Small Business Optimism Huge With Trump

Actually, it matters nothing what happens on Wall Street or in Washington, it is always a great time to start a business when you have customers.  As I have blogged here countless times before, entrepreneurs take no risks, and mainly because we find our customers first.  To achieve customers first takes a process, which I each in my seminars.  But to the news:

“We haven’t seen numbers like this in a long time,” Juanita Duggan, president and chief executive of the NFIB, said in a statement. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy. Business owners are feeling better about taking risks and making investments.”

Feelings canot trump reality for very long, what is the basis for this optimism?

The share of business owners who say now is a good time to expand is three times the average of the current expansion, according to the NFIB’s data. More companies also said they plan to increase investment and keep hiring, which reflects optimism surrounding President-elect Donald Trump’s plans of spurring the economy through deregulation, tax reform and infrastructure spending.

OK... if The Donald does all of those things, and there is zero reason to think he will, that could be good.  Far more interesting is if he gets rid of the FED, and we finish off what is dying anyway, the ex-nihilo credit regime.  And that is the big source of optimism (note not mentioned in the article), the fact that the the dinosaur retailers created by the ex nihilo credit boom, concentrating the family life small businesses into one family's life, such as the Waltons.  Into that vacuum much demand and thus opportunity beckons.  That fact has nothing to do with who won the election, plus there is nothing any politician can do about the fact that economic regime is near dead.

So now the work for all businesses is to adjust to he new regime, and small business is always the small quick agile British Fleet against the Spanish Armada.  We win.

You just need to know how to approach this.  That is what I teach in my seminars, how o launch a small business international trade company.  The current rundown of courses available, both online and in-person, may be found here...  if you have any questions, you can email me from the link on that page.

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Where Brick and Mortar Pure Play Beats eCommerce

Now if you ever talk about any given business, even with audited statements, you really cannot tell very much.  And even if a single example is valid, then question the is, is it reliable?  Will it work for anyone else?

I've been in Paris the last couple of weeks, and was introduced to a brick and mortar retailer specializing in sporting goods.  The tactic is pure contra-eCommerce, something I have yet to see, a "brick and mortar pure play" to reverse the jargon of the 1990s.

The natives tell me this fellow spotted the flaw in the eCommerce conceit, and devised a way to best the internet.  But first, let's review.  There are two insurmountables in eCommerce -

1. It costs more to gain a customer marketing online than you can make off what you sell to that customer.  eCommerce is a money pit.

2. The "last mile" is the most expensive part of logistics.

And what is the big advantage of the internet?  If you know what you want, the best version at the best price, the internet is the place to go.  (Fantasy, of course, but that is the world we live in now.)  knowing reality, you may then proceed to make money.

Dealing with reality, this fellow has rented out many small storefronts in one section of Paris, called the Latin Quarter.  Take a look at their website (and scroll down to see a map for a visual of how many stores he has in this one area, and only this area.)  Twenty years so far and still ticking.

Each boutique is dedicated to one sport.  There is the sailing boutique.  The rock climbing boutique.  The whitewater kayaking boutique.  The skiing boutique.  The bicycling boutique.  In each the has the the best brands, the best models and sizes at persuasive prices.  In this way he kills the internet competition.   He has what you want, in your size, at the right price and you can have it right now (which means the last mile is handled by you taking it home.)

Not only has he conquered Paris for sporting goods, he has repeated this pattern in ten other French cities.

Yes, you can order online.  Sort of.  But pay by check is preferred, mail it in.  But over 800 euros, they want a bank transfer. Yes, you can pay by credit card or debit card, but they make that difficult, not easy.  In essence this is just the way you'd pay thirty years ago from a mail order catalog,

Indeed, their stores hand out free-of-charge a huge 500 page paper catalog, for today, as 30 years ago, you have to have a paper catalog for effective retail.  The internet is strictly self-service checkout.

It has a website, with all of the social media buttons, so it is not short of organic materials for being ranked high in search engine searches.  But guess what?  The number one retailer of sporting goods in Paris shows up not until page three on a google search for "Paris sporing goods."  But then, who cares about what a google search gets you?

Another sporting goods store, REI, has proven to be internet-competition-proof as well.   In this instance the store is a co-op, that is it is owned by its customers, so it is not another example as a test of the hypothesis.

How did he figure this out?  First of course, ignore the hype, deal with reality. Was a Starbucks on every corner an inspiration?  Who knows?  But as the dinosaur retailers die, and a small business renaissance fills in the vacuum, examples of how to do it right will be valuable.  If this example is valid, now it needs to be tested for reliability.

The title of this post is disingenuous.  eCommerce is a non-starter, so brick-and-mortar is already the winner.  The internet is about self-service check-out.

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Whole Foods Hot Water Bodega Sammich

Does Whole Foods charge too much, or do its customers pay too much?

The pricey food-store chain rolled out a chopped cheese sandwich for $8 — but savvy shoppers know you can find the same product in most bodegas for just half the price.

Then you need to go to a bodega and get it for half the price.  Why did you walk into a grocery store in high-rent Columbus Circle without understanding people need ot cover costs and want to make a profit?

Pre-packaged items were accused of being severely overpriced. It was also reported at the time that the city’s Whole Foods stores had received more than 800 violations during 107 separate inspections since 2010, totaling more than $58,000 in fines.

Yes.  I buy Cafe du Monde coffee, which I see is usually well over $12 a can at Whole Paycheck, and never over $6 a can at the Chinese grocery where I get my fresh fish.  I buy my coffee where it is convenient/best price, from the Chinese grocer.  New Yorkers need the Hegemon to check on prices, and tell them Whole Foods is profitable.

The solution to high prices is high prices.  The Chinese grocer is making full mark on the coffee.  As long as people are paying over double at Whole Foods, even with the alternative, then Whole Foods will continue to stock it.  Much to the delight of Cafe du Monde, who likes having Whole Foods and the Chinese grocer as customers

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Export Food - Repping Supplier Approach - LCL MOQ FOB Part 1

Here is the continuing of the colloquy started last week.  The names & location & product & urls are changed to protect the innocent... it’s the tools, tactic and attitude that matters...

On Nov 19, 2016, at 2:28 PM, J L wrote:

Hi John,

Thanks for sending over all the info for week1. Very insightful!.

So the product I have in mind is Specialty Snack Chips. You can read all about them here https://specialty*chips.com/ but in brief these are Gluten free, Non GMO chips containing only limited ingredients. I have tried them out and they are good. But I guess that does not matter :). This idea came from a restaurant owner in city state and he currently sells it to speciality shops in the area and through his website. I am originally from Ghana and have never heard of or had Specialty Snack (South Ghanian cuisine) chips before. 

I went through the steps outlined by you to find the HTS number but I don't think I have one for something like this. This is what I got 

• HTS 2005.20.0020  ( These are Potato Chips ) and the data came up with nothing which is very odd. Either I'm doing something wrong or data is incorrect

• HTS 2005.90.0000  ( These are Chips made from other vegetables) and the data came up with nothing

• HTS 2005.99.6550  ( These are Other Vegi Preparations ). I do get data for this which I have attached but don't think I have the correct 10 digit HTS number for this product. Any suggestions on how I should go about finding the correct HTS?   

Regarding the above product, I guess here are my questions

• I guess after the data has been analyzed and once confirmed that there is an opportunity, the next step will be contacting the supplier just like in your sample letter. I don't have a registered company. Does that matter?

• Now I'm assuming the production capacity will be on the lower side for these chips. From an agent perspective and with the process outlined by you, is our supplier generally this small?

• Please let me know your thoughts on this idea

For me I love the breads (Dave's and Eureka) and chips that are produced in USA. I haven't travelled the world that much but love these products and think there is scope. I'll probably do some analysis on Eureka bread too after this :) but they are pretty big and I suspect might not need someone like me to export. What do you think?

And finally thanks for the blog today morning. Very timely. I'm a (job & location) and have a bunch of friends proposing a startup and leaving our jobs to concentrate on it after we get funding :)    

Thanks,

J

On Nov 19, 2016, at 10:07 PM, John Spiers wrote:

Of course you don’t need funding, you need customers.  Until you find customers, you cannot know what funding, if any, you need.  It is rare for a start-up to require any more funding than what is lying around.

On Nov 19, 2016, at 2:28 PM, J L wrote:

Hi John,

Thanks for sending over all the info for week1. Very insightful!.

"Specialty Snack is a kind of pancake made from a fermented batter. Its main ingredients are (ingredients)." well, then they are a rice product, not potato.... nor veggie...

from http://rulings.cbp.gov/index.asp?sjeudjksed=Specialty Snack&vw=detail

"

The applicable subheading for this Specialty Snack will be 1905.90.9090, HTSUS, which provides for bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa…other…other…other. The duty rate will be 4.5 percent ad valorem.

"

In export, the Sch B number seems to be....

1905.90.9090

But when I go to the report, it said "communion wafers...."

so I dropped back to 1905.90.9030  "..savory chips..."

and here is what I found...

John

On Nov 20, 2016, at 10:18 AM, J L wrote:

Thank you!. I started all wrong by doing a search for chips.

J

On Nov 20, 2016, at 10:29 AM, John Spiers wrote:

I searched Specialty Snack and was surprised there was actually that customs letter on the item...

So now try to do the USITC Trade Data analysis...

John

On Nov 22, 2016, at 1:03 AM, J L wrote:

• So the exports to Canada far exceed any other country, though the amount exported has been decreasing gradually since 2012. Also the Average selling price is less than the world average selling price

• Exports to Australia and Mexico have been increasing since 2012, with the Average selling price is higher in Mexico.

• Philippines exports have somewhat remained constant but have the highest selling price among the top 6

• Exports to Japan and Korea have gone down and they also  have selling price cheaper than world average selling price.

Based on the above analysis, the best target country appear to be Mexico

.[ Analysis attached ]

Thanks,

J

On Nov 22, 2016, at 1:18 AM, John Spiers wrote:

On Nov 22, 2016, at 1:03 AM, J L wrote:

• So the exports to Canada far exceed any other country, though the amount exported has been decreasing gradually since 2012. Also the Average selling price is less than the world average selling price

**Cheap mass production chips, but that means here is market for high end too...***

• Exports to Australia and Mexico have been increasing since 2012, with the Average selling price is higher in Mexico.

• Philippines exports have somewhat remained constant but have the highest selling price among the top 6

• Exports to Japan and Korea have gone down and they also  have selling price cheaper than world average selling price.

Based on the above analysis, the best target country appear to be Mexico.[ Analysis attached ]

*** Very good...  now to create the offer, the LCL MOQ FOB...  you'll need to approach the supplier for  that, let's discuss that...

John

On Nov 25, 2016, at 11:14 PM, J L wrote:

Hi John,

So the owner has closed down his restaurant until further notice but his voicemail says that he still does Specialty Snack chips and points to his website which only has an email address. I guess I’m left with only 2 options now, go meet him personally or email ( which I know you strongly recommend not doing ). Would it not be worth trying to email hom with the details and then calling in a few days?. What do you suggest? 

Thanks,

J

On Nov 26, 2016, at 1:10 AM, John Spiers wrote:

Find a mailing address for him...  google, google...  real estate agent for location would know... 

The second you say “call me” you give u conrrol of the process.  Syat in charge of this business deal.

Find the mailing address and a phone number and then when you've drafted the letter, let me look at it...

JOhn

On Nov 26, 2016, at 6:46 PM, J L wrote:

Hi John,

Appreciate all the advise and help you're offering!. Done. I googled his home mailing address and have attached the initial draft of the letter. For the Company name, I have also included my brothers name as I'd like him to join me if/when this turns into something. I concluded the letter with the alternative of he contacting me as I do not have his direct phone contact.  Please review and let me know.

Thanks,

J

On Nov 26, 2016, at 6:50 PM, John Spiers wrote:

the letter comes thru garbled on a mac...

Why not just call the company L ?

(What's it mean?)

John

On Nov 26, 2016, at 7:02 PM, John Spiers wrote:

On Nov 26, 2016, at 6:46 PM, J L wrote:

 initial draft of the letter.

If you can send it as a .pdf, great...

On Nov 26, 2016, at 7:39 PM, J L wrote:

Attached is the pdf format.  

The name L does keeps it short. So just L?. No Company or Corp or Inc after it? or maybe the old fashioned way L & Sons. 

Are you asking what does L mean ?? ?    I actually don't know. I'll have to ask my parents

On Nov 26, 2016, at 7:56 PM, John Spiers wrote:

Here are some notes...  do you have your name spelling in (ancient script)?  And the suppliers usually has a capital D.

Problems in the letter:

do we know "savory"?

I think price per kilo, but includes plain old potato chips...

Initially we'll discover what market there is in Mexico, and then whether we can work together building this new market,and after that...

 best to find his phone number,. what was the phone number of the restaurant?  do cached webpages say?  Even if dead, name a phone number...

John

On Nov 26, 2016, at 9:56 PM, J L wrote:

Thanks John. I've updated the draft with your recommendations.

• "Do we know savory?". The chip is not sweet and is crunchy with little salt added. The HTS number 1905.90.9030 is for "Corn chips and similar crisp savory snack foods". I'd say these are similar to corn chips 

• I found suppiers landline number and have listed both landline / restaurant numbers in the letter. John, I'm hoping he won't mind me contacting him at Home address & number. On specialty*chips.com, he's clearly mentioned the email address as contact info and that's the reason I'm being a little skeptical.

• You're right. I checked the HTS for units and it is Kg. So then is the analysis correct?. The Specialty Snack chips, 1 packet is 5 OZ and cost ~ $5 (retail). For Mexico the average price is $4.55 per Kg!

• So my first name means "whatever" :) and here's the first and last name in Anciet Script.

On Nov 27, 2016, at 3:50 AM, John Spiers wrote:

On Nov 26, 2016, at 9:56 PM, J L wrote:

Thanks John. I've updated the draft with your recommendations.

• "Do we know savory?". The chip is not sweet and is crunchy with little salt added. The HTS number 1905.90.9030 is for "Corn chips and similar crisp savory snack foods". I'd say these are similar to corn chips 

***Good...  gotta be careful when using words and representing data, you have...***

• I found his landline number and have listed both landline / restaurant numbers in the letter. John, I'm hoping he won't mind me contacting his at Home address & number. On specilty*chips.com, he's clearly mentioned the email address as contact info and that's the reason I'm being a little skeptical.

*** He very well may freak out, but I doubt it. He already put himself waaaay out there opening a retail biz...  as to the phone number,  it's tactical...

1. He pre-empts you, calls you with a 

a,.  I'm interested

b. get lost...

With a, you proceed, humbly, with him in charge...  with b, you find a new source for Specialty Snack chips...

2. The phone number is dead, THEN you email saying, "I wrote, I called, and now I email....

You are driving at a contact, and rather obliging him to answer yes/no...***

***

• You're right. I checked the HTS for units and it is Kg. So then is the analysis correct?. The Specialty Snack chips, 1 packet is 5 OZ and cost ~ $5 (retail). For Mexico the average price is $4.55 per Kg!

***Right, mostly chips...  at costco chips are about that...  he might say, that's too cheap, you reply..

a. that includes the cheapest mass produced chips too, it's the average, so skews very low give the mass amount of bad chips going in...  

b.  the bigger the mass market, the bigger the specialty market too...  

It's the trends that tell... ***

• So my first name means "whatever" :) and here's the first and last name in ancient text.

*** Maybe your parents will answer first, but let's see what my sources say...

There are brand names like Ernest and Julio Gallo, and of course just a last name, Nordstrom.  People read it first, then sound it out, and then maybe wonder what it means...   You can always change it, maybe ask a dozen random people at a starbucks...  I am starting a food biz selling Specialty Snack chips, what do you think of these two names (L and then brothers L and J & ?  L...    Indeed Brothers L J might be interesting...

*** As to the letter, make it Dear Mr. d’Daddy  be formal...

clean this up...

 what market there is in Mexico and then whether we can work together building this new market and after that can negotiate if we are the team to represent you. 

maybe : what market there is in Mexico and then discuss (negotiate is too hard) if we are the team to help build market for Specialty Snack chips in Mexico.  

I see now the two phone numbers,  do just the restaurant one, avoid the home one if possible...  

So now it is attitude - he'll want to know about you...

Answer matrix:

I am nobody, (Fedex driver?) hate it and love your chips... (what's your "conversion story"? keep this real short...)

I am Ghanian, but did not know about Specialty Snack of Specialty Snack chips...  (south v north) it's Ghanian, clearly, but new to me...

"I'm hungry for change, you might be hungry for more customers, let's find people hungry for your chips, and then see if there is work for me too..."

Took some training on how to break into new markets, but no accomplishments yet, so no demands on my part: if I find customers, please sell to them, but if you don't want to work with me, OK, I'll find another product I love....  it really is not hard to find out if the customers are there...

(Also, who knows, "you may want to take mexico, and let me have France...  way too early to decide anything because we know nothing...")

So once this letter goes out, you shift to attitude with the supplier...  "you get free market info, I get a chance to maybe start my export food biz with you...***

Indeed, to use his very nice website to add the lcl moq fob would be ideal...

anyway, good to see this proceeding...  your views?

JOhn

(Part Two Tomorrow)

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Chinese Banks Prepare For the Scheduled World Economic Crash

China-haters salivate at the prospect of The Chinese Communist Party coming apart when the banking system, modeled on the USA system, fails.  Never mind the obvious implication; if the Chinese banking system modeled on the USA fails, well, then...

It ain't gonna fail.  The Chinese want to replace the USA, become #1, exactly the same way USA became #1.  And what I love about Marxists is they get their facts straight and proceed in a straightforward manner.  No hype, no halo on exploitation, no "it's for the children" cant, just "get 'er done."

This reporter hilariously wonders if the efforts of the five Chinese state-owned banks is coordinated: all five have proposed subsidiaries to offload bad debt and funded with ten billion yuan-

ABC Asset will specialize in the debt-to-equity swap business, including acquisition of debt assets, converting debt into equity, holding, managing and disposing of equity in debt-to-equity swap enterprises and other financial business, according to the announcement.

The investment, which will be funded by ABC's own capital, "meets the bank's needs to adapt to changes in the internal and external economic and financial environment".

"It will enable the bank to enhance its competitiveness and gradually transform its business model from over-reliance on the deposit and loan business and to carry out integrated operations," the bank said.

...

"We commercial banks regard this as an opportunity to transform our business," he added.

After the subsidiaries are established, they will raise funds for debt-to-equity swaps from qualified institutional and individual investors.

The sources of money will include insurance funds, pension funds and industrial investment funds that can make long-term investments.

"By setting up a subsidiary, we'll have a professional team specializing in debt-to-equity swaps. Moreover, it will be easier for the subsidiary, as a legal entity, to isolate risks from the bank," Zhang said.

Just like GoldmanSachs and Lehman Bros did (does?) secretly, China will be forthright about it.  The ten billion yuan is a ludicrous amount to deal with China's credit problem, it is probably just the start-up costs of the office building necessary to conduct the wealth transfers.

So there it is.  The crash is coming, the Chinese will simply raid "insurance funds, pension funds and industrial investment funds" and oblige them to "make long-term investments."

That is exactly what the USofA plans, it is called "opt-in" where they seize your "assets" (ex nihilo credit is nothing but tally of nothing) and turn it into a long term investment, "for the children."

Now you know.  Forget about guns and ammo, stocked prepper foods, and gold coins.  Start an authentic business, that does not require ex nihilo credit.

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Is Internet Sales Just Mail Order Self-Service?

For all his precoccious perspicacity, Mish can make seom glaring errors.  Maybe it is just his age and wasn't there.

Retailer inventory-to-sales is a reflection on a huge move towards online shopping and a massive buildup of new retail stores despite the clear shift towards online shopping.

Whoa, Mish... what huge move to online shopping?  Still no more than roughly 6% of retail sales, what is massive about that?  94% is brick and mortar, and even Amazon is opening brick and mortar stores.   And maybe ex nihilo credit dinosaurs are not opening new, but specialty sure are.

And did the internet really take sales from brick and mortar?  I don't think so.  To what degree did online sales cannibalize its market share from mail order catalogs?  

And even the mail order catalogs are still working, in both senses, operating and profitable.

Victoria Secret as $4.5 billion in "online sales" and 450 million catalogs.  Do you know what it cost to open enveopes and prcisses cheacks and credit cards back in the 80's and 90's?  I don't know, but VS remembers.  I was probably in the hundreds of millions at least.  With the internet VS pushed all that order processing back onto their customers, getting that work done free, money not spent that went straight to the bottom line.  Alaska Airlines saves a lot of money now that I book my flights, not resevation clerks. Ka-ching!

Or did they save money?  The easier online shopping gets, the more returns there are.  All these "sales figures" don't take into account returns.  I never see that mentioned.

I was speaking with an international banker once asking if deflation was a problem.  He waived the question off and said "Everybody is lying.   that is the huge problem. We cannot make a loan decision because we cannot trust the information."  Well, with ex nihilo credit, nothing matters, so why not lie?  About such things as sales figures.

People try to copy people losing money on the internet, like Jeff Bezos and Bill Gate. Learn from the people making money, like Les Wexner and Steve Jobs.  It is unlikely the Hegemon will find you like he did the money-losers, but the Hegemon won't get in the way of you making money like Wexner and Jobs.

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Start-up Requires No Funding

Funding a start-up is risky, and as Drucker noted, entrepreneurs never take risks.

The risky part is not for those who assign a bit of ex nihilo credit tally to a given start-up, but to those who sign the slave papers in return for the granting of ex nihilo credit.  Now that is risky. You might end up like a college graduate today, huge debt and unemployed. No need to do that when starting up, for a proper start-up takes no money or credit to speak of.

The banks promote the idea of "risk taking" by entrepreneurs as a means to unload the unlimited ex nihilo credit, the granting of which is no risk to them.

We have at least one generation that has been trained to lose:

get enough funding to live off of for a year or two, and blow through it... who cares if anything succeeds, cuz you get to play "business" for a year or two...  and who knows, great resumes have serial start-up experience.  Those days are over, but the idea is embedded in a generation core curriculum at the universities.  (And as Drucker said you can tell when information is obsolete, the universities make it core curriculum.)

If you are serious about start-up, you must have a business plan that moves forward without funding.  If you are saying "I just need funding" then you are deluding yourself.  If you are saying "I just need customers" you are at least assessing the problem correctly.

Start-up is about creating customers and innovating in the redeployment of excess capacity (or lessor demand capacity) to the end of solutions to problems. (And as Drucker says, there is no solution that cannot be imporoved upon.)

It takes no money to conceive of the solution.

You must speak to the customer at some point, why not first?  It takes no money to do so.  And you walk away from this phase with ideas and contacts, with which you begin to fill your rolodex and files.  And this is critical, to begin to build your "world trade organization" that is the people you've met, with whom your synergies will produce more than otherwise possible.

It takes no money to talk to your customers.

You have no credibility as a start up, so you borrow authority from target customers... talk to them first...  do they say yours is a good idea and does not otherwise exist?

Then you begin to work on the design, which the best is on a royalty basis. Again, done right, no money up front. And as to design, you work only to achieve "enough design" to generate enough orders to cover the suppliers minimum order requirement. Repeat this mantra: customer is the most important thing in business, getting the design right is the hardest.  But even with this in mind, people fail by working way too hard on the design.  Learn from Steve Jobs.

https://en.wikipedia.org/wiki/Apple_I

You learn quickly that in the real world "intellectual property rights" thinking is counterproductive.  Forget about patents, copyrights, trade marks, you get nothing you can use for your time and money. You leave all that behind. With necessary and sufficient product design you expand your world trade association. You begin to discover those whose expertise is in your area, and gather their advice: freight forwarders, customshouse brokers, 3PL, and with it the realities of logistics and costs of your product.  You do not waste time and money becoming expert in international trade, you become expert merely in the international trade of only your items.

It takes no money to gather to get this far.

Please note what "snowballs" here is your solution with customer feedback packed around it. It is what is rolling and why all the other people you contact stick to it getting bigger and ever more momentum (and value).  Each door is opened because of the work getting the previous door opened.  You have not made any money yet, but you haven't spent any either.

Now, you propose importing or exporting (or both?)  Neither importing nor exporting is a business. They are steps in business.   In essence, authentic international trade is simply accessing optimal excess production capacity to the end of production.  Business is buying and selling, not making.  The world is full of production that created no demand.  We do not want to join the 80% of start-ups that fail.

Customers (there is that word again) call forth the product.  We are the impresarios who gather the players necessary to respond to that call.  Yes, we suggested the solution, but the customers power the rationale for all the players you collect to act.  (And I might add, dealing with very talented people each in his own narrow field is a privilege and often breathtaking.  It is also tempering, you just know not to waste these peoples time, you know you must do your best work. Re: best work, see below.)

With importing, you are moving from general (the domestic market) to specific, the best supplier in the world.  In exporting, you are moving from specific to general, the best supplier in the world, to any buyer worldwide. With either, you are discovering markets no one else considered, directions informed with data no one else has created and studied.

This costs you nothing, and you cannot buy it anywhere, it is not for sale.  It is free.

For specialty, the best source is rarely, if ever, the cheapest.  Usually it is more expensive.  We are not achieving perfection in initial product design, any more than Apple's first product was perfect.  We are achieving milestone #3, enough orders to cover the supplier's minimum order requirement, in a workable amount of time, profitably.  Again, learn from Steve Jobs.

https://en.wikipedia.org/wiki/Apple_I

Then you find the best sources for production, and discuss what you've done so far. And now this is where you do your best work, as paranthesied above: you promise nothing except to test this very well informed (by now) idea, by presenting the sample of what you created in the form of products, agricultural items, services, you name it, back to the customers you first encountered in your start-up.

What you are offering is new market study at no cost to the supplier.  Your compensation comes only from customers you create.  Everyone involved gets something for nothing, and you get paid by customers (your markup on all the discovered costs) if you get the design right.  Never promise anything more than to report back on a test.  No one needs anything more, expects anything more, nor would believe you if you promised anything more.

You form a hypothesis and shift from passion/joy to science. You seek out valid and reliable information about the market, you search and learn the contours of a market no one else yet sees.

You may of may not pay for samples, but otherwise it does not cost you money to pay your dues. The less money you spend and the more time you research, the better off your start up. As the carpenters say, measure twice cut once.

Now, here is where people those with funding fail:  since they did not start with the customer, they promise the supplier much in the way of flash and imagery but no customers (or worse, assumed customers).  The wrong suppliers respond to that (or just plain scammers.)  Just as these people begin "selling", things go bad fast.  (Alibaba is the world center for failure match-up.  Amazon and eBay is the medium upon which failure occurs.)

What we promise all of our associates is not a single order.  What we promise is to test against samples the most informed hypothesis of whether there is enough customers collectively to cover the supplier's minimum production run in a workable amount of time, profitably.

Sound complicated?  No, it is quite simple, and may take some unlearning to "get it." It is what the best suppliers expect.  And so far it costs nothing to speak of.

That minimum production run requirement is specifically the LCL MOQ FOB:  Less than container load, minimum order quantity, priced free on board country of origin port of lading.  That is often merely a pallet load.

 In importing we are the ones buying the lcl moq fob, in exporting, we are the ones selling the lcl moq fob.

And if we do achieve the initial goal of enough orders to cover the suppliers minimum in a workable amount of time, profitably, then we execute.  And we are talking a min order qty of one maybe one pallet, no more than say $5000 worth.  Do you really need a venture capitalist for this?  Or a banker? Or even a rich uncle?

And if we do not achieve it, then what we have in hand is market feedback, what is wrong (shape, weight, color, size, package, material, speed, flavor?) with our product.  Aren't you glad you only have samples, not a garage full?  You can go back to your world trade association you built and fix the problem.  And then go at the market again.  These is no excuse for failure, or especially burn out.

You may fantasize some business in which you are paragraphed in the Wall Street Journal.  Sure, if you want, but both Apple and Vandor started the same way.  Vandor never got above $3 million in sales (at least when I was managing it) and you've never heard of it.  The first company I was working for was at that time the same size as NIKE, tiny.  Phil Knight knew no bounds. But the owners of all had all of their material wants met by the business.  Business is about lifestyle, not accumulation, another conept the last two generations need to learn.

And start-up is not about funding. Anyone investing more than $900 or ninety hours before discovering whether they have enough orders from customers to cover the suppliers minimum order requirement in a workable amount of time, profitably is wasting time and money.  I am often pointing out where people are wasting either in their pursuits.

Now as simple as this is, there is many a slip twixt the cup and the lip.  I came of age when it was no problem to walk down a street and see a "help wanted" sign in the window of an import-export company and after two years of learning every part of the business, be travelling the world as a buyer.  Ex nihilo cedit ended all that for now, but the ex nihilo credit regime is over.  Thirty years ago I could see this de facto apprenticeship program ending, so I began to lecture at colleges and wrote a book to fill-in the gap formed when getting a job and working your way up ended.

Those were boom years, and the damage is done during the boom years.  Now it is the bust, where the losses are laid on the living (the rich take the profits, the poor take the losses) and the work of rebuilding a natural, authentic economy is at hand.

Pro sports bore me.  I spend the time most people devote to pro sports teaching, writing and lecturing.  I find it fun and fascinating.  And writing is how I get paid for time spent thinking. The rest of the time I spend working on my own business.  Lifestyle, not accumulation.

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A Tool For Seeing Clear

You need an analogy upon which you can compare and contrast your own situation, to derive some sense of it.  For me it has been the music business.  So many parts of it are absurd, and other parts stone cold truth, that it is probably the best analogy, as far as I am concerned.

On one hand, music has a total of four notes.  That is it.  From those four notes, all music proceeds.  Just as the entire computer industry is based on silica (Silicon valley), that is the kind of sand necessary for computers to exist, and probably the most common element in the universe (or is it carbon?), so what you do with sand or notes upon all depends.  In other words, design is everything.

As to compare and contrast, on one hand we have the utterly delusional, insane, evil regime of intellectual property rights, in music of all things!  How did food and clothing escape IPR but not music?  (Yes, 97% of USA corn is GMO, and under patent, but it is not food, it is poison as far as I can tell, and anyone who eats it is taken out of the gene pool early anyway as suppressed science suggests, so never mind that.)

At the same time, with those mere four notes in music, with time and melody, all music proceeds.  Everything else, which notes, harmony, timbre, key, chords, arrangement and dynamics, is all up to design.  Like computers, in music design is everything.  It can yield the best song extant ever composed, Greensleeves, or its nadir (Gud hjålp oss) Torn Between Two Lovers.

And Wynton Marsalis notes all songs are about God or love.  Such much for themes. (If not, the are novelty songs, empty.)

So with the music business is at once utterly basic and utterly nonsensical.  That can help when wondering how to handle a product that has become a fad.

I found this article full of points that cross all boundaries:

Most people start out in this game looking for that “thing,” whether it be a special insight, indicator or strategy, that will show them how to win. They think if they can just find the secrets to what make the greats great, then they will be set. But in reality, if there is any secret at all, it is that there is no secret.

Yes!  So many people look for the angle in international trade, when there is none. It is the same in any busininess, find a need and fill it.  Yet everyone else teaches "find a met need and study it" ... good luck with that. People feeling smart try to take that a step further, and try to find some names in trade data in hopes of interposing their offer.  Good luck.  And then

Mark Spitznagel wrote in "The Dao of Capital" that the most valuable lesson he learned from his Chicago trading pit mentor, Everett Klipp, was that “you’ve got to love to lose money.” If you love to take small losses then you will never take a large one. That is important because it is the large ones that will kill you.

Yes, lcl moq fob.  Entrepreneurs never take risks.  We have orders for what we buy, and we study the feedback on what we sell.  And then step forward based on science.  Countless tiny errors are data points supporting ever more better iterations of the product mix.  And then

Livermore’s occasional failure to follow this rule is what led to the multiple blowups he experienced throughout his career. He lost when he failed to follow his advice that it is “foolhardy to make a second trade, if your first trade shows you a loss. Never average losses. Let this thought be written indelibly upon your mind.”

Yes, indeed, even the teachers fail to follow their own advice, and end up obliged to cut a deal with BigLots! to get rid of a big lot of mistake.  The analogy here is change if you take a loss, and entrepreneurs take a profit on every deal, especially their very first.    Anyone who plans to take a loss "to get a foot in the door" or whatever rationale, should stop and reconsider another field.  The point is lifestyle, but losing money is not a viable lifestyle.

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How To Build Export Sales In Four Steps

Redo your spreadsheets, look for differences.   Here comes the announcement at USITC.gov:

 Aug, 2016 trade data are now posted. Our practice is to update Dataweb as soon as possible after the Census Bureau releases monthly trade data, generally within three business days.Notice: The import and export data on Dataweb for 2010-2015 have been updated as of July 2, 2016 based on the latest official revisions from the Census Bureau (the first official revisions for 2016 data will not be available until June 2017). For the years prior to 2010, Dataweb will continue to show import and export data as originally issued by the Census Bureau with no revisions.

Yes, we begin with passion and joy, and then ground our strengths in what real world trade data (commodity, prices, target markets, trends) to form a scientific hypothesis to test.  Central to proceeding in int'l trade is the rock solid trade data.  Not the pointless junk you can buy at the 4 digit HTS level, but the most specific 10 digit level, which can only be had by gathering and analyzing it yourself, by hand. And in so doing, you have information no one else has.  Knowledge is power.  Five years is enough trend info, and then there is the practical problem wrong numbers stay wrong after five years.

And you must keep up on the trends.  So every year say around April, the full year data may be updated.  But when you find something that just looks dead wrong, like the price of caviar exported from USA (yes, we do...) then you must jump on it and get a review:

From: "M DDate: May 13, 2015 2:38:36 PM PDTTo: "johnspiers@b
Subject: Data Inquiry
Dear Mr. Spiers: This refers to your email concerning the unit price for exports of caviar (Schedule B number 1604.31.0000) to Japan during 2014. We have reviewed the data and have revised the reported statistics. Please make note of the following attachment and revisions to our published statistics. Thank you for your interest in the accuracy of our trade statistics. If you have further questions contact *****  The attached revisions are also available on our website at: www.census.gov/foreign-trade/statistics/corrections/index.html In June, our revised monthly data for the three prior years will be available through our on-line data product, USA Trade. For information on our current revision policy go to: www.census.gov/foreign-trade/guide/revisions.html

So here are the changes made after the challenge:

Corrections to Published Export Data

Month	Year	ACTION	Type	ERRATA	HS	Country	Qty1	Unit1	SWT	FAS Value
April	2014	READS:	Domestic	2016	1604.31.0000	Japan	1,312	KG	1,489	$19,368
		SHOULD READ	Domestic	2016	1604.31.0000	Japan	74	KG	1,489	$19,368
May	2014	READS:	Domestic	2015	1604.31.0000	Japan	15,045	KG	30,804	$222,097
		SHOULD READ	Domestic	2015	1604.31.0000	Japan	589	KG	30,804	$222,097
July	2014	READS:	Domestic	2015	1604.31.0000	Japan	7,986	KG	9,064	$117,896
		SHOULD READ	Domestic	2015	1604.31.0000	Japan	288	KG	9,064	$117,896
September	2014	READS:	Domestic	2015	1604.31.0000	Japan	40,429	KG	21,759	$1,097,248
		SHOULD READ	Domestic	2015	1604.31.0000	Japan	21,847	KG	21,759	$1,097,248
October	2014	READS:	Domestic	2015	1604.31.0000	Japan	24,515	KG	13,517	$970,738
		SHOULD READ	Domestic	2015	1604.31.0000	Japan	12,953	KG	13,517	$970,738
November	2014	READS:	Domestic	2015	1604.31.0000	Japan	19,145	KG	21,729	$282,607
		SHOULD READ	Domestic	2015	1604.31.0000	Japan	637	KG	21,729	$282,607

Source: U.S. Census Bureau, International Trade Management Division, Washington, D.C., 20233

The analysis on the original trade data looked ridiculous.  The client whose first foray into trade data analysis, in this case the trade data on caviar,  rejected it as impossible, evidence of criminal activity, anything except reality.  I advised him to challenge USCensus on the underlying data, and indeed they found it wrong (unlikely a Census problem, most likely a source problem corrupted data at the collection point, etc.)

Now, since we work at the ten digit level in data analysis, the new caviar trader introduces himself with information, at that point only someone in USCensus and he could have, could possibly have (OK< also me, but I am not in caviar), for a month or so.   The trader with this may make news, enhance his image and grow his business, as Ogilvy demands.

Yesterday I received this, in part of an email, from another student...

...the VP of sales I spoke with today told me "obviously you (meaning me) have been exporting for years"!  I explain my plan just as you outlined in your class (did not tell me I just completed my second class with you on Tuesday).
I followed up as you stated and found out the person I tried to contact is no longer with the company so I sent the same information update with the new VP sales contact information and we setup a call to review the opportunity to be a selling agent with them.  Finally schedule this morning.
My first question was are you currently exporting, she said no but do have sells in *****.  I told her from my data ***** and ******* are markets I would not presue because they are NOT growth markets and the price per kilo in on the decline.I explain my test market 1 size fits all (preselected pallet of product) with the MOQ FOB LCL and creating a website for serious buyers only.I told her it will be the same as a domestic order.  Her major question was who pays for all the export fees etc...I told her the buyer who imports that is their responsible.

Just so...  what I present in my classes is what I learned on the job the first decade I worked for others.  I've been self-employed since then.  I teach on the side, and as such have gathered the meta-study data that shows what I teach is also how it is done.  It is no secret, but I am the only one teaching it.  For reasons I can only imagine, no one else teaches what is effective.

The work is also crucial to economic recovery, as in YOUR economic recovery, so I am running another special session of my online seminar:

Fall Special Session  2016 

11/15- 12/6/2016   Four Sessions

Section One ~ 6 PM to 7 PM Pacific Time

(This would be 7 PM to 8 PM Mountain, 8 PM to 9 PM Central, 9 PM to 10 PM Eastern)

The tactics taught here relating to food can be used for any product, but the specificity fits with the brevity.  Here is more info on the course, and you may enroll here.... (scroll down to the bottom of the page and use the form at the bottom of the page for this special session.

eMail me if you have any questions. (Ask John in upper right)

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