All you need are samples.

[AgainstAllOdds]

The idea of taking "action" is a tough one for me b/c I'm married to the idea of making immediate money (job). The idea of shifting significant time/energy/resources to a risky entrepreneurial venture is a concept I need to learn to embrace. Greg

Product businesses take awhile for cashflow to start coming in.

That's the negative.

Positive is that it will take a similar time for any competition to start taking away that cashflow.

 

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[masterneme]

After that, I have them sign a letter of interest

I didn't know this was a thing and I don't quite understand it.

I've read this Letter of intent - Wikipedia and a couple of other explanations.

As I see it is like signing up for a pre-sale notification that can be cancelled?

 

[AgainstAllOdds]

I didn't know this was a thing and I don't quite understand it.

I've read this Letter of intent - Wikipedia and a couple of other explanations.

As I see it is like signing up for a pre-sale notification that can be cancelled?

It's non-binding.

Basically means nothing.

But if someone "commits", then they don't want to back out and screw you over when you're just starting out. People want to help people, especially if it's in their own self interest.

The letter is just something that shows them: "Hey, you wanted this, I have it now," when the product comes. You can take a picture of the letter (order sheet, whatever you call it), and send them a message/email with it attached when the product arrives.

 

[masterneme]

It's non-binding.

Basically means nothing.

But if someone "commits", then they don't want to back out and screw you over when you're just starting out. People want to help people, especially if it's in their own self interest.

The letter is just something that shows them: "Hey, you wanted this, I have it now," when the product comes. You can take a picture of the letter (order sheet, whatever you call it), and send them a message/email with it attached when the product arrives.

Thanks for the explanation, now is clear.

I'll note it down because I may have some use for it in the near future.

 

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[ChrisV]

You don’t even need that. A lot of times you only need a conceptual video showing proof of concept.

 

[Wolfman]

Product businesses take awhile for cashflow to start coming in.

That's the negative.

Positive is that it will take a similar time for any competition to start taking away that cashflow.

Against all Odds (you are a registered bad-a$$ hahaha), Anyhow, thanks for the not-so-subtle reminder that there is a positive to spinning my wheels to get to that point where I show profit. Somebody else will probably have to spin theirs for a while too. The only problem is that the Chinese and Indians seem to be able to run on empty for years before showing a profit.
But that's the present playing field and there are certain advantages we have like knowing English, American mentality/marketing and having tons of options/opportunities they don't.
With developing my particular product it is an up-hill battle and it feels like a war with Chinese and Indians sometimes.
You're right though, even if they can knock anything off cheaply, bad asses like you and me know how to win too.
Stay strong pal,
Greg

 

[AgainstAllOdds]

Against all Odds (you are a registered bad-a$$ hahaha), Anyhow, thanks for the not-so-subtle reminder that there is a positive to spinning my wheels to get to that point where I show profit. Somebody else will probably have to spin theirs for a while too. The only problem is that the Chinese and Indians seem to be able to run on empty for years before showing a profit.
But that's the present playing field and there are certain advantages we have like knowing English, American mentality/marketing and having tons of options/opportunities they don't.
With developing my particular product it is an up-hill battle and it feels like a war with Chinese and Indians sometimes.
You're right though, even if they can knock anything off cheaply, bad asses like you and me know how to win too.
Stay strong pal,
Greg

Your biggest advantage is geography and local know how.

If you're importing and selling product, your core competency is distribution. The Chinese, Indians, etc don't know how to distribute and operate in your country. You do. Or at least you should.

You know how to create a distribution channel, figure out what the customers want, provide them as much value as possible, and do it in the most efficient manner possible.

Here's a good way to look at it:

The Chinese can have the same product as you, but if they don't handle every step of the value chain as well as you, then they'll never be as good as you.

Let's say a value chain includes:

Chinese can operate at the following example efficiency levels:
Inbound logistics -- 100%
Operations -- 90%
Outbound Logistics -- 90%
Marketing & Sales -- 50%
Service -- 35%

Then their total value creation efficiency will be: 1.0*0.9*0.9*0.5*0.35 = 14.18%

Meanwhile, your value chain can be as follows:
Inbound logistics -- 100%
Operations -- 40%
Outbound Logistics -- 90%
Marketing & Sales -- 90%
Service -- 90%

Your total value creation efficiency would be: 1.0*0.4*0.9*0.9*0.9 = 29.16%

You can provide double the value that the Chinese can. Even if your operations side (sourcing/price/etc) are bad, if you make up for it in other realms, you will outcompete anyone that steps on your toes.

 

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[Wolfman]

Your biggest advantage is geography and local know how.

If you're importing and selling product, your core competency is distribution. The Chinese, Indians, etc don't know how to distribute and operate in your country. You do. Or at least you should.

You know how to create a distribution channel, figure out what the customers want, provide them as much value as possible, and do it in the most efficient manner possible.

Here's a good way to look at it:

The Chinese can have the same product as you, but if they don't handle every step of the value chain as well as you, then they'll never be as good as you.

Let's say a value chain includes:

Chinese can operate at the following example efficiency levels:
Inbound logistics -- 100%
Operations -- 90%
Outbound Logistics -- 90%
Marketing & Sales -- 50%
Service -- 35%

Then their total value creation efficiency will be: 1.0*0.9*0.9*0.5*0.35 = 14.18%

Meanwhile, your value chain can be as follows:
Inbound logistics -- 100%
Operations -- 40%
Outbound Logistics -- 90%
Marketing & Sales -- 90%
Service -- 90%

Your total value creation efficiency would be: 1.0*0.4*0.9*0.9*0.9 = 29.16%

You can provide double the value that the Chinese can. Even if your operations side (sourcing/price/etc) are bad, if you make up for it in other realms, you will outcompete anyone that steps on your toes.

Hi v. Odds: I must say without understatement that you are the gold standard. W/out knowing a thing about my product you managed to hit the important advantages/disadvantages. You also inadvertantly gave me a problem to solve.
My product is disposable, let's say like toilet paper. How do you service/follow-up w/ a customer. "I hope you enjoyed wiping your butt w/ our tp and continue to do so..." haha (You get my issue.)
At the same time I buy into your model that this is a real potential advantage over the Chinese. I suppose it is not impossible to follow-up w/ customers even of disposables by promotions. ex. "Please fill out this questionaire as to how we can improve...and we will send you xyz for free..." It is a stretch though and probably wouldn't do much for the bottom line.
Do you have any ideas v. Odds? I have noticed that the the Chinese, and to a lesser degree the Indians, have a dismal command of English. Maybe learning/employing excellent copywriting is an exploitable angle. (I'm so darn new to this I don't see the big pic yet.)
Thanks for your wisdom (again, that's really not an exageration),
Greg

 

[Wolfman]

This is a footnote. I realized after my last post some could view me as down on the Chinese/Indians. That is not the case. I respect both a lot. In my life I've seen "made in China" go from meaning "crap", to the present case where they make high quality machines that manufacture high quality products all over the world. Although I don't blame those countries for leveraging their price/labor cost advantages, it does bug the heck out of me. I've heard horror stories but I've yet to personally experience a lack of ethics in the Chinese or Indians. Greg

 

[Michael PS]

Hey @AgainstAllOdds,

love this topic and it matches exactly what I was looking for. So you have so much experience in this Supply Chain Topic and physical B/C products. May I ask you how is the best way to star. As I have understood it is not so important to gain a big inventory in the first time and build a website. But how would you offer the market your product to understand if there is demand or not?

My understanding of this process is like this:

1. Build a prototype
2. Ask the market, if their is a need ( But how do you do this? Building a landing page? Ask at Instagram and Facebook? Go to gib retail wholesalers and ask them if the want to order this product for them)
3. Adjust the product or order invetory

• Does it make sense to build a landing page in front to advertise people who could be interested in? And maybe do some Pre-sales or ask them if they like the product?
• When would you build an online-shop for your products
• When would you order a bigger inventory?

Appreciate your feedback, because these are questions, who challenge me right know to understand what the market wants and if I could sell the stuff I want to offer.

By the way is the fashion business


Best regards
Servos

 

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[AgainstAllOdds]

Hey @AgainstAllOdds,

love this topic and it matches exactly what I was looking for. So you have so much experience in this Supply Chain Topic and physical B/C products. May I ask you how is the best way to star. As I have understood it is not so important to gain a big inventory in the first time and build a website. But how would you offer the market your product to understand if there is demand or not?

My understanding of this process is like this:

1. Build a prototype
2. Ask the market, if their is a need ( But how do you do this? Building a landing page? Ask at Instagram and Facebook? Go to gib retail wholesalers and ask them if the want to order this product for them)
3. Adjust the product or order invetory

• Does it make sense to build a landing page in front to advertise people who could be interested in? And maybe do some Pre-sales or ask them if they like the product?
• When would you build an online-shop for your products
• When would you order a bigger inventory?

Appreciate your feedback, because these are questions, who challenge me right know to understand what the market wants and if I could sell the stuff I want to offer.

By the way is the fashion business


Best regards
Servos

It's a fashion product?

• Go on google maps, yelp, or whatever your local search engine is for fashion businesses.
• Make a list of everyone in the vicinity for whom your product would be a good match
• Go on the national registrar or whatever you guys have in Germany to find out who the owner of each business is; update that data in your spreadsheet; if it's a bigger business, check Linkedin to find out who the decision maker is
• Include in your spreadsheet the phone number and email for that business
• Send them and email with a question that will get a reply and follow up to your 4 sentence pitch
• Push for a meeting via email
• No luck? Then pick up the phone. Call them and say "Hi, this is @Servos. I was wondering if you had a chance to look at the email I sent you?"
• Ask politely if you could come in and show them samples.

Basically do the actual sales process. Push towards an in person meeting. Show up with samples and a good attitude. Make it known that you're just starting out but are really reliable and someone they can depend on. If they're not complete jerks, then they'll help you out.

 

[Wolfman]

Hi Against All Odds:
What is the U.S. equivalent of a "national registrar"?
I'm in the same stage as @Servos. I'm finding that I usually have to make a cold call or two to get a good email and they are never responded to.
So if I have gotten a good name, not even necessarily the decision-maker, I will send a sample with my sales sheet.
Now I'm at the stage of following up the sample with a warm phone call. (I at least have a name.)
It's an expensive and inefficient process. Is it avoidable or improvable?
If I were to hire a virtual assistant (not sure if I can afford it), is that an option?
Greg

 

[Wolfman]

@AgainstAllOdds,
I'm further down the road but you were right when you said it takes a long time to generate cash for physical products, especially brand new ones. I've yet to make a sale and it is making me a bit nervous at times. (to say the least)

 

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[Wolfman]

Excellent post!
How do you find your prospects and what's your approach to getting meetings?

I feel like I have the sourcing/importing part down, but no idea where to start as far as sales go....

Hi @Ronak,
I'm at this stage. Have you solved the "sales problem"? How?
Greg

 

[AgainstAllOdds]

Hi Against All Odds:
What is the U.S. equivalent of a "national registrar"?
I'm in the same stage as @Servos. I'm finding that I usually have to make a cold call or two to get a good email and they are never responded to.
So if I have gotten a good name, not even necessarily the decision-maker, I will send a sample with my sales sheet.
Now I'm at the stage of following up the sample with a warm phone call. (I at least have a name.)
It's an expensive and inefficient process. Is it avoidable or improvable?
If I were to hire a virtual assistant (not sure if I can afford it), is that an option?
Greg

[Type in state] + "LLC Search". Then search the company.

 

[Ing]

A question:
You buy and sell goods.
What brand is it usually, when you buy it and what, when you sell it?

BTW: I admire silently sometimes

 

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[Walter Hay]

But how do you do this? Building a landing page? Ask at Instagram and Facebook? Go to gib retail wholesalers and ask them if the want to order this product for them)

A sales pitch must never include such a question. If you ask a question like: Do you want to order......? Are you interested in....? Would you like to buy.....? that gives them a too easy exit from the conversation and will almost guarantee that they will say no.

Be positive.

Walter

 

[AgainstAllOdds]

A question:
You buy and sell goods.
What brand is it usually, when you buy it and what, when you sell it?

BTW: I admire silently sometimes

Everything I sell is under my own company and brand. Building materials. A lot of commoditized products, positioned in the higher quality tier.

I buy the products 3-4 months ahead of time, sell them either right when they land on project-based deals or through local distribution over time on commoditized products.


This is the model I like:

1. Find a product you like.
2. Figure out the factory that makes that product or similar.
3. Rebrand it and add a value skew where applicable.
4. Repeat for a 100+ other products.
5. Distribute.



Here's another one I like:

1. Find products you like.
2. Get distribution agreements for those products.
3. Leverage the partner's inventory and capital to grow your list of clients.
4. Identify the top selling products.
5. Source those products yourself with a slight value improvement. Incognito to not throw up red flags for your partners.
6. Overtime improve your margins as your partner starts to realize what you're doing and wants to drop you.
7. Have your own brand.


Based on the question you asked, model #2 is likely a better fit for you.

Figure out an industry you want to be in.
Learn the industry (this might take even a year+ ... getting a job in that industry is the easiest to jump).
Boring industries are easier money.
Talk to top suppliers in that industry to be distributors for them.
Implement the model above.


What it comes down to with distribution businesses is your ability to sell and keep the wheels turning. If you're smart, you'll run an efficient operation that keeps growing and gives you healthy margins. If you're not, then you'll waste years of your life getting nowhere.

 

[Ing]

This is the model I like:

1. Find a product you like.
2. Figure out the factory that makes that product or similar.
3. Rebrand it and add a value skew where applicable.
4. Repeat for a 100+ other products.
5. Distribute.

Based on the question you asked, model #2 is likely a better fit for you.

I m just trying the first one. At time I work on 2. and 3

Its in a branche, where I m in since 30 years. But not with job, but with hobby ( i hope and believe thats no issue)
There would be 100s of different products to purchase. Some with a margin not to look at, some with healthy margins.
So at time I try to find a supplier in far east for the first produkt and look, whether my brands get registered.
Than I have to get used to the importing procedere; than I hope, repeating is easier from time to time.

I dream of switching to Number 2 lateron.

Thanks for your informations!

I would love to print and cut this your post on paper, cut it out and clue it to the foreheads of my boys!

 

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