Story of Building a Private Label Brand inside China with Cameron Walker

Welcome to today’s show! We have someone who has always been so supportive of the GFA community over the years – Cameron Walker. He’s spent many years at Global Sources developing the trade shows, but is now a full time entrepreneur and Amazon seller! I have been able to see his growth and convinced him to come on the show and share, welcome to the GFA podcast Cameron!

√ GFA’s HK border guide blog post where Cameron and Mike first connected
√ Global Sources trade shows
√ Global Sources Summit
√ Mike Bellamy’s interview on GFA podcast about avoiding factory scam & black box
√ Zack Franklin’s 1st interview on GFA podcast
√ Zack Franklin’s 2nd interview on GFA podcast
√ Cross Border Summit official site
√ GFA review of Zoom (Since Zoom gve us some China connection issues due to Coronavirus spike)

This has been a great show. Thanks so much, Cameron, for sharing, I really appreciate it and I am sure this will be one of our more popular shows.
I’ve been talking to some great people, getting them to come out to Cross Border Summit 5th Annual on November 19th-20th 2020. This will be the first time out of mainland China, down in Southeast Asia in Chiang Mai, Thailand.

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gfa292

[00:00:00] Episode 292 of Global From Asia. Today we’re talking about building a brand and Amazon business from inside the Chinese firewall. Welcome to the Global From Asia podcast, where the daunting process of running an international business is broken down into straight up actionable advice. And now your host, Michael Michelini.

[00:00:25] Thank you all for choosing to download and listen to our little podcast here. Closer to the number 300 and this has been one I’ve been waiting for. Cameron Walker. He’s a long time listener and supporter in the community in many communities here and uh, China and the Amazon space. And it’s a, it’s a pleasure to get him on.

[00:00:47] We are talking about his journey to build an Amazon brand inside of China where he has some unique perspectives and he really shares quite a bit of insights. It’s really, really great. It’s also really, thank you, Cameron for sharing on, on this community, uh, podcast as well as over the years and, um, blog posts and coming to our Cross Border Summit and other other events we do and other other initiatives and members calls and the GFA VIP membership and everything.

[00:01:17] So it’s a real pleasure to get them on the show and he shares some really amazing insights. Just, um, technical difficulties here, like struggling with internet between my bad internet in Manila and his internet in China, and, uh, maybe there’s just so many users on zoom. They said zoom stock was shooting up with the coronavirus and more people working online and needing these online collaboration tools.

[00:01:42] But basically it’s an a, it’s a fascinating conversation. I, I think you’ll get some great insights for you know, building your business, you know, finding products, ups and downs, the some strategies for being closer to your factory in different ways of, uh, of sourcing. So without further ado, let’s, let’s take it ay,away.

[00:02:01] Cameron. Do you enjoy the show and you want to get involved with even more amazing benefits and features and people here? GFAVIP Global From Asia VIP is an amazing members program. We’ve been doing more and more calls lately cause these events may be getting canceled due to Corona viruses and travel bans and border issues.

[00:02:25] So we are online more than ever. I’ve got a whole library online courses. We have these live workshops and masterminds, of course, the community, and we have community management. Actually, a new girl on the team, Princess is helping out now, so if you want to talk to Princess, she’ll take care of you.

[00:02:41] That’s a pretty cool one. gfavip.com, it’d be great to see you on the other side. Thank you Mike, to another Global From Asia podcast. The show is, is developing and, uh, I finally got Cameron on the show and we’ve, we’ve known each other for quite a while. I mean, I’m going to community and the various events, uh, we’ve both progressed so much over the years.

[00:03:06] Um, and, uh, Cameron’s a fulltime seller now, and you’ve also done a amazing work with Global Sources and the trade shows and, and um, we’ve seen each other. I don’t, I feel like my first impression, our first time I remember we talked was the border crossing blog post. I think if that’s the right, is that the right, is that where we connected or first started chatting or am I wrong?

[00:03:30] I think that’s right. I think I wrote a post on your blog, so it’s been, um awesome. First of all, it’s awesome to finally be on the show. I think we’ve known each other for, yeah five years or so. And I think you’re right. I think it was the, uh, the blog posts on crossing the border. I was meeting you, we’re both kind of soldiers across the border every very often, a couple times a week.

[00:03:53] And I think we’re both also one of those kind of people that likes to incrementally pass, so we were both, have little secrets to save ourselves. 30 seconds here, 30 seconds there. Yeah, exactly. Those ended up like, yeah, I know. I mean, uh, definitely. I don’t know how many times foursquare is deactivated now. I don’t know if he’d used Foursquare, but I remember I was like King the, it was like a check-in.

[00:04:19] app on your, like a social app. I was the King or I forgot. No, I think it’s. Man, I’m blanking on what they give you trophies or awards if you are the most frequent visitor of certain places. It was like a location based app. I was lot often the King of, I’m saying the wrong word, but basically the number one, a visitor of the Hong Kong border for awhile and Shenzhen Bay border back in.

[00:04:43] Cool. Maybe that’s because I wasn’t using foursquare, wouldn’t have been me if you had to use that app, but my newest tip for everybody is take the train. I haven’t been to Hong Kong in a long time. I completely avoid it now and just take the, take the high speed rail. Okay. We’ve got to update the blog, man. That’s awesome.

[00:05:06] So, so today, there’s so many things we can talk about, but I think just, you know, I think people, listeners, I know you’re, you’re also a regular listener. Thanks for, for always tuning in and giving feedback. Um, yeah, I think we talked about your journey, the private label brand, you know, becoming, you know, developing has, you have developed me before we get into a little bit of background about, you actually we’re connecting on, on Skype.

[00:05:30] You spent time in Shihan, right? First or maybe your journey into China a little bit. And I did. I did. Yeah. I spent six years in Shihan. That’s kind of the middle of the story. So let me give you, yeah, let’s go back. Let’s go back to the roots. Go back to the beginning. Let’s go back to the beginning. So first of all, I’m Canadian from Toronto.

[00:05:50] Area. Um, I graduated university in 2002, um, with a business, you know, with an undergrad business degree. And I, uh, I moved to Hong Kong two months later. So it was kind of right out um, right immediately after graduation, I got an internship at an investment management company in Hong Kong. Okay. It wasn’t really anything special.

[00:06:11] It was kind of a little bit of a marketing position. It was through, believe it or not, the Canadian government, in a subsidy program, so this company didn’t have to pay me a salary. All they had to do was put me up in a house in an apartment in Hong Kong for six months, and I work. I worked for them for free.

[00:06:28] Um, so thanks to the Canadian government. I ended up, uh, over in Hong Kong, and that was kind of the start of, um, what’s been, I guess, 17 years. So that wasn’t the original plan, but, um, it kind of developed that way. So Hong Kong. Um, for six months. Um, I traveled around Asia for three or four months, uh, you know, backpacking after that.

[00:06:54] and then I ended up, well, I guess something to put in there that we can maybe touch on later is that was right during SARS as well, right in the middle of SARS in 2003 in Hong Kong and also Mainland China. And after that, I moved to Beijing and started learning Chinese. That lasted about a year and a half, and then I joined Global Sources.

[00:07:20] Um, which I guess some of your audience are, the majority of your audience probably knows best. It’s best known now for being a trade show organizer. Yeah. But back then they, I mean, it’s a B2B media company, so they had magazines. They have an online catalog, um, and they also have trade shows. So I worked for them for

[00:07:40] 14 years, believe it or not. Wow. Time is flying. Yeah. Started in Beijing, worked for them for a year and a half. Um, basically frontline sales. So that meant, um, visiting suppliers and selling, um, selling trade show booths and selling, um, you know, online subscriptions in Chinese. So it was really on the front line, uh, speaking to suppliers, kind of thrown into the fire or thrown into the deep end sink or swim on Chinese.

[00:08:11] Which was interesting slash embarrassing, very frequently embarrassing. Um, that lead. Yeah, absolutely. If you can kind of, if you have thick skin and you can be kind of, uh, embarrassed quite frequently, but still kind of learn from that, um, it, it is the best way to learn. Okay. Yeah, I remember, I remember Peter, Peter F mentioning you, I think, uh, he was talking about the Shihan office, and, uh.

[00:08:44] I remember, um, that was a long, long time ago. But yeah. 14. Yeah. That’s why it’s great to get you on the show. I mean, there’s so much, um, so much we can talk about. Maybe we can get you on again even more, but, uh, yeah. You mentioned SARS, and of course we’re recording is right during this coronavirus night nightmare, or is it a nightmare?

[00:09:05] I mean, I’m here in Manila. I’m just reading the news, you’re, you’re there, right? I mean, you’re in, well not in Wuhan, you’re in mainland, mainland China right now. I don’t know, maybe we just hit this right off the bat, like your experience so far with SARS being through SARS and now I guess the word is coronavirus or whatever.

[00:09:21] I don’t know what it would call it. Right, Yeah. My, um, I mean, it’s not funny, but my kind of half joking way of thinking about it. This is, I was right in the middle of SARS in Hong Kong when it started. I went, and then I traveled through mainland China when kind of the news wasn’t very, it was, they weren’t being very transparent.

[00:09:42] That was right in the middle of stars in Beijing as well. Um, and then I traveled through Southeast Asia when they were getting it, and then I went back to Toronto where I’m from when they got it. So, um, I was right in the middle of that. And then this year my wife is, my wife, Michelle, I think, you know, is from Hubei province and we go back to  every year for Chinese new year.

[00:10:09] Okay. Um, and we got stuck this year and now we are stuck here. So we are right in the middle of this one as well. Mmm. It’s obviously scary, but they’re being very transparent, or at least much more transparent this time. And you can talk about it more. So you kind of, I do feel, yeah, it’s very difficult this time.

[00:10:37] Um, there’s a lot of numbers going around. People are taking it very, very seriously versus last time when, you know, honestly, nobody knew what was going on. . If anything, I mean, this time, this time we’re like, you just go out on the street and there’s just absolutely nobody outside. I think you even even said in your, in Shenyang where your wife and kids, yeah, but to be honest, there’s not a lot of cases that are right.

[00:11:03] There’s not many cases in Shenyang as there is in, let’s say, like Los Angeles. Yeah. But the entire city is shut down. So if anything this time, I mean, they’ve taken it very, very seriously. Yeah, it seems for sure. Um, I guess what, as some of the news highlights I’ve heard is, of course the Chinese economy is bigger than when SARS was in 2003.

[00:11:26] I mean, you were there, you were, you were here and when it was happening. So, [00:11:30] you know, now it’s a much bigger deal, much bigger, more money’s on the table. I mean, uh, Chinese new year is over, but it’s still going kinda right here. I mean, I guess this is Chinese new year still. Like everybody’s home longer. Well, I’m working, work was supposed to start yesterday and it kind of has, except the, obviously the whole province of Hubei is shutdown and the rest of the rest of the country is kind of three quarters shutdown.

[00:11:55] So I guess the question is what happens in a couple of weeks from now? But you’re right, it’s like you take the, you take an economy and you’ve cut a month, you know, a month of GDP out of it. I don’t know how the hype, how do you make that work? I know. Plus there’s already Chinese new years already, like a few, two or three weeks anyway, and then, yeah, add on.

[00:12:15] Let’s buddy. I guess let’s just move forward. I think people can read the news and, uh, but yeah, I guess everyone’s just locked down and like my wife is saying she’s just bored with the kids. They’re all like, they’re all just bounced around and it’s like two bedroom apartment with like aunts and uncles and grandmas and grandpas and kids and stuff like.

[00:12:34] It’s just seems like everybody’s just locked down, bored at home. That’s kind of what I’ve heard. So I guess we just hoped for the best. And um, you know, there’s a lot of people who are working very hard on this and you just kind of hope, uh, sooner rather than later. Yeah. Yup. Yeah. So let’s move, let’s go into the main part of the interview.

[00:12:56] So, yeah, you’ve spent quite a bit of time in China and um you did the Chinese cold calling, which is something I just learned from today, which is cool. And um, so how did, where did, you know, we’re going to talk about your journey to FBA and the brand and building, you know, private labeling and packaging today

[00:13:18] And where was the conversation, I think I kind of remember, cause we’ve been, we’ve been in touch, but maybe just where, where did this discussion or how did it get get into this, the idea to start it. So into FBA. Um, I guess there’s a couple of different avenues that it happened. I mean, at Global Sources.

[00:13:36] So I’d be talking to a lot of suppliers, and I’d also be talking to a lot of, you know, a lot of buyers, and we’d also see buyer trends at the trade shows and buyer trends online. So it was pretty evident, you know. Let’s say 2015, 2016 that there was a, there was a trend towards B2C and also the, you know, there was more and more buyers who weren’t the traditional, you know, B2B buyers.

[00:14:01] They were new online buyers. So I could kind of see that happening. Um, but you said you knew, uh, you know, Peter, you know, Peter was kind of the, the leading edge of that for. You know, for global sources at that time. So he started the little sorts of summit, which is, um, no, it’s been going on, I don’t know, six or seven times now at the trade shows, which is more like a three day kind of, you know, a training event for, for online sellers, mostly Amazon sellers.

[00:14:29] So we were getting that kind of exposure. My wife is also, um, she has quite a bit of contract manufacturing experience. So she was doing, um, like if you go in the US there’s a car dealerships and those kind of, uh, those kinds of companies. When you go in there, you see a lot of branded merchandise, like see branded clocks and you know, premiums, relatively expensive premiums in those dealerships.

[00:14:57] She was manufacturing some of those. So it’s custom one-off manufacturing in the, you know, making, let’s say 20 or 30,000 units at a time. Okay. So she had, she had a warehouse at that time for that business. And she also had that kind of, you know, experience. Um, at the same time, I had brother-in-law over in Canada, has quite a bit of marketing experience and obviously also has English as a first language and whatnot.

[00:15:26] And the two of them kind of put together, um, put together the idea to start the business. And I obviously, um, encouraged both of them. So, basically what happened is they’ve been running the business for a couple of years and they’ve been growing it. And since I loved Global Sources, my job leading the company now is to scale that business.

[00:15:46] Um, you know, using the corporate experience that I have, you know, with org charts and people and hiring and growing, um, global sources at one time. And Sianna had something in like a thousand people under me. I mean, we’re nowhere near that scale, but you never know. Okay. Yeah. Of course, man. It kind of have big, big goals, big dreams.

[00:16:10] It’s exciting then, so, so I think some of the advantages, you know, being being where you are, obviously, you know, you learn Chinese. Yeah. Chinese wife and you have these insights with within the industry. So how, how was the product selection? Was it, was it your wife’s industry experience or was it market research?

[00:16:36] Well, actually it was. It was luck, or I guess, I guess you can call it, um, experience. Uh, we have, my daughter now is eight years old, and so I guess back then she was a big four years old or something. So we were quite frequently, um, buying toys and, you know, that kind of stuff. Uh, stuff for her and we, you know, in China, so on Taobao or on some of those platforms, and we could see that there was like a value perception gap there.

[00:17:08] Like, we could see that you could, the price. So some of this stuff was reasonably low, um, compared to the. Kind of value that people see. And so we, there was a couple ideas there that we had, that we got from some of the things my daughter was doing. Um, and that’s the direction that they started. So they ended up in, um, toys and games and mostly at least toys and games, and then now built a brand around that.

[00:17:35] And so that’s the direction of the company. Okay. Excellent. I mean, I guess it’s luck, but it’s also like. Taking action and, uh, you know, being in the right, in the right position to, to, to do it. So it’s, um, it’s really great to, to have this story. Um, I remember we’ve, you know, you’ve joined some of our, our member calls that go from Asia.

[00:18:00] I always appreciate your participation with what we do here. And I remember some of your insights always was there still, I mean, I mean. There’s still opportunity, right? For private labeling even is how are you maybe talk about the product or these products from factories existing? Is there molds, is there, is there product development?

[00:18:20] Um, maybe if you want to share about the process of, you know, getting sourcing, was it, was it finding what they already had and, and, and private labeling it. Sure. So, um, at the beginning it was, it was buying stuff that was, you know, let’s say 90% existed in the market and then doing packaging around that.

[00:18:40] Um, when I say a lot, uh, I, I mean, one thing that was lucky is that in the end we discovered that this category plays two plays to their strengths. So, like I mentioned, I mentioned my wife had a warehouse. Um, so they were able to do final assembly on some of these products, so they could buy materials from a factory, they could buy packaging from another factory, and then they can put it together themselves.

[00:19:07] So you have a cost advantage over other people. You can also do things faster. You can also do final QC and make sure that everything’s fine. So they hadn’t, that wasn’t the original original plan. But that’s the way things worked out. And it was really lucky cause it is actually quite a big competitive advantage.

[00:19:27] So now what we do is we’ve taken that step further. Um, we have designers, um, you know, we have designers that work for us full time. Um, we do all the package design, we do a lot of the product design. We have some molds. Although not, I mean, we’ve got a couple kind of plastic injection molds, but nothing really, really huge.

[00:19:49] Um, but we, it’s mostly design work that we do, uh, that we do ourselves. And then all the packaging and branding and all that stuff. But we do have some products where we get, um, we get raw materials from, let’s say four or five or components from four or five different places, and we’ll assemble them ourselves.

[00:20:09] Okay. Make me think. I’m sure you know Mike, Mike Bellamy’s, he’s a pretty nice guy. And um, they had, they, I think I learned from him, or at least was the black box. I think you’re, what you’re saying is kind of, is that black box where you’re taking in multiple suppliers products to your facility and then pack repackaging and consolidating?

[00:20:34] I mean, is that what it would be? I mean. Or is that it’s pretty similar. It’s it. I mean, the end result is the saying yes. No supplier sees the entire, generally no supplier sees the entire situation. No supplier controls all the components. Um, we don’t really do it too. Keep the products secret necessarily.

[00:20:54] We do it to do QC and also just to keep, you just keep control of everything. The costs are lower and also you, you know, it’s easier for you to. To get things out the door and specific schedule. It’s just easier to do everything for us if we do it that way. Got it. And so you still think this is an opportunity to finally maybe existing product.

[00:21:22] Um, well, I mean, I don’t know. I mean, I’m sure there’s listeners, quite a few of our listeners still haven’t been to China or Asia too often. They’re overseas in the West U S Europe. How other places? I mean, it’s, I mean, maybe there are service providers. I don’t know. Maybe you offer this as a start offering as a service.

[00:21:39] Some people do, but is this, how hard is this to do if you’re not there like  it’s fine if you say our model, it’s impossible. But that’s why I can talk pretty freely about it. To be honest. It’s impossible. Um, we try to, basically, our goal is to bridge the gap between, Mmm. You know, the Western sellers that are overseas, they can, they can do marketing pretty well.

[00:22:09] I’m in, some of them probably do it better than us. Um, but they can’t, they can’t do as well as the Chinese suppliers on sourcing. They can’t do as well as the Chinese suppliers, maybe on pricing, et cetera. We’ve got, um, you know, we can, we can find that middle zone cause we have the China team, we have the warehouse in China, we have, you know, team overseas in Canada.

[00:22:32] So we try to kind of bridge that gap. We try to be the best of both of those worlds. That is probably not a model that will work for most people who don’t have, you know, the, the situation that we have. So what I say to people about, you know, if you ask about overall FBA, is there opportunity? There is, but in my opinion, you have to come into it with a skillset or you have to come into it with an angle.

[00:22:59] What’s your angle. If your angle is that you’re really good at content development and you, you know, you’re an online marketer and you can push traffic, you know, like, like Zach Franklin, who, you know, she come into over that side, you know, you know, every single outside traffic source. Um, you know, how to drive cheap traffic.

[00:23:18] You know, you’re a computer programmer who knows URL structure and you can figure out ranking on many chat and whatnot. That’s an angle. Um, if you come at it from an angle like, like we do, or, you know, our expertise is probably mostly on the China side. Well, we have enough marketing. That’s an angle as well.

[00:23:37] If you come at it with, you know, no angle, like you’re just taking one of these, you know, guru courses and you just graduated, you know, from  English major in university yesterday. Unless you’re really, really good. It’s very difficult. Yeah, I would say the same. I mean, unfortunately the core school was, won’t say that, but I think you and I are, you know, practitioners and to, you know, making things happen and my, everything, this is what Amazon wants.

[00:24:11] I’ve, I always think of a, I think of a. Interview I did with Derek on a while ago. Um, and he, he would always talk about you have two choices as a seller, or I guess any business owner is to be really good at product or be really good at marketing. Of course you need both, but I always, I often talk to people about this.

[00:24:30] I always, I think is probably more important to be a good product over a good Mar marker. Uh, you can do both, but. I mean, you should do bowls of course, but usually you have to have a stronger on one side or the other. So you’re kind of a, seems like you’re talking about the stronger product side, right?

[00:24:46] Yeah. We came at it definitely stronger from the product X side, and we’re learning the marketing kind of as we go along, obviously. I mean, we had a certain amount, but we’re not, um, you know, if you look at some of these like supplement companies or whatnot, they’re, you know, light years ahead of, of, of where we are.

[00:25:03] That’s true. Well, yeah. I mean, that’s probably one of the hardest categories, or at least had be more skilled marketer prior to getting into supplements. Do you want to share some of the, some of the struggles and some of the wins? Maybe we can start with Donald and a lot of pessimists or an optimist, start with the harder stuff first or the, some of the.

[00:25:22] The lessons learned or things you’d tell them? Let me start with the wins or the way I’ll change the order here. I mean, the main, the main wind is that every year since they’ve started or since, and also since I’ve kind of joined, um, we, the revenue’s been going up in the profits been going up. So, you know, the overall trajectory of the business has been positive since I started.

[00:25:48] Um, you know, revenue, profit on number of products, number of marketplaces, number of employees, everything. It’s growing quite nicely. So from an overall perspective, you know, the winds have been, you know, that that wind is kind of what you’re looking for. Um, I think that what most people would probably learned from though is the downs are the tough part.

[00:26:11] So let me, let me jump into a couple, I guess, a stories slash slash lessons share. This is a good stuff. Well, I mean, the first thing that happened to them, way back when they started, I think it was 2016 so they, they were just sending in their first shipment. They sent it in. Um, it was supposed to be sent by air and it took 30 days to get that.

[00:26:39] Um, so we think what happened was that the, the freight forwarder actually sent it by fasc. And not by air. So normally you’d say, okay, well, no big deal. Wait an extra 20 days. But the problem was that was exactly when they cut off the sales for Q four. So because their product didn’t get in there fast enough, they were cut off three months.

[00:27:03] So the first three months, uh, they basically couldn’t sell. And I guess the story is a little bit complicated. The big God, it was even worse because they got a first small shipment in. So that first shipment that they actually, um, that they sent, they were allowed to sell, but they weren’t allowed to send any more in, I think is what it was.

[00:27:24] And that first shipment sold like firecrackers, just like right off the bat just gone. So what happened was they sent in, you know, I don’t know what it was, but maybe they got like $20,000 in sales. And in like a week or 10 days, but they couldn’t replenish and everyone had seen that they’d gotten the sale.

[00:27:45] So you can imagine what happened.

[00:27:49] So, and they had to wait two and a half months before they could, where they could send in any replacement. So before it was just sitting there waiting, kind of, you know, horrified by the situation, waiting for the competitors to flood into that market. I haven’t heard very many people with a word that is a rough one.

[00:28:11] But I mean, I guess that’s what’s starting. I mean, of course that’s a hard one. Most people starting have a, have a bad experience or a bad story. I think that’s the point of starting as part of the process, right? I mean, I guess it, it’s part of the learning process and, uh. And maybe the fraternity hazing from college days or just to make sure you’re serious, uh, to do this.

[00:28:40] Um, for sure. And you know, it ended up working out fine. The product actually still survive. They were the market leader for a year and a half or two years after that, so it ended up working out fine. But you can imagine the anxiety of those kinds of two moms. I could definitely, definitely. I mean, I’ve had some scary stories too, for sure.

[00:29:02] So. Yeah, that’s one. Um, there’s been, you know, they, we’ve expanded into Europe that’s been successful, but also very, you know, there’s been a bunch of problems there. Got pulled down for the entire account, suspended for a customs inspection. Nothing was wrong. They did nothing wrong, but just pulled down for a week.

[00:29:25] So in Europe, you get pulled down in one tiny little country. They pull your entire, all your accounts in the EU down. Geez. So they’ve been suspended there, which was, I think, eight or nine days for really no good reason. Um, VAT. We’ve been fine. 6,000 euros for problems that we couldn’t really couldn’t really.

[00:29:47] Uh, it’s kind of Amazon problems. So there’s, there’s all sorts of, you know, little stuff that, um, that happens. We’ve had it dispose of, you know, I think somewhere around 20,000 US dollars where the product for various reasons. Yeah. Lots of little, lots of little stuff. Overall trajectory is pretty good.

[00:30:09] Yeah. I mean, I think it’s what separates the men from the boys or the girls from the women. Those scary times where, yeah, you’re writing off inventory, you’re delayed on imports, you’re out of stock here. Maybe some recalls, you know, listings, suspensions. I mean, this is just scary stuff you hear, but, Hmm.

[00:30:32] Well, last time I saw you, I think was during the cross border summit. That time I was, we were, we were kind of freaking out because we had a very seasonal product. Uh, we had around 200 and $250,000 us in inventory and it wasn’t moving like we had predicted. Yeah. This, this is scary. I think I remember you maybe chatting to me, you know, a couple of us about that.

[00:31:02] But I think, like you said, the overall trajectory. I mean here, I think, you know, I’m part of alpha rock here and there’s always some nightmare cause we have quite a few different brands and things. So there’s always some, some emergency. I think that’s just part of eCommerce or retail maybe, right? Retail, you’re taking the risks from the factory, you know, all the way to the consumer.

[00:31:23] So there’s all that supply chain. Risk. Right? But of course you have the higher reward of the margins to direct. You know, somebody of course, got to deal with all of these little risks and nightmares along the way from that factory to that end consumer. And the music’s got to hopefully. Yeah. Like he said, just gotta make sure that you’re.

[00:31:45] Earning more than you are. Uh, you’re losing and business. Right. And, and as long as the overall net net is up here, you’re doing better. But of course, I think every seller, it goes through those scary times for sure I don’t think anybody would say they haven’t. And hope you still with me, you’re there. Yeah.

[00:32:06] Okay. Just help me in a connection. Um, so let’s, let’s talk about, and we’re talking about from factory, so you, you know, you have your own kind of like little, I call it black box or your low consolidation packaging area. Maybe you can share, do you have some, do you guys go and have your relationships with your factories drinking by Joe and gifts and Guangxi and.

[00:32:28] Terms is there, is there anything, you know, are you doing the 30-70, 50-50 or are you, you know, are doing, or maybe you’re actually doing VAT, are you doing ex-works with RMB and you’re doing exporting, and I don’t know if you want to talk about some of the

[00:32:45] Okay. So I guess, you know, I keep it real on this show when we had a little technical difficulty. We’re reconnecting now, Cameron, and, uh, let’s just start from that last, that last question. Um, you know, I think just some insights on the relationships in the factories. I know, you know, I know you have the advantage of your own, your own like consolidation, packaging kind of center, but also is there any other advantages or, or, or deals you have with these suppliers.

[00:33:12] Um, yeah, I mean, we have, uh, we have the advantage of having the packing facility warehouse, but we also have the advantage of having a local Chinese team, um, which means that all our sourcing is done locally. Um, all our pricing is usually done in ex- works, uh, in renminbi as well. So, and then we also, we do things a little bit differently than kind of what’s generally taught.

[00:33:35] Because of the way that we’re, the way that we’re set up. So we have the ability. I mean, we have hands on all our materials before we send them out of our warehouse. So we have the ability to basically QC every single piece that comes into, you know, that comes to us. So generally, you know, what that leads to is we don’t do things like a factory and we don’t do it, but you know, pre-shipment inspections, like everyone.

[00:34:01] Like everyone kind of recommends. The reason is because we inspect everything by hand. When we’re assembling it and anything that’s bad, we, uh, we just directly send back. Yeah. So, I mean, that allows us to have relatively simple contracts with our, um, with our manufacturers. We don’t generally do kind of the 50 page.

[00:34:23] Um, purchase orders with, you know, a hundred different, um, you know, uh, conditions and all that kind of stuff. We work on relationships basically, and we keep a very close eye on the orders, so we don’t just wait until the order is ready to ship to ask kind of how it’s going. We check very frequently on the progress.

[00:34:45] Um, and then we inspect everything and whatever’s no good, we just send it straight back. So it’s a little bit of a different system then what most people, um, are used to. But it’s worked quite well for us. We didn’t quite start that way. We started with, you know, what, what generally as recommended, which is very rigorous contracts and whatnot.

[00:35:07] But this has work, uh, quite well for us, for the system that we have set up. It allows us to kind of, you know, rely on the relationship with the manufacturer. Well, um, and, you know, we try to, we try to find, um, you know, factories that have bosses that have the same kind of mindset as us. It’s, you know, we’re partners.

[00:35:33] We’ll help you. You’ll help us. And you know, we give a little, we take a little, um, we’re pretty, we’re very actually rigorous on, on quality. We don’t accept anything that’s kind of. Let’s even borderline, and they know that, but at the same time, we will give a little on timing sometimes, like, especially now with what’s happening in China, we’re obviously understanding of that situation.

[00:35:58] Um, we sometimes will give a little on price if we understand the reasons behind. Um, some of the, you know, some of the price increases and stuff. If we know, if a supplier tells us before Chinese new year that they want us to pay a little bit more than we normally would in advance. Sometimes we do that, but then we’ll also, when we need the orders quickly in July and August for Q4, we’ll push them super hard.

[00:36:26] Or if we need to extend terms even beyond what we’ve agreed with them, um, when we need that, we’ll push them very hard. Got it. Yeah. This is great insights. Um, so I’ll just kind of like reiterate or maybe say it in my, maybe like a flow. So ex-works, I think most listeners are familiar. Most people, so that’s just the op the most to comment, or Ex-works or FOB.

[00:36:50] And of course there’s other Inco terms it’s called, but basically Ex-works is not as common as FOB. Most. Most. People like, you know, in the U S or overseas or getting an FOB Ningbo, FOB maybe Guangzhou, FOB Shenzhen, quotation right from the, from the supplier. And that means that it’s sent directly to the port of a, of that port with the export duty, um, taken care of.

[00:37:13] Or Exeter is a rebate, which I can probably, I don’t know if you’re ready to answer that, but I’ll, I’ll simplify, you know, I’ll just kind of reiterate. So then you’re doing ex-works, which means you pay in local RMB currency, local bank transfer. Um. And then it’s shipped by probably truck to your facility and then you don’t have any, maybe you go to the factory.

[00:37:33] I’m wondering if you’re doing onsite, you’re saying you’re following the production. Are you having, but you have anybody there go there? Or do you just, you’re following just by like having somebody in your team chatting to them while production’s happening or getting photos? Or do you actually have people going to the production on your team.

[00:37:48] It’s mostly, it’s mostly WeChat. I mean, I’ve been to a lot of these factories and my team’s been to a lot of these factories, but we don’t check on an order by order, order, order by order basis. It’s mostly WeChat. Like we have groups with all of our suppliers and, um, you know, we chat back and forth and if there’s any doubt on some of the stuff they’re saying, we’ll ask for pictures or video.

[00:38:11] That kind of stuff. Cool. And then, so just let me finish, I guess. Let me just go through this flow. So then they finished production. You don’t have anybody, like you said, a lot of people actually, I usually do recommend, I just spoke here in Manila, actually for a meetup, and I should, you know, always pay for the pre shipping inspection.

[00:38:27] But it, it definitely, if you don’t have your kind of setup, of course you’re kind of going crazy if they don’t even do any pre shipping inspection. But that’s normally the one we send, like a third party QC company or maybe somebody in your team to go to the factory. And usually it’s not 100% check.

[00:38:42] They’re doing like a small percentage on, actually, I don’t know. What’s the percent at five, 10% spot check usually, right. I mean, they usually don’t do a hundred percent inspection and then they’re just making sure that that quality acceptance rate, uh, know statistics that they’re willing to accept, um, is passed or failed.

[00:39:01] And then if not, if it’s failed, they have to kind of like maybe recheck all the products. That’s usually how it goes. But yeah, your, your situation is you don’t have anybody have to go there. You’ve maybe been there for relationship building or, or early stage factory development, but once you’re reordering or ordering, you just get it received because it’s received in China.

[00:39:18] You can just take it, uh, and check it. And I actually, we had that with theSisitano case study where we had the Yiwu market pickup and it was bad quality. We didn’t like it. We sent it back. We got our money back. You know, I think if, anyways, able to, I think China’s willing to take back returns. Before it leaves China.

[00:39:39] Right? So I think a lot of the PI listeners and foreigners, you know, they don’t notice a problem until it’s in Amazon, or at least in the U S warehouse. And then then that by that time you’re kind of dead because the cost to ship it back is more than usually the, uh, cost of the product. So, I’m just trying to reiterate what you had said in a, in a more of a different angle, but.

[00:40:01] So most listeners are doing that, but I still think you’ve got to do it. If you’re not, I did a pre-inspection he, you know, QC inspection. If you’re not using what you have, because there’s some buyers, you probably know what it just, just wing it and hope that it’s good quality and wait until there’s an Amazon, which is, which is freaking Russian roulette.

[00:40:18] But, um, that’s, that’s a, for sure. Most buyers can’t or can’t. Do the can’t do it the way we do it. Um, by no means am I suggesting those kinds of buyers don’t do, don’t do appreciate men inspection.

[00:40:33] But you’re right, it’s the domestic shipping in China is cheap, number one, as long as it doesn’t leave the borders, um, you can, you can sip it back pretty easily once, once that leaves China reimporting it is a totally, yeah. So then usually that’s where you get in trouble with the supplier. You’re like, Hey, 20% of this was bad.

[00:40:51] I’m getting re- of course. But it does something about the money at that point, when you’re getting negative feedback on your Amazon listing or returns, you know, or, or listing problems, that’s the nightmare. That’s not even worth it. That’s not even about the money or the product. That’s like your business livelihood at that time.

[00:41:05] But so yeah, I mean, you have the advantage because, and you’re doing 100% because you’re also checking everything as you package it and, and maybe assemble it or combine it with other products while they’re factories. So. So that’s, that’s really insightful. And you know, I know other foreigners in China that do that, and we, we’ve been able to do that under our service providers.

[00:41:25] I think that do exist. People could use, you know, of course they’d have, you know, pay for that service, but there aren’t, there are options, I think, for people, not in China, but of course being there, um, like in your setup as is probably the ultimate, um. I guess the one other, the one other point that I would make, I hear actually, I hear a lot of people commenting on this that I kind of disagree with most people’s opinions.

[00:41:49] When you hear, um, you know, you go on Facebook or you hear podcasts and stuff, you hear a lot of people talking about cultural. You know, how you negotiate with Chinese people, how, how the culture works, how, um, you know, that you have to know all sorts of, you know, cultural aspects, what to do, what not to do in China.

[00:42:12] I’ve been here a long time. My feeling is, is generally that, um, you know, in general, uh, people are people and. As in any negotiation with a Chinese supplier, it’s really quite easy. It’s a information is your friend. So if you go into a negotiation having no idea what the cost of a product is, regardless of where it happened, where you do that negotiation, you’re probably going to get fleeced.

[00:42:44] But if you go in with five different quotations from five different suppliers, you have an idea of the raw material costs. You have an idea of the cost of the box. You have an idea of the cost of labor. If you go in with that kind of information, you can basically back out the supplier’s profits and you can basically, you know, parrot that back to them, tell them that you’re not.

[00:43:09] Some schlub that doesn’t know what they’re talking about and, you know, get to a fair price for both of you. That’s the way we do it. That’s the way I kind of approach these things. And I think that in a lot of cases, people really overthink it, get information. Um, you don’t really have to spend a ton of time on  cultural stuff.

[00:43:29] Chinese people in general are highly pragmatic, especially the business people. They want your money. They want to do business with you. You don’t really care if you, you know, as long as you don’t insult China. Mmm. You know, you don’t really care what you do. Yeah. I don’t know. Maybe even agree with, I usually tell people to bring a small little home gift, like, you know, like st Louis, somebody came once, I said, bring some like hot sauce, you know, some small little fun stuff from your hometown is, it’s kind of like my little tip.

[00:44:00] I usually add in my, but yeah. But wouldn’t you do that? And regardless of where you went. Yeah, it’s kind of true. Yeah. I guess that’s true anywhere. True. True. Um, but yeah, it’s awesome. Cameron. Thanks. I mean, this is great. This has been really gold. Um, I guess my last, one of my last parts in the supply chain is VAT.

[00:44:24] You know,  crap or the Ex works to FOB, and I, I there’s always a really complex topic and, but I guess you’re doing that internally or you have a partner company or a local company that can help with the whole export process cause you’re doing XW in RMB and then you get the tax benefit or the rebate benefit.

[00:44:44] No, we haven’t, we haven’t quite figured out the rebate yet cause we, um, I mean there’s a whole bunch of, does the structure exactly. You have to have in place in order to get it done. And for us, the value is not. It’s sitting there as one of the items the to do list when we figure it out. Yeah, exactly. So like, I guess just, it’s so, such a complicated topic.

[00:45:08] I think we actually had to live out some of the older podcasts, but basically you’re actually, so you’re actually paying a little bit more with X works than our fob, which is also counterintuitive. But the price right is higher RMB cause it has the  with Fapiao. Right. So you’re, if you actually probably asked him for fob to probably give you a lower price.

[00:45:28] Right? Because that’s how I’ve noticed it with our, our products is, but then you, like you said, it’s not just about the unit cost, it’s about the control, but I think usually the price is higher if it’s not FOB cause they get that tax rebate. All right. Try three here. These we, we work hard here at Global from Asia with these Cross Border Interviews and internet.

[00:45:54] Ah, but anyway, let’s continue. We’re getting towards the end and this has been a great, great, uh, great show. Thanks so much, Cameron, for sharing. So we were just kinda talking about the whole fapiao EXW fob pricing. And so it seems like you haven’t really applied for that, but you’re, you’re saying it’s still worth it right.

[00:46:13] Yeah, I mean, it’s a couple percent net, um, of your export value, like three or 4% or something like that. Um, generally, so it’s worth, I mean, if you, it’s worth going for, if you, if you have the structure that can handle it. Um, we don’t quite, we aren’t quite there yet, but hopefully we will do it, you know, this year and next year, maybe.

[00:46:30] Okay. Cool. Yeah, so that’s pretty advanced anyways for most listeners. So I guess let’s, let’s go to that. Like one of my final questions is that poor listener, like, I don’t want to use names, but I’ve talked to some of them. You met some of them, like, you know, they’re sitting there, back home and, and they’re in America, your Europe.

[00:46:46] I’m trying our best to build your Amazon business and control their supply chain. I mean, I don’t know. I mean, this is probably overwhelming to them. And. What would you say to somebody listening today, uh, to try to improve their supply chain? Um, well, I mean, it’s not easy for sure what the time changed and whatnot, but, uh, I think, you know, everyone should be talking to their suppliers on WeChat.

[00:47:12] Um, and I, I’d say just don’t expect things to go perfectly all the time, so you have to be on it. Um, you really, I mean, if you’re. If there’s an employee doing it for you, you got to make sure that they’re on it. But. The key is just to really follow up very, very frequently. And the key is, despite what I said, our situation is good pre-shipment inspections with good standards for the quality inspection company to, uh, to understand kind of what your, you know, what you want.

[00:47:43] Never let bad product get out of China, if at all possible, because it’s a total nightmare if it does. Um, and just, you know, uh, assume that it’s going to take a significant amount of your time to get it right. Yeah. I think that’s great. Amazing advice. Um, you know, e-commerce, I always, I tell people it’s, it’s the merge of internet and know electronic and traditional co commerce.

[00:48:07] And especially with this whole fact, you’re really kind of factory to consumer F2C. You’ve got to deal with all that headache. You know, that used to be four or five, three, four, five companies back in the traditional. So now, by going direct, you as the seller or the, you know, the almost factory directly to consumer have to deal with all those headaches.

[00:48:26] So does this part of the game, if you want to make the extra margin and, and uh, and grow in today’s. Kind of new evolving e-commerce world, I think you’re going to have to invest in stepping up your game and improving. If it’s just like anything in life or business, if you’re not improving and, and, and, and, uh, and increasing your, you know, um, business, uh, reach, you know, you’re, you’re probably dying or at least stack stagnating.

[00:48:51] So thanks so much again. Camera. Is there a ways people could, uh. Connect with you. Of course, you’re asking, you’re really active in our community and, uh, others. Um, I don’t know if you have websites, you might not have anything really to sell or promote, but, uh, what’s, what’s some ways, uh, people could find?

[00:49:07] Yeah. I don’t have anything to, um, to promote, but I’m on WeChat, I think I’m Cam Walker. On Facebook. It’s, I think you can find me under Cameron Walker. Super. It should be pretty easy. So those are probably the best two ways. Okay. Cool. Thanks Cameron. Really appreciate you sharing today was, although it was a little struggle for me, and you’re recording and I’m sure this will be one of our more popular shows.

[00:49:28] It’s amazing. Thank you. Yeah. No worries. We got through. It happened. You know, some people thought I was crazy as taking Cross Border Summit out of China, but somehow maybe we made a make, maybe made a good move. I’ve been talking to some great people, getting them to come out to Cross Border Summit fifth annual November 19th and 20th 2020. We’ve been doing five of these 2016 2017 2018 2019 and this is 2020 first time out of mainland China, down in Southeast Asia in Chiang Mai.

[00:50:00] Thailand. I’ll be back there with my wife and kids. I’ll try to bring them to the event. I think they are old enough. Maybe they can speak. If you enjoy what you are listening to and you want to meet amazing guests on the show listeners, other experts in the community. It’s an action packed today, plus some pre event action if you want, and some post event action.

[00:50:19] It’s getting bigger and better and we’re working on us even harder and even more in advanced cross border summit.com/thailand get on a waiting list. . Thanks again. We really appreciate it. Um, it’s a crazy time right now, and we didn’t talk too much about this Corona virus. I know it’s on everybody’s mind.

[00:50:40] Uh, let’s just hope it cools off a little bit. Some, you know, I was just literally took my mask off when I got back to my apartment here in Manila, Philippines, and. But I do feel like it’s calming down a little bit and maybe it’s just I’m getting used to it, but also I was on BBC radio in the UK they liked my V log.

[00:51:01] I, to those, if you wanna check out my videos on Mike’s blog.com/vlog or find me on social media, but, um, reported they, they really liked. My story of how I feel guilty as a dad in Manila when my wife and kids are stuck in their apartment in, uh, North China. So, um, had a little three minute clip in the BBC live radio earlier last week when this show goes online, February, 2020.

[00:51:30] But like, you know, I think most sellers I hear from and Cameron too, I think, you know, camera’s been through SARS. I can’t say I’ve been in China that long, but, um. I think these things just, this will pass by when it’s weeds out the weak, right? The strong will survive. Hopefully you have enough inventory.

[00:51:50] That’s something. So we’re going to do a webinar and we’re going to do, um, what did David Nicolucci and, uh, we’re just afraid to do too much about sales promotions when most people maybe are increasing price or defending against a running out of stock, you know? Um, so they’re scared to do promotions right now.

[00:52:09] It’s a crazy world. And, uh, I hope everybody stays safe. Seems like the tariffs, the trade Wars kinda going by there, there maybe this Coronavirus helps make the old better. But taxes seemed in terror seem to be lowered on both sides Lately I don’t have quotes, but I’ve been seeing screenshots in various social media.

[00:52:33] Um, and I’m sure this will develop, I’m sorry, I’m just so exhausted. Seriously. Oh. But, um, we’re just grinding here. And I think that’s, that’s how, that’s what separates the winners from the losers. You know, you gotta get through these tough times. And men, I had a good call at the friend Marcus and investor, and he was saying it has been brutal last couple of years, trade Wars, Hong Kong protests, and now coronavirus is like, what is next?

[00:53:02] I even had a little mini volcano, in the, in a issue here in Manila. I mean, it’s just. Just making a stronger business. But I, when I’m talking to BBC, I’m like, damn, so would the reporter, well, it wasn’t on the interview, but in the prepping, she’s like, are you thinking about going back to America? I’m like, man, I didn’t think so, but with all these crap now it’s like one after another challenge, challenge.

[00:53:28] But just like Cameron said in the interview, you know, you. You know, you have to, uh, kind of go through a school of hard knocks, you know, it’s gets them bad quality, gets them to the lays shipments, get some stuck, stuck in customs. I mean, I, there’s that thing, I don’t know, maybe my dad always reminded me, if it was easy, everybody would do it.

[00:53:46] You know, if you want to do something easy, there’s a, there’s definitely easy routes, but we are. If you’re listening here and take an action, I hope you’re taking action. Not just enjoying the show, but, uh, getting in the battlefield, getting the arena e-commerce gladiator. I actually just got a good friend who wrote me a great email.

[00:54:04] They enjoyed, uh, enjoy the book, e-commerce gladiator. Just a little plug for my fourth book, but I am going to wrap it up. I am burned out. I’m going to get my teeth cleaned seriously. I didn’t want to do it in China and I’ve been trying to find a dentist in Manila. They rescheduled cause of the Coronavirus, is everywhere.

[00:54:25] Man. Like the battle does not end just to get my teeth cleaned. You know, I have a, I think I have a pretty bad cavity cause it hurts when I eat. So hopefully don’t drill too deep, but no matter what, we’re going to live another day, right? Every day above ground is a good one. Everyday, making a least a little bit of progress.

[00:54:47] Trying to build that relationship with your supplier. Trying to get a little bit of marketing strategies, learning something new, meeting new contact, being a new relationship, appreciating an old relationship. I tried it at once a day, but I’m burned out and Man, the headsets fallen off.

[00:55:04] Okay. And it’s something it’s telling me, I asked stop. Thank you for listening. Thank you Cameron for sharing. We’ve got some amazing, amazing guests on the show and there’s so many more lined up. I mean, we’ve got them recorded already and people emailing us all the time to come on the show. And, uh, there’s just so much to talk about, so thank you.

[00:55:21] Thank you. Thank you. And, uh, see you next week. Tuesdays 10:00 AM Hong Kong time. Bye bye. To get more info about running an international business, please visit our website at www.globalfromasia.com that’s www.globalfromasia.com also, be sure to subscribe to our iTunes feed. Thanks for tuning in.