Bowie Ad

All advertising is about aspirations, and high-end ads play on the hopes and dreams of everyone.  The lyrics are the best part.


The logo at the end is rather anticlimactic.

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Labelling for GMO

The Co-op from which I buy my food led an effort to require GMO products to be marked thus in Washington State.  The initiative was labelled I-522.  Some $20 million was raised in opposition, all but $500 worth coming from out of state.  So I wrote a letter to the editor of my Co-op newsletter:

With the outrageous defeat of I-522, is it not time to rethink the food safety strategy of government as protector?  We see regularly that the regulated own the regulators, and defeat of initiatives are easily bought.  This is so fine tuned that the GMO forces purchased a mere victory, not a landslide.
Now, no doubt the fall-back position for us will be exactly what the evil empire wants, we to call for campaign finance reform or some sort of corporation reform, a process, as demonstrated, for which they control the outcome.
Is it not time for us to realize that the only certification as to whether something is GMO or not, organic or not, is for PCC to define? And then for PCC to oblige its suppliers to comply.  And PCC to ally with like-enterprises to this end?  I would argue my co-op should take the initiative here, it would probably cost less than we spent on the political initiative.

Never let the government make definitions.  This is an important principle, like "never let the government produce the currency."

And the funny thing is in this controversy, even without the law requiring it, the market is getting what it wants, but in another way -

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Fill In the Blank With the Name of Your Product

Fill in the blank:

"I came here to sell ____________ , why are you here?"

Let's say you are selling smoked sablefish.

"I came here to sell smoked sablefish, why are you here?"

This aggressive, confrontational expression should be at the heart of any sales encounter.  It should only be actually expressed to get rid of someone who is talking but not a buyer.  But otherwise it should be in mind before any sales encounter, so you think in terms of the sales encounter before the fact.

I present this as a corrective to those people who go to trade shows with some other attitude in mind, such as

1. emotional blackmail - "I am helping the underprivileged by selling these products.

2. entitlement: "You should have heard about us."

3. labor theory of value: "I work hard to make this."

4.  support my hobby "I have a passion for making wine."

Write down how come people should buy from you, and then be cold hearted in assessing if that is true, or better yet, ask customers if that is true.  (And if true, and you are struggling, perhaps that means you are attracting the wrong crowd with your USP.)

Now notice how "I came here to sell smoked sablefish, why are you here?" trumps any view you may have of yourself, and why people buy from you.  One of the most dangerous things in life is to believe your own PR.  And your imagined USP is an expression of your PR.  (USP = unique selling proposition, PR = public relations.)

Say there is a trade show coming up, then to think of the trade show in the terms of "I came here to sell smoked sablefish, why are you here?" is to begin to prepare properly for the show.  That is, identify the best customers that would be attending the show, and approach them about buying from you.

For the sales process is about Approach, Qualification, Agreement on Need, Sell the Company, Fill the Need, and Close the Sale.  If exporting, I need maybe three companies in all of China to which I might export (sell) and showing at a trade show in Shanghai, I should be pushing maybe a half-dozen companies as far through that sales process as I can before I attend the show.  Of the six companies, each I managed to get to some step in the sales process.  Then the big advantage of the show is instead of visiting six companies in six cities over ten days and knock myself out, I can visit with six companies over three days in one booth.  I know where each company is in the sales process, so when the reps of that company come to the booth, I can proceed from the point in the process that company happens to be, toward a sale.  The point of being in the booth is writing orders, legally binding contracts (although in international trade, contracts are far stronger, they are morally binding, rather than legally binding).  If the booth does not generate sales, I literally have no business in the booth.

Aside from those buyers I have targeted and engaged, if in a new market, the booth displays the company's old products (old products to new customers, now products to old customers.)  I want to sell my MOQ FOB to as many companies as possible, so there is as much searching and learning about markets as possible.

Now, this attitude may seem aggressive:  "I came here to sell smoked sablefish, why are you here?"

But guess what?  It matches the attitude of a real buyer:  "I came here to buy smoked sablefish, why are you here?"  If you are in a booth guided by any version of those four attitudes mentioned above, or any other delusional premise, a real buyer is going to spot it instantly an move on.  Real buyers cannot waste time working with the delusional.

"I came here to sell smoked sablefish, why are you here?"  "I came here to buy smoked sablefish, why are you here?"  Perfectly matched, orders get written.

If you have a booth to sell products, and you are not stripped down, oiled up, and ready for a cage match with a ready, willing and able buyer (tautological), do not go to the show.  The MOQ FOB is the tool to present to a real buyer, and the attitude behind the MOQ FOB on the part of the seller matches that of the buyer.

Update:  If you are in the SF Bay Area late February, I'll be Foothill DeAnza College is hosting an all-day import-export startup course.

Class Description Come learn the strategies those thriving in small business international trade use to grow and build their business. You will be guided through selecting products, finding customers, working with governments, licensing, bankers, brokers, carriers, financing, costing, pricing and gaining orders for your products, all from a practicing professional. Highly rated by students for content, pace and humor. Recommended textHow Small Business Trades Worldwide by Instructor is available at on Amazon.com.  Class ID: 2907 Saturday, 9:00 am - 5:00 pm; 1 session starting February 22, 2014, ending February 22, 2014 Course Fee: $89.00 Instructor: Spiers Location: De Anza College, G Building , Rm. G-7       Map

You may enroll here....

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Celebrating Failure in Wine Sales

I was reading in the Chinese press about the success of exporting wine from Washington State to China.  Lets read:

As the nation's second largest premium wine producer after California, Washington wine exports to China totaled an estimated 14,051 cases in 2012-13, a 175 percent increase from 2008-09, when exports to the market were 5,094 cases, according to Seattle-based Washington State Wine Commission.

Hmmm... let’s jump into the raw trade data and get some hard facts:

Source: USITC.gov / John Wiley Spiers analysis

175% for Washington wines is well below par performance of wine exporters from USA to China, and only about half of the growth into Hong Kong.  So actually, Washington performance quite bad.  How come?  Tactics, tools and attitude.  Let’s observe comments a Washington Vintner:

"Our hope was to try to find more regional distribution," said Carter, adding that the other goals for his trip were to teach buyers and the press about Washington State and it's wines as well as do a little self-educating about the China market.

Sales is a matter of hope?  It is not a process that yields results?   “Regional distribution” sounds very MBA-ish.  How about the point of the trip is to “sell wine”?  With a billion people, what will talking to several dozen, even several hundred, accomplish as far as teaching buyers and the press?   And is one in the wine business to teach, or to sell wine?  At the wine shows there are booths dedicated to promoting programs teaching about wine.  Leave teaching to the teachers.  And why bother learning anything about the Chinese market?  The Chinese market is for the Chinese to worry about.  One is in the wine business to sell the wine one makes.  Let Chinese importers worry about selling into China.  The job is to find the right wine importers in China.

Carter's winery has so far shipped three orders to China. "One was not a Brian Carter Cellars label but a custom project. The other two were within the last year with our current importer GIYA," Carter said.
"China is our most successful and promising export market at this time," he added.

Three orders in two years is the most successful and promising market?  How long can one sustain this level of success?  At what cost came the two brand orders and one non-brand? Let’s check Giya out:

http://www.giyawine.com/

促进中美红酒文化交流，搭建中美红酒贸易桥梁!

To Promote Chinese and US Wine Cultural Exchange. To Build Trade Bridges between China and US!

Anyone see a problem here?  No wonder there have been only three orders.  P O P  Q U I Z for my ag export students:  critique this sales site.  I'll respond.  And looking around the site, wait, what?

GIYA International Trading L.L.C. is a US registered import and export company based out of Seattle, Washington

Their current customer in China is a Seattle business?  Sigh.... 

My guess is these were very small orders, which is the right way to build market, although the tactic seems by default.  And who knows if any of the three sales were profitable.  Assuming the vintner has come upon the right MOQ FOB tactic, the attitude associated strikes me as counter productive.

I was listening to another fellow at an export ag conference yesterday, and he made the point by his services "we save people time and money."  Exactly.  People would be successful anyway, advising others just saves them time and money.  The problem is if people knock themselves out doing everything except selling before they get to "success."

About 14 wineries from Washington State showcased their vintages to more than 7,000 trade visitors at the Shanghai fair, all hoping to increase awareness of Washington State wines and build relationships with key importers and buyers in China.

Not write orders?

Steve Griessel, owner of Washington-based Betz Family Winery, said the event was productive. "We were able to meet many excellent wholesalers and we were excited about the reception our wines received," Griessel said.

Did you write orders?

"Education is essential," she said. "Many Chinese buyers and certainly consumers are not aware of Washington State wine. The more we can increase awareness of the high-quality, critically acclaimed wines from Washington, our unique territory and the stories of the dedicated, down-to-earth people who make our wines, the more success we will see in the Chinese market."

That is a hypothesis, easily testable.  I can pretty much assure the outcome if the hypothesis were to be tested: nonsense.

If one wants to know why in spite of all of the efforts to “promote Washington wines”  the results are only half of elsewhere, it is due to false premises, wrong tactic, tool and attitudes.    At some point, some wineries will figure it out.

One can arrive at sub-par performance at a lost less expense.  And one can also find paying customers at a lot less expense.  It is called sales.

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Expertise

I am not making this up:

As China was growing in the 1980s, they wanted good old USA stock of prime beef and dairy.  How to get it there?  Well, we in the USA would remove embryos from prime Bessie, transfer it to a live rabbit, and ship the rabbit to China with the cow embryo inside,  and then the Chinese would transfer the embryo to some Chinese Bovine host to carry the embryo to term.

(No lighthearted tales of rabbits escaping and carrying a calf to term.)

China eventually built up enough stock to end this practice and breed their own, but there is the problem of epigenetics which gets you good and bad, but in any case uncontrollable results (so far).

Expertise in a narrow field gives you an advantage, such as exporting dairy cattle.

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Your Web Based Business

You can read that titles two ways, as in a business solely web based, or that portion of your business that is web-based.

Since the WWW has combined, and therefore replaced, the telephone book and the telephone, and has done no more than augmented the company catalog by putting a copy online, you can see how the internet can go only so far as part of your business.

I was lecturing on this, and arguing the cost of websites and maintenance is usually not worth the return from internet sales.  That is, the amount of money spent does not bring in enough sales to make the effort worth while.  A marketing manager for well-known and established winery looked off into the distance (I watch reactions) and after some calculations, offered how in their instance that was exactly right.  When she reckons the money into the site and the sales therefrom, it just isn't there.

So why do people make such websites?  Momentum.  We have an entire generation that believes in magical internet powers that simply does not exist.

There is a balance to be struck, one does need a web presence, but not all of the nonsense and Sesame Street grade child grade distractions which makes up most of most websites.

Next, and this is common enough, a student found a very cool source of jewelry, everyone says it is great stuff, and the would-be importer would like to do good by doing well:  help the folks overseas who make it by selling it on the internet in USA.  Ain't gonna happen.  And I teach this in my classes.  And when people say no to plan A, I offer plan B, a way to test their hypothesis without running any risk.  If you think your internet based business is going to work, test it all out before you spend any time and money.  Go straight to those customers.  Get samples, set up the site, and do what you expect to do to get sales.

Here is an exchange with that student, who took my course within the last few months:

On Nov 18, 2013, at 5:59 PM, Delight Of Light USA wrote:
John,
How do I get people to see my website www.delightoflightusa.com?  I have beautiful jewelry to sell, but need to attract more traffic to the website. How do I increase my traffic flow?  Thanks!
Georgia

Hey Georgia,
Well, do you want traffic, or sales?
You can pay for traffic, and get lots of people to come to the site, for a price.  But that does not mean any of them will buy.
That is exactly the problem of selling on the internet.  It costs more to get people to come than you get from selling to people.  If you have to spend $90 to find someone who will buy something at $75, then of course the system will not work.
This is why I advise people to sell to brick and mortar stores and sell TO web stores, not sell on the web.
John

Hi John,
I agree with everything you stated.  I want to increase sales.  When selling to brick and mortar what percentage do they buy the product at?
*** You have your price, and you do not worry or concern yourself with the retail price.  They set it at whatever they want.***
  How do I get my product into the stores? Do I meet with the buyers?
***Your item is existing...  therefore the best you can do is simply walk into stores, show your product, and "test your hypothesis"  that is, say "I believe I I import these you will buy form me.  Am I right?"
See what they say...
You can call sales reps and ask them to look at your line, and see what they say.***

If she gets sales from this method, good, then she will start to redesign based on customer feedback.  If she does not get sales, she will redesign based on customer feedback.  In any event, to be successful, she will gravitate toward designing.

So how to approach it?  Remember my point above...

Since the WWW has combined, and therefore replaced, the telephone book and the telephone, and has augmented the company catalog by putting a copy online, you can see how the internet can go only so far as part of your business.

If you want to see an example of this done right, check out www.uline.com.

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Vietnamese Banking Regulation

The Government & Chase agreed another $13 billion will be transferred from taxpayers to other bankers to pretend Chase is being fined.  Since corporations have no money, and all costs are covered by customers (or taxpayers in this instance) Chase of course pays nothing.  As to anyone being responsible for anything, well, no.

Vietnam has a different view.

Vu Quoc Hao, 58, the one-time chief of a finance subsidiary of the state-owned Vietnam Agribank and building firm boss Dang Van Hai, 56, were sentenced to death on Friday, according to state television.

And we should note that is spite of its martial glory, Vietnam is quite modern in effecting punishment.

Vietnam resumed executions by lethal injection earlier this year, drawing criticism from the UN's human rights office.

USA is generally considered free of bribes and corruption because we say so.

We outsource many things in USA.  Perhaps we should outsource banking regulation.

But better yet, get the state out of banking.  Then there is no ability to concentrate such opportunity to be wicked.

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Pricing Specialty Goods

Here is a specialty retailer with ski sweaters on offer.  As see the $1000 range is typical, with sweaters running up to $4000...

Whatever you were planning to sell, whether hats or sardines or sweaters or dRams, anybody can make any product specialty.  There is a change in perspective necessary, but that should not be too hard once the facts are known.

For a $4000 retail sweater, the wholesale is probably $1800 - 2000, but the $4000 sweater is extra special, down lined, and in that measure price blind.  No one can look at it and figure out quite what the price should be.  And being unique the rip-off artists steer clear of it because there are too many unknowns in such an item to mess with.  Lower hanging fruit is available to take elsewhere.

Aside from the occasional price blind items, there are items such as just plain merino sweaters that run $2000, and are not price blind.  Once the facts are known all of our competitors know what your item cost you.  "Merino, 20 micron, aniline dyes, 4 ply, 12 gauge"

Once you could check with Robert Morris and Associates for standard markups in an industry, but that is now morphing into KPI.org.  In any event, you need to learn what those standards are, because they will become your markups.  And, you can always ask, say a retailer or another person in the industry, or google it for news reports on the topic.

Let’s look as something as basic as shoes, and here is a pretty standard men's shoe style, this one by Bruno Magli, at anywhere from $400 to $500 depending where you buy it.  I read a news article that happened to offer some statistics on this shoe, and briefly Bruno Magli sells some 300 pairs a year in USA, at $425 that is $125,000 retail, $62,000 wholesale, or about $5,000 a month.

Not much, eh?  Of course Bruno Magli has more items in their line, but the point is at the specialty level, we are not selling mass quantities.

But we are making the same amount of money as if we were selling mass quantities.

Net profits can be easily be around ten percent, which seems low when people learn of it, but they do not quite apprehend that the net is what is subject to forfeiture in taxes, more on that elsewhere.

The point of this note is pricing.  Say a sweater costs $500 to make.  Say that is five times as much as the going rate, but with better materials and lower quantity, the five times progression is necessary.

The big issue here is quantity.  

Now, your competitors in the specialty field already know what something costs, at what quantities.  They see exactly what you are doing, and do not steal your idea for the simple reason that they 

1. have their own ideas

2. have no customers for your idea

3. As to the mass merchandisers, they would rather wait until you prove there are customers before they “steal” your idea.  But by then you are already proceeding ahead with next moves better informed by the market feedback on your advantageous head start.

Given all that:  If your price is too low, you cannot a cannot attract all of the talent that must be assembled to make this happen.  People need to be paid for their time, and ultimately that has to come out of the sweater.

But your competitors know what everything cost you.  Price it too high, say a greedy $1000 wholesale vs a rational $500 wholesale, and they will know you are charging too much.  If you charge too high you invite competitors to at once punish you and make themselves look good, by knocking you off and pricing at $750.  In this way they at once make better returns making you look bad.  Then comes the regression to the mean, and the greedy get knocked back into line.

In a free market the cop is your competitor.

Don’t fail to charge what you need to charge, don’t get greedy.  Two sides to the same coin.

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Why Hong Kong Should Reject Democracy

Hong Kong government is not a democracy now, nor has it ever been a democracy.  Good for Hong Kong.

The people of Hong Kong have no experience of democracy, and it is one of the most peaceful, prosperous places on earth.  What Hong Kong does possess is the world's most valuable repository of experience of anarchy, or self-government.

With the British appointing a governor for some 200 years, and now the Communist Party picking the Hong Kong leader, any governor today as in the past had to tread a fine line:  try to follow the directions of the powers that be, don't upset the locals.

Any high school principal knows this feeling - there is the policy of the school board, there are the desires of the parents.  Successful principals learn early: in all disputes, take the side of the parents.  You'll ultimately win.  The people of Hong Kong are the parents of Hong Kong.

Weak leaders make strong people.  The people of Hong Kong largely self-govern themselves.  It is the best case extent for anarchy today.  And since the communism has as its ultimate goal anarchy, Hong Kong is just a vision of the future.

Hong Kong is unique in the world today, but not in history.  It is very much like the city-states of the renaissance, such as Venice and Milan, or the Hanseatic League city-states.  Or even such in ancient Greece.

Democracy will introduce the opportunity for a power player to begin to favor one faction over the others, where one group votes another group must give them free $#!+, which destroys every democracy.  See USA, 2013.

The people of Hong Kong should continue to take to the street like outraged parents every time their independence is threatened, but also reject democracy whenever it raises its ugly head.

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Pope Benedict on Small Business

I was reading the bulletin board outside a church in Hong Kong the first Sunday after Easter way back in 2006, and there was a letter from the Pope at that time.  I like to read what Popes have to say, and I was astonished to read this:

Thanks to men and women obedient to the Holy Spirit, many forms of charitable work intended to promote development have arisen in the Church: hospitals, universities, professional formation schools, and small businesses.

Now, in that list is small business?  We are up there with Mother Teresa in our work?  In what ways?  I had to think about this...

1. We necessarily help others before we help ourselves.

2. I am not in the personal transformation business, but small business necessarily transforms oneself and others.

3. With the necessary passion/joy nexus upon which small business is built, the experience is somewhat religious.

4.  We tend to be "nonprofit" in the sense I laid out in the post on taxes, that is we spend every cent pursuing our mission, and every cent spent goes to build another business.

5.  We are necessarily "richer" than anyone else because we figured out what we want to do.    So is it that sense of "mission" that makes us like the saints in their charitable work?

6. Like Catholic schools and hospitals, we'll do business with anyone, regardless of race, creed, blah blah blah...

The Pope goes on:

Such initiatives demonstrate the genuine humanitarian concern of those moved by the Gospel message, far in advance of other forms of social welfare. These charitable activities point out the way to achieve a globalization that is focused upon the true good of mankind and, hence, the path towards authentic peace.  

Perzactly!  The Gospel message is love, and that is the heart of any true rEVOLution.  Nonviolent, mutually beneficial, voluntary association, etc.  I'd rather be in a religious hospital than a public-funded hospital, I think most people would (although in USA most religious hospitals now are in name only)  anywhere in the world. Or another way, I'd rather be in charity-based schools and hospitals than public-(government)-based institutions.

And of course the most critical piece of social welfare is a job, and self-employment begets self-employment, as people form mutually beneficial relationships and employees branch out and start their own businesses.

I bought a copy of the Catechism of the Catholic Church as soon as it came out, to learn what the Church actually teaches, contrary to the nonsense many people say it teaches.  I had heard about a The Compendium of the Social Teaching of the Church which purports to suggest concrete actions given what the church teaches.  I was finally prevailed upon to buy a copy, and now it is my favorite of the two.  The book is surprisingly balanced and the right people dislike it.  I highly recommend it.



So there is your Sunday assignment.  As an act of charity, start a business.

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