copy us. How easy or hard does not matter if customers make the work worth your while.***
Or could this be overcome with simple tweaking, or contracting designers in each of these countries? If I could only design for the UK this would make it more difficult to get sufficient orders in a workable amount of time profitably, because in the US you're dealing with more retaliers = more chance of getting the minimum order. If I was able to contract sales reps in the whole of europe I'd have a situation similar to yours in the States.
***Yes, there are plenty of world-class designs that will sell in all countries... you could design those too, but the salient point is not cultural differences, but customer satisfaction. Whatever scenario you conceive, it will be up to your customers to support it or not.***
To put it in a nutshell, the lifestyle element which you also say is so important, I'd like to be travelling, spending 50% or more time outside the UK, or moving abroad. Is there any way in this business you see that I could achieve this. Basically I'd like to be able to decide where I go and make a good living while doing it.
***On the lifestyle, which is the motivation, I believe it is the work that is the lifestyle, grounded in passion. Where you are and what you have will flow from the work. The point is you will be happy doing good while doing well. Location may be important, but it would be subsequent, not primary. I know a pilot who loves river rafting. He decided when he retired he would open a river rafting company. Then he decided to quit and open a river rafting company. Finally he is happy.
Since you will not say where your passions lie, it is hard to suggest anything except in principle. But if I listen to "travel... various countries.... extended stays..." I think "tour guide." Possible. Check out www.ricksteves.com. The fellow is a millionaire off of this. he starting hitchhiking around europe. there is no sia or africa or middle east version of this ...
John.
Ending the Internet
How the internet will be killed and replaced with something unrecognizable has been laid out in Canada. There is a technique in policy wonkerism called "policy laundering" in which you introduce an unpopular move in a foreign country, and then call it good, and afterwards introduce it in USA.
My guess is something will happen wherein we'll all clamor for the government to do something, and they will do the above.
Monday, July 14, 2008
Movie Industry Bust-up
Paramount is having difficulty raising money, and Spielberg and Geffen at Dreamworks SKG are cutting a deal with Bollywood to secure their future.
These are examples of deals in every industry at every level. These are the kinds of high paying jobs that will not remain here. The Hamiltonian policies will come to harm everyone eventually, but when the democrats take over, they will adopt Hamiltonian policies to solve the problems, only making it worse.
Customers Video 9 to Finish
Folks,
Here are the last 5 installments on customers, and next we go into "exporting as a small business"
customers 9
customers 10
customers 11
customers summary A
customers summary B
John
Bank Runs
"I wish I was a little more savvy," says the fellow who has lost money in an American bank. No one on this list should be unsavvy about the shape our banks are in, especially if they follow my links to Mish Shedlock.
Sunday, July 13, 2008
BioFuel Murder
Although the biofuels con has done as much harm to the world as the Iraq war con, it is unlikely anyone involved in biofuels will be prosecuted anymore than anyone will be for the Iraq war.