If you could manufacture/import any product....

[Blue]

So basically, Blue, you import a product that there is demand for and sell it. So you aren't manufacturing anything, you did a good job sourcing it from an inexpensive source and you are moving some volume so right now you have a good niche.

Without divulging your widget, do I have that right? Not suggesting that isn't great. It is true that if you said you are importing knockoff chi irons from so and so manufacturing in Shanghai ....then absolutely, easy on the details.

Yes that's basically correct, except that I'm not importing knockoffs (although it's funny that I do know about chi irons, I can't believe what people pay for them); I make a few design tweaks to improve them for let's say $2 more per widget. Then I sell the "new" and improved product for $50 more with branding and move them along side the regular stuff.

 

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[Bobo]

Yes that's basically correct, except that I'm not importing knockoffs (although it's funny that I do know about chi irons, I can't believe what people pay for them); I make a few design tweaks to improve them for let's say $2 more per widget. Then I sell the "new" and improved product for $50 more with branding and move them along side the regular stuff.

OK, so in your case it would be foolish to disclose more than you have, from what you've said I know just what kind of business we are talking about and I applaud you for being lazy! I mean that as a huge compliment by the way, I never found nobility in putting in extra sweat, I think the key is to make a few little improvements to something that is proven and then have someone else sell it for you. ...fastlane thinking there.

Just as a cautionary note - most here, myself included, would not kock you off but willl ask you a lot of questions. I have some areas where my experience can be helpful to people (as you do) and the goal here is to use the community's experience when our own falls short or gets stuck in the mud.

LOL... when your widget gets one upped and you can't think of how to one up the one upper I will be happy to brainstorm with you for the cost of a few drinks and I won't compete... remember we have guys here who sell sniper suits, that whole rule about not stealing other people's ideas is enforced.

 

[theBiz]

damn Bobo thats a lot of good info, thanx. I used to look into alibaba and such im not a fan of doing this. Many stay at home mothers can do the same thing everyone is doing, i don't believe to be the smartest person in the world. For that fact that anyone can see your product, search it there and strike up a deal through email in 5 minutes and that bothers me. I was going to import a product once but for this reason backed out i know a guy making almost 500 per day i could copy his entire operation, but as i suspected competition is coming in and it is soon to be killed. His 250 profit per item is soon to be $30. Whatever your selling, look on ebay in a few months, sometimes the manufacture is selling there for the same price your getting it for...i believe something like plumbing is great, most plumbing supplies buy from the same guy, you could actually buy these products and distribute to all of these supplies and beat their existing prices. There is no need for pricing etc, differentiation. an elbow is .50c and your competition is .75, they will buy. Yes you run the risk of this happening to you, but you will be ontop of the curve at this point and most likely people wont beat your pricing at this point.

 

[Blue]

Heard this story from a fellow importer a few days ago...

Friend runs an online store that sells a widget. Friend gets an email from someone in India claiming to have a factory that makes so called widget. Friend asks for a sample, the person sends him a good sample. Friend places order and sends deposit money 50%. Person claims that factory in India burned down. Friend loses deposit money.

In hindsight a few flags.

1) Friend was contacted directly by the person. Probably should have contacted a factory themselves through more reliable channels
2) Sample friend received was an exact copy of a currently produced widget. Again hindsight, but most likely the person in India just purchased the widget from the US and then shipped it back to India and then to my friend. As a seller of the widget, she probably should have realized that the copy was too good. Should have asked for pictures of the factory, the assembly line making the widget and photos of multiple widgets in different production stages. Again, these are things you think of after you've been burned.

 

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[Bobo]

Heard this story from a fellow importer a few days ago...

Friend runs an online store that sells a widget. Friend gets an email from someone in India claiming to have a factory that makes so called widget. Friend asks for a sample, the person sends him a good sample. Friend places order and sends deposit money 50%. Person claims that factory in India burned down. Friend loses deposit money.

.

Well that will send you to the proctologist complaining of an inability to sit down now won't it?

When you get things produced offshore (or onshore for that matter) there are financial devices you can use to prevent this.

The simple one is Escrow. Foreign banks are used to arrangements where you deposit funds and they issue you a letter of credit you can take to a factory to get work started.

See this is one thing I did differently than most. I may have had production issues from time to time but I spent the money for Jill and I to go to the factories where our raw materials were made, to the production facility etc. I had eyes on every component of our business and trust me, I do not enjoy being a detail or control freak.

Your friend made a stupid mistake, not saying friend is stupid, but this one is avoidable. Once you establish the relationship and know the people at the facility it is less troublesome to make deposits but sight unseen? Tell your friend he can make the money back, I know this Nigerian diplomat whose bank accounts have been frozen and....

Seriously, I used to be very trusting, then I owned a business or three. Trust but verify was one of Reagan's better quips.

 

[mkzhang]

Like Bobo said, escrow is the best bet.

There are also methods such as the responsibility of the goods in transit, if you don't take ownership of the product until it reaches you, then you don't have to pay for it. This serves as a deterrent to such situations, but must be follow up with commitments to larger orders or prepaid ordering because its suppose to be an initial supplier test, not to manhandle their business.