Wenchuan EarthQuake in Sichuan China - What you can do to help.

As most are now aware, due to the intense worldwide media coverage, there was a massive earthquake in Wenchuan, which is in the middle of Sichuan Province in China. According to official reports, more than 12,000 people died, and there are many more injured or that have lost property. Even in Shenzhen, we are hearing reports of many families in their hometowns whose house has been damaged or destroyed and entire livelihoods have been lost.

The earthquake was a 7.9 on the Richter scale and tremors were felt across China.

The goal of this article is to give thanks to those who covered the earthquake quickly and efficiently within the blogging arena, as their help to get the word out was most helpful in getting donations to assist with the recovery, which is still ongoing.

It’s our pleasure to point our readers to CNReviews.com who put together a comprehensive list of over 24 ways to donate money to help the earthquake recovery effort.

If you haven’t yet contributed, and are financially able to, please don’t hesitate to help with whatever amount you can. For many of our readers, China may be a far off place, but most likely if you’re reading this site, you’re involved with China on some level. Your contribution is appreciated and needed.

Probably the most comprehensive coverage of the Wenchuan earthquake was by the Shanghaiist. It’s also interesting to read AllRoadsLeadToChina.com’s coverage as they have maps of fault lines in China as well as other unique information.

And last but not least, we found a website called ifgogo.com which contains a personal account of the Wenchuan earthquake unfolding with personal pictures and videos. Do note that some of the pictures may not be appropriate for all viewers, but they do begin to show the magnitude of the crisis.

Thank you for reading and sharing this information. Your help is truly appreciated by these organizations but mostly by those people who will never know your name but the universe does and one day the gift you gave will surely be a positive force in your life. May we pray that all those suffering in China are given expedited help and love.

May 15, 2008 | Filed Under Uncategorized | 5 Comments

Importing over the Internet? Challenges, Opportunities, and Hedging Your Bets!

Is it possible to source products from the Internet without ever stepping foot in China? The answer is yes! I am a proven example of this fact. It may surprise many, but there are reasons why sourcing remotely may be your best bet.

Navigating China and the language is as difficult and vast as the Great Wall. You will need a tour guide or a representative from the factory to take you around. I say tour guide because the factory rep will not take you to the other factories you need to visit (unless you bring a lot of RMB). If you do make the trek to China, you will need to use the Internet to at least make a list of good candidate factories. You can use an intermediary or trading company to locate these companies before your arrival as well.

There is without a doubt no substitute for being in China, do the face to face with the factory and get a good feeling for product quality. This face-to-face is my primary reason for visiting before buying. Shopping on the Internet can have its hazards. For more information on why an intermediary can also be useful, please read the SourceJuice article Beware the Middleman and Seek the Intermediary.

I have successfully sourced and imported, from start to finish, a wide array products with lucratively positive results. It is important to remember that with any business there will be bumps in the road; importing from China is no different. If you fail once, research and then try, try again. The statistics in United States are that out of 10 businesses, only a single one is destined to succeed. For this reason, I recommend importing multiple containers of different product at one time. This increases your likeliness for overall success (like diversifying your portfolio). Of course you’ll need to have the buyers set up!

If you import two containers, one may break even in cost and the other makes. If you had only imported one container and it was the break even one, you might stop importing all together, thinking that there is no profit potential. To maximize your chances for success, read Digging Deeper series for some solid information on extra costs to expect, based on my successes and failures.

Let’s look at some of the challenges that sourcing from the Internet has:

Time zone difference (12 hours or more depending on Daylight Savings in the US)
Zero responses to communications from most factories or trading companies
Outdated and unavailable product models on websites
Lack of product samples available
NO WEBSITES at all!
Poor photography of products
The items you are looking for are available, but their presence on the Internet has possibly not yet made a debut.

The list is endless…….

What can you do to help wade through the challenges?

Signup for the Pro version of Skype, get a long distance calling card and get familiar with dialing +86 phone numbers.
Befriend a Mandarin speaker in the US to use on phone calls. Use all the resources you have at your disposal.
Get an Intermediary or reputable trading company contact
Meet every international trading entrepreneur you can, as experience is the best teacher. Losing money on an import venture is the second best teacher.
Get in the local trading circles of small import shops (they are everywhere and you have absolutely no idea until you stumble upon them). In Atlanta there are shops importing granite, sanitary items, furniture, lighting, doors – come on…. EVERYTHING. Each of these shops usually has company names completely unrelated to their business. I spent a lot of time at these locations trying to bring their inventory back to the Internet, working partnerships, etc. Learning how someone else runs his or her business is essential for your success. The best teachers are the failures. I have seen more full warehouses with no customers/sales than you can even imagine. I have seen huge warehouses with no inventory system or uniform model number scheme.

Here is your short-list of small import shops in the Atlanta area:

Panda Kitchens and Bath: http://www.pandakitchen.com/ : Cabinetry

United Corp Intl: http://www.unitedcorpintl.com : Highend spa/steam rooms, Jacuzzi tubs, lavatories and bath cabinetry (Chinese modern pedestals and classic wood cabinetry)

Homeware Building Supplies: http://homewaresupplies.com/ : a little of everything – cabinetry, copper, glass and granite sink bowls, lighting, hardwood flooring, modern Chinese pedestal sinks.

Stone City, Inc : http://www.stonecityinc.com/ : cabinetry

Don’t get frustrated when talking to owners of above businesses – I am certain now that I am in China that their job is to discourage you from stealing their profits.
The best advice I can give is finding a good customs broker, they are worth their weight in gold. You do not know everything there is to know about logistics and customs regulations, but they do. In addition, they have lots of contacts with people importing a broad range of items – ask them to make some introductions. It gets no better than Encore Forwarding out of Jacksonville, FL. Even if you are not clearing goods at the Jacksonville port they have offices that work in concert on any port you need. Encore also works with a logistics company Triple Eagle for a turnkey import transportation and customs solution for your goods.

May 14, 2008 | Filed Under Sourcing Guides | Leave a Comment

Why decorating a new home in China is the same as importing from China!

If you ever bought a new home in China then you know that most are sold bare - absolutely empty with concrete walls and floors. There is no insulation, no flooring, no paint, no pipes, no appliances, essentially nothing. This is the normal standard in China and there is a huge home decorating and remodeling industry that has been created by the need of homeowners wanting to decorate their homes before moving in because they don’t want to move into an empty shell.

So where it gets interesting is when you spend a considerable amount of time doing your design of how the home should look to what types of materials - here below is just a short list of the things you must consider.

Kitchen - You will have to consider everything from the floor to the cabinets and appliances and even the wiring for the electricity and the sockets in the walls. Vents, counter tops, faucets, pipes, and the list goes on.
Rooms - You will have to consider everything from the floor to the ceilings and walls to where you can plug your computer or lights into. Lighting, decorative fixtures, paint, and the list goes on.
Main Areas - You will have to consider everything from the floor to the ceilings and paint to electrical outlets and insulation to, if you desire, under the floor heating systems.
Outside Areas - You will have to consider everything from what is available (like electrical outlets, lighting) to what is on the ground.
Bathrooms - You will have to consider everything from the floor to the wash bin to the tub or shower and all the materials involved as well as the plumbing to how hot water will get into the bathrooms.
Storage Areas - Just like the above, you will need to consider everything.
Walls to Doors - Putting up extra walls for a storage area to picking out doors for every room to the front door made of steel (in China the main door to the home is considered critical and often times it can be a metal door with another metal cage like protecting door before it).
Wiring and Plumbing - It is even critical to ensure you think about this for the entire house and where it will be put and how it will be insulated and accessed for repair in the future.

Now, think about doing this for the first time and not having anybody other than a friend or a relative help you do all of this - designing the home, identifying the materials, and outlining all the rules and guidelines to ensure the home decorating company gives you the home you wanted in a few months after construction is all complete. Sounds difficult? Yes it is and that is only the beginning. If you really want your home, in China (and possibly many other places in the world), to look like what you designed and have the materials you wanted while being developed the way you outlined in the rules and guidelines with proper care and attention – you have two options.

You have to personally monitor all of this and hope you have enough knowledge (and if you do then that’s great) to know, monitor, and audit the decorating company you hired so as to make sure they are absolutely following the design you gave them, buying and using the materials you requested, and following the rules and guidelines you outlined. Most likely you will not have the time since it is a full time job and most likely you will not have the knowledge since you don’t own such a decorating company. Let’s be honest – can you even begin to imagine what is truly necessary here? If it’s not your full time job then let’s just say the answer is absolutely no.
Hire someone who knows this and can be trusted! In China, trust is an important asset as it is in any other country. Finding a trusted project manager or quality manager to be fully aware of your needs and desires and work each day with the decorating company is critical if you want your home to be what you designed with the materials you picked following the rules and guidelines you outlined. Many Chinese families have found, after a few months or a few years, when problems start showing up in their homes that they should have used such a person or company. The problems span all over the place - flooring starts coming up and out, tiles are breaking apart, pipes are causing condensation and creating molds, kitchen cabinets are breaking or no longer working, paint is cracking, ceiling fixtures are coming apart, and even the power outlets are not working. Many times, the problems are from the decorating company trying to earn extra money by not buying the materials you requested but substituting with something cheaper or far cheaper. Additionally, the problems rise from the decorating companies just trying to finish your home as soon as they can and not following the rules and guidelines you requested – that is why you end up with faulty wiring, bad paint finishes, poor tile and floor work, and a variety of other issues.

So SourceJuice, what does all this have to do with importing from China? Well, if you look above at the two options you may find some exact similarities to sourcing and importing from China. Quality happens when you either put in the time or have someone else do that for you. There are many Chinese companies and suppliers that adhere to giving you the best product for the money you are providing them, but alas there are (like anywhere in the world) far more who just see you or your company as a one time deal – get your order, build it quick (possibly ignoring your material requirements and guidelines or standards) and ship it out to collect the funds as quickly as possible in the fastest amount of time. This is reality and it doesn’t stop just because a company is verified or a trusted supplier or even if it’s someone you have done business with for some time.

Take another look at the SourceJuice article Beware the Middleman and Seek the Intermediary for a real life example where it was a little late to bring in a third party (the trusted partner) and in hindsight the lesson learned was one of investing the time or investing the money to make sure you are not surprised by bad news but rather get what you expect. Even the largest and most sophisticated companies in the world face this lesson – review this post on the Heparin scandal for yet another example. If you followed the news on the Heparin sourcing issue, you will find that it seems to be a matter of substituting ingredients to make a larger profit.

Many of you will say the analogy of the home and importing from China can come from anywhere in the world. That in fact, this happens even in America as well as London to Russia and Brazil. Yes it does, it isn’t just a China challenge, it is your challenge when you invest in a product and find a supplier to generate your orders into shipments. It is your opportunity to work with such a supplier to generate the profits you so desire at the margins that led you to come from all over the world to China. It is your due diligence that will either make you vastly successful or vastly in debt if not wondering how you ever got into the situation you did.

The smart and successful companies and people that import from China know (like the Chinese home buyer who is investing either their time or their money on a trusted partner) that everything needs to be managed and that means everything. Yes there is a cost to managing everything in time and expense, but in the end the time and money you save by not having to deal with crisis situations to substitute materials will far outweigh the time and money you invested!

And in case you’re wondering what the final apartment looks like…

May 11, 2008 | Filed Under Quality Control | 3 Comments

One Man’s Challenge Is Another Man’s Treasure - Home Building Materials, part 3 of 3 and continuing.

Welcome back to SourceJuice and the treasure of knowledge in sourcing for home building materials and products that truly make sourcing from China a golden opportunity for those willing and determined to reap the benefits of going direct to the source. If you haven’t already read the first two parts to this series, go here to #1 and #2.

Now to part 3 as SourceJuice explores the different components of home building materials and products.

Appliances – every house, condominium or apartment has them. There are many pieces to fitting a home (microwaves, vent hoods, stoves) and builders absolutely love to save as much money as they can – they want to pay as little as possible. However, this is an area to stay away from as builders have a period of warranty they must deal with and parts for Chinese appliances are hard to acquire. Even if you get a builder crazy enough (trust me all builders have crazy in them), it will be a hard sell for the final customer - the homeowner who is going to ask why the appliances are not name brands like GE, Whirlpool, Jenn-Air, Sub-Zero, etc. So SourceJuice’s advice, in the US and Canadian markets at least, is to stay away from this area and save yourself time and money for other areas as noted below.

Hardwood Flooring – there is competition in this category from contractors, national wholesalers like Space Flooring and online retailers like flooring.com. Check prices everywhere before you get into this game. This is one of the most expensive items to the builder and one of the better opportunities if done right. This is where private labeling may make sense to reap even larger benefits. Most builders check prices and look for cheap and easy solutions, but just because you are the cheapest does not mean you will get the deal. Be cautious of laminate hardwood flooring as builders will opt instead for cheaper engineered flooring. Also be cautious of hardwood flooring materials with protective sealing materials, when you spill something the liquid is never able to escape, causing mold. Builders are aware of this and most will stay away from these products.

High End Roofing Tiles - this is your million dollars and more opportunity just waiting for new businesses to enter the market. Look for slate tiles from the same companies you purchase granite through in China. Many builders are also looking at synthetic alternatives to save a buck. Without a doubt, this is an area where price is critical and so are choices. Not a bad place to also start your own private label brand and build a long term business.

Custom Doors - builders spend an incredible amount of budget dollars on custom doors. Many of the reasons builders do not buy doors, in general, direct from a distributor is because of the finishing that is required (hinge mounts, door knob holes, etc). When we are talking custom doors, we are talking Georgia Art Glass. This is a very detailed industry with standard sizes, glass types, etc. Know your business before getting into this area but SourceJuice believes this is one area where unique ideas and designs can truly bring you significant opportunities to make money. Don’t just think doors here, think lifestyles, security, glass and wood, metal and wood, sculpted, embedded with granite fixtures, and the list can go on about how unique design and your ideas can create new and highly desired models for people and builders looking to create a unique look for their homes. Another great place to start your own private label products that may start as your brand but soon could be a name brand if done right.

Fireplaces – Great margins, little market saturation, every house needs one (maybe more). Another area looking for innovative products and a great way to think about how your partner companies in China can, with your ideas or theirs and some unique designs to sizes, create a very large business.

Fireplace mantels - look into marble slate, crushed limestone, plaster composite and low end mantels for opportunity and to be unique. Builders buy a lot of mantels from companies like Valencia Accents. You could easily do the same with the right partner in China.

Travertine Tile - If you are in the USA, go Mexico. You can bypass steam ships, railroads and import duties thanks to NAFTA. The only cost you will incur is product and domestic freight across the border to your loading dock (approximately $1,300USD). Need a suppler, try Impameric. This is an expensive item on builders’ budgets, but watch out for Home Depot (they have the price jump on everything) and other large home improvement retailers as they will be tough competition. For other markets in other countries, once again China is your factory and partner unless your country is imposing tariffs.

Lighting & Ceiling Fans - there are a lot of the big companies like Progressive Lighting in the game already manufacturing overseas. What SourceJuice has noticed recently are import companies bringing in light fixtures with no pre-planned pricing schedule. This market is relatively new to the small import shops and they haven’t quite figured out pricing yet. The major retailers (Home Depot, Lowe’s, B&Q, etc.) all have a stock of their own private label products and are making good margins here. There are thousands of ceiling fan and light fixture manufacturers in China and this creates great opportunities for smart importers. Get unique, great looking, upscale product at great prices and you have opportunity. Once again, everyone with enough determination can buy product from China at great prices (even with all the changes in currency, labor, raw materials, etc.) but the key is not just buying and selling but rather giving yourself a competitive position.

SourceJuice is a firm believer that companies succeed by offering value that is not so easily found – that means you either have great prices and decent product, great products at decent prices, or unique products at whatever price you can set with the end buyers. Looking back at this article and all the prior ones in this series and what you will find is that there is opportunity everywhere. So many companies, started by 1 or 2 persons, started from nothing and made fortunes. The companies and people that make fortunes and continue to make fortunes are always the ones that are excellent in one or many ways and the real treasure is in being unique, reliable, fast, and knowing your business.

Sourcing is for the strong, the determined, and those who know that it is not easy but that is why there is opportunity and that is why every treasure takes a map. That map is not easily found but for those of you reading this should already know that you are far more prepared and far more knowledgeable than most of your competition and yes – information is power. Now you know why most of your competitors or even others outside of your business do not want to share their supplier and their buyer information – because that is power, that is knowledge, and that is their supply and demand chain.

Next week we will bring you part 4 in this series. Thanks for reading and see you soon at SourceJuice.

Dylan Blankenship signature
dylan@sourcejuice.com // Dylan Blankenship

May 4, 2008 | Filed Under Sourcing Guides | Leave a Comment

Should You Diversify Your Supplier Base?

It takes time to develop a successful relationship with suppliers. For many importers, once this relationship is stable, they are hesitant to keep looking for other factories to produce the same product. There are certainly benefits to working with as few suppliers as possible such as gaining economies of scale, stability in terms of quality assurance and predictability as far as shipping schedules.

However, with the recent inflation in China, partly due to decreases in VAT rebates, many factories are raising costs hand over fist. When a factory decides to raise your costs, you have 3 options:

1. Eat it - You need the product. You have no other options.
2. Try to Negotiate - Perhaps you can knock the price down a bit; however, you will still agree to a price increase and you have no real way of knowing whether the price increase is reasonable.
3. You’re Prepared with Alternative Factories - You’ve got secondary suppliers that could take up part of (or all of) future orders. You can play your suppliers off of each other, dangling carrots as necessary, and make sure that the price increases are reasonable.

Jason Busch at Spend Matters, adds an additional insight on why you should diversify your suppliers in his article Split of Business: The Best Sourcing Justification for Supplier Diversity?

By dangling the carrot of additional business out to the secondary suppliers, a buying organization can get them to invest more in the relationship than they otherwise would. Out of this might even come joint innovations or even new product ideas.

And at the end of the day, aren’t we all looking for better, more interesting products (at cheaper prices)?

May 1, 2008 | Filed Under Negotiating & Strategy | 1 Comment

One Man’s Challenge Is Another Man’s Treasure - Home Building Materials, part 2 of 3

SourceJuice continues its quest in bringing you more of the world’s best import treasure maps. If you haven’t read the first part of the series One Man’s Challenge Is Another Man’s Treasure - Home Building Materials, part 1 of 3, please do so before continuing onto part 2.

To find the gold, one must know the pirate. Before we sail the seven seas and complete the series, let’s get to know our customer a little more intimately. Meet the Captain Blackbeards of the construction industry: real estate tycoons and builders.

Just because you can lower the bottom line, doesn’t mean you will get the sale. Its all about knowing your customer. Real estate developers and builders are a rare breed; they:

Like to get something for nothing
Like extra value. Importing granite countertops is the best example of this.
Utilize turn-key methods
Understand labor is cheap and have a lot of people working for them – much like Howard Hughes.
Have the ability to purchase in quantity due to access to multiple construction draws/loans.
Are impatient, time is money and interest accrues on a daily basis for them
Live on ego alone
Think on the bottom line, per house and per project/subdivision
Will always check your price against your competitors

How does this affect your sales pitch?

Push cost savings up front. That is why you are going to China right?
Massage their ego. Give them something to talk about with their colleagues. It is as much about selling cost savings as it is about the image gained by “doing business in China”.
Give the 60 day to arrival timeline early into the sale. Pick items that meet your 60 day production and logistics schedule. If the builder is already in the framing stage with rough-in inspections complete –don’t expect to sell sheetrock. Ask about new or up and coming projects. Builders are always building.
Put together packages, an easy turn-key solutions are best. Builders are running multiple projects at one time and rarely want to have to micromanage just to save a few dollars.
Certain kinds of labor are expensive in the US. Pick labor intensive products to manufacture overseas.

Stay tuned in this series for the continuation of “challenge” items on builders’ budgets.

Dylan Blankenship signature
dylan@sourcejuice.com // Dylan Blankenship

April 26, 2008 | Filed Under Sourcing Guides | 1 Comment

One Man’s Challenge Is Another Man’s Treasure - Home Building Materials, part 1 of 3

Solve the greater pain and reap the biggest reward. Every industry has it hardships and they come in different degrees, wearing many masks. If you figure out a way to solve these masquerading enigmas, then you may have the keys to your next successful business enterprise. This week, SourceJuice brings you its expertise on the building and construction industry through interviews, hard data and success stories. What are the problem items on builders’ line item budgets? Which hard goods construction products have the most margin? Which items do building supply houses stock and why? Exclusive details contained herein.

The Budget

The document split throughout this article is the actual budget for a home selling in the $700k range ($340k construction cost) in the Atlanta area. The problem items for builders are not just the costly ones. Framing, for instance, can vary in cost depending on the contractor or engineered lumber supplier. These are old-school builder experienced categories, they know how to work the system and categories like these should be avoided. What we are looking for in this budget are the items that traditionally have cost builders a lot because they have no power to decrease the price. “It costs what it costs… unless you buy from China.” Granite requires a $100,000 saw to cut with experienced laborers, a builder will leave this alone and pay top dollar for the high end product. This brings up another point, builders have access to an abundance of labor and are not afraid to take on a few extra steps in the buying/implementing process (to save a buck). It can be no clearer than this article, the highlighted items on this budget cause the most headaches and spend the most budget dollars.

Budget - S2

Plumbing Fixtures – There is a lot of margin here, do your due diligence in comparing similar products. All products that look the same have varied degrees of finishing and contain different kinds of internal parts, see Sourcejuice’s Quality Rating Systems article for more information. It is still possible to resell mid-range kitchen and bath faucets for 20% profit, but companies like e-Barnett supply are highly marketed to contractors and builders. A shoe-in is the high end luxury market for plumbing fixtures. Some high end roman tub valves, like the waterfall styles, can have hundreds of percentage points in margin. Private labeling faucets is another great way to get a niche that can propel your brand above the no name brands. Sourcejuice has you covered there too: Private Labeling and Criteria for Selecting the Right Manufacturer.

Sheetrock – hard to compete with Home Depot. Home Depot has such buying power, it is only possible to beat their price by minuscule margins. The money is had here in container quantity. Don’t expect to be buying less than six containers, you need to be buying more. In addition, to make this import venture profitable you will have to research and obtain overweight permits to utilize 40ft containers, maximizing the cost efficiency of logistics.

Trim – one of the most expensive categories for builders, half labor and half materials. In addition, wholesale manufacturing companies like woodgrain Millwork (who manufacture in South America) will only sell to wholesale building supply companies. This leaves an opening for you to sell direct to the builder. For a lot of builders/track builders, there are standard trim types used for base, crown, chair rail, etc. This makes ordering, stocking and fulfilling orders quite easy. For the luxury builders, two million construction cost, there will be many different kinds of trim, but enough to buy a whole container (or more) just for one house. A house of this caliber will utilize over $100,000 in trim.

Stair Parts – equally as good a product to import as trim. You can make this as complex or simple as you like. If you have ever seen a catalog for stair parts you will know how many pieces there are. There is a stair parts company in New York that imports over 5,000 different products, all relating to stair parts. My suggestion, stick to the basics.

Granite – if you have been reading Sourcejuice, you know by now how profitable granite can be. Point-blank, buy it prefabricated at $11 and sell it at $30. More details in Sourcejuice articles:
•    Share Your Expertise: David Anderson on the China Granite Industry
•    Prefabricated Granite Import Guide
•    Digging Deeper Series: Actual Landed Costs Examined

Kitchen Cabinetry – go modular and read Sourcejuice article Beware of the Middleman and Seek the Intermediary.

Stay Tuned for part 2 in this series, your treasure map to the building industry.

Dylan Blankenship signature
dylan@sourcejuice.com // Dylan Blankenship

April 20, 2008 | Filed Under Sourcing Guides | 2 Comments

Technology in the 21st Century - Your own factory and catalog showroom for almost no money!

Thousands of our readers are buyers who work in large companies to their own retail or wholesale businesses. Many use China and other countries around the world to base their manufacturing, if not sourcing operations. Many also outsource the entire production of their private label products to a host of companies in China that run the gamut of design, develop, manufacture, package and even drop ships the final product to the end customer.

Most however, must to some degree, own the merchandise in some form or pay for its development prior to sales. Recently, with the advent of the Internet and advancements in technology, a whole new market has been created where you really can own your own factory and catalog showroom for almost no money AND get drop shipments. This is definitely not for the big companies but for those owning their own small business to those that setup shop in Ebay to TaoBao and want to create unique products and use the technology of the 21st century, then this company and its business model may be just right for you!

Enter Ponoko – technology in the 21st Century.

Ponoko is the world’s first personal manufacturing platform. It’s the online space for a community of creators and consumers to use a global network of digital manufacturing hardware to co-create, make and trade individualized product ideas on demand.

The ponoko.com marketplace connects creators, consumers, digital manufacturing hardware and service providers to promote, make and trade products on Ponoko and social networking websites.

Here is more information from Trendwatching.com from their 8 important consumer trends for 2008.

New Zealand-based Ponoko (which works like a CafePress for 3D objects) is offering consumers a new way to turn their creative ideas into real-world objects. After uploading their own design to the website (in EPS file format), or choosing a free design, users can choose from a variety of materials. Ponoko then runs the design through a laser cutter. Besides offering access to professional tools to manufacture products, Ponoko also helps users bring their products to market. Once they’re ready to sell, members can add photos of their product to their profile page, together with a description and pricing information. Products can either be delivered to the designer for assembly before being shipped to customers, or self-assembly products can be sent directly to the end-customer. Ponoko currently only offers two-dimensional sheet cutting, which limits designs to flat objects or three-dimensional objects that can be assembled from flat pieces, but plans for 3D printing are in the works.

As well as being a manufacturing platform, Ponoko also serves as a community where fledgling one-off fabricators and designers can exchange ideas and help solve each other’s problems. The larger goal, according to Ponoko, is to be a catalyst that helps bring personal manufacturing of individualized products to the masses.

So when you get to the point where you are doing well with this business model, come back and share your stories and we may conclude with the possibility that by that time, China may be once again the place where you scale your business. So, yes, China is still in the picture and so is good old manufacturing!

April 13, 2008 | Filed Under Sourcing Trends | Leave a Comment

Get Rich Quick? Thinking Bigg!

Do you ever watch television really late and see the guy selling that new real estate (become a quick millionaire) marketing package? Have you said to yourself “That can’t work…. can it?”. The answer to that question is no, it can not. However, if you are looking for a great success story then look no further than Dave Novak.

Novak is the classic “40 Hour Work Week” example. He was a cubical slave/art director turned shower and spa importer and eBay seller powerhouse. He dove into the high end spa market after concluding that there was so much margin purchasing from China that he could turn a huge profit selling at wholesale cost direct to consumers. With no experience, and for that matter, no idea if anyone would buy such a product on ebay, Novak became a success by being bold and thinking big.

I was turned on to this story by a great friend and colleague who peaked my interest one day with an email reading nothing but Novak’s website address and this question: “Dylan…doesn’t this guy remind you of the old days importing granite?“. Novak indeed followed a similar path to my own importing granite. I found a niche market, the margins were high, but would people buy?

Fortune favors the bold, Novak invested $2,000 in savings and continued to double his investment finally to the tune of $2,500,000 over a two year period. So what is Novak going to do with all that loot? Sell subscriptions to his “eBay Millionaire Secrets” website of course.

While my story starts out very similar, with a home-run importing granite, my experience with suppliers has not always been easy. Importing modular kitchen cabinets is a prime example of this and changed my approach to international trading. This is about someone who took a risk, found an opportunity in a niche market and like in poker, went “all in”. Dave Novak has been featured on Fox News, GoDaddy and StartupNation Radio. What his interviews don’t tell you is that there will always be bumps in the road along the way. Using SourceJuice as a forum, I invite Dave Novak to “Share His Expertise” on perseverance, a quality that goes hand-in-hand with success.

Every major company in the world has been started by risk takers who learned as the company grew. SourceJuice is here to educate you, excite you, inform you and learn from you through Sharing Your Expertise. We at SourceJuice celebrate all those that take the risk to do something.

So the core question that is in the forefront of everyones’ minds when doing business internationally or in China:

Is it possible? - Yes! Are there risks? - Yes.

Should I do it? - Do your research, read SourceJuice.com, invest in solid due diligence, scrap the idea and start over, talk to anyone and everyone that has done business in China…. and then the answer is Yes.

When I mean read SourceJuice, I mean read:

About real people like you that have persevered: Beware the Middleman and Seek the Intermediary
Success Stories: The Holy Grail of Risk Taking Entrepreneurs: Brits Get Rich in China
The most valuable of stories, experience: Share your Expertise Series - David Anderson on the China Granite Industry
How to get your business into motion with funding: Show Me the Money! Finding Investment For Your Import Venture
Everything you need to know to make sure the numbers will work: Digging Deeper Series - Actual Landed Costs Examined

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dylan@sourcejuice.com // Dylan Blankenship

April 11, 2008 | Filed Under Success Stories | Leave a Comment

Be Clear on the Currency and Rate in Your Contracts

At the beginning of 2008, SourceJuice published an article titled 4 Reasons Sourcing from China will be More Expensive in 2008 discussing the various reasons to expect costs in China to rise. One of the main points was that the Renminbi (RMB) is appreciating against the US Dollar (USD).

We were again reminded of this by the China Law Blog, with their post Yuan/Dollar Exchange Rates. They also reference an article by CNReviews.com titled RMB appreciation and the emergence of a new Asian reserve currency. While both are good reads in general if you’re interested in currency analysis, the important point from a sourcing perspective is: Specify the Currency and Rate in Your Contract!

Spending time negotiating prices is only one part of the puzzle. As you can see in this 2 year chart from Yahoo Finance, the USD vs. RMB chart is pretty ugly. And many are expecting the USD to fall significantly further.

This creates uncertainty. For example, if you price your goods with the factory in USD, the factory is going to want to raise the price on you when the USD depreciates further. However, if you price the goods in RMB, you’re going to be spending more dollars than you expect, and possibly eroding your profit as a result.

April 8, 2008 | Filed Under Currency & Finance | 1 Comment

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