Import/Export to India

[Mikkel]

I came across an interesting opportunity for myself and was hoping for some input.

I have been networking with people from India, as I have been working to import products for a brand that I am working on. I got to talk to a CEO of a biotechnology company who wants to export his products to the United States. Because we have a good working relationship, he asked me if I wanted to help him bring his products to US markets as well as export products to India for him. He is already in talks with some major US companies to buy his products, so he will most likely already have buyers set up.

Now what I am trying to figure out is, what would be the best business model to work with that will be mutually beneficial. We both came up with two possible business models. Are these the only two models, or is there a different business model that I am unaware of?

Option 1: I start a branch office in the United States. All products are paid for by the company so I personally have no overhead, but it seems more like a slow lane job. The benefit, from how I look at it is, I can gain some good experience with importing and exporting and can use this opportunity as a springboard in the future.

Option 2: I act as a separate company, maybe work out a deal that I am the sole distributor of the product. The more I sell, the more money I make. Of course, then I may need a large amount of capital for start-up costs. The benefit would be that I can use that same company to import/export products from other companies in the future as this CEO is willing to introduce me to other business owners who might be interested in the same service.

I have never had this opportunity offered to me, and wanted to see if anyone had insight on this topic.

If I can hash out a good deal with the company's owner, I'll make a progress thread on the topic!

 

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[growth]

I came across an interesting opportunity for myself and was hoping for some input.

I have been networking with people from India, as I have been working to import products for a brand that I am working on. I got to talk to a CEO of a biotechnology company who wants to export his products to the United States. Because we have a good working relationship, he asked me if I wanted to help him bring his products to US markets as well as export products to India for him. He is already in talks with some major US companies to buy his products, so he will most likely already have buyers set up.

Now what I am trying to figure out is, what would be the best business model to work with that will be mutually beneficial. We both came up with two possible business models. Are these the only two models, or is there a different business model that I am unaware of?

Option 1: I start a branch office in the United States. All products are paid for by the company so I personally have no overhead, but it seems more like a slow lane job. The benefit, from how I look at it is, I can gain some good experience with importing and exporting and can use this opportunity as a springboard in the future.

Option 2: I act as a separate company, maybe work out a deal that I am the sole distributor of the product. The more I sell, the more money I make. Of course, then I may need a large amount of capital for start-up costs. The benefit would be that I can use that same company to import/export products from other companies in the future as this CEO is willing to introduce me to other business owners who might be interested in the same service.

I have never had this opportunity offered to me, and wanted to see if anyone had insight on this topic.

If I can hash out a good deal with the company's owner, I'll make a progress thread on the topic!

Hello Mikkel. Both options are great. In my own opinion and little experience, being a sole distributor requires a huge start-up capital because you have to purchase products in large quantities. So what happens when you purchase in large quantities and do sell all at once? I would suggest option 2 with a little tweak. Instead of being a sole distributor of that product, become an agency that help import and export, even with scouting buyer. Here's how you make money as an agency,
1. Charge a certain percentage on the total cost of the goods. i.e If the total goods costs $5,000 you charge 10%, 20% or any % of the cost of goods as your service fee. You sell at company pice but agree on a percentage you'll be given.
2. Charge on each item. i.e If 1 item costs $2, you can quote $2.5 or $3. You'll make $0.5/$1 on each item. You sell at your own price after the company gives you a discount.
How would you benefit from being an agency, compared to a sole distributor,
1. You don't need huge capital.
2. You don't have to purchase with your money, you only deliver what is needed.
3. You can import and export any kind of product, not just the product this brand wants. You are not limited to being a biotechnology distributor but you can also do other things.
I hope this helps, good luck with your business Mikkel.

If you'd like to discuss more, write to me at faithfulychi@gmail.com

 

[Mikkel]

Thank you @growth

I had been doing more research on both options since making this post. I think you are correct. To decrease my risk and overhead, being a middle man who organizes shipments from one company to the other seems to be the most scalable and cheapest option with the most amount of control.

Now, I believe an import/export company(option 2) can still have the ability to sign a contract where my company is the only company that can distribute a certain product in a certain country. Rather than hold the product in a warehouse(USA), I may hold some samples of the product to help promote their product, but all orders must be shipped from the manufacturer.

I have a meeting with the CEO in the next few days. I will propose these two options but suggest the 2nd option.

 

[growth]

Thank you @growth

I had been doing more research on both options since making this post. I think you are correct. To decrease my risk and overhead, being a middle man who organizes shipments from one company to the other seems to be the most scalable and cheapest option with the most amount of control.

Now, I believe an import/export company(option 2) can still have the ability to sign a contract where my company is the only company that can distribute a certain product in a certain country. Rather than hold the product in a warehouse(USA), I may hold some samples of the product to help promote their product, but all orders must be shipped from the manufacturer.

I have a meeting with the CEO in the next few days. I will propose these two options but suggest the 2nd option.

Exactly! This is perfect. I wish you a successful proposal, Mikkel. Cheers!

 

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[Kubera]

Just a heads-up, Indian red tape and bureaucracy are epical and legendary. I'd be careful whom I trust and whom I'm making any deals with. Government officials can ask you for bribes if you need them to get things done(like stuff that's within their job description)

Don't get me wrong, I have friends there and the most of people I came across are great, but there are people who wouldn't think twice before trying to scam you, just cos you're a foreigner.

Good luck!

 

[Walter Hay]

Just a heads-up, Indian red tape and bureaucracy are epical and legendary. I'd be careful whom I trust and whom I'm making any deals with. Government officials can ask you for bribes if you need them to get things done(like stuff that's within their job description)

Don't get me wrong, I have friends there and the most of people I came across are great, but there are people who wouldn't think twice before trying to scam you, just cos you're a foreigner.

Good luck!

This is very true. I have dealt with Indian companies as both a buyer and a seller. The amount of corruption I encountered when trying to export my industrial chemicals to India was so bad that I gave up. I am not a person who gives up - it's not in my genes, but India was an exception.

Walter

 

[Walter Hay]

Thank you @growth

I had been doing more research on both options since making this post. I think you are correct. To decrease my risk and overhead, being a middle man who organizes shipments from one company to the other seems to be the most scalable and cheapest option with the most amount of control.

Now, I believe an import/export company(option 2) can still have the ability to sign a contract where my company is the only company that can distribute a certain product in a certain country. Rather than hold the product in a warehouse(USA), I may hold some samples of the product to help promote their product, but all orders must be shipped from the manufacturer.

I have a meeting with the CEO in the next few days. I will propose these two options but suggest the 2nd option.

You have been getting close to the right solution, but you need to understand how agencies, distributorships, and genuine import/export broker businesses work.

Here is a quote from Chapter 5. IMPORT/EXPORT BROKER BUSINESS COURSE of my sourcing and importing book: (See my Marketplace offer for ProvenGlobalSourcing below.)
The best business model is one in which you do not yourself buy any product that you will be selling. You should be acting as an agent whose role is as a broker. A broker doesn't take title to the product or service.

What this is teaching is that you can operate a profitable Import/Export Broker business without spending a penny on buying product.

Walter

 

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[Mikkel]

You have been getting close to the right solution, but you need to understand how agencies, distributorships, and genuine import/export broker businesses work.

Here is a quote from Chapter 5. IMPORT/EXPORT BROKER BUSINESS COURSE of my sourcing and importing book: (See my Marketplace offer for ProvenGlobalSourcing below.)
The best business model is one in which you do not yourself buy any product that you will be selling. You should be acting as an agent whose role is as a broker. A broker doesn't take title to the product or service.

What this is teaching is that you can operate a profitable Import/Export Broker business without spending a penny on buying product.

Walter

I appreciate all you have done in regards to teaching on the topic of Import/Export, @Walter Hay. I got into this sector of business because of your posts on the FLF and your book which I am currently reading for a second time, to brush up on the updated Incoterms and revisit relevant topics to my situation.

Since I last posted, I came to an agreement with the BioTech CEO. He wants me to do something that I believe is quite unique. He wants me to open an LLC with soul ownership in the USA(foreign ownership in a US business is a huge headache). Due to the legality and ensuring he doesn't appear to have any control of the business he will be giving me a loan to help open up a warehouse(~1,000+ SF) which I will pay back as sales begin. He wants me to rebrand the company to sound more Americanized. When he ships the products, we will delay payment until AFTER the sale has been made, which effectively puts no financial burden on me.

Simply, he wants to break into the US market and doesn't want to use Distributors so we can secure higher profits. The reason for not taking a traditional import/export stance where I would be hands-off is for customer service, speed of delivery, and he wants me to visit companies to help sell more products (hopefully I can scale up and hire someone to do this in the future). To allow for him to see some of the extra profits selling direct to the business, I will be paying him on a monthly basis for a consulting fee.

I am finding it hard to pinpoint exactly what type of business this is, though you could say that I am essentially private labeling with extra help from the manufacturer. He already has contacts and sales with multinational pharmaceutical and agricultural companies in India, some of which we have all heard of before. So, all USA and Canadian sales will go through my warehouse or would be sent to a distributor if needed.

It is not exactly what I had in mind when it comes to starting an import/export business, but this was my best effort at negotiating a deal that is mutually beneficial. My hope is to gain experience importing his products into the USA as well as exporting some products from the US to India.

I feel this is a really good opportunity to network in India. This one contact has already branched out to multiple other contacts who are possibly interested in working with me to import their products into the United States if I can help this BioTech company.

I am open to critique or suggestions as I still can make some adjustments to this business model with the agreement of the owner of the BioTech company. This is new territory for me, so mistakes will certainly be made along the way. I only hope I am humble enough to see and take good advice as it comes my way and implement it to the best of my ability.

I will probably give an update here in 2-3 months as this will be the approximate time when I will have leased out a warehouse.

 

[Mikkel]

Just a heads-up, Indian red tape and bureaucracy are epical and legendary. I'd be careful whom I trust and whom I'm making any deals with. Government officials can ask you for bribes if you need them to get things done(like stuff that's within their job description)

Don't get me wrong, I have friends there and the most of people I came across are great, but there are people who wouldn't think twice before trying to scam you, just cos you're a foreigner.

Good luck!

Thank you for this insight, as this is my first time dealing with India. Would you say it is typically government officials that are corrupt or other groups of people? I would like to think I have a very friendly relationship with the guy I will be working with, as we met outside of business. I was actually the one who approached him about his business venture after I learned he was running a successful BioTech company.

I want to be optimistic, but cautious pessimism is warranted until I can ensure the quality of the products. My assumption is that if these multinational companies in the US are willing to buy these products, then they will have already been strongly vetted.

This is very true. I have dealt with Indian companies as both a buyer and a seller. The amount of corruption I encountered when trying to export my industrial chemicals to India was so bad that I gave up. I am not a person who gives up - it's not in my genes, but India was an exception.

Walter

Did you find this to be difficult when going through customs? Were the requirements to export your products into India exceedingly onerous to the point it was not worth it in your opinion or did they ask for some form of bribery?

The owner of the company said he has friends who work in customs that have helped him in the past with imports and exports. Maybe this will be of benefit to me in the future? Only time will tell.

 

[Walter Hay]

1. Thank you for this insight, as this is my first time dealing with India. Would you say it is typically government officials that are corrupt or other groups of people? I would like to think I have a very friendly relationship with the guy I will be working with, as we met outside of business. I was actually the one who approached him about his business venture after I learned he was running a successful BioTech company.

2. I want to be optimistic, but cautious pessimism is warranted until I can ensure the quality of the products. My assumption is that if these multinational companies in the US are willing to buy these products, then they will have already been strongly vetted.

3. Did you find this to be difficult when going through customs? Were the requirements to export your products into India exceedingly onerous to the point it was not worth it in your opinion or did they ask for some form of bribery?

4. The owner of the company said he has friends who work in customs that have helped him in the past with imports and exports. Maybe this will be of benefit to me in the future? Only time will tell.

1. Corruption is definitely not limited to government officials. As @Kubera said:
"there are people who wouldn't think twice before trying to scam you, just cos you're a foreigner." As a buyer I became very wary of that from experience, as did my brother in law who would not pay for his container loads that he frequently bought, unless he travelled to his supplier's premises, watched the entire packing and loading process and sealed the container himself.
2. This makes sense.
3. Duty rates were prohibitive although there was nothing like my product available on the Indian market, and the industry I supplied extensively throughout the Asia/Pacific was still using an obsolete and ineffective chemical product. Even the Customs brokers I approached wanted ridculously high fees because of the bribes they would have had to pay.
4. Having someone in place like that is almost essential.

Walter

 

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[Walter Hay]

I am open to critique or suggestions as I still can make some adjustments to this business model with the agreement of the owner of the BioTech company. This is new territory for me, so mistakes will certainly be made along the way. I only hope I am humble enough to see and take good advice as it comes my way and implement it to the best of my ability.

The business model you are considering is quite unusual, but it looks to me as though it would work.

I hope so for your sake.

Walter

 

[Kubera]

Thank you for this insight, as this is my first time dealing with India. Would you say it is typically government officials that are corrupt or other groups of people? I would like to think I have a very friendly relationship with the guy I will be working with, as we met outside of business. I was actually the one who approached him about his business venture after I learned he was running a successful BioTech company.

I want to be optimistic, but cautious pessimism is warranted until I can ensure the quality of the products. My assumption is that if these multinational companies in the US are willing to buy these products, then they will have already been strongly vetted.



Did you find this to be difficult when going through customs? Were the requirements to export your products into India exceedingly onerous to the point it was not worth it in your opinion or did they ask for some form of bribery?

The owner of the company said he has friends who work in customs that have helped him in the past with imports and exports. Maybe this will be of benefit to me in the future? Only time will tell.

Think @Walter Hay gave a good answer. Corruption is everywhere and you'll have to be alert at all times when dealing with people over there. Walter knows a lot more than I do in terms of business-related matters when it comes to India. However, if you have any questions about India, Indian culture, and mentality, just drop me a private message. I've lived there for a total of two years so I'm familiar with the culture, and places. I'd be happy to help you understand better that colorful place.

 

[Mikkel]

UPDATE: Since my last post, I have made some drastic changes to my business model. When I looked at my previous model, I had a difficult time seeing how I could use this to scale with other clients who would wish to store their products in my warehouse. So instead, I pivoted to a distributors model. Very simply, the process goes something like this:
1. Manufacturer's product gets shipped to my warehouse
2. Charge a storage fee(to reduce the cost of the warehouse)
3. Send samples and talk with prospective buyers in the US and Canada
4. Set up shipping via truck to customers' warehouse
5. Handle the payment
6. I take a % of the revenue of each sale. Depending on the buyer(end-user or larger distributor), the % will be a sliding scale that is predetermined based on the product. Roughly 15-30%

This business model should allow me to warehouse and distribute other biotech companies' products so as to not rely on a single manufacturer for my business to succeed.

Next, I have decided to be a bit more cautious with warehouse storage. Originally I was going to outright lease a 1,300 SF warehouse with no proof of concept, for 3 years. Seemed unnecessarily risky in my opinion. I'll be renting monthly storage units for ~$250/month for about 200 SF of space. Initially, only samples will be sent to me, so we can test the market before I sign a 3-year lease and before my manufacturer sends over a large number of products.

The next step is to set up my LLC by talking to a lawyer and also speaking with my CPA to make sure I lay the groundwork properly, right from the outset. If anyone has some ideas for critical questions I should ask either my CPA or lawyer, let me know. I have a running list of questions for both of them. I'll be scheduling appointments with each of them over the next two weeks(my CPA is on vacation right now).

Finally, I've asked the manufacturer to send me over his audited financials. My thinking is this, if I am going to be starting a business specifically to help him sell products in the US and Canada, I want to see proof that he is truly selling the type of volume he claims to be selling and that he is actually selling his products to multinational companies in India already. He agreed that this was fair and said he could get them to me in the next week or so(he also is on vacation right now).

Questions to anyone who may know:
I am looking at two types of lawyers right now. A typical small business lawyer(to set up my LLC) and an import/export lawyer. To those who have done import/export before, is it worth talking with an import/export lawyer when setting up the business? Would I even need a small business lawyer if I have a niche-specific lawyer that I am working with?

 

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[Mikkel]

UPDATE: A quick monthly update.
I officially have an LLC for this business.
I spoke with my CPA, long story short, he believes it is best to speak with an Import/Export Lawyer first so that I have the correct business structure in place so that we can set up a system of how the money will flow in and out of the business.

Until I know more about the structure of the business, there is not much else to report on.

If anyone has used an import/export attorney that they recommend. Let me know, as I am currently on the hunt!

 

[Mikkel]

UPDATE:
Since the last update, I took the advice from others on a different thread and found a SCORE mentor. Super helpful. One of my two mentors started his own successful chemical company that imported and exported products internationally, he has proved to be a valuable asset when trying to fit all the puzzle pieces together when trying to set up the structure of this business.

A few suggestions he brought up:

1. I don't need an import/export lawyer. I just need a contract lawyer. I certainly agree that I need a contract lawyer, though I am undecided if I truly need an import/export lawyer or if they will just complicate the process and eat up some valuable money that I need to start this business.

2. Use public warehousing. Pretty straightforward. I was initially going to try and use a private storage facility(month-to-month) and then move to lease a 1,300 SF warehouse. The problem would be that leasing a warehouse usually comes with a 3-year contract. Public warehouses have all the logistical support, WMS, 3PL, and month-to-month agreements that can allow me to scale as needed.

3. Use a consignment model. Now, I am not going to use a traditional consignment model as I have been told that the Indian government requires all exports to have invoices before leaving the country. I have not personally verified this yet, but this is what the manufacturer is saying. I should confirm this first before assuming this is true.

4. Reach out to local resources. I have reached out to local people in the agricultural biotech space. It was quite each as I just contacted the local university close by where I live. I've already made some contact and intend to get a better understanding of what they do and what problems need solving.

The first samples should be arriving in ~1 month's time, so I need to kick things in high gear.

Just have to continue to be consistent as I have been for the last few months. I have gone through multiple iterations of different business models but things are starting to take shape.

If anyone has done something similar in nature, I would love to pick your brain! If not, I will continue on this path!

 

[Niptuck MD]

hello @Mikkel
my posts can be of use for you as i have spent a lot of time in india.
I recommend only dealing with the southern states. (the north is an absolute shitshow and mess right now do to government and now mobs and riots for religious reasons)
the southern two states of kerala and tamil nadu are going to be your safest bets, however others in the central zone COULD potentially work.

Yes corruption is everywhere but knowing the right people (more importantly the ones with some moral grounding) are essential. They have mastered the art of greasing the palms that need to be greased but wont take shit at the same time and will not cower over any frauds either. (this is truly an artform that can only be explained by people that live in these types of environments. i have seen quite a lot and its truly fascinating the persuasion and the finesse that goes on)...

After reading through you posts, biotech can only mean three regions. Gujurat or outside Mumbai, Hyderabad or Chennai. (different regions different types of people)
Biotech is exciting as there are so many opportunities there but finding the RIGHT balance of skilled labour and effective personnel is going to be the issue in India. As we all know there is no shortage of labourers but are they competent??? Also communication is vital. I would avoid dealing with whatsapp with your suppliers. Try to get on zoom or skype video calls and document what you are saying at each meeting. Have them sign off on it as well. This is just routine due diligence work. (Trust me it will be of use in the future you never know)


feel free to reach out if you need any help with sourcing. Also take heed to whatever @Walter Hay says as he is aware of the situations.

On a side note, the Indian constitution and laws are basically modelled by british law, (meaning theoretically its supposed to be as thorough and fortified as the law of the UK but REALITY tells us the law and constitution are indeed for sale which is why india is in the state of madness its in.) This is not to scare you but this is just the reality of the situation. However my experience is that if you have the right team and the right network of competent individuals you should be relatively fine and you can profit from the opportunities that india has to offer.

 

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[Mikkel]

Thank you for the reply @Haji Mastan

I am going to spend some time reading your other posts and may shoot you a direct message if I have any more direct questions.

The person I am working with is from Chennai, India which is in Tamil Nadu. I was lucky to speak with others who lived in India prior and who set me on the right path when looking for the best areas in India to do business.

I met the owner of this company outside of work, developed a friendly relationship, and months later we got to talking business. It is hard to judge character when you grow up in a different culture, but after having many video calls with him both for business and outside of business, he seems to have solid morals.

From what he tells me, he realizes there is a lot of corruption, certainly, this includes dealing with customs as well. He says that being friends with people who have power is important. As a side note, if this business venture goes well, he wants me to meet with someone with political influence in India that has access to raw materials. I have no idea what this intales, as we only spoke briefly on this subject matter, but from what I inferred, raw material suppliers in India need to play politics. Something I'm sure I will find out if everything goes well within the Biotech space.

In regards to the quality of the product, this is certainly something of high importance. The manufacturer who is also the owner of the company has a big incentive to provide good quality products. Products do not get sold if the quality is not to the buyers standards as there will be multiple rounds of sample buys from larger companies. It has not been written out yet, but we will be getting a contract lawyer involved where all products that are not sold or are defective are to be shipped back to India and my company will not be held liable for the product. Biotech products need to hold up to high standards, so this is certainly something I will continue to monitor.

Try to get on zoom or skype video calls and document what you are saying at each meeting. Have them sign off on it as well.

This is interesting. I have never thought of this. I will suggest this to him and will start making this a habit!

The forum posts and the books that @Walter Hay has written have been a northern star for me. I have his book next to me at all times so that I can reference any of his work quickly!

On a side note, the Indian constitution and laws are basically modelled by british law, (meaning theoretically its supposed to be as thorough and fortified as the law of the UK but REALITY tells us the law and constitution are indeed for sale which is why india is in the state of madness its in.) This is not to scare you but this is just the reality of the situation. However my experience is that if you have the right team and the right network of competent individuals you should be relatively fine and you can profit from the opportunities that india has to offer.

I view this as a benefit as this is a huge barrier to entry for most people. If I can manage to break through that barrier to entry, then this leads to more benefits for my company. This is certainly not to underestimate the large barrier to entry. I am trying to broaden my network so that I can make this as successful as possible.

Once again, thank you for your post!

 

[Niptuck MD]

The person I am working with is from Chennai, India which is in Tamil Nadu.

again if you need help let me know. I am tamil and speak it almost weekly for other clients.
hope it works out for you

 

[Niptuck MD]

he wants me to meet with someone with political influence in India that has access to raw materials.

yes this is how it works in tamil nadu. The dominant party leaders and MLA (members of the legislative assembly) usually have the raw materials on lock. (You have to go through them or one of their proxies). This is how they got clout to run for office obviously.

 

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[Walter Hay]

again if you need help let me know. I am tamil and speak it almost weekly for other clients.
hope it works out for you

@Mikkel, It is clear to me that Haji Mastan knows the realities you face in dealing with your contacts in India. I suggest you maintain contact with him.

Walter

 

[Mikkel]

UPDATE:
End of August / Early September I should be receiving samples. The number of samples should be ~100 units(I'll explain below why I am ordering so many samples) of smaller products and 5-10 larger products. In the meantime, I am prepping as much as I can, this includes setting up my bank account, looking for warehouses, better understanding shipping costs, etc.

I had a conversation with a local university professor(I’ll refer to him as the professor) who is in the field of study I need to target as his work and the students he teaches will someday be the type of people who will be buying these products. The discussion was very helpful, and far more productive than I anticipated. I got a lot of relevant knowledge that will be helpful when speaking to future buyers. What might be even more important is that the professor has invited me to their science lab, once I receive my samples, to not only test my products so they can give me an honest review on the quality of the product, but so they can determine if they would be interested in purchasing the product. This does not mean they will buy the product, but it can be my first experience with a potential customer. The professor also wants to get me in contact with the PhD student who is in charge of purchase orders for their lab. I can pick her brain in regards to what she looks for in products when choosing which items to buy from which companies.

The samples that I will be receiving can be used to run tests at the university. They would only do tests with a minimum of 100 units. This is the reason for the high number of samples I will be receiving. Luckily, I won’t have to pay for the samples, the supplier is, so that is helpful.

Currently, I am getting stonewalled by public warehousing companies. I’m going to keep hounding them until I get some answers. If I get nowhere in the next week or two, I have a contact in my area who might be able to sift through the BS and help me get in contact with someone.

I cannot say this enough. Networking is critical when starting a business like this. I would be dragging my feet trying to figure out the next steps without some critical information that I have gained just from talking with knowledgeable people, both from this forum and outside this forum.

I spoke with @Haji Mastan earlier this month, this dude knows his stuff! I appreciate the conversation. Haji suggested I make a thread on the INSIDE on what I learned throughout this process. Right now I am compiling important information that I have learned so far. Once I get further into the process, I’ll start dumping information. Hopefully, someone will find it useful.

Also, some of the information in this thread will start being selectively edited so as to not give away too much information to the public forum, this is still a business of course. Some of this information might make it into the INSIDE when I get the chance to start the new thread.

That is all the updates I have for today. Thanks to everyone who has helped so far in the process. The next big step will be proper due diligence on the products I receive. I remain cautiously optimistic.

 

[Niptuck MD]

can be my first experience with a potential customer.

Yes. It very well could be. Stand your ground and try and grt the sale. Read spin selling by neil rackham on this idealogi and also the feldman method (great book)

. I can pick her brain in regards to what she looks for in products when choosing which items to buy from which companies.

Pick away! Academic types love this sort of.stuff makes them feel useful.

this dude knows his stuff!

Thank you for the kind words. Hope to help you further and see where this goes. It sounds enticing

 

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[Mikkel]

Yes. It very well could be. Stand your ground and try and grt the sale. Read spin selling by neil rackham on this idealogi and also the feldman method (great book)

I'm 1/2 way done with @MJ DeMarco's book, I should be finished reading the book by this weekend. Great read so far! I just purchased Spin Selling on Audible and I'll follow that up with The Feldman Method. It looks like I have enough reading to last me a while. I'm still working my way through Transport Logistics: The Wheel of Commerce and it looks like Export Import Procedures and Documentation just came out with a new edition 3 days ago, selling on amazon in early September. So I got my work cut out ahead of me.

Pick away! Academic types love this sort of.stuff makes them feel useful.

Hell ya. He also gave me important information on finding other universities around the country that have similar programs. I can begin to reach out to other universities once I better understand what labs are looking for. I certainly need to better understand my customer's needs before I can become effective at selling.

 

[Mikkel]

UPDATE:
Since it is labor day weekend, I thought I could spend some time writing an update as I have some extra time on my hands.

It is getting close to the time when I will be having samples shipped out. Ideally, samples would already be shipped out, but a roadblock has slowed things down. I found out a bit late that one of the products will need an SDS sheet. I also want to speak with a consultant in regard to any regulations that I may need to adhere to. I thought I found someone to do both of these things last week. Unfortunately, they realized they didn't have a specialist who could advise me specifically on biotech products.

I'm kicking myself, I should have reached out to multiple companies last week, instead, I am left sitting on my hands waiting to reach out to other businesses after the Labor Day Weekend

In regards to warehousing, I was able to get in touch with all but one warehouse. Unfortunately, they were either at full capacity or could not meet the needs I was looking for. I expanded my search for warehousing companies throughout the entire USA. I found a total of ONE...

Yup. Only one company that is located in Texas. They seem like a great company to work with, though I would have preferred to have a company located closer to the Northeast as this will be where I begin to target my earlier customers.

The benefits of a warehouse in the Northeast would be both a decrease in transportation costs as well as a decrease in delivery time. However, the downside would be that inevitably we will be having customers located on the West Coast(if all goes well). Ground transportation from the East to West Coast is not very cost-effective. Having a warehouse central to both the East and West Coast can have its benefits.

I will admit, having two warehouses on each coast would be the most ideal situation.

For now, I will continue to look for different warehousing solutions, but I am happy to at least have a single viable option.

Those are the main updates. Currently reading SPIN Selling by Neil Rackman. A great book for anyone looking to make large sales.

 

[Niptuck MD]

Having a warehouse central to both the East and West Coast can have its benefits.

Yes from a logistical perspective. This is why chicago remains relevant (otherwise who would want to live and do business there?)

Finding the right balance-mix of freight cost per mile from a central location is ideal from the start as the quantities are lower which drives up cost for the transporters.

 

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[Walter Hay]

I'm 1/2 way done with @MJ DeMarco's book, I should be finished reading the book by this weekend. Great read so far! I just purchased Spin Selling on Audible and I'll follow that up with The Feldman Method. It looks like I have enough reading to last me a while. I'm still working my way through Transport Logistics: The Wheel of Commerce and it looks like Export Import Procedures and Documentation just came out with a new edition 3 days ago, selling on amazon in early September. So I got my work cut out ahead of me

It appears to me that you might be trying DIY sourcing and importing. If you work through either an efficient freight forwarder, or a top class logistics provider, you can forget all that study on logistics. A good logistics company should have warehouses strategically placed to expedite your distribution.

Walter

 

[Mikkel]

It appears to me that you might be trying DIY sourcing and importing. If you work through either an efficient freight forwarder, or a top class logistics provider, you can forget all that study on logistics. A good logistics company should have warehouses strategically placed to expedite your distribution.

Walter

Correct. I do plan to use both a good freight forwarder and the warehouse that I am looking at seems to have a solid logistical infrastructure. As of now, my main focus is ensuring all products are compliant with all applicable US laws so that I can properly sell them, so logistics is one thing I don't have to think as much about, which is nice. I'll have to do some more digging to see if there are larger public warehousing companies that are located on both coasts that could adhere to my product's needs.

In the meantime, I am trying to expand my knowledge on applicable topics including importing and logistics as my long-term goal will require this knowledge. Only when I have free time like waiting for the compliance team to get back to me am I spending time on this type of work.

Yes from a logistical perspective. This is why chicago remains relevant (otherwise who would want to live and do business there?)

Finding the right balance-mix of freight cost per mile from a central location is ideal from the start as the quantities are lower which drives up cost for the transporters.

The top 2 states for biotech are certainly Massachusetts and California. I believe that if I can use two private warehouses on each coast, that will be the most effective because there are significantly fewer biotech firms outside of the coastal states. However, each state has at least one university that has an agricultural biotech program, so starting in the middle is not the worst option if I can sell to these universities.

 

[Niptuck MD]

top 2 states for biotech are certainly Massachusetts and California.

Ok good to know. If you need a forwarder let me know

 

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[Mikkel]

UPDATE:
It has been nearly two(2) months since my previous update.

As with any new start-up, the only thing you can expect is the unexpected. I did not think it would take this long to understand the regulations for the products I will be importing. I expected the regulations would be complicated, but I was not ready for the lack of knowledge from many in the FDA and USDA in regard to these regulations and who I should talk to. Essentially, I have been handed off some 20+ times where they would tell me to call this person or email this division, only to have to wait for a reply. Luckily I found a person at both the FDA and CBP who have been very helpful and I am just now making legitimate progress on the regulatory and import front. After speaking with the FDA, USDA, and CBP I was informed I should lock down all regulations and ensure I have all the paperwork in place before I even bring samples over, so as to not have the samples detained or rejected at the Point of Entry.

I was given a lot of references to review and have only a few more people I think I will need to contact from these regulatory boards before I can instruct my supplier on the correct actions that must be taken prior to him shipping over the samples.

Due to the arduous nature of the above work, I have been a bit slow on the warehousing side of things. My thought is that if I don't get samples or products over into the US, who cares if I found the best warehouse? When I am able to square away my current problems in regard to regulations and importing initial product samples, then I will better be able to target other warehouses. At that time I can also provide the requested paperwork to these warehouses when they ask about these products.

I spoke with a regulations consulting firm. The guy was sympathetic to my work, knowing I was a one-man start-up. Rather than charging me an arm and a leg for his work, he gave me some instructions on what steps I should do first before returning to his firm so as to greatly reduce costs. Essentially, the two(2) tasks:
1. Call all potential governing boards(FDA, USDA, CBP) to determine the regulations for the products.
2. Find a warehousing/logistics company that has worked with identical or similar products as mine.

If I am lucky, I won't even need to use the company's services, but they are there in case I get completely stonewalled and have nowhere else to turn to.

Anyways, that is my update. I wish I had an exact date on when samples will be sent and arrive, but that is largely determined by how quickly I can get adequate responses from the regulating boards and how fast I can meet those regulations.

I hope to give a more exciting update next time around!

One quick note that may sound cliche as it has been said many times before:
Put in the hours, put in the effort. Don't give up just because it is hard or challenging. The lonely desert of entrepreneurship, which has been referenced in this community many times, is very much real, but this is where the weeding gets done. The weak fall and those who are persistent are the ones given the opportunity to make real change in both the world and in their own life. Small progress each day makes a huge difference after months and years. Keep moving!

I told you it would be cliche

 

[Niptuck MD]

but they are there in case I get completely stonewalled and have nowhere else to turn to.

just be weary... if it is a reputable regulations dealing firm, they will charge high, regardless of what they say to you... Unless they really need business thats a different story... other than that keep on trucking.