If you have ever thought about sourcing a product from overseas and then selling it locally and online, or you have an idea for a physical product you want to have created in a country like China, were costs are lower, this is the interview to listen to.
Craig Ford has spent virtually his entire working life in different companies related to importing and exporting of goods.
He’s done things on the small scale, for example finding unique jewellery in India while backpacking in his twenties, which he then sold in Australia, to much larger scale projects, like supplying Australian mining technology to companies in Asia.
As you will hear in this interview, Craig knows a lot, and there’s a lot to know about importing and exporting.
He covers everything, including -
- What website to use to find suppliers
- What pitfalls to look out for and avoid when you begin negotiating a deal
- How to spot fraudsters
- What to do if you want to get some kind of technology developed
- If you want to get clothing made, how to make sure it is of high quality
- A step you can take to make sure your supplier is not exploiting child labour and his paying fair wages
- When is it necessary to hop on a plane and visit factories
- What kind of research you should do before engaging with a supplier
- and so much more
As is tradition on my podcast, Craig also explains his backstory, revealing how he became good at what he does and what he learned along the way.
If you have ever thought about getting into the physical product world, this is must-listen to stuff.
Make sure you also stop my Craig’s site, MyImportLabel.com.au, as he has some great training resources to guide you in the right direction.
Where to Find Craig Online
- Craig Ford Twitter Account
- Craig Ford’s LinkedIn Profile Account
- Craig Ford on Google+
- Craig Ford on Facebook
Subscribe to the raw RSS feed (Podcasts Only)
YARO: Hello, this is Yaro Starak and welcome to an Entrepreneur’s Journey Podcast Interview. Today, I have a guest that hopefully will be someone who can really fill some gaps that I feel are missing in the interviews I’ve done in the past which is in this case, my guest, Craig Ford, Craig, thank you for joining me.
CRAIG: Thank you, Yaro.
YARO: Craig is an import specialist. He runs MyImportLabel.com.au as a consultancy and a trainer and a teacher. But, he’s also got an Asian to doing it officially through government channels to basically help people do importing, in particular, manufacturing in China so, you can get your product made in China and then, sell it online or sell it wherever you live though he specializes in Australia given the .com.au.
Now, I was talking to Craig before we started this interview to try and come up with some sort of big number we can tell everyone about how much money you’ve made or you’ve helped other people make or something like that.
Craig hasn’t answered that question. I’m going to let him say that. So Craig, what is your claim to fame?
CRAIG: Well, export advisory is a large part of my background and in our last four-year contract we supported Queensland businesses to export more than $20 million in export sales to overseas markets.
So, our market is all over the world everywhere from Kazakhstan, over the US and everything in between and all kinds of products from e-learning software to clothing and fashion.
YARO: It’s both sides of the fence, isn’t it? You help with importing and exporting.
CRAIG: That’s correct, yes.
YARO: Which I assume will be quite different games.
CRAIG: It is. Well, obviously, you’ve got product going in and product going out. Our background is in the exporting side and it’s really about finding opportunities in overseas markets and then, finding a product that fits that opportunity. That’s really the bread and butter of it.
Importing is not that different in that we know the market better than anyone else. It’s the Australian market. It’s a matter of finding what the product is that we can fit into whether to your Australian market or your home market, if that’s the US or whatever it is.
The principles are very much similar.
YARO: Okay, so we can almost say at least as somewhat of a goal in this call is to talk about completing the circle which is coming up with an idea, getting it produced overseas, importing it to wherever you are and having it then sold online and potentially exporting it.
You’re importing, manufacture the actual product and then selling it all around the world which should be what most people do nowadays especially with the Internet, right?
CRAIG: Yes, absolutely. It all depends on the products. Some products were obviously better launched in the local markets. Build your brand and following locally then, go off shore.
Many businesses that we’ve worked with start with your local markets. New Zealand is a no-brainer for us and then, when they got the resources, starts strategic exporting. But, really with online selling this day, you can start exporting from your first day of business.
YARO: Okay well, I’d love to find out more about how you gained all the insight into this world of importing and exporting.
YARO: As a tradition with Entrepreneur’s Journey interviews, let’s take a trip down memory lane here with you, Craig. Can you tell us, well I guess the first thing, have you always been into the exporting and importing market or was there a career of different entrepreneur projects as a teenager in your 20s or whatever it is you did those early projects?
CRAIG: Yes, certainly. Probably my first real career role was sales for a very large printing company. We were producing nationwide magazines. The Internet, this is ’97. I was 19 years of age selling about 1.2 million in sales a year.
The Internet had just come out at this stage and even then, web pages were basically glorified yellow pages at the time. But, even then, we could say, wow, this is going to transform the [unclear] industry because there’s instant scalability and very low cost.
We were run by a multi-national center out of Singapore that had arms in different markets so, we got to [unclear] doing industry markets.
Not shortly after, I did the usual Aussie thing and backpacked for a number of years living in England, six months in Spain teaching English and also in the Kibbutz in Israel. That’s backpacking across forty odd countries over several years and in that time collecting products and sending products back and seeing what sells and what doesn’t.
At that time, the Internet and eBay wasn’t really some forum and my brother and family sells some products, and still do at markets, merged that onto an eBay platform now.
But, yes, certainly different products over that period of time bring back, say, “Let’s give this a go.” Sometimes, the product would completely fail and other times, it would go well purely because it’s unique.
YARO: What sort of stuff were you buying? Was it just what you found interesting or did you have a real strategy behind it?
CRAIG: No, it’s not interesting. The only principle was unique. It’s got to be unique. It’s got to be something that can’t readily be bought within your local market, something that grabs attention.
There’s certainly a novelty factor but, for long-term, it stands out. There’s got to be novelty but, as well as a real function sort of product as well.
YARO: Can you remember something that actually sold well like tell us, maybe you were in the Kibbutz in Israel and you found some sort of… I don’t know, ancient Bible look-alike product that you could mass manufacture or something?
CRAIG: Yes, I can give you a couple of examples of things that went well and not so well. Certainly, the things that went well was in India. We found the margins were insane.
We found cosmetic jewelry so basically, designer jewelry, the low-value jewelry. [unclear]. We would buy off the streets for a dollar and we went, “Wow, if we can buy this off the street for a dollar, what can we actually get it for from the manufacturer?”
So, we travelled all the way out to Rajasthan which is not surprisingly a desert where all the camels are. And, that’s where we could buy this really nice design of jewelry for around $0.20 to $0.30. That’s sold in Australia for $20 to $30 a piece.
This was my pre-wedding honeymoon with my wife, our trip to India. Instead of going to a nice beach and relaxing, I dragged her to India and we traveled all over from Kashmir down to [Cairo] and bought leather jackets, leather shoes, all kinds of stuff but, that cosmetic jewelry, the camel bone jewelry went really well.
It was a short-term product. You hit the market really well for 6 to 9 months and then, the market catches up with you, prices going down a bit but, it’s a great example of finding a niche product, fantastic margins and essentially tightening a low-cost product and introducing it to a high-cost market.
YARO: How were you selling because you were travelling and I can imagine you can just grab a suitcase and fill it full of jewelry. Did you order from the manufacturer and have it shipped back to family in Australia and then, they’d sell it locally?
CRAIG: Actually, you can get a surprising amount of jewelry back. So, yes. Literally, you’d stuff your suitcase with as much that is feasible so, of course, we can avoid some GST and import duty in Australia if you’re under $1,000 in value for the products.
You can get those samples back and we did that and we tested the market. The market feedback was fantastic.
That gave us the confidence to say, “Hey, we know this stuff can sell. We know what we can get for it. Let’s get some big parcels and let’s start moving this stuff,” because essentially, the best thing about it as well it was also small. So, it was very easy to ship regularly.
None of this 20-foot container stuff. You can get regular small shipments and that was cost-effective.
YARO: I have this image of you coming into the Australian airport wearing all these jewelry on your arms and legs and neck just to try and get it in and saying, “Oh no, it’s just my jewelry…[laughs]”
CRAIG: And, my watch as well.
When you said you test the market, what vehicle? You said it was eBay eventually but, how did you find out if you wanted to buy this stuff?
CRAIG: Friends and family and markets. So, literally going out there and saying to the market, “What would you pay for? Have you seen it before?” That was the first thing. These are valuable. You see stuff around because essentially, when you’re overseas, you do see lots of products that are great and then, you’re going back here and the numbers might not stand out.
There might not be a market. It might be that novelty fact towards where people weren’t necessarily buying it continuously. So, you do have to get that human feedback to really confirm your decision. It’s really you don’t want to be making guesses at that stage and making a deal already.
You want to make sure that one, is the market and two, people will pay a good [unclear] for it.
YARO: Okay, so it’s a very basic introduction to importing. You could head off to India or Bali or whatever, find these things that you are think are unique, that might sell, buy a sample that you could sell, go home, show it to your friends and your family and maybe hit some of the local flea markets and more upscale markets you might have. See if they sell there and if it does, then what would you do next?
CRAIG: Well, you take that feedback and you would look at the products that are doing well and obviously disregard the ones that you don’t want the feedback on so, you’re informing that those decisions in your product development then, go back to the manufacturer and start ordering in large volumes.
But, I think that apart from those channels really and jewelry is a good example and baby products is another good example where there are tons of independent retails in Australia that are rival to take on products from small guys.
They are also a fantastic sales channel for being able to get a bit of scale and being able to knock on the door of an independent retail and say, “Hey, I can supply you so many boxes of these product. If you think you can sell it, these are the margins you can make. How about it?”
That’s a model that some of my clients have used very successfully.
YARO: Okay, well can you take us through even with your own stories. You’re travelling as a young early twenty-something with your fiancée and you’re buying product and then…
Are you thinking this is going to be my career or are you hoping to get rich from a big hit from a product that just sells like hotcakes like Crocs or something like that? Take us forward.
CRAIG: Yes. We have plenty of mistakes we make along the way. I know there’s, in doing this, you’re paying more for freight than you should. You’re making mistakes and customs are giving you a call on. You may have to, stuff has to go through quarantine and that costs money. So, you’re making mistakes along the way.
I finished traveling. That was three years. I go back to Australia and said, “All right, let’s do this properly.”
So, undergraduate degree in International business and that was also to fix my Spanish which I spoke really well but, somehow my grammar was so poor, apparently. So, that was to basically get the theory and to get the knowledge behind while I was doing this plus do it correctly.
I did that on the International business degree and then, my career took a little bit of a turn where I’d say I did a [unclear] picture apprenticeship doing export development but, in a government [draw] which completely sets the entrepreneurial experience [unclear].
But, the role itself was fantastic. Apprenticeship is a very big picture and essentially, I was in a team, a very small team and we would look after the staff managers [unclear] experience that India bought in and we would look in industries in India and look where there are Australian companies with high technology and services that could export to most sectors.
We had a lot of big wings with the mining sector in India. We would contact large Indian mining companies for coal and minerals and they’re generally producing at very low rates, low levels of technology, very low levels of safety as well and we would facilitate them.
We would bring those miners and decision makers to Australia, have a look at our mines and we’d introduce them to the technologies in Australia. That’s a very big picture of, we were dealing with big mining companies and very big mining technology providers in Australia and is essentially a match-making role where finding the opportunity and grabbing that technology or services locally produced and being able to introduce that to the market. So, that was a fantastic apprenticeship for literally looking at markets, finding opportunities and for supplies or for products that we already we have.
YARO: How does that even start, Craig? I find that mind-boggling. Does someone from Australia just go to India and start walking around or is there already established lines of communication? Because to know that the Indian minds are not safe and they’re using old technology, how do you even learn that and then, reach to the decision makers that those companies convinced them to buy Australian mining product?
CRAIG: Yes, that’s a fair question. There are already established lines of communication through business and through government channels and we would obviously go as a market but, we would also employ a local contractor.
An expert we’d already supply to the industry in India, a local Indian company and we would employ them to say, “Right, engage with this mining company,” so, it was hard as steel and they’ve got a whole lot of coal mining operations, “and assess this largest mine that they’ve got and tell us about the technology they’re using.”
Are they using an ERP system or are they just planning a whiteboard. Are they planning on a whiteboard? Tell us about the safety levels that they’re using. They’ve got underground mines. Are they using any sort of guest monitoring systems or are they just doing it all and sending it to an area and [unclear]?
Literally, we’d get that feedback and say, “Right, we can see that these guys are employing a ridiculous amount of people.” They are producing a very low-volume to call that market.
We would get quite a large amount of funding and they would start putting on programs to send planes in on Australian companies over there and to get into the face of the decision makers.
It’s really, it was tough. It was very enterprising in being able to look at a brand new sector and say, “Right, how can we fit into the [unclear]?” Another example of that project was the aviation sector in India.
The aviation sector was controlled by a couple of big airlines and that was completely de-regulated. All of a sudden, you get all of these brand new airlines popping up like a nut and they don’t have enough pilots around.
That was another opportunity whereby we engaged with for these new Indian Aviation companies and said, “Right, we’ve got these world class facilities for training pilots in Australia.”
YARO: This is a big difference from selling jewelry at a market that you found in India, in the desert. Your career has obviously taken a turn. What were you enjoying in that process and what were you finding what you were learning that obviously would eventually lead to you doing your own business with importing and exporting again?
CRAIG: Yes, I guess, the principles are the same in that you’re essentially taking the model of a niche product or a low-cost product and introducing it into a market where there’s a lot of demand or high-cost market where there’s big leverage on the sales margins.
So, even though those two projects sound completely different, the principles are quite similar. What I didn’t like about it was I wasn’t in control. I wasn’t the sales person. It sits very hard not being the sales person.
YARO: Yes, and you were on salary I presume too, right?
CRAIG: Yes, salary. As I said, it’s very draining in the entrepreneurial spirit. So, I had little things I was running on the sides, still importing the occasional product but, obviously that was my main role at the time.
From there, I went and worked for… it was frustrating so, I went and worked for a morning technology company and that was selling software into mine sites all over the world.
Those guys were already exporting their software to the US, to Canada and to other South Africa, all across Australia that was selling it. I helped them to introduce their software to three more mine sites.
That was… got my entrepreneurial spirit back.
YARO: So, after that, what led you to deciding well, it’s a big leap to go from obviously, you had two secure jobs, right? One was with the agency, the Australian government and then, with mining software to then, do your own thing. Did you have concerns about traditional things like by then, you’re obviously married and you might have a mortgage, I don’t know but, there’s certainly more dependencies than when you were a 20-year-old kid backpacking around the world. It’s easier to think that, “I can play around with product and see what works and doesn’t work because I’ve got enough time to fail.”
As you got older, was that something you were afraid of especially because now… What is it that you do right now? You are an independent business owner.
CRAIG: Yes, that’s right. I run my own business and we provide essentially an online learning and software platform for startups and importers. I hopped on, I created an account and start learning how to import products to market and I have the software and the tools to do the job as well.
YARO: So, how did you create that? There was some overlap left here with the job that you had in creating this business, right?
CRAIG: Yes, well there is a big gap here. This was after the morning technology company, I went to, this is a role that myself and my wife have shared for six years and this was another role, largely consultant role and this is called “Trade Start” whereby we have had and still have an exclusive contract in the Brisbane region to provide export advisory services to small business.
This is a very much sought after contract. We’ve won it over a couple of periods now. The last period we beat professional management companies of BDO, [Kendall?] Australian Institute of Export to secure the role and that role is specifically working with, over a four-year period, we’ll probably keep coming to contact with over 600 companies. We will work very closely with about 150.
When I say, “companies,” I mean largely small business, startups and small business and we are advising them what market you should go into. We’re advising them how to get into the market.
Should they export online? Should they engage sales agents or distributors or should they market it or set up an office?
Then, also how to change your product for the market. So, not only how to meet compliance with products and standards but also how to adapt the product to a customer tax for that market service.
YARO: That’s similar to it sounds like your own kind of business you do at MyImportLabel.com.au. Can you maybe explain the difference between the Trade Smart was it?
CRAIG: Trade Start, yes.
YARO: Trade Start and what My Import Label does?
CRAIG: Yes, certainly. This really closes the gap in that we’re working very closely with clothing, fashion, software companies and we are able to get them to a very high level of capability in the export side and we can see that a lot of the products, a great majority of products was coming from China and other markets. We couldn’t help them on the input side.
Really, it was really obvious to us. There’s this huge knowledge gap in importing. There’s lots of knowledge at exporting. There’s lots of programs to support bringing and obviously export revenue into the country, but there’s no program to support people who wants to import product. Obviously, money is going out of the country.
It was obvious to us that big companies that we all work would have very, very mediocre import supply chains. That just slapped us in the face and said, “Wow, this is a real opportunity where people…” People want to know about importing but, they want the services that go around it as well. There’s a lot more to just grabbing a product and putting it on a plane and bringing it back. You got to know whether it’s worthwhile to start and then, you got to know how to best target a market to be able to sell it and get the best sale for it.
That was the [unclear] the tool that made us look at the mine [unclear] starting.
YARO: When you say they have mediocre importing systems and knowledge, can you give us some practical examples like where a company is going so wrong with their importing.
CRAIG: Oh wow, I can tell you a million stories. And, we still get calls every week from people that are using online B2B supplies directories that are based in China and in other markets and are getting not necessarily replies by fraudulent guys. That’s probably a bit rare these days but, inexperienced exporters get taken off by genuine suppliers.
One example is in business, a Trade Start client. She would just use the manufacturer’s freight forwarder instead or using her own freight forwarder. They would under-wrought the value of the order so, when she would export those goods back to another market instead of claiming a back order duty and GST she paid, she couldn’t claim any of that back. So, she lost several thousand dollars in duty and GST paid.
That’s just one small little mistake made of many niche.
YARO: Can you give us a few more. I’m thinking of someone listening in to this who might be thinking about importing. I won’t mind doing a little bit of an example but, just for the mistakes side of this where do people go wrong besides that?
CRAIG: The thing would be before they even start is just not finding out what your actual costs are before you take part in the market.
YARO: Let’s do this properly then. I’m listening to this interview, Craig and I run a website or I’m thinking of starting up a website. I’ve got some traffic and I’m thinking, I have this great idea for, you know even like mutual friends we have, a couple of girls who are looking to sell in the model marketplace and they are thinking of buying and importing products that working and aspiring models would need to use from make-up to… I don’t even know. I’m not a model but, let’s go with make-up.
That’s something that, there’s all kinds of different layers, too. There’s so many different types of makeup. No doubt, there’s many things you could import but, geez, I’m sitting in America or Australia or England or somewhere and I’ve never even imported or bought wholesale or manufactured. I’ve got an idea for something that I could draw with pencil on a piece of paper and say, this should look like this and have these sort of ingredients.
What would you do next?
CRAIG: The first thing I guess is to set small targets and to try and get a quick return on revenues. Let’s do the make-up for instance.
The first thing I would sell them is, let’s not go and make a brand new compound, a brand new product and develop that with your own line and bring it back to Australia and so on because that’s going to take a very long time to bring to market and a lot of cost and sampling and meeting regulations as well.
The easiest thing I could do to start to just see if it works, let’s grab some makeup that’s already been produced. You can hop on Alibaba and have a little bit some that’s already been produced sub-standard, bring it back and let’s get some feedback on it.
So, tell those girls throw it on to your blog and get some feedback from your customers. Or, throw it on Facebook and get some feedback whether it would sell. Then, obviously, we would have program run you through different product checks you can write. You want to know that the compounds are legal, that there’s not related in the market for instance that’s obviously harmful to the person.
You want to make sure that the product actually can be safely imported. You want to make sure that can be legally imported and you want to make sure that there’s actually a dollar on it, as well.
But, importantly, and this is an area that many, many importers will come on stock is that we’ll launch into a big import project, what we’d call [unclear] or custom job without understanding how much work is involved in bringing to the market.
The first, it would be let’s bring a really super product back and let’s achieve that first step, make some quick sales and get some feedback and then, we can sell her out. We’d sell a few hundred taxes in make-up. It’s going pretty well. We want to make some changes.
First thing every girl might want to do is put their own leg warmer. I mean, that’s obvious. When you put your own leg warmer product you can create a premium brand. With that premium brand, you can ask for more money for the product. You can create a fantastic social media strategy and you can also corner it in the online market as well.
That’s one area whereby they can make a small adjustment to that product and greatly improve the market ability and their sales margins.
YARO: How hard is it to go to, was it Alibaba? For people who don’t know what is that?
CRAIG: Alibaba.com is the largest business to business supply directory in the world. It is an absolute phenomenon. So, Alibaba has largely shaken up the sourcing industry in the last three or four years whereby three or four years ago, you would have gone to a sourcing company. They would have charged you between three and twelve grand to go and find the manufacturer in China and they would help you bring the product back to your market and that’s about it. That’s what they do. They facilitate instruction to manufacturers.
Alibaba is, they have got a phenomenal database of manufacturers and supplies mostly in China but, also in other markets so, really, you don’t need to pay that big money anymore to go on research and to find supplies in every market because it’s all online. It’s all for free.
YARO: So, I could search Alibaba and I type in foundation or something like that for makeup and then, I have all these suppliers there who could provide this for me.
I pick one. How do I get my own label made for it?
CRAIG: Well, this is the start of the negotiation from the very first contact when you asked the questions, the negotiations have already started. This is where people need a little bit more help and support.
So, really, the part of the manufacturing processes is obviously more complex to print or emboss your label on to that product and you would arrange it. You’d negotiate. It’s part of the manufacturing process.
Generally, you’d be asking them, “Yes, can we label this?” That would be the first question. “Can I put my own brand on it?” Or, you would say, ODM which is original design manufacturer.
That would be the question though generally, it’s a very common request and the price would be adjusted and perhaps the minimum order quantity or the MOQ will be adjusted, as well.
YARO: Ok and then, how do you know you are going to make a minimum order just to test whether your audience wants? What, that like you’re not getting ripped off in terms of what you are paying for, like you might have in your head, ok the makeup going to be positioned at $25 each a unit. But, the wholesale right might be $4 or a dollar or $10. How do you know what’s fair? Is this the case of just looking at as many different suppliers and asking them their rates?
CRAIG: Yes, and this so, to enter simply there is no magic bullets, there is probably we work through probably 12 to 15 steps in that negotiating, importing and testing size, and sampling size for which you ran through the steps that mitigate these risks.
You want to know number one if this guys’ [unclear]. And that’s pretty easy to find out these days. As I said, the incidence of [unclear] is uncomfortably high but, it is certainly cutting down a lot.
Secondly, you want to know that the product can be imported and you also want to know that it can be sold and it is what it is. The compounds are quality.
That’s when you get samples back. You wouldn’t go and make an order for a start. You would order samples and we certainly suggest to clients to go and order samples for at least three supplies and then, you test them.
When I say test, I mean quality testing. Obviously, if it’s clothing, which we do a lot of, either stretching it, you’re testing that fabric. You leave it on the clothes line for days. You throwing them in the dry, wet, you testing shrinkage, you testing the seams. That’s one example.
Something like make-up however, I would be strongly encouraging the girls to get a lab test. Test that compound in there. Test the breakdown of the different compounds to make sure they are what they say they are.
And you know, once upon a time again that was difficult. You’ve got guys in China, you can even get that done in China with international companies, they have offices in every single city in China wherever you made your signatory and that test can, it’s $250 to $300. It’s a no-brainer to get that done.
The third part of the testing is of course the market testing, which we’ve alluded to before. The girls would put that might up online and say, “Wow, here’s some fantastic foundation we have got. It’s completely different. Really, what is it about it that you like? What don’t you like about it? We’re giving some samples away.” Then, they would get that feedback that would help them decide, “Wow, how do we develop this product?” Or, “How much of this product do we actually need?”
YARO: Okay. I remember several years ago there was a bit of a craze in drop shipping.
YARO: Which sounded great, you just go to something like Alibaba instead of needing to buy at wholesale and ship a bunch of products, stick it in your garage and have it sent out maybe by yourself, you’re just getting started by tracking down to Australia Post or something or UPS if you’re in the States or whatever and sending product out like that. For drop shipping, you just fill out a form and they send it straight to your customer. Is that something that still done or..?
CRAIG: It is, it’s marketed, but we actively discourage all clients from doing it and let me qualify that by saying in the early stage, it’s just not feasible.
I have got a blog on this that is very well read and we talk about the reasons why drop shipping aren’t sustainable. Number one is that there is no accountability. The person that’s essentially the importer is just finding a customer and trusting the manufacturer to send the product that is up to spec to that customer with no faults. That rises a whole lot of issues in this certainly under Australian laws where the product is not up to scratch then, the drop ship is responsible for getting the situation right. Reimbursing the customer or sending in another product.
You also have to trust the manufacturer obviously to get a product up to spec and certainly there are some payment providers that have withdrawn support for drop shipping models in some degrees because people would essentially buy the goods on credit and then try to sell them and recruit the money instead of investing money into it.
Really, it gets back to the accountability. If there is no accountability then the model falls out. Drop shipping was very utopian idea but, it really didn’t work.
Let me qualify that by saying once you are in a position that you have established good working relationship with the manufacturer, let’s look at something like furniture because the other issue with drop shipping is it’s not scalable.
You’re essentially ordering one or two products at a time and sending it over. Many manufacturers want to talk about thousands of products at a time, so it doesn’t work in that regard as well.
However, if you’ve got something big ticket out unlike furniture, you’ve got a track record with that manufacturer and that obviously produce that product one at a time.
That is a circumstance whereby you can market that product. You can have it custom made in, Indonesia is also very popular for furniture and then, you can send that and have that product made and then sent straight to the customer. Obviously, you’d still get quality inspections done in the market but, that isn’t an exception whereby that drop ship, the principles of drop shipping can be used effectively.
YARO: Okay. Can you tell us bit more about what you actually end up doing with my My Import Label? You touched upon, I can see some areas where I’d be going in blind for sure. I wouldn’t be thinking about lot of these things. You’re talking about like getting lab tested and I guess I’d make sense but, you know sort of think about these things and even if I want to sell something from Entrepreneur’s Journey, let’s say I decide want to have a custom business card holder made with the EJ logo on it or something like that. And, even just to give a few away to my paying members and things like that.
I want to go to Alibaba and look it up and then, find a way to get it engraved with my logo and things like that. Can you give us a typical case study, even a real case study if you have a client you can mention on an interview like this, where they come from, when they first approach you and where do you take them to like where you lead them through your coaching and your teaching?
CRAIG: Yes, so look, we started at My Import Labels as a full service agency. Literally, a client would come to us and say, “I want to set up a clothing line” or, “I want to set up this product label.”
We would do the sourcing for them. Literally, I was in China very regularly, in the factories, meeting with the factory owners, bringing the product back, launching the online stores, creating a brand and essentially handing it over to the client.
That was very popular. In fact, it was too popular for us because we could only handle so many clients because it was a very labor-intensive business.
As a result of doing that, it was pretty obvious to us that there was a few points. Number one, there were many, many more people who didn’t have the budget. Startups have a modest budget. They have to find out resources.
We would get a lot of interest from people who want to have a goal but, couldn’t commit to that sort of extent. You know we are charging $10,000 to $15,000.
We said, “All right, well we need to make this knowledge and this processes available to people so that they can just give their product [unclear] without sacrificing the mortgage or even sacrificing their lunch money.
We had switched the business to an online platform. We’ve automated instead of spending realms of time coaching people. We would put it into an online learning platform. People can access these processes and that information of how to asses and qualify and import the product. They can do that online much more readily for a fraction of that cost that we used to charge.
Let me give you one example. This is a really good product. It’s called My Pet Tracker, it’s mypettraker.com.au. This is a client of mine called, Monique. She is over way to the other side of Australian Perth and she came to me and said, “Look, I have got an idea for a product. It’s a GPS tracker for dogs. It’s something that you would fix to a dog’s collar and you could find where your dog is.”
CRAIG: It’s a very cool product and I could relate to it because we have got a dog that’s we spent out, spending $8000 on after he got hit by a car.
I said, “Wow, I can definitely see the demand for it.” We found the manufacturers in China. There was a whole lot of technical issues that we had to work through as well with the client. Obviously, with my background working with technology product, I was very familiar with GPS and mobile devices and what the ins and outs of those were.
We got quite a few different samples of the product for the client, tested them out. Of course, my dog still wanders about even though he’s only got three legs. So, we road-tested just to see what’s this product, what it’s limitation. Is it that effective? Can it solve the problem? Can it find my dog when he goes missing because [unclear] are also quite expensive, not to mention vet [unclear].
So, certainly we are overwhelmed by the demand. We did the Facebook, the blog, blog commenting and getting feedback in. What people were saying was, “Yes we really need this” because people spend a lot of money on their dogs. They love their dogs. They’re a part of the family.
YARO: How did you ask people that question? Did you just write a little post on Facebook saying, “We’re thinking of making a GPS tracker for your pet. Would you be interested in buying one?”
CRAIG: Well there is a phenomenal amount of track kits for lost cats and dogs online. People looking at directory saying, “Where is my dog. My dogs is still missing, and the associated search rises.”
We would tap into some of that traffic and say, “Look, we’ve got this product. What do you think about it, what would you be prepared to paid for it?
That gave us the confidence to say, “Wow, this is a really viable product and there is a ready market, ready to go and its unmet demand at the moment.
We were [unclear] at varied lengthy presses of like we sure complied with the Australian Communications and Media Authority. So we, what we call a “[IT] compliance.” That cost quite a bit of money and I can tell you this, there’s no way she would have had the confidence to go sure with that if she didn’t know the product was viable and profitable.
I think that was, I think it probably cost $6,000 to $8,000 to get that compliance. That was a significant barrier and probably a barrier that most people would have stopped that but, with that knowledge, we knew that she underway now.
Fast forward, a couple of months, we’ve got the compliance, negotiated ODM, so we created her own brand, put her own label onto that products and we are now just launching the market across Australia and she is getting fantastic feedback – Facebook friends, she is getting a couple of hundred new Facebook friends a week through marketing and also through advertising and purely going after dog owners, dogs and cat owners that are worried about their dogs. Dogs and cats going missing.
YARO: I can imagine that quite a unique piece of technology. I’d be daunted trying to find that at wholesale and being confident that it worked and getting it small enough to fit on animals, and all those little niggling things.
There’s got to be more to it than just searching through Alibaba and finding little GPS boxes and thinking, “Ok, I can attach that to a pet. Because there’s a design required in something like this and some technology required, so is that hard?
CRAIG: Yes, certainly. The difference is, this was an ODM product. It wasn’t actually a custom-developed product. It was already available on Alibaba but, we had to make sure it complied and fit the Australian market.
We didn’t guess on the manufacturer, so we spent, I was with the client and a translator and we went to the manufacturer’s premises. We saw the product being made. We tested it there. We viewed their certifications for US [unclear] market.
We saw the manufacturing assembly. We saw how the product came together. So, there was no way we would have gone ahead with that without seeing that product being made and becoming familiar with the people that are making it and seeing how genuine it was.
YARO: When you say, “You saw,” you went to China and saw all that.
CRAIG: So yes, in China.
YARO: I can see why the research phase is important because we are talking about compliance fee, the travelling to China part costs obviously a few thousand dollars, as well.
There is lot of upfront potential costs here. You do want to know there is actually demand for something, especially that’s the thing with physical goods. You always have a cost up front. I think by the sounds of it Craig, you are a big fan of a pre-research phase before doing anything else.
CRAIG: Yes, absolutely. I mean that’s the sort of project where if you wanted to just jump into it and not do that background research, you would have done a compliance, done an MOQ, a minimum order quantity order and easily cost up ten to fifteen grand.
That stage one phase of getting that feedback, literally I mean she did that for less than a thousand bucks. Right now, I mean our program is worth less than five hundred, you can hop on Alibaba and order some samples [unclear] and ship them to Australia for less than five hundred.
So, really you have got that confidence to give it a go before you go in and invest your life savings into it.
YARO: How important do you think it is to go to China for these sorts of things? It sounds like lot of you do, do that. I like the idea of seeing the product I’m potentially going to sell to people being made for confidence. But, then again, I also feel a sense of I don’t know, whether I’m being swindled at what I’m looking at, when I get to China and there is a language barrier, how do you find all that?
CRAIG: Look certainly it is very tempting to just stay to just talk and to order [unclear] just talk. But, you’ve got to remember that main China or in India or in many developed markets are relationship-based markets. They don’t really rely on the rule of law like the Australia and the US to where things go wrong, we can [unclear] and then, we can sort it out this way.
You are dealing with a wild west in many ways in China. You don’t have the rule of law to fall back on to.
You can put a whole risk mitigation steps in place to make sure that the supplier is [unclear] but, one thing I repeatedly emphasize to clients is look on a long-term basis. It’s really not that expensive to go to China.
From Brisbane, you can fly direct to Guangzhou for $900 return. You can get there in a day, 8 hours each way and to go and meet that factory owner and to meet the staff that are producing is invaluable. It’s by far and away the best risk management strategy you can have because once you get to the factory, all of the facts that are posted online, some of them you realize are just not correct.
You find out things from the factory that you just wouldn’t otherwise find out. out. Let me give you an example, we were sourcing very high quality women’s fashion leather shoes.
We went to very good manufacturer, everything stepped up, all the details, all the credentials and everything but, on the manufacturing floor they were producing very cheap kids’ booties. You know that you’d probably see in an apartment store for about $10.
They were trying to convince us they could produce very boutique, you know, this high-level women’s leather shoes and I wasn’t convinced because the manufacturing processes was large scale low quality when they were actually, they wanted to produce for us very low-scale, very high quality craftsmanship and materials.
As we were leaving the premises as well, my translator said to me, “Look at all these signs on the wall here. They are having trouble getting staff because they are out of a major manufacturing region.
He said, “Well, a very good supplier. There was a few alarm bells ringing to us say, “Right. I don’t know if there is good in producing this product as they say they are and I have got question about [unclear] over their skills if they are having this much trouble getting consistent quality staff that can produce these goods.
On the other side of that, we’ve been to other factories where we met with the factory owner. As soon as we’ve had lunch with the factory owner, wow we came back to Australia and as soon as we make a request, his staff just jump all over us. They could not be more helpful. That personal connection with the factory owner is just essential. I cannot write it hardly enough.
Certainly, in early stages, you don’t need to go to China on that expense and the hassles certainly in that stage one, the sampling phase, no need whatsoever.
As soon as you looking to engage into a commercial order, really the expense of that nine hundred bucks, few days in China is money well-spent a wise investment in your long-term business.
YARO: And it’s obviously easy to get a translator to come with you that sort of thing?
CRAIG: Yes, I look with the girls grown in China. That’s exactly what I do. And it’s certainly easy to get a translator. You too want a translator. You would prefer to be hearing the words from translator that you have engaged.
Well, look with that said, I mean China is a fantastic place, is very friendly but it’s not that easy to get around if you don’t speak some of the language.
YARO: We mentioned China a lot, that’s not the only place. You said India, as well. Do you have certain opinions on where to go like are other countries better for certain kind of products?
CRAIG: Yes, absolutely. I mean this is a really good point. Because the east coast in China in particular is becoming more expensive. The cost of living there is increasing and certainly we have noticed with clothing in Guangzhou, southern China region is getting quite expensive.
They are becoming more expensive than Vietnam. Vietnam is actually a very good bargain place. And certainly a large, the Walmart to the world, are getting a lot manufacturer than Bangladesh and two of us [unclear] India as well.
The market is a really important choice. They have got to specialize in that product. They have got to have manufacturing expertise. You’ve got to learn about that as well.
We provide a bit of information about how you can learn which market is better for which products. There are bunch of other factors. They’d go into consideration as well. We have got several modules on how to select the manufacturer.
Certainly, the attraction for China though is they have so much industry across so many different products that is already exporting. Another very important rule of thumb I’ll bring up here is if you are starting up importing, you want to deal with the manufacturer that’s already exporting to either the US, the EU or Australia because the quality that we demand in our markets are very high.
You don’t want to deal with a manufacturer that’s only dealing in the Chinese domestic market. Generally speaking, they do accept a lower quality product and materials. So, it’s very important to ask that question, where are you already exporting to?
YARO: But, there aren’t any rules I’ve found in terms of you know get clothing from here and get electronics from here anything like that?
CRAIG: Yes, absolutely, absolutely different, there are different [unclear] of regions in China that produce different products. Shenzhen for instance, is infamous for their electronics; Guangzhou is infamous for their clothing and Dongguan for shoes.
Vietnam is a major manufacturer and exporter of clothing as well to the US but, not so much to Australia. India has a fantastic textile industry, very diverse. Pakistan, for instance, is very great with leather.
YARO: I guess this is the sort of insight a lot you pick up, and it’s working, right?
CRAIG: Yes, absolutely.
YARO: Now I have to ask this question and I know some people would be thinking this and my readers have thought this before when it comes to doing anything outsourcing is the issue to exploitation.
Now, when you tour a factory obviously you probably have better chance to see this but are there ever concerns of underpaid labor or standards of safety or quality of work that you should look out for any signs, or even child labor to the that degree when you start doing something like this?
CRAIG: Yes, look, there’s two important ones that your raise there so, I’ll address this separately. The first one is child labor and that social exploitation and the second one is a quality issue.
That child exploitation, of course we know it exists and it’s been a PR disaster for few big companies. You know the Nike’s and other crisis. Personally, I have never found any child labor in Chinese factories and there are quality control firms that we use. I do, what we call “social responsibility audits.” I will check environmental concerns. I will check social welfare concerns, as well. You can actually get a social audit of the factory that you’re dealing with.
On the flip side, you can actually then use that as a selling point, as well. You can actually use that as a very strong selling points and say, “We have had our factories, they all comply, they are all environmentally friendly, and they all pay the staff well and equitable, as well.”
You can turn that into a positive. Look, the cost of an audit is not that significant that you wouldn’t bother if that’s a concern to you. Although, I will say, as a seller, I have never found child labor in Chinese factories ever.
The second point you made though is about quality. This is another really important rule of thumb that I will say, when you are selecting and deciding between manufacturers. If he gets a sample that is well made, good craftsmanship but it is poor materials. That’s quite easy to actually negotiate the better quality materials.
We provide a lot of steps to do this to be able to go back to the manufacturing and say, jeans are a good example, “This quality of denim is actually too thin. It’s poor but, the craftsmanship and [unclear] is really good. We like it.”
That’s a good reason to stay with that manufacturer if they agree and if they can prove to you that they can get the required quality denim. On the flip side of that, you get a pair of jeans that are really quality, the fabric is good but craftsmanship is poor, it is very difficult to get that manufacturer to increase that quality of their craftsmanship and that strikes at the heart of their business that they need to improve the skills of their workers and they do not even have their quality processors or even equipment to be able to produce to that required standard.
This is a really important rule of thumb if that quality craftsmanship is not up to scratch, you should be seriously considering moving to another manufacturer.
YARO: Okay. Craig what a lot of information you provided. It’s a ton! Clearly, you know your subject really well. I’m hopping every one listening here, they are sort of thinking I have got a blog. I have got an existing audience. I actually like to test some physical product that they have at least the pathway now is certainly Alibaba is the starting point. Your sites myimportlabel.com.au, what do you provide there in terms of both structured courses and free information and coaching or anything like that?
CRAIG: Yes, look we have got an online learning platform with software, so essentially you can log onto our website and create a free account, we’ve got a six-week program. It goes over six steps and within six weeks you can run through…
We run through about fifteen learning modules per week so there is more than 70 learning modules over the six weeks and within that six weeks, we compact everything we know into that program. So before you go and launch your product and go and invest, we want people to be up to speed and to essentially become an expert importer in six weeks, that’s what we provide.
We have got the tools to make the task easy, so templates and check list, criteria for how we assess our manufacturer. We have got online store software, with a blog as well that’s click to launch and you have got your own online store which you can certainly start building and start optimizing, while you’re at the sampling stage.
It’s a very low cost resource that you can hop on to with a pay-as-you-go subscription model with no locking [unclear]. It’s designed to get people at the startup stage to be able to test their idea without committing vast sums of money or resources.
YARO: Well, it sound fantastic. What do you personally do nowadays Craig, like what’s a working week like for you?
CRAIG: A working week is I’d run monthly webinars, of course. Part of our membership is we provide webinars on different topics with Q and A, so that takes up a bit of time, as well as I provide coaching as well. Of course, people do the program and they may have a specific circumstance or need for the product or business requirements, they engage us to do different coaching, as well.
We have got a few different coaches that we provide based on the specific requirement whether it’s online. My wife of course, her expertise is exporting of fashion and clothing. She is in demand. Then, of course, I cover large parts of the business, as well.
It’s largely dealing with our paid members, people who have come on to our program and helping them to troubleshoot issues and just overcome those challenges of the startup phase that seem to bog people down.
YARO: I’m assuming this is what still floats your boat sort of thing. Do you have any big plans for any new business because I have to admit, it must be tempting knowing so much about importing and exporting to go and start, like a business every time you see a cool product.
CRAIG: It is, it is very tempting. There is a couple parts to this. One is that I have very strict confidentiality agreements with clients. So, we do have plenty of secret squirrels that come to us and get us to sign nondisclosure agreements. Look, I don’t have a business if we can’t do that. That’s important.
But, I do have other clients that come to me and say, look, look I need a professional partner on board and we are open to engaging with people on an equity basis and looking at doing the task for and bringing products to market where they basically want to focus on the selling of the product and then, want us to get the product for them.
That’s also an area that we are engaged with and I have a mate down the Gold Coast who has got a fantastic technology product that we are doing there at the moment which is a broadcast mobile marketing software.
YARO: Any other cool products that you got your fingers in? It must be cool kind of an entrepreneur you can many different products selling because you’re just the partner for the consulting with the importing and exporting but you know you could be selling jewelry, underwear and leather shoes, do you have any products like that?
CRAIG: There’s plenty. There are always new technology products. If you are looking for a hot area, I mean small consumer niche technologies like the GPS tracker for the dogs. That was a fantastic example.
The thing with technology, it gets cheaper and it becomes more complex as it evolves and as it become cheaper, it opens up all these new markets. So technology is a great area to look for new emerging products.
That pet tracker, for instance, that technology has been around for years. GPS as well as SMS but, because it has become so much cheaper, it’s opened up this new market.
Once upon a time you wouldn’t have thought to put a mobile phone type device on a dog’s collar because this just wasn’t worthwhile but, now it is.
YARO: All right well, wrap it up Craig. Any last words of wisdom or advice? It sounds like your journey is very much tied to importing and exporting through entire life working life, so far. So, you’re clearly meant to do this, anything, any passing words?
CRAIG: I would say the people, don’t try to do everything yourself because if you try and master everything you’ll never get started and you can start up lean and test that product idea out without spending the Christmas money. You can give that product idea a go before you go and commit to a large commercial order. That would be my advice.
YARO: Okay, fantastic, so Craig Ford from myimportlabel.com.au. Thank you, Craig for spending this hour with me and sharing all these fantastic information. I have to admit, I am going to go check it at Alibaba now just out of curiosity to see what sort of stuff I could start selling online.
I have a feeling there is a bunch of people who sell on eBay who must love Alibaba because that would be a great combination there. Your source of goods and your distribution channel for marketing hence, probably a lot of competition too but let’s not go down that discussion right now, Craig. We already got an hour.
Thank you for joining me. For everyone else listening in, you know where to go if you want more interviews like this, you can heat to enterpreneurs-journey.com or Google my name which is Yaro and you will find all my podcasts there. There’s over 80 of them with fantastic and very experienced entrepreneurs like Craig who shared their story.
Thanks every one for listening and I will catch you again very soon.
CRAIG: Thanks Yaro.
YARO: I hope you enjoyed that interview with Craig. I think it’s one of the best ones we’ve had on the Entrepreneur’s Journey podcast.
A reminder again, if you are looking to join my EJ Insider’s Club, if you love this interview with Craig and you want more on a regular basis, please go to EJInsider.com/interviews and you’ll find all the details about my new club which you can join now.
Thanks again for listening. My name is Yaro Starak. I hope to see you in the EJ Insider Program.