Compete on Design Not Price: Do Better than eBay

Callum sends in an article which is fairly common experience, and aligns with what I teach, Plan A.  Everyone seems to thing importing is about Plan B, just buy something from overseas and sell it here. No, you have to design your own.  Here is an example...

But a lot of what McGrath sells is just what he thinks can be profitable — like remote-controlled boats, which he used to buy from an importer in Long Beach at around $14 and could resell on Amazon for $34.95.

So far, the usual start-up.  But then he finds two problems, there is always someone who will charge less than you, so you will always lose at the game.  next, taxpayer subsidize the freight rates to the advantage of the Chinese.

But as Chinese companies began logging on to Web marketplaces like eBay, Amazon, and Alibaba, they started taking advantage of the shipping deal to sell directly to American consumers. And so it’s never been easier to get something cheap and Chinese delivered to your door for a startlingly low price: $4.64 for a digital alarm clock; $2.50 for a folding knife; $1.88 for aniPhone cable — all with shipping included....All this should be a reminder that any trade deal has winners and losers and unintended consequences. 

Yes.  This is what governments do, pick winners and losers.  Simple solution, deregulation.  And corporatize the USPS.  Take away its monopolies.  But unintended consequences.  how can you know exactly what will happen then claim the result was unintended.  how can you say "I had no idea if I let go of the pencil it would drop.  I really thought it would rise up."  You get more of anything you subsidize.  Econ 101.  Sigh.

But anyway, The fellow goes on, and what is his reaction?  To go to plan A...

To insulate his business from foreign competition, McGrath has tried different ways of making his products stand out. He likes to tell people to sell what you’re passionate about, and McGrath loves indoor pistol shooting. Recently he designed his own kind of mattress holster, which hangs a gun and a flashlight from the side of the bed for easy nighttime access. He contracted a company to manufacture the holsters, and they are shipped out in bulk from — where else? — China.

This is what I learned 40 years ago working while working ten years for others, and went on my own since then.  It is what I teach and write.  Last Saturday in at Cal Poly someone asked me if what I teach makes people successful.  No, they make themselves successful. what I teach saves time adn money.  Everyone does plan B and wastes times and money.  Eventually they get to Plan A.  I teach start there.

Coming up I have live seminars in Portland Oregon October 25 and in the San Francisco Bay Area November 1.  I also started online seminar last week, in which you can still enroll and get caught up.

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

Bookmark this post --- Email this post