Thursday, July 23, 2015

Plan A or Plan B - Start-up

On Jul 20, 2015, at 11:49 AM, RT wrote:
Hello John,
    Back in 2011 I attended one of your seminars at DeAnza college and thoroughly enjoyed it. Ever since, I have been contemplating designing and selling a product on Ebay. In this regard I wanted to see if you had any reference for prototyping companies(and possibly manufacturing). I basically need to prototype and check who in China can manufacture these for me. Please let me know if you have contacts. ...
On Jul 21, 2015, at 7:58 AM, John Spiers wrote:

Thanks for your note.  You must know I think eBay is a terrible place to start a business, but to answer your question, first, are you going to come up with your own design?

Prototyping is a step in a process leading to the creation of customers.  The prototypers will want to know upon what foundation are they building?  Who is your market?   Can you name buyers who said your design is a good idea and does not exist otherwise?  If not, you are unlikely to find any first rate prototyper (who will be come a first rate supplier) without you coming up with the cost of prototyping.  And since you have no market, the cost will assume a one-time event, very expensive.

To answer more directly, I have no resources on the product you contemplate, so I would be starting where you are, and find the best producer in the world. Anyone less than the best will take time and money only to get no where. (What makes you think it would be China? Less than 3% of what we buy in USA comes from China.)  (As an aside, the better the supplier is, the less likely you will find them on alibaba.) 
Entrepreneurs do not take risks.  Prototyping, without customer feedback to warrant the step, is too risky.  Prototyping with less than the best supplier is too risky.  Selling on ebay costs too much (ROI) to ever employ that channel.

Go instead where 94% of the customers buy, get customer demand first, and bring your project to the best suppliers.   That is the path to a viable company.

Let me know what you decide to do...

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


Anonymous said...

John I am not the one who sent you that message but I couldn´t notice this statement in this post:

"(As an aside, the better the supplier is, the less likely you will find them on alibaba.) "

Why wouldn´t they be on alibaba? I mean is another place to contact them, the only thing to worry is to filter potential scammers. Besides that, what harm can be to a business to promote itself on Alibaba?


John Wiley Spiers said...

Well, first, the best customers in the world expect you to be working with the best suppliers. The best suppliers are rathe busy, and are not out cruising skid row, in essence being on alibaba, looking for work. They have more business than they can stand. Next, in order to with the best, you'll need to name names. demonstrate that your potential is with the best customers in the world. Do you really want to share that info with wannabees and scammers?

Alibaba is a fire hose of waste water when you want a clean sip of fresh water. I cannot imagine any legit biz listing on alibaba. On the other hand it is a great place to check and see if someone you contemplate doing business with is listed there, at which point you could cut off all contact.