Amazon and MyHabit

Amazon is brilliant in its marketing using the web as an interactive mail order catalog.  On the one hand they allow competitors sell in their prime real estate, and then also drive product directly to now known buyers tapping into buying habits with their system called MyHabit.

Amazon.com is itself a first rate school of retail amrketing and distribution.  Study it.


Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Start-up Small Business

Never try to compete on price.

You will fail if you try to compete on price.  We can guarantee that with 100% certainty.  if one cannot compete on price, what other basis is there?  The “secret” is to compete on design.  your role and value at the small business level is to be a innovator, which means premium prices and unique designs. You make more money doing less.  You may be selling hats like anyone else, but they are upscale, specialty hats.  You may have a hole in the wall restaurant, but your Chow Mein is $22.50 a plate.  

If you plan to be a big business billionaire like Steve Jobs, you start here.  If you plan to be a small business billionaire like Ty Warner you start here.  If you plan to have your dream lifestyle, and don’t care about the money, you start here.

But how you make the money you need is to compete on design, bringing your passion, others design talent, with the world’s best producer to demanding retailers.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Export Sales: No Good Deed Goes Unpunished

One mistake people who are looking at exporting make is to fail to have a clear, rational offer, that is solid.  The problem is two-fold: on one hand the sellers are trying to be helpful, and on the other, they are trying to learn what will work.  They are open to everything when we already know exactly what the buyer wants. The salespeople keep running to the owner - can we do this, can we do that?  In every instance, no good deed goes unpunished.

Any buyer worth his salt will try to get as much as possible from a supplier.  All buyers hate to leave anything on the table, to not get what anyone else is getting from a seller.  They will push, whine, probe.  There is no such thing as an outrageous buyer demand.  There are only outrageous seller concessions.  

The MOQ FOB (search the term on this blog) offer is your best defense, because you can keep returning to all the details in the offer, and only discuss a change one way or another of any of the detail items in the MOQ FOB.

The very fact that you have all the details published up front quiets the clamoring for gimmes.   And since it is an FOB quote, prepaid, the buyer clearly understands you will take no risks on this shipment.  Yes, the buyer understands the seller will take no risks... ultimately, buyers will buy if the product looks promising, the reason the buyer is talking to you is the product looks promising.  Exporters need to be disciplined in never giving in on any point unless all extra costs are profitably covered...

Sellers who fold and give things away worry buyers.  Such sellers are not long for the world.  What is the point of testing products from a supplier that may not be in business in six months?

Giving in may be agreeing to pay some cost on the MOQ FOB, or agreeing to cover the cost of something like new labels.  The answer is no, you will not cover the cost.  You may be willing investigate what it will cost, and add that plus a profit to the price, but you will NOT cover the cost.

If the buyer can get you to put on new labels at $1.00 each cost to you, at no charge to the buyer, then the buyer does not have to put new labels on in his country at ten cents each.  Why would he do it for a dime when he can get you to do it for $1 no charge to him? If you put on the labels and they are wrong, then it is all your fault. No good deed goes unpunished.

Anything you give for free is in effect a discount on the price.  Once you discount the price, the buyer starts looking for more.  It never ends.  And there is a pattern in unhappy export results: the more talking the more likely some sort of failure in getting paid.  The more talking, the more expectations, the more expectations, the more expectations to fail to get met.  And scam artists, people looking to flat out rip you off, keep talking as you invest more and more time in the deal, and then they slowly get you to drop all defenses.  Scammers get paid for their patience.  Be impatient to move on to the next potential customer.

You will not be scammed with MOQ FOB because you say no, and you are prepaid.

In my book page 221 I have a section on the deleterious effect of discounts. Any freebie is in effect a price discount.  They are far more damaging than you may think.

This back and forth is the process of getting to know you, know each other.  Show yourself to be steady, calm rational.  That makes you a more attractive long term partner.

If the seller ever gives in to a buyers demand, and gives a freebie, then the  seller lost the opportunity to find out what objections there might be to the standard offer.  Giving in now means you no longer know what you are doing.  Don’t go there.  When the seller gives in, he lost his margin while missing extremely valuable feedback.

I was a buyer for years, working with larger companies.  Now that I am a one man operation, I still am.  When working with buyers, keep in mind, spare the rod, spoil the buyer.  They are like children, you have to beat them so they learn no means no.  Like beating a child, done right, it only has to be done once.  It's the kind of thing you do not want to have to do a second time.

The MOQ FOB should be is not all 300 items in your product line, but your best seller, one, maybe three items.  You offer your best item to new customers, and new products to old customers.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Photo Essay On The Development of the Chinese Stock Market

You might enjoy this trip of the last 20 years down memory lane....

Stock Market Trading Floor

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Progressives and Farm Policy

Marx and Engels were dismissive of the peasant (farmer), and I was reminded of this while reading Lucien Bianco, The Origins of the Chinese Revolution, 1915-1949.  Together with Simon Leys' Chinese Shadows if you want a quick study of the Communist era in China, you'll do well to read those two books together.   Leys had to use a nom de plume to write his book because the truth of it about Maosim would have cost him his job.  It covers a time that seems impossible today.

Bianco's book describes some political arrangements that are not uncommon in USA today.  Sometimes you have to see it in play somewhere else to realize it is in play here.  But the most interesting part of the book is how Mao himself never really understood Marxism (or had no real use for it, actually comparing it to dog shit) and how he had to work around the Soviet advisors to advance a revolution that was peasant (farmer) when Marx and Engels in theory expected the liquidation of the peasant and Lenin and Stalin in practice were liquidating peasants.  We forget that central to the progressive world view is control through farm policy.

If there is one area where American's eyes glaze over it is farm policy.  If there was one area they should be most attentive, it would be farm policy.  I know myself I haven't been paying attention to a farm bill that is being debated.  If it is like any other bill, say immigration or romney/obamacare, it too is no doubt a mess.

I do know this, USA farm policy affects the rest of the world.  I do know that the small farmer is critical to any nations health, and that is why such countries as Japan and France so protect theirs, if by misguided means.  Small producers exporting allows them to expand production profitably, a capacity that may very well come in handy if the BigAg/BigGovt progressive policies do not work out, as they usually don't.

Read these two books to start...




Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Wouldn't it be Nice..?

I've been saying for years the most likely explanation for the downing of TWA flight 800 was that our weapons systems got hacked.  I thought this when the Russian sub Kursk sank itself after launching a torpedo.

Wouldn't it be wonderful for all of us to find out that none of these terror weapons systems actually work independently, that they can be taken over by hackers at any time?  For example, when two of our drones in a row were landed in Iran?

That no country has real offensive war power?  And we've never been invaded, that all of this money on weapons and security is just very expensive theatre?

And defense of the USA meant that USA citizens armed was the best defense of the USA and we needed no standing military?  And so we needed no domestic spying looking for foreign threats? And our relations with the rest of the world were based on how we trade with people around the world, like it was in Tang Dynasty China and the early 1800s USA?  And we no longer related to the world by our military might, which leads to USA being isolated in the world?

And would that not be terrible for the standing militaries around the world?

Here is what an Irish legislator had to say about the Obama's recent visit to Ireland:


Nothing like an Irishwoman...

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

New Online Course: Introduction to Google Analytics

Seattle Teachers College has partnered with ed2go to offer hundreds of online, instructor-led courses and is pleased to announce the launch of "Introduction to Google Analytics." 

Participants in this course will learn to use Google's free, state-of-the-art Web analytics tools, Google Analytics, to track and improve traffic to their websites, create reports, and analyze data. Using this tool, they'll be able to determine which of their content is the most appealing, where their visitors come from, how long they stay, which links they click, and where they go when they leave. 

This course is part of Seattle Teachers’ College's growing catalog of more than 300 instructor-facilitated online courses. Through well-crafted lessons, expert online instruction, and interaction with fellow students, participants in these courses gain valuable knowledge at their convenience. They have the flexibility to study at their own pace combined with enough structure and support to complete the course. And they can access the classroom 24/7 from anywhere with an Internet connection. 

New sessions of each course run every month. They last six weeks, with two new lessons being released weekly (for a total of 12). The courses are entirely Web-based with comprehensive lessons, quizzes, and assignments. A dedicated professional instructor facilitates every course; pacing learners, answering questions, giving feedback, and facilitating discussions.

To learn more, visit Seattle Teachers College online or the course at http://www.ed2go.com/seattletc/online_course/iga/detail/Introduction_to_Google_Analytics.html 

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Why You Should Never Open a Factory Overseas

International trade is about utilizing excess production capacity and superior management.  For an American to open a plant overseas is to violate both principals.   I managed to make a bit of an object lesson on this with a BBC series where Brits efforts to develop factories in China went a-cropper.  I covered the BBC series in 2008 and in 2008 predicted failure all around for those who were claiming success in 2008.  By 2012, the BBC did a follow up.  Failure all around.

Now comes an American who has had similar unhappy results.  I guess people always think they  are different.  China is a great place to do business.  A great place to get first class work done.  By Chinese. But if you plan to open your own factory, well, that just won't work out very well.  China is for the Chinese.  Here is the photo of the American from the article.

AP photo

His picture captures very well the reality.  I feel for him, but it is not as though the advice against opening your own plant is not out there.  Even Apple would not dare open their own plants in China. The article says he plans to move the plant to India.  Some people never learn.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Priorities

https://securecdn.disqus.com/uploads/mediaembed/images/530/2975/original.jpg

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Where Are the Edward Snowden Masks?

I am afraid I am starting to sound like an old crank, but really, in my day, by now, the world would be flooded with Edward Snowden masks.  They'd be selling at every college and in every airport.  People would be getting off planes wearing these.  Have we no sense of humor any more?

In my day some Taiwanese read a story about a statue of the Blessed Virgin Mary crying and tens of thousands of people crowding around.  Like good entrepreneurs, seeing the demand,  they tried to find out if anyone was making these.  When they decided no, they went into production of Statues the Cried.

Problem is today someone will just make an Edward Snowden App instead of the Edward Snowden mask.  Why, back in my day....  wait a minute, I take that back...here are kids in Hong Kong....

http://news.ripley.za.net/2013/06/top-stories/hong-kong-rallies-for-edward-snowden

Well, this is another reason why USA needs its own Hong Kong: 1. so The Snowdens have a place to flee, and 2. entrepreneurs can turn a buck.

The bible requires there be "sanctuary cities" but USA does not have one.  I am thinking Detroit would be a good place, a federal free zone.

Update:

Check this out...  you may want to wear a mask in public...    see how a mass picture can be drilled down to find YOU.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Amazon Webinar on State of the Art eCommerce

First let me say I love Amazon.com, we do business together, it is possible to make money with Amazon.com, and I do.  As far as I am concerned, they are just another retailer to whom I sell.  Nothing more nothing less.

Having said that, funny that I should be criticizing ecommerce websites just as Amazon, the world's #1 online retailer by far, offers a webinar on state of the art eCommerce websites, which supports exactly what I have been saying.    I am delighted at the confirmation from Amazon.  Web developers should begin looking for other work.

When you have an hour, check it out for yourself here.

It does not quite embed, but this is the session you want.

The Agility Imperative - learn how to use micro-sites and flash sales to drive growth

Amazon says in this webinar business people "can no longer depend on SEO" and such. O really, what changed?  I have said all along you never could.  There is more: if you think that stuff is any good, Amazon says you are trapped in "traditional processes."  Amazon catches up with me today.

But wait, ok, so far it has been a waste of money, but where is the science that the "new stuff" pays off?  In this hour long video, there is no evidence that the new ideas are any better.

As background, Amazon hired Forrester Research to find out new trends in web marketing.  Forrester Research has found some people really like SaaS to build eCommerce systems, connected to Amazon Stores.  The science does not get any better than that in this state of the art explication.

Now the webinar covers both B2b and B2C websites.  I know nothing of B2C, but if the B2B info is any guide, the B2C info is just as bad.

So Forrester finds, talking to about 90 people (!?) that you need to use flash sales, micro sites, daily deals, etc, to match customer needs.  And to get 700,000 hits in one hour, as one flash sale generated, you need Amazon.com's scalable cloud system and a SaaS designed website to get the numbers up to 700k an hour for "millions of dollars in orders.".

Problems:

1. What does it cost to create such a website?

2.  700,000 people at once, and millions of dollar can be less then $3 per visitor.  I wonder how that metric stands for web performance?

3. What is being sold, at what margin?  What does this event mean in the life of the company?  Is this sustainable?  Was the flash sale a loss leader?  Were they getting rid of a huge inventory mistake, wherein the webmaster, buyer and sales manager all beam with pride at each other, as the unemployment line gets closer for them?

4. Once you have paid for this infrastructure, how often can you create a flash sale that generates 700,000 visitors in one hour (assuming it is not a net deficit event.)  Is this repeatable?

5. What are the logistics of moving so much inventory?  One assumes this means ramping up and ramping back down.  Expensive.

6. The exposure of such a sale and the chance of customer dissatisfaction leading to a devastating return rate is imprudent.

On the B2B part of the webinar, much effort is directed as to how to "get around your customers and go straight to the consumers."  Risky business that strategy, without knowing if it will work.  They mention Russell Athletic as one company doing it.  Russell just laid off another 191 people.  If I sold uniforms, I'd go after Russell's retail base, now the Russell is trying to cut them out.

The Forrester research is presented in the webinar by a fellow with an English accent.  Often when people have nothing to say they bring in someone with an English accent, like Piers Morgan.  I would not have thought of that unless he kept quoting "what one company we talked to said.."   "We believe that is increasingly how you need to think..."  Well, wait, where is any science from your survey and research?  There is none, it is only "hey you were all wrong, and here is the next best guess."

The summary features a couple of companies who have brought Amazon and SaaS together to make some wonderful things happen, although the only mention "zero fraud tolerance."  What?  Zero tolerance anything is usually a bad idea in business.  Excellent gets you to say 98% of the way, at a certain cost.  Eliminating that last 2% usually costs another 25%.  It is usually not worth it, that is it costs more than the "zero tolerance" of fraud, in this instance.  I worry for the company that is in the exhibition case.

The scenario here is the same "gee whiz, wouldn't this be cool...!?" process that Amazon decried in the opening of the webinar.  There is no science that says any of these ideas will work.

To make clear, I am arguing that websites do less, not more.  if you think you need all this SaaS/Amazon etc stuff, well, you can get it all for $40 a month from yahoostores.    That is how I know what I am talking about, I've been trying out all of these ideas for nearly 15 years online.  I have actually been profitable that whole time, although never big.  Since I am self-employed I cannot afford to lose money.  We entrepreneurs never take risks.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Snowden No help To Enemies

If China let Snowden go, if Russia lets him go, it is prima facie evidence Snowden has nothing that the Russian and Chinese did not already have.  Neither would scruple at taking everything he has from his computers, and work him over to get what else he might have.  The fact that they are not doing so, rather proves that Snowden really has nothing useful to them, nothing they do not already have.

So what is so important about to USA intel about copies of our phone bills?  The fact that we have this massive edifice that makes copies of phone bills and everything else.  This is a case of special pleading, "we keep you safe, we are critical, and any criticism of us is treason."

More likely it is a case of lack of adult supervision, something that cannot change because USA has effective, Soviet style election fraud.  Now, the narrative has shifted.

The USA is threatening countries not to help Snowden move to wherever his final destination might be.

The United States continued efforts to prevent Snowden from gaining asylum. It warned Western Hemisphere nations that Snowden "should not be allowed to proceed in any further international travel, other than is necessary to return him to the United States," a State Department official said.
U.S. Senator Charles Schumer charged that Russian President Vladimir Putin likely knew and approved of Snowden's flight to Russia and predicted "serious consequences" for a U.S.-Russian relationship already strained over Syria and human rights.

But look, Snowden is touring the world demonstrating the countries who no longer have respect for USA.  Apparently a South American country will take Snowden.  USA threatens as countries line up to show they are re-aligning.  The madness of the Bush/Obama policies are coming home to roost.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

A Great 2.5 Minutes

An excellent summary of USA intellgence services:



 (Thanks to Lewrockwell.com) Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Small Business Exporting To Save USA?

James Chan sends in an article for our edification...

Research shows an increase in overseas sales by companies already exporting, and a growing interest in exporting among those who have yet to test the international waters. Exporters say demand for their goods, from clothing to blankets to crop dusting planes, is rising. That makes it worth their while to deal with the complexities of exporting, including logistics and complying with the varying regulations of overseas markets.

The lead example is an exporter who is selling his Chinese products around the world, something I advocate in my book (my book covers everything, doesn't it?) but then goes on to stright exporters.

If you are selling anyting in the USA now, you really ought to consider the market overseas.  As to the issue of complexity of exporting, as my MOQ FOB strategy points out, you can easily manage thata ll away until you find a customer worth spending some time on.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Small Business To Save Poland?

Heres another Bloomberg/ Businessweek article:

With Poland’s economy in its worst stall since 2001, Zdzisław Polański, 64, is betting the farm at an age when most entrepreneurs are thinking about calling it quits. He’s planning to invest $10.3 million—about four times his annual sales—to build a new food packaging plant alongside the 1970s prefab facility he leases in a forest near Warsaw. Sixty percent of the funding comes from a European Union loan. A new production line, chemical and microbiology labs, and equipment for making and testing coatings and inks are Polański’s answer to sales that haven’t regained 2008 levels and the squeeze retailers have put on his customers for price cuts.
“If I don’t do this, there’s no chance for the company to survive,” says Polański, a lieutenant colonel in the communist-era air force, who took over his wife’s wrapping-paper business in the post-transition slump of 1990-1991.

False dilemma.    A loan or death?  I don't think so.  The world is swimming in excess packaging production capacity.  he ought to tap into that before he borrows ten million to speculate with taxpayer's credit.  Since it is easy to speculate with taxpayers, he does.  And he misses a more rational business move.

Contrary to this one unfortunate example, Poland's small biz is saving their economy.

The resilience of small and midsize manufacturers such as Polański—counterparts to the German Mittelstand companies with which many do business—is the one bright spot in Polish industry as the euro area endures its second prolonged recession since 2008. Exports are the only reason the economy grew in the fourth quarter, and they’re still expanding 7.5 percent in dollar terms in the first quarter of 2013.

Plenty of people know what to do, and must be doing it.  I see it at the Asian trade shows, crowded with young people from around the world, except from USA.  We have a terrible combination of entitlement and ignorance.  The pendulum needs to swing back to more freedom, which means less false security.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Snowden Escapes to USSR!

Just as Soviet dissident Aleksandr Solzhenitsyn travelled from USSR to USA via some intermediaries, so USA Dissident Snowden has travelled USA to USSR via some intermediaries.  If the Russians will allow Snowden to make a speech criticizing the Russian policies at Moscow State U, then the reversal will be complete.

USA has lost its moral high ground, as Hong Kong uncooperation has turned into USA embarrassment:

The statement from the Hong Kong government also said it had written to the United States government to ask for clarification about news media reports that Mr. Snowden had released documents showing that United States government agencies had hacked computer systems here, adding that the Hong Kong government, “will continue to follow up on the matter so as to protect the legal rights of the people of Hong Kong.”

Ouch.  In other words, just who is the criminal here?

We may need to relieve our entire judiciary and law enforcement leadership and military command to field a government that is not full of people who are compromised and unable to stand the "goods" mid-level spooks have on the decision makers.  The has been a coup, and mid-level apparatchiks have taken over.    But we cannot clean house.

The way USA treats whitleblowers, no one should criticize Snowden for going on the lam.  But Snowden would have made a good supervisor in the restored USA.  Gone now.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post