Managing Financials With A Remote Team With Jack Pinkerman

E-commerce gladiator series episode 19 – let’s talk numbers and finances. How about cashflow, bookkeeping, and dealing with cross border payments between USA, China, and Hong Kong. Oh the joys – but if it was easy – everyone would do it!

√ Bank of America
√ HSBC
√ Godaddy Bookkeeping
√ Aureliapay
√ SendWyre

Thank you Jack for sharing. It has been amazing to have him on our founding team, can’t wait to meet him in USA in Feb!

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Welcome to the Global from Asia Ecommerce Gladiator Series where you can follow along the progress of setting up a Cross Border Ecommerce business from start to finish. Hear insights of real product research, Amazon FBA, China manufacturing, branding, marketing, and all the blood, sweat, and tears of building a global business from Asia. Now, let’s tune in.

Mike: Life is moving really fast here everybody E-commerce Gladiator series for the Global From Asia podcast Episode number 19. We’re in December and I hope you guys are enjoying the rest of your 2017. We got another partner in Paraliving Inc. Jack Pinkerman, Jr., amazing guy. So happy to have him on the team. He’s been so positive and he’s the CFO, Chief Financial Officer and we’ve been talking a lot about selling a books, balancing the books, cash flow, payment solutions, and others. So I hope you guys enjoy this. This is a discussion. We’re preparing the pay for this manufacturing order. The back and forth of this. I think I want to get Lorenzo and Roland next time to share about the back and forth of the factory. But it’s a small order but we don’t want to mess things up. We don’t want waste bank fees and other things. So, Jack and I talked a bit about some of the money. The money is here. Enjoy!

Mike: S,o yeah. Jack we’re talking finances here and thought we would make this a podcast. But first you’ve been on the show a little bit a couple of times but do you want to introduce yourself to the listeners.

Jack: Sure, yeah. Thanks, Mike. I worked in China for 7 years and in the packaging industry and started a family there. When my kids get a little bit bigger I decided that I wanted to move back to the US. And so I came back here couple of months ago and my company unfortunately do not have a position for me when I came back here. So I am on my own now and really excited about the future, excited about getting involved in some e-commerce business and that’s when you and I connected. I really appreciate this opportunity to work on the Paraliving Inc. with everybody and that’s where I am right now.

Mike: Awesome, Jack. Yeah. I mean. it’s great! We’ve been talked a little bit before even this new business venture but it’s getting great. Especially now we talked regularly at least once a week on our weekly management calls and it’s been really crazy. We’re doing this talking cross border payments, cross border finances, that’s what we’re talking about today. But you’re back in North Carolina, it’s great. I saw a pictures here with your kids, just had a birthday. Happy birthday to her.

Jack: Thanks! That’s great. It’s been a bit of adjustment here for everybody ‘coz we lived in the city in China. We’re in a big city of Suzhou and now we’re back here in North Carolina, it’s more of a country setting. So we’re ones getting used to driving in the car more and not taking the subway so much and things like that. But we’re doing great and from a business point of view, I’m involved with your business and I’m doing some real estate investing and really just excited about learning new things even at my age. It’s great to be able to keep fresh, keep up the date with everything. So this opportunity has been great to learn. All the new tools, yeah it’s really good.

Mike: Awesome! Yeah, it’s great. You’re always so positive Jack. Everybody likes working with you, too on the team. So it’s been awesome to have you and you’re in America even helped. We had one, you shipped the book together at Amazon account. I guess active or at least have an order goes through. You sent some of your, used the books there and it’s sold, actually we’re pretty amazed.

Jack: It was just a book I had on the show and went down to the local store here. Ship in the Amazon, set up our listing there and they didn’t really do anything then all of a sudden when I guess about 4 or 5 weeks later someone bought it and so we had our first day on run on our way. I was good way to get started. If I can help, I tried to help from the US , I also just tried to give you guys, the maybe a perspective of another US perspective on things. What my friends are telling me, what my family is telling me about. The coffee industry for instance getting involved in that. Whatever I can help.

Mike: It’s been great. I know we were, I think you were shopping for Thanksgiving maybe and sent us some picture. We do some research in isles of the supermarket of some other coffee accessories happening there. It’s awesome.

Jack: I think I’ve walked by that probably 20 times in this, just last time it just jump out on me, it was on sale. It was interesting, it was nice to pick it up and look at the packaging and everything. So it’s good but now today’s call we’re talking about finances a little bit.

Mike: Yeah, that’s what we’re going to talk about today’s episode. It’s a little bit complicated and then there’s a lot of service providers. I guess the biggest thing is international business is awesome. I mean, there’s challenges is like you said, you’re up early at 7 a.m. your time is 8 p.m. my time I think that’s probably the big challenge but in today’s show. It’s, the real big challenge is the cross border, a payments, so we got into the Bank of America and security codes and the sharing of accounts and passwords. Well there’s also a text verification a safe pass yet which is weird like, I’m used to having them sent a text message but none of that.

Jack: I was thinking of the financial level, there’s like 2 areas. I think every company deals with the financial decisions. What should we buy now, what should be wait, how much do we pay, how much book strapping should we do. There’s all does decisions, right and we handle that on our calls and within our messages during the week. And we’re doing a good job on being conservative at first. But what we’re talking about now was like the mechanics of things, of the finance. How do you actually pay people and what denominations do they need. How do you avoid big wiring fees from the US to China, stuff like that. So all these details and mechanics, it’s the pricing, the banking industry does not make it easy. I understand they’re trying to protect from fraud and all that. But, so yeah that’s what we’re kind of dealing with it now. It’s a challenge but we’re working through it.

Mike: Yeah, we’re getting there. I think we should just talk about so many options or the obstacles. I think at the very core, a few of us are US citizens and you’re based in US. But I’m an American overseas. But regardless, we have to have US either individual account or US business account to sell in Amazon because they don’t want, I guess they made reasons tax evasion, so they don’t want us make a money overseas and not paying US tax. So which I understand and respect, I’m not trying to douche taxes but at the same time it’s been a little bit challenging the login of accounts and the bank statements and other challenges. And now they’re actually paying suppliers in China, we have Bank of America which we’re able to apply online and get approved. That was smooth and I expect it. But some of the challenges now is we’re preparing this first manufacturing order and they need a 30% deposit and this is small order. I was telling you 1500 US dollar total order, 500 pieces. And we are they want US dollars, I was trying to pay them RMB but they want US dollar ‘coz they get a tax rebate. There’s VAT, so for us to send them in US dollars from our US company means paying America gets 45 dollars each transfer so I put, pay 30% of 1500 that much money, right. 500 bucks. And then 50 bucks about to them, 10%. That seems crazy. So one of my sponsors at Global From Asia is Aureliapay but any help with Asia cross border. So, I usually use them for Hong Kong into China or Hong Kong to Philippines, but they don’t have an US bank. There’s other service providers do that can help. One company I’ve known for few years, but they merged with Sendwyre. And Sendwyre, they leverage the whole idea of blockchain which is, a bitcoin for blockchain. It’s basically free almost. There’s a little bit of exchange rate difference but it has to be RMB to China. So the factory has to accept RMB for them to receive, to send out. Because you can’t send to US dollar, to US dollar to China with that service. It has to be an exchange. So that’s what they were, I was talking to them about it and they said it has to be RMB into China but this factory seems to want US dollar because of the tax reasons. And then this is kind of the hour will be sticking and I don’t want to be cheat. But that one give the bank 50 bucks twice for 1500 dollar or hundred bucks or 90 bucks on 1500 is insane. So when I was talking to Roland and to you Jack, this one actually we’re talking about Hong Kong actually my Hong Kong bank for now. And do a US dollar inbound it to China from there and the bank fees is about 13 dollars each time. And another option is it might have a Hong Kong bank account. A lot of factories have Hong Kong bank accounts so I can, they can ask them I think Lorenzo is asking them if they have a Hong Kong bank and then depending on where the bank is if HSBC Hong Kong which I have, it will the same day like instantaneous transfer, no fee. It’s like Bank of America in the US basically. So this is the stuff that is always kind of getting to know each other, the suppliers and the banks and the currencies and stuff like that.

Jack: And I have the message for listeners, it’s real and you’ve got to spend time on it and so just plan for that. It’s not a small thing to figure out how to do the finance transfers and when it’s 10% of your order or some big fees like that when you start it off, it’s important. So just be prepared for it. Just like all the other things that we’re planning on and the logistics and finding the right factory, all those things. But one of them was the whole finance area. And it’s important thing. You can make a big difference in your profitability.

Mike: Yeah, it’s totally true. I mean and then I think before we start recording, you asked me if we, obviously it’s kind of a favor, I’m doing my Hong Kong company and then I have, basically alone, we have to keep track of the accounting with all these different companies or personal accounts we had. Some people like Cadrian help out. Paying for some samples with these Chinese bank and others. That’s the other issue of the accounting. So, if it’s all set to one bank account of course it’s nice and easy because you can have just all the transactions nice and slow, end up in order by day to from where, to where. It’s much more smooth.

Jack: We’re keeping track on that right now on spreadsheet and we’ve loaded on some of that stuff into GoDaddy bookkeeping.

Mike: Yeah, we’ve done some. We caught up bookkeeping or at least some of them up until I think early October. We got to catch up, there’s not so many transactions but we should catch up. The other thing that’s pretty funny actually I’m afraid to update the account bank, because I think I told the listeners I had to switch them back to personal account in Amazon under my personal name because we didn’t have a bank statement with that activity. And now we do have a bank account with activity and I emailed back to customer service at Amazon and nobody reply like twice. And then I’ve been hearing other’s saying they’re afraid to update banks or update their account at Amazon during fourth quarter because they don’t want to upset Amazon and get any trouble with their account. So I’m afraid of updating it but then I’m afraid also that the address proof that we have for the company might be too old if we don’t update it sooner. You know what I mean.

Jack: Yes and a lot of details around all this.

Mike: Yeah so that’s another thing. Because actually that book you sold, it remind me actually the income goes into my personal bank because Amazon so connected to my personal US bank account, not to the company US bank account.

Jack I know.

Mike: I gotta dig that one out. I’m rich, I want to run away with that. But if we do get active that’s gonna be a little more messier than I was worry about. I think you might, too. As Americans, I’m just afraid of the personal tax liability of the company tax. So if we start selling my personal name and then the liability if one of these products cause liability issue. It’s just nerve wrecking anywhere. Of course you don’t want to hurt anybody that buys a product but there’s aggressive people that take advantage of that.

Jack: So I think Mike is it’s important to have a network of people that can help you with this stuff. It’s been my experienced in the past. Like I have always done my own taxes and I’ve always help my wife immigrate to the US. Get all the paperwork myself and I would back at that and say well maybe it’s better to get the experts involved and help you with some of the details so I know you and I have talked about, is this bookkeeping something that you and I can do now or as we grow do we need somebody that is an expert in this to help us with everything.

Mike: Yup agreed. That mean none, there’s cheaper that we can find online. The other thing is we took advice from my GoDaddy bookkeeping ‘coz he says integrate well with Amazon. So we did that and I haven’t yet actually our level of plan doesn’t connect automatically and the one issue I’m afraid of this bookkeepers might not know this software so when we talked to service providers, you know how it is, “oh I used Zero or I used Quickbooks”.

Jack: You have to find the right one. You have to find somebody that know our stuff. And we got some good advice from, legal advice from the first started that was great and we were gonna write, do some legal documents ourselves but we hook up with Edward and he helped us. So I think that’s important for our listeners also to just think about what you want to do yourself to save you money. But then where is it important to spend a little money to have some service providers help you. And maybe you get some free advice from some people, too. Just that.

Mike: Exactly. Yeah I think the main point I think you’re on my side here with this, you can put your input but I think we’re just doing it, right. Like I think that’s the difference, that’s the main difference is some people.

Jack: Exactly right.

Mike: Actually, I was talking to our listener a little while ago and he was saying how he thinks as a general theme of the podcast is. A lot of people we talked to, or just taking action and doing it. So I was excited that he saw that but I think that’s true especially we talked about international business and do business in your home country or in Asia. So, it’s even more challenging or risky or different or scary. Everyone’s think that there’s like rule book that has all the answers but actually I almost got into lax a little bit. But sometimes there’s conflicts between countries or states like, who’s right when this country wants tax or this country wants to follow that way.

Jack: We learned a lot by just doing it. Some on that book. I remember you guys saying messaging me saying “Alright Jack, do you have something around the house you can just sell so we can get this account going and he said to my wife “I have no idea how to do this but I got to do this today”. So I found the book and figure it out, we go online and you’ve learned so much by just doing it. And at some point you have to stop researching and stop thinking about it and just go. Then you’ll learn and do a lot better the next time.

Mike: Yeah, it’s true. So, I think this gets people hopefully people are excited and motivated to take action especially at the beginning finances are a little bit slappy. We had to make some personal transfers and we have to do some slappier stuff but we’re cleaning up. Hopefully at least for me, my goal is going to New Year’s cleaning things up and more streamlining on them. So thanks Jack for sharing on the show today.

Jack: Yeah, you’re welcome. It’s great. Thanks for having me part of this. I’ve learned so much and still get a lot more to learn but that’s my goal and our listeners, my message to you is you can do this at any point in your life and then the situation that’s going on. You get dealt bad card, flip it over, get another one, move on.

Mike: That’s true, right. I mean. There’s always an excuse here too young, you’re too old, you’re too rich, you’re too poor. You’re Chinese, you’re American, European, Australian, African, Filipino, there’s always an excuse like. Of course we’re too white males so of course people, some of like reverse there sometimes. Because I think, well there are of course some benefits. There are benefits of course, but there are challenges as well. I think, I don’t like people to use their background or something that can’t really change as an excuse for a while they can’t do it.

Jack: Embrace that difference and work together. Our team’s got a very diverse background and we’re gonna add to it with some old diversity in the future and that helps.

Mike: Definitely. Great. Thanks Jack and I’m excited for the next stages of this venture.

Jack: Okay, thanks Mike.

Mike: Thank you Jack, it’s always fun talking. Hope you guys are enjoying this series. It’s real time like we promise. We got 33,000 dollars in the bank. And what’s annoying is we are talking too much. I want to take more action but this order are pretty small compared to the amount that we have to invest. I was joking with Roland, we could invest it in bitcoin, imagine that. Throwing at bitcoin, maybe we still should but I think patience is virtue. Patience is important in business and in life. So while I do want to buy a million of this coffee things and sell a million in bank, we got to make sure we get things bright. And it’s a different challenge like when I first started my first e-commerce business I dropship from the US wholesalers. And I started smaller. This is a little bit backwards where I was starting bigger with production orders but you got do lean startup style. You got to make sure you got the right product and what people want. So we’re doing right I believe. And thanks listeners for your input and I’m adjusting as like business in life. So have a great day. Have a great weekend. And let’s enjoy 2017. Life is short.

Welcome to the Global from Asia Ecommerce Gladiator Series where you can follow along the progress of setting up a Cross Border Ecommerce business from start to finish. Hear insights of real product research, Amazon FBA, China manufacturing, branding, marketing, and all the blood, sweat, and tears of building a global business from Asia.