Saturday, December 31, 2016

Start At The Top

In my book I address the specialized work in international trade of acting as an agent, giving the example of a friend who put together a deal between a Mexican manufacturer of a specialized device and a Japanese hospital group.  I point out this is in essence semi-retired work for people who have established themselves in business and are trusted by all the players to put the deal together.

Regardless of role in international trade, there are two things that are fundamental: relationships and taking no risk.  Since here is no recourse in international trade if and when things go wrong, everyone relies on the other party to do the right thing when things go wrong.  Insurance might help, but the bottom line is relationship.

The "taking no risk" is not a matter of somehow pawning risk off on a third party, it is a matter of pay as you go and at no step would failure be catastrophic.  For the semi-retired player, he knows what he is doing and manages the risk with experience and wisdom.

Long before there was ever an internet, there were trade leads and trade lead brokers.  They were to be ignored then as now, for they are people with no product talking to people with no customers. The best customers and suppliers with whom the start-up needs to work cannot be found there.  Alibaba is the most successful and worst. My analogy is Alibaba is a firehouse of waste water when you just need a sip of clean water. Great place to waste time and lose money.

To my regret, in my book I mention a clever tactic one of these semi-retired experts employed, and that is occasionally looking at old trade leads, and I explain why this was clever (although in the context, it should be clear it is inadvisable.)  Lord help me, occasionally someone will seize on that secondary tactic in an unlikely scenario and bet their life on it.

It is occurring to me way back then and to this day, those who want to work the "trade-lead" fantasy essentially want to start at the top.  You know, find a lead, a supplier, bring the two together, $100,000 deal, letter of credit to eliminate risk, make $5000 commission, next... sounds great but it cannot happen, will not happen in the real world.  It's all fantasy.  You know, someone has a great script, you get it in front of Spielberg, he contacts De Niro, they put a movie together, you make a $100,000 grand commission, you have passion for the deal, what could be more natural?  It ain't gonna happen.

(Some day I will catalog all the ways the delusion can go wrong.  Well, some week, since the problems are legion.)

Now as one of the participants this special session proceeds, I can see clearly the juxtaposition.  Continuing with the movie analogy, there are plenty of people today who contact Spielberg with a script, who then contacts De Niro, they put together a movie and the guy with script gets $100,000, etc.  That guy started at the bottom 30 years ago.  He was a messenger boy in a mailroom.  He worked his way up.  it wasn't the passion for the deal, the deal is easy, it was his passion for producing quality results within that medium, knowing everything there is to know.  All parties know and trust him.

Still with the analogy, what I teach in this export food class is how to start the only place you can start, in the mailroom as a messenger boy.  You take news you found and bring it to a seller, and then when you have permission you tell a buyer what the seller offers, again as a messenger boy.  The risk is mediated because the deal is so small, the lcl moq fob.  if the deal goes bad, expect both sides to expect you take the loss.  of course.  That is true no matter what.    But the deal is so small, and amelioration so easy, this risk is unlikely.  Frequency, not volume, is the way to growth and prosperity.

You flogging the lcl moq fob is to act as messenger boy between people who can trust you that much, to deliver a message.  if and when anyone cares about the message, then you can offer to help with the discussions, and given the likelihood more work is necessary than both parties can handle, you have created your own opportunity.  So all this work is search and learn, passing messages, finding the unseen opportunity that you create.  You grow from there.

I cannot teach anyone to be successful, or even what to trade.  i only teach people how it is done so they can save time and money getting to their own success. And how it is done is you start at the bottom and work your way up.  You cannot start at the top.  With what product is the one you love, you see how this product is a solution to that problem.

Spielbergs work is limited to pop culture and engllsh and disposable income.  With food it is non-discretionary budget, all languages and worldwide.  More opportunity there, but as always, demand is for quality content.  In food we call that specialty.

The process is easy, the customers are easy, getting the product right is the only hard part in this business.  That takes passion/joy.  Without it, your progress is unlikely.  And there is no way to start at the top.

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