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GOLD! Where I have been this time... and why I'm famous at Wells Fargo

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Kak

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Hey guys, I have been extremely busy the last several months. As usual. Sorry that's such a pattern. It has definitely been an incredible learning experience. I know @Vigilante is privy to some of the details of this time away... I decided it would be a huge shame not to use what I have learned to help some of you. I also plan to do what I can to stick with this although the companies suck up a major portion of my time.

First of all, I got married back in April to a wonderful woman and I am thrilled I got her. She is amazing, I love her very much and I am extremely happy I married her. So to those of you who think you can't have a successful business and a wife or family are wrong, you just have to be deliberate and make sure you create systems that allow you to spend time away from the business. Its worth it. No judging here, just don't let entrepreneurship stop you from pursuing a rewarding relationship if it is something you are interested in.

Now on to the business stuff... I am convinced that we all will be humbled at some point. The fortunate part is it is probably one of the largest stepping stones to the success there is. I can't believe the shaky foundations I have tried to build on in the past viewing from where I stand now. I have gone through so many times in my life where I felt like I couldn't lose. Like I had the world by the balls. Sometimes you need the world to kick your a$$ to realize something better might be out there.

The following few stories I'm going to share show how being diligent in hard times is so important. I will start with part of the first story on this post.

Ok. I have been attempting to source raw materials for very large companies. Companies you would know. This had initially been a project I took on for fun because I saw some opportunity. I eventually found demand for something huge and went after it. It took over a year to find this particular product. I worked and worked. Through supplier after supplier. Country after country. I must have had the same discussion with 1000 different potential suppliers. I have spent thousands of dollars on samples that didn't pan out. Plane tickets to meetings that didn't pan out. Shit wasn't going right. I wanted to quit because this sourcing crap didn't even matter, I was making money elsewhere, but I decided a long time ago that if "its too hard" is my reason I will not quit. I refuse to be a pussy.

Finally, after all of that blood, sweat and tears, I found the material in China, at a price where I could make an ongoing mid six figures per month. I thought the blood sweat and tears were over. This was by far the biggest kind of deal I had ever done. It was amazing and exciting. I sailed through the process of sending samples and supporting documents to potential customers. Doing my best to look like a way bigger company than I am. Finally, One bit. Hard. Within about a month I had money being put into a letter of credit for the first of what would be 6-10 similar transactions per month. It was there. Way more income than I have ever had in my life was sitting in limbo. It was a side project about to blow past my other businesses. It was sitting there ready for me to transfer just a fraction out to my supplier. That fraction happened to be about 100k by the way. The remaining chunk would be mine when the LOC cleared.

Wells Fargo made the transfer a pain, every step of the way they would need some other bs for me to create. I ended up on my honeymoon during this deal because it took a few weeks to get this done. My wife, being the awesome girl she is, was supportive and found it hilarious when I needed to get a document notarized in Cabo. We went to like 7 places before one just took 20 bucks to stamp my document. Finally I was in compliance with all of the regulatory crap. Honestly it probably wasn't because the Mexican notary may have just been some guy with a stamp.

Whatever, now I can relax and look at million dollar vacation homes and have fun on my honeymoon because big money is on the way. Back at home I got confirmation from Wells that the transfer was a success and the credit was now offered to my supplier. I was excited to tell them that evening, but evidently they already knew. The supplier we had been in discussions with for months, who supplied a rock solid sample was completely unreachable. Their website gone. Phones disconnected. Email bouncing. Son of a bitch...

I will continue this later, I'm going to sleep.
 

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Mikkel

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This makes me want to punch a few walls for you :headbanger:

I assume you have some sort of regrets along the way, maybe in hindsight some sort of step you could have taken to prevent an event like this from happening?
 
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Kak

Kak

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Yeah that is what I thought. They had a very professional website. They had a number of different salespeople. I ran their business license with the Chinese government and they were new, but clean. The sample was good. They accepted a secure form of payment. They looked like the real deal and I was fooled. I didn't think I needed to look harder at them. Although I have a different way of doing things now.

Within 10 minutes I contacted my customer with the bad news. I always do business above board with the most honesty I can possibly share in order to build the most solid foundations I can. As you would expect this looked bad. I looked like shit. I basically sent 100 grand of his money to a scam.

I was livid. On that day, given the opportunity I would have been willing to murder those pieces of shit. I called wells fargo about the protections offered by a letter of credit. They said they MUST transfer the actual funds against a bill of lading... More bad news. They have "no say" in whether the transfer is facilitated. So adding this up in my head... These scammers had a plan to be able to transfer the money even though it was supposedly a secure LOC. I called around to people I know who work out of China and they said it was becoming a common thing to fraudulently accept letters of credit because they have paid off ship captains that will create fraudulent bills of lading for them and allowing them to transfer.

For all intents and purposes I was screwed. Not only did my deal fall through, but I was going to lose my customer 100 grand, probably get sued, and proceed to lose 150k of my own money in the lawsuit. I thought the blood, sweat and tears were bad until then and I would have given anything to go back there and take a different turn that would have led me to a different supplier.

I almost took Wells Fargo at their word. The money was basically sitting in escrow just waiting to be dispatched to the scammers whenever they submitted the proper documents. I almost decided to hope and pray that the bill of lading would get flagged, and then that my customer wouldn't sue me if it did. I was in for a rough month of a waiting game. Then I had a discussion with @Vigilante. He said something along the lines of "the hell they have to transfer the money", and "make it known that you aren't going to go away."

I took his advice... for 2 weeks I beat them up. Calling them and sending them email after email. I got to the board of directors. I was the most annoying to any one organization I have ever been in my life. The total tally was over 500 emails. Probably 100 that said I was going to sue them and that they are complicit in the fraud if they transfer the money. That they knew in advance of a fraudulent transaction and did nothing. Their internal communications system sucks by the way, you can never get the same person on the phone twice. They told me time after time that there was not a thing they could do. Then a lady called me. She said "I think I can help you", for the first time a bit of hope. She said "we can't cancel the LOC but we can make it expire sooner" I asked how much sooner because we definitely had already given them plenty of time with our money exposed. She said 2 days to process an amendment. I said lets do it.

Meanwhile I wasn't giving up beating on the board at WF over and over I asked for a cancellation. 2 days was all it really took for them to run off with the money anyway. Over and over they said they cant. I sent emails to the CEO, CFO, internal counsel, COO. Every single officer each of them probably got 60 emails. Finally it was confirmed that the LOC had expired. I had dodged a bullet, but I still had the Chinese police looking for them and assisted in an investigation with a Russian guy that was actually defrauded. I should follow up with the police to see if anything came of it. Hopefully they are all behind bars or dealt with.

I told my customer he could call and get the money out of the LOC. When he called and said which transaction they kissed his a$$ up and down the place. "Oh you were the applicant on KAKs LOC? We know exactly who that is, lets get you your money". He later called me and asked me what the hell happened and I told him this story. He said he has never worked with a supplier that has gone so above and beyond to protect his interests in his life and has since given me the opportunity to not only sell this same product to him again, but has asked me to source most of his raw materials. Yeah a big 180. Thanks to @Vigilante kicking my a$$ a bit.

Me and my team talk about two things in this business "irons in fire" and "balls in courts". A good iron in the fire turns into a ball in court. When its no longer up to you and you are waiting on a yes or no that is a ball in court... I have 2 currently, with the same customer I worked with in this story.

One is a synthetic lab made version of that initial Chinese good. It solves ALL of the problems I had with the natural product. Like supply ability, quality, consistency, and outrageous price. It is also made by a company I visited in person, in Texas. It will probably take over an entire market with a private label brand of the good that I own. Finally some light at the end of the tunnel for that product.

The other product I am sourcing for him is made by a friend's company in Shanghai. The factory is the size of the town I live in. They are legit. My customer has considered 2000 tons (which is like 90 containers full) per month of this material and I'm waiting to hear back on that as well. If one of these balls in courts turns into a deal, and I have no indication why it wouldn't, it will be a 2 year "overnight success story".

The point I'm trying to make here is that if I had given the finger to this project at ANY point along this journey I wouldn't be here looking at a far more lucrative deal than I ever thought possible. Hard times can be a blessing in disguise. Clearly a much closer relationship with my customer than I would have had. I have earned respect. Also don't let anyone tell you they cant do something, they may be right, but someone can. Remember no one gives a shit about you.
 
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Kak

Kak

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Great, now every newb here is going to start using ridiculous cliffhangers in their posts.

In all seriousness, well done, Kak. Can't wait to read the rest.
Aren't most of you guys NLP fans? Haha I couldn't resist.
 

Fox

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Damn one of the best posts I have read on here. This is what pure process looks. Excellent insight. Rep sent @Kak
 

Chazmania

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He said he has never worked with a supplier that has gone so above and beyond to protect his interests in his life and has since given me the opportunity to not only sell this same product to him again, but has asked me to source most of his raw materials. Yeah a big 180. Thanks to @Vigilante kicking my a$$ a bit.
The point I'm trying to make here is that if I had given the finger to this project at ANY point along this journey I wouldn't be here looking at a far more lucrative deal than I ever thought possible.
Damn what a story! Impressive turnout on so many levels - persistence, going the extra extra mile, and never ceasing to look for opportunity and a way to win.

I'm glad that's how it's wrapping up now cuz your cliffhanger ending was pretty intense!
 

Vigilante

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I would have died at the point that 100k was sitting in limbo with a manufacturer that went poof
He was actually pretty calm.

The way he dismantled Wells Fargo was surgically methodical.

He plays life by a different set of rules .
 

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Mikkel

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@Kak That is an incredible story and says a lot about who you are. Also, sets a Gold Standard for people looking to start any business. Fight like hell for your customer, and when that hell comes back to fight you, you fight like hell again.
Great story!
Rep ++
 

Andy Black

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Different league stuff.

Well done @Kak, and thanks for sharing.
 

MJ DeMarco

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But what exactly do you sell? Who is your supplier? Who are you selling to? Give me all the details please. Don't forget phone numbers, web addresses, and shipping logistics.

Different league stuff.
Around here we say "bigly" LOL.
 

The-J

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He said he has never worked with a supplier that has gone so above and beyond to protect his interests in his life and has since given me the opportunity to not only sell this same product to him again, but has asked me to source most of his raw materials. Yeah a big 180. Thanks to @Vigilante kicking my a$$ a bit.
Rep+ for this
 
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Kak

Kak

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This makes me want to punch a few walls for you :headbanger:

I assume you have some sort of regrets along the way, maybe in hindsight some sort of step you could have taken to prevent an event like this from happening?
In any large scale international trade where you can't use a credit card or paypal the best bet is net 30. Second best is using straight escrow service. I suggest an LOC as a last option, its only marginally safer than a full blown wire transfer. No matter what, get references. Do a ton of research and don't trust anyone.

Don't leave yourself exposed if you don't went to get screwed is the bottom line.

I'm not above flying somewhere with a laptop and transferring in person as I take delivery on the spot and bring in my own transportation on the first few deals.
 
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Kak

Kak

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But what exactly do you sell? Who is your supplier? Who are you selling to? Give me all the details please. Don't forget phone numbers, web addresses, and shipping logistics.



Around here we say "bigly" LOL.
Lol not this crap again. Nice
 

Bigguns50

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@Kak...thanks for sharing and congratulations on the many positive things that came from your experience. Some of your advice reminds me of my lawyer friend's advice. Basically to cover your a$$...cover your a$$'s a$$ and your a$$'s a$$'s a$$.
 

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LightHouse

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Don't NiLP us bro.

Good to hear the client still wants to work with you. I can't wait until 2 years from now when you post how this next deal closes :p
 

Ravens_Shadow

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One of the best real life in the trench stories I've heard in a long time.

Seriously reminds me when I was in Indonesia inside a customs warehouse in jakarta, shitting a brick, because they forged our manifest list (Lists everything in your crate) so that it was no longer compliant to what was actually in the box. They were trying to get a bribe out of us, but it wasn't going to happen. I ripped them a new one, and I gave zero F*cks as I got it out of customs, scotch-free with a huge smile on my face.

Way to go on turning this around @Kak! Persistence pays!
 
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AlexCph

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Great ending man. Im glad to hear your approach of transparency worked out. This is something I practice generally speaking throughout my life and its reassuring to hear that this strategy helps instil trust in you even tho things are looking extremely bad. WP!
 

ApparentHorizon

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Care to share a cliffnotes version so we dont have to read that? :)
1990s Rise of Mainland Chinese Patriotism

- Mainland Chinese officials feel inferior to the west (West interference, opium wars)
- Communist party: indoctrinate/educate workers and young (Propaganda, full media control)
- Media pushes rise of "East Asia" (culture/economy)
- "[rise of] faith in science, material wealth, capitalism and national strength"

Internal Debate:
- "Western values and civilization are generally welcomed...apart from...economic or other forms of imperialism"
- "...Chinese intellectuals...sought foreign [solutions]" (trade, labor, etc.)

TV Show: "A Beijing Man in New York":
"...depicted horrors of Western capitalism at the same time as affirming the positive dimensions (rags-to-riches) of the market economy which China is pursuing with such energy."

"...children of the Cultural Revolution and the reform era come into power...."
 
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mayana

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He said he has never worked with a supplier that has gone so above and beyond to protect his interests in his life and has since given me the opportunity to not only sell this same product to him again, but has asked me to source most of his raw materials. Yeah a big 180.
Holy shit! That's fantastic!!!! Man, I was almost crying there for you for a minute. I'm so glad that this worked out for you, and thanks to @Vigilante for looking out for you.

Wow, what an incredible turn of events. My heart was racing when I read your first post.

Very happy for you! And congratulations on your marriage :)
 
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Kak

Kak

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That also makes 2 companies I am famous at. Im sure there is survalence footage of me at UPS. ;)

I have another story Ill unpack for you guys. Simillar theme. Also, if you have any questions for me don't hesitate to ask. Im not some billionaire, but Ive been around the block a bit.
 

Biafra

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That also makes 2 companies I am famous at. Im sure there is survalence footage of me at UPS. ;)

I have another story Ill unpack for you guys. Simillar theme. Also, if you have any questions for me don't hesitate to ask. Im not some billionaire, but Ive been around the block a bit.
Thank You for sharing this incredible story. Those are the reason I keep lurking on this forum. (Love how the threads are categorized: GOLD, Landfill etc. - that saves so much time)

I hope I will be able to contribute too in the future.
 

Mikkel

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But what exactly do you sell? Who is your supplier? Who are you selling to? Give me all the details please. Don't forget phone numbers, web addresses, and shipping logistics.
I think MJ already asked my TOP 5 questions ;)

Now, you would think that these big companies would have the man power to figure out how to buy these products from the manufacture, but apparently that's not the case. Besides finding are good quality product is your only other job is to get the product from manufacture to client?

Being a Raw Materials distributor seems to be a zero fluff type of business. Is it fair to say that the barrier of entry is to have the capital to buy all those samples and also the knowledge that there is raw materials to be sold?
 

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