Exporting Food as a Small Business

My online seminar Exporting Food as a Small Business is being very well received, and so I have added another section.  If you wish to start up a business as an agent or you currently produce food or beverages or both, this course is open to all.  Click here for more information.

Winter 2014

Tuesday 2/25 - 3/18/2014   Four Sessions

Section 1 ~ 1 PM to 2 PM Pacific Time

(This would be 2 PM to 3 PM Mountain, 3 PM to 4 PM Central, 4PM to  5 PM Eastern)

Course Objective: To find overseas business no more difficult than a domestic sale yet

as profitable.

What if your small food or beverage business had an untapped market overseas that was just as profitable but no more difficult to serve than a domestic sale? Forget what you have heard about exporting and come learn a proven strategy to test market your product while eliminating all the problems and risks people commonly associate with exporting. No business is too small to export.

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Free Cruise Liner

According to law of salvage, this ship is abandoned and may be had by anyone who will board her.  There is a nasty problem of very, very hungry rats, but that can be fixed by sinking her part way, and killing the rats as they come up.  Tricky on the high seas, for I don't think any port will take her in before the problem is solved.

I simply don't have the resources to take this projecton, but you might.



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Key Business Ratios - Retailers

Here is a helpful site for retailers, and those of us who serve them.  By knowing mark-ups and other key ratios, we can better serve those retailers.  Glad to see these private efforts happening.

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A New Low In USA Activity

We get nothing from USA diplomatic hijinks around the world, only more and more hatred for Americans.  This is no good for business.  There is no adult supervision at the federal level.

Somebody (who knows?) tapped top USA diplomats interfering in activities in the Ukraine,  and published it.  The USA Spokesperson tries to change the topic by blaming Russia, on no evidence, and calling it a new low.

Wait, wait... isn't the USA the #1 phone call tapper in the world?  Including world leaders?  And wasn't the low when the FBI tapped MLKing infidelity and mailed the tapes to his wife?  Whoever did this is lower than that?

There was an entire video of the whole thing available earlier this morning, but like China, USA blocks a lot of internet content (people are thinking I am making that up).  This is working for the time being.

http://www.dailymail.co.uk/news/article-2553509/US-officials-four-letter-tirade-against-EU-Diplomat-caught-tape-letting-rip-discussing-Ukraine-crisis.html

update:  Found it again!


Listening to top USA officials "in the wild" so to speak, one is reminded of Hannah Arendt's observation on the banality of evil.  These two top officials are showing us the reason for all the secrecy we have is not because anyone has anything particularly interesting to offer, secrecy it to keep us from knowing just how stupid our officials happen to be.  Snowden leaked nothing because there was no content there to begin with.  His content was so stale even the Chinese didn't want Snowden when they had him.

Ban Ki Moon is a USA errand boy, who dis-invites the Iranians from a discussion crucial to the Iranians and world peace.  USA Superstars are obliged to show up and advance the personal preferences of a few appointed officials.  State Department Spokesperson Psaki trying to blame the Russians (to change the topic) and deny the USA is doing what clearly the USA is doing.


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Adverse Possession

Probably one of the most important innovations in common law is adverse possession, the taking of property that is not in use for a set time.  It is usually a ten year term in USA, and in Islam it is three years.  I hear in Peru it is 24 hours!

Redistribution of property, especially unused property, is critical to wealth maintenance and creation.  And the fact that property can be adversely possessed demonstrates that property is not a human right, but a statutory right.

Now, no state, no property?  No, then convention comes into play, and the degree to which you produce for others is the degree to which the community will support your private property.

Sounds scary, doesn't it?

Add adverse possession to the list of cultural artifacts that show USA once attempted to be uniquely free.

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Regulators Owned by the Regulated

The FDA is supposed to protect us from wicked business people, but the fact that there is an FDA is what makes wickedness possible in businesspeople.

The FDA has warned about the dangers of giving low doses of antibiotics to livestock since at least 1972. But efforts to clamp down on their use on the farm were mostly blocked by the livestock and pharmaceutical industries. Experts say that routinely feeding medically important antibiotics to livestock plays some role in antibiotic infections in humans, though its significance is widely debated.

In other words, the FDA takes its orders from the regulated.

It is not possible to give power to anyone who will not abuse it.  Our government is big to "fight our battles for us" and in fact turns on the only group who cannot resist: citizens.

Take away the subsidies for BigAg, and get rid of the FDA, and watch prices fall, quality rise and prosperity spread exponentially.

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$85 Puts Haiti Coffee Campaign Over $3000!

Here is a chance to do good...

It became personal after several team members survived the earthquake side by side with millions of shaken Haitians. Their request was help creating jobs in agriculture and help selling Haitian coffee. The once famous Haitian coffee industry was in ruins and its great taste was lost to the world. 

And $50 gets you a bag of coffee as well as doing good...

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Traceability and Big Business

Sigh.  I mentioned here when progressives criticized Walmart for not buying more from small business, Walmart turned the criticism into a money maker off those companies they turned down anyway.  Of course Walmart turns every critique into a profit center.  They are expert in feeding demand and making money off of it.

The progressives turned their sights on Unilever -

So here we are into the world of perverse incentives.  To achieve “100 per cent traceability” Unilever has decided to cut the number of smallholder farmers who supply its palm oil – by 80 per cent, according to Gavin Neath, senior vice-president for sustainability. He told a conference in London earlier this year that it was “a cull… to ensure standards”.   It was not he said, that the smallholders were bad guys, but that for a large corporation they were untraceable and therefore a risk.
Klintworth admitted that the rest was “a trade-off” in which social concerns lost out to environmental ones.  The result is a greater reliance on large palm oil plantations and a further turn of the land grabbing screw – all in the name of green ethics.

Since progressives relentlessly lose, and since they make money off the game, just playing the game, they too have a perverse incentive (moral hazard in economics) to continue to play and lose.  Big biz loves the outcome.

Small ag traceability is cheap and effective. Big ag traceability is irrelevant. Unilever enjoys taxpayer funded anti-knockoff law enforcement. Small producers should not be selling palm oil to Unilever for soap, they should be making soap.  They can link to google earth to assist in traceability, along with other cheap and effective means. Sulawesi’s All Natural Plantation Soap would be literally on the map.

We know how to get the soap to overwhelming and profitable demand, so that is not a problem.

It is standard corporate response to take a criticism and study how they can leverage the criticism into more power and profits. Strategy: never criticize big business. When Shell Oil becomes a “green certified” company you lost, you did not win.

Asking bigbiz to do the right thing is to ask a wolf pack “what’s for dinner?”

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Exports From USA to Canada, An Interesting Exception

Google the cited source, but the point is interesting...

Per the Foreign Trade Regulations, Subpart D, §30.36, non-licensable exports to Canada are exempt from export filing requirements because of our arrangement to exchange import data with Canada. Thus most U.S. exports to Canada are only reported to Canadian Customs as imports, and Canada in turn provides the details of these transactions to my agency for us to tabulate the export statistics. In the same way, our counterparts in Canada receive from us data about Canadian exports to the U.S. (U.S. imports).

I guess it has to do with efficiency, why have USA count outbound and Canada count it again inbound...

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Promoting Export to USA

In comes a inquiry, from a NGO asking assistance, my comments between the asterisks....

We have just recently launched our Export Incubator program which is designed to help exporters here in (Overseas Country) tap into the US marketplace. 

***Very good...***

 Our program involves training and mentoring on things like how to communicate with importers, properly pack and ship goods, register with the FDA, and all that other technical stuff. 

***Often this is counterproductive...***

 Another component of the project is simply finding data on importers in the U.S. -  I have identified sites like Piers and Import genius, ect. 

***Not a useful vein to mine....cannabilizing current trade is not net development, there are better means for better results..***

 I just wanted to ask if you had any other advice given our particular situation.  We are trying to line up exporters here (exporters with innovative goods that we think will be competitive) with importers in the U.S.  

***My advice would be to assume you have no idea what would sell in USA, and design a program based on that...***

A lot of these exporters will be looking for very niche markets while others may be medium to large enterprises. Any help would be appreciated.

***Test for companies competing on price vs competing on design...  then I’d not bother with any company competing on price.  This would limit your efforts to necessarily the small and medium firms.  Competing on design and competing on price are mutually exclusive tactics and processes.

Working with a freight forwarder, have the prospective exporter design a minimum order quantity, FOB shipment quote, (MOQ FOB) with all particulars provided on a single sheet.  If a website is possible, publish that sheet.  Two parts: the exporter is going for the smallest rational export order, not the largest possible, all risk is on the USA buyer, not the Moroccan seller.  The process is test order, not “new customers.”

Do not try to make anyone an expert in int'l trade, forget teaching incoterms, etc...  make them expert, via the freight forwarder, on the one sheet of paper that is the MOQ FOB sales offer  (if and when a market is found through selling MOQ FOB, then they may learn a little more about the biz...)

Next search google for the names of trades shows in the usa that carry the products being sold (fancy food shows for figs, home furnishings for carpets, home improvement for tiles, etc)  Find the name of American exhibitors at these shows, drill down in their product mix and find say 1/2 dozen potential USA buyers of the product, and then by snail mail, never email, send the MOQ FOB quote soliticing business.   A piece of paper in an envelop through the postal system.  It is the only way the offer will get read.

Anyone you are assisting should be communicating with decision makers, people ready willing and able to buy, within several weeks.  They should be shipping goods to USA within that time, or if not, know why not, from the only people whose opinion matters, USA buyers.  With rock solid feedback, they can decide if they want to make what changes are necessary, or not.  The Moroccan will know what he is talking about.

There is a pre-step I’ve left out since your brief is only USA trade.  Personally I would teach how to use raw world trade data to search and learn new customers worldwide.  World trade practice is also about defending home markets, and being apprised of world trade patterns gives even a small trader wonderful unseen opportunities from time to time.

John

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Hong Kong Watch

Good things don't last forever, but they do seem remarkably resilient.  The disintegration of Hong Kong post-handover has not happened as anticipated, but some very ill-advised ideas are being advanced.

First, a good professor is advocating expanding mandated welfare in Hong Kong:

This is why Hong Kong needs a redistribution policy, and the latest Policy Address by the ChiefExecutive said: "... despite the protection offered by the statutory minimum wage, manygrassroots workers, as the sole breadwinners of families, still bear a heavy financial burden.Providing them with suitable assistance and encouraging them to remain employed will help keep them from falling into the CSSA safety net."

Now, Hong Kong has plenty of examples of government-provided welfare, their prestigious sport center network is home to admirable advancement of many of the physical arts.  And no one, except the Church of England, has ever owned land in Hong Kong, and it was the Colonial Governor who set up a public housing scheme that solved a basic requirement for Hong Kong's development, housing for the deserving poor.

The "war on poverty" in the USA was hailed as expressly as a means to end people being on the dole, a war to end poverty.  It is now a war on the poor, but stated goals were precisely what is cited in the article.  We do know where this goes.

Hong Kong always has had an excellent redistribution mechanism: charity.  Hong Kong's charitable giving is second to none in the world, and savvy charity-pimps target Hong Kong assiduously.  Hong Kong charities are rich with resources, I cannot think of any place on earth I'd rather be poor (or busted) not so much for the helping hand I'd get, but for the immanent opportunity Hong Kong offers anyone in its polity.

So much so the irony is Hong Kong is a very welcoming place to people world wide, except for Chinese.  Hong Kong's benefits would drown in immigration if allowed, so Deng Xiaoping exported Hong Kong to China, in the SEZs.  An unpredictable outcome.

As to income in equality, no one is more afraid of that than the rich.  Let the rich redistribute their wealth, they will get it to where it is needed far better than any political process.

Next, Hong Kong as a colony was an ephemeral place, and this would be out of character 50 years ago.

HONG KONG - The Hong Kong government on Wednesday declared a sanction against the Philippines since Manila failed to make a formal apology and meet all other demands by families of victims died in a hostage crisis three years ago....
Spokeswoman of China's Ministry of Foreign Affairs Hua Chunying said in Beijing Wednesday that the central government supports the SAR government's endeavor to properly handle the aftermath of the hostage crisis and urged the Philippines to show more sincerity to resolve the problems which affects Chinese people's feelings....
The injured and families of the victims have claimed four demands: official apology, compensation, punishing accountable officials for the handling in a bungled rescue attempt, as well as improving security measures for tourists in the Philippines.

The outcome of the hostage situation was deplorable, and certainly the local authorities were out of their depth.  While appropriate gestures are indicated, dictating terms seems out of character.  How sincere is a response that is mandated?

And second only to the victims in this slaughter, the Philippine authorities are motivated apologize, punish negligent officials, and improve security.  Compensation is tricky, since a criminal act is rather difficult to assess, and further the visitors contract was with the tour group, not the state.

The Philippines must have experienced an immediate and hard hit after this event, and is no doubt correcting problems as best they can.  I am not sure how demanding specific actions can improve upon that.

I don't think a Hong Kong, desirable as it is, can be had through planning and negotiations.  I am convinced all such happier polities are accidental, an unseen consequence of forces large in life.  Hong Kong and USA were formed at the same time by the same Scotsmen with the same goals, freedom explicitly sought in USA and immediately lost, freedom necessarily obtained in Hong Kong and maintained by Chinese self-interest.  You cannot control for human action.

Hong Kong is changing, as all places do.  See it soon.

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Markets Are Necessary and Sufficient to the Task of Politics

I attended an edifying lecture the other night hosted by the University of Washington School of Philosophy, and was astonished when I saw Hayek cited (Hayek?!) in support of a theory on discovering justice.  The visiting professor outlined a process that simply described the way it is, and for my part, in an edifying and thus more effective way.

People malign free markets advocates with the claim we say the markets provide for all human needs.  I've refuted that elsewhere, but it dawned on me upon reflection, that one provision the market does make that is often overlooked is it settles political questions, the free markets provide all that is necessary and sufficient in politics.  And this may be another reason why politicians hate free markets.

During questions after the lecture there was concern over 10,000 people of one opinion having the same starting position of one person with an adverse opinion.  I saw instantly that the one lone nut or prophet must negotiate one at a time with the ten thousand, and absent power preventing free trade in ideas, the lone nut will starve for commerce and the prophet will find more customers than he can stand.  Few people recall what Steve Jobs was up against, but he started in a field that had few constraints so his voice, although contrarian, was heard and accepted. Offering new ideas is not voting 10,000 to one, and it is not a pathogen infecting the body politic, it is negotiating among equals. 

Also, I am not certain, the audience seemed to believe that a social contract at some point must be achieved, a stasis.  And if so, then the problem arises that the system outlined may not produce it.  The professor agreed, asserting he only offers movement, not good results.  And what results, if I heard correctly, may be in the audience estimation woefully thin.

But woefully thin and lack of stasis is precisely what is called for, a kind of rolling polity of contracts and liquidations that have people gainfully employed yet are not at any point measurable in any observable way.  This is what I see among the self employed when I work worldwide.  And I handle a lot of trade data, which never sees what is coming.

The problem is power.  People inevitably give it up, and those who take power, sought and unsought, inevitably abuse it.  There are no exceptions, just ask the person on the other side of the policy dictated from power.   So far, the USA has been fairly good at leaving alone those who are disinclined to give up their right to self-determination, what with the overwhelming task of managing all those who demand that their God-given rights be taken over by the few who take grim delight in wielding outsized power, sought and unsought.

Hong Kong has no less a range of characters good to bad than any other polity, the difference is none has the power to leverage over another.  Collective abuse just does not get traction.  It may be the ephemerality of the place, but so far so good.  

Once upon a time in USA the news was about business people, not it is about politicians and celebrities.  Business people, on the side, did some politics, something like a Rand Paul today who would continue where he left off caring for people's eyesight.  (And as a doctor, he is the about the only senator who is not a millionaire, for people wholly devoted to public service become millionaires).

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Senza Te

The original, sung by the fellow who wrote it...



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