Tuesday, January 10, 2017

Dangers of Import - Retail

The problem here is two-part, one is import/retailing, and the other is not competing on design:

At the small business level, we enter the market at the place of the void, products are solutions to problems, and there are no solutions you cannot improve upon.

Your own designs are a solution to a problem not yet addressed, so you'll own that market. You never need compete on price.  Off the shelf is a solution already established, so you cannot own that market.  You are obliged to compete on price.

A retailer is better off to buy from importer who designs his own products.  As the designer, the importer has come up with new-market-tested items, still rare enough to make a retail store exciting, plus acceptable to USCustoms.

A retailer trying to gain savings by cutting out middleman causes losses...
Swope had another smaller shipment en route from Morocco and could see more difficulties ahead. Ornate wooden jewelry boxes with some Mother-of-Pearl inlay were part of the Moroccan shipment and Swope learned that Mother of Pearl qualified as a “wild product.” 
“One of the most unpleasant parts about this whole thing is that I felt like a criminal. I felt like I was in violation. I was just feeling awful,” he said. “They were holding all my merchandise and I couldn’t talk to them.”
Sorting through the mess was time consuming and Swope estimated it cost him more than $20,000. 
A common retail tactic is to "stack 'em high, watch 'em fly" ...  that is to buy a bulk order and use it as a loss leader...  that is great with a product off the shelf overseas where you can get bulk prices, and a known commodity, but exceptions prove the rule.  That works.  but not buying small quantities of known off the shelf, or buying any quantity of unknown off the shelf.

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