Returning to the show, we have Afolabi Oyerokun. Afolabi joins us today to discuss the high costs of shipping for businesses, sellers options in sourcing and the benefits sourcing in the US. With over 20 years of experience, Afolabi Oyerokun has been learning and developing the best logistics strategies, relationships and tactics to streamline and improve profitability for his clients. passionate about finding hidden treasures, haggling and negotiating prices he is a believer that “You’ve got to make money when you buy, not just when you sell”.
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Date: November 30, 2020
Episode: 70
Title: Norman Farrar Introduces Afolabi Oyerokun, a Co-Owner of Honu Worldwide and a CEO of Trillion Source
Subtitle: “Business opportunities are like buses, there’s always another one coming”
Final Show Link: https://lunchwithnorm.com/episodes/episode-70-bracing-for-covid-2-0-and-chinese-new-year-w-afolabi-oyerokun/
In this episode of Lunch With Norm…, Norman Farrar introduces Khierstyn Ross, a product launch expert that specializes in Kickstarter & other popular channels launch for physical products.
Afolabi has always been passionate about finding things, haggling and negotiating prices. In this episode Afolabi takes us through his predictions for the holiday and how to get ahead of the inventory problems.
If you are a new listener to Lunch With Norm… we would love to hear from you. Please visit our Facebook Page and join in on episode discussion or simply let us know what you think of the episode!
In this episode, we discuss:
Our favorite part of recording a live podcast each week is participating in the great conversations that happen on our live chat, on social media, and in our comments section.
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Norman 0:02
Hey everyone, it’s Norman Farrar, aka The Beard Guy here and welcome to another lunch with norm, the rise of the micro brands.
Norman 0:20
Okay, so today I’m going to be joined by Afolabi Oyerokun and he’s a sourcing expert, also a partner in Honu Worldwide and today we’re going to be discussing COVID 2.0 and also the Chinese New Year. What to expect, how to plan around it. But before we get to that, Kelsey? I can’t hear you. Because you’re muted.
Kelsey 0:49
There we go. We’re good.
Norman 0:50
Okay.
Kelsey 0:51
Yes. Happy Cyber Monday, everyone. Hope you guys are enjoying some sales. What are you guys buying today? You can go ahead, post it over in the comment sections. Is there anything you’re looking at? Today or Black Friday, maybe.
Norman 1:06
I want to know how everybody’s Black Friday was, how it went.
Kelsey 1:10
Yeah. So on a scale of 1 to 10, how is your Black Friday experience as a seller? Put that in the comment section. But more about the show, if you’re new, you can follow us on social media. We have Facebook, Instagram, YouTube. We are streaming live from the Facebook group, too. So any discussions about selling online in Amazon, you’ll find them in the Facebook group. Need to answer three questions to get in. They’re very easy questions.
Norman 1:40
What’s your name?
Kelsey 1:43
So yeah, if you’re interested go on. It’s Lunch with Norm Amazon FBA and eCommerce Collective and we are a podcast so you can find us on Apple and Spotify too.
Norman 1:58
Alright and if you are watching this on a replay, you can always just skip ahead and for those watching on my profile page, you can head over to the official fan page, Norman Farrar aka The Beard Guy, where you can see full episodes, as well as content and clips that Kelsey has put together.
Kelsey 2:18
Hello, Marina. Marina is joining us. Yes. I don’t know if you guys can hear but the rain is setting off my window. Yeah, it’s a stormy day here in Toronto.
Norman 2:30
Oh, yeah. It’s cool up here, too. I’m just trying to warm up. Alright, so I guess the last thing is just if you do have any questions, put it over in the comment section and we will get your questions and tackle your comments hopefully during the show. If not, we’ll do it after the show. So sit back, relax, grab a cup of coffee and enjoy the episode. Afolabi.
Afolabi 2:58
Hey, how are you?
Norman 2:59
I got to get one of those orange, like those really beautiful orange tracksuit, we got to do that.
Afolabi 3:07
It’s like us special signatory one. Just for me.
Norman 3:12
Yeah. You did it to be color coordinated with the website. Right?
Afolabi 3:15
Yeah, you can see my shoes are nicely matching.
Norman 3:22
Oh, really? Orange shoes, too. Very nice.
Afolabi 3:25
Yeah, kind of.
Norman 3:28
A stylish young man.
Afolabi 3:30
I’m trying.
Norman 3:33
Hey, for those of us that don’t know anything about you. Can you tell us a little bit about yourself and what you’re doing?
Afolabi 3:43
Well, thank you again for having me on the show. I’m Afolabi and I enjoy sourcing. I’ve been doing this for more than 20 years, sourcing supply chain and recently we just opened that 20,000 square foot warehouse here. So whoo hoo. Cranking up and getting ready. There’s been a lot of FBM orders going on. So I’ve been sourcing for 20 years, over 20 years different products. I just like negotiations and I enjoy working with China a lot. I spent a lot of time there, understanding the culture, the people and I just love it out there. So yeah. That’s what I do all day, sourcing logistics supply chain. It’s what I enjoy the most and some of those things, we’re going to share this episode of the show as well.
Norman 4:45
Okay, fantastic. But before we do that, I just wanted to give a bunch of shout outs to Marina again, from Toronto, Darwin, Mark, Facebook user.
Kelsey 4:56
So that’s that’s Tom and Rad.
Norman 5:00
Okay, very good. Simon and also Lisa. So thanks for joining today. I don’t know about you Afolabi, but I was looking at a bunch of different brands that I manage and then my own brands. I didn’t see, like I see some people saying, they got 1,000,000%, increase in sales. I didn’t see that big of a bump across anything that we did. Like we saw some, but years that we used to have maybe a 300 or 400% increase. There was a bump. Did you notice anything different?
Afolabi 5:42
Yes. Especially in school supplies. There was a major, major one in school supplies. There’s also a major one in Christmas, because people were shopping early. So starting from like, beginning of November, the most of the gift items really went up and as I had predicted in our last show several months ago, baby products. It is rising and rising.
Norman 6:12
I couldn’t predict that. Well, you did.
Afolabi 6:18
It is rising. The COVID babies, they’re shopping for the COVID babies.
Norman 6:22
That’s a tough category, though. Anytime you want to get into something like the baby category is tougher. But those people in it, they’ll reap the benefits. But I’m just talking about like, we had a lot of typical beauty items. Even pet items, I saw an increase, but I didn’t see 100 or 200% and also, usually they’ll be the spike on the Friday and the Saturday. It was kind of reversed. If I did see anything. It was on the Saturday. Weird. I don’t know why. But anyways, I noticed that there were a couple of comments here. So before we get started on that, Kels?
Kelsey 7:05
Just go through them?
Norman 7:06
Yeah, cuz they’re about a millimeter high for me. I do see that Victor and Alan are on now too. So yeah, Hi, guys.
Kelsey 7:13
Alright, so let’s see. So Darwin, slight increases in sales Friday. I’m not buying anything today but hoping to sell it on. From Mark, Hello Norm, Kelsey and Afolabi. I’m out picking up a generator, recent electrical outages in the wife says no more and I believe this is from Tom and Rad, the Facebook users. They are in the Facebook group. Alright, so for those in the Facebook group, if you’re commenting, it comes up as a Facebook user.
Norman 7:44
Fix it up, Kels.
Kelsey 7:45
I wish but I’m constantly checking the Facebook group to see who it is. So you kinda notice it. But Lisa, good morning. Lisa from Novuland. Simon, seeing sea freight costs increased three or four times in the last week and is expected to stay high throughout q1 and let me see. Alan, Victor saying, Hello. Darwin, I’m in the baby industry. It’s cutthroat and stressful, but it’s worth it.
Norman 8:15
Oh, look at Victor. Look at what he’s saying. Do you want? Yes, yes. Yes, sir. We want.
Kelsey 8:22
I thought it was a live stream yard that there’s an issue streaming in groups. But yeah, if you have a solution, let us know. But, Jackie evening from Wales.
Norman 8:34
All the way from miles.
Kelsey 8:35
Okay. Got lots of people out. Looking good. That’s good to hear and yeah, that’s it for now.
Norman 8:41
Okay, so I’m not the only one going crazy about these Black Friday sales, then. This is interesting, because we’re gonna be talking about that today. In a way, I guess the first thing that we should be talking about is COVID 2.0 and how do you think it’s going to affect sourcing or just the next quarter?
Afolabi 9:05
Well, in so many ways, and we’ve already seen it. If we have to learn from COVID 1.0, we shouldn’t let it repeat. We shouldn’t let all the effects, the bad ones, repeat themselves in the 2.0. We should be better prepared because 2.0 we don’t know what’s going to happen. Everybody’s waiting for vaccines, everybody’s gearing up and say oh, I was talking to somebody yesterday and he’s like, Oh, once I get my vaccine, I should be able to travel back to China. Nobody knows what’s going to happen. All we can do is just have to be prepared. Now we’re going into Chinese New Year again, so could be 2.0 plus Chinese New Year, double hit. We just have to be prepared. Nobody knows. We’ve already seen sea freight going up, it’s going up. Now, some companies, some factories, are starting to recover from the impact of COVID 1.0. If 2.0 hits, I don’t know if they’re going to survive, we don’t know if they’re going to survive. We don’t have a lot. We don’t have reports of COVID in China so far. But if it hits, as it’s looking like it’s going to, we have to brace and be better prepared for what’s coming.
Norman 10:35
Okay, so this happens. Do you recommend doing more factory audits, when you’re sourcing?
Afolabi 10:43
Oh, a lot of things, a lot of recommendations. First, I will say, for your q1 and q2, you have to double up on your orders. If you can get your orders out of China before the Chinese New Year, it would be very good. Why? Because first, maybe some people that don’t know what Chinese New Year is, maybe we let them know. It is a period of time in China that everything shuts down, everybody goes to their hometown, it’s between February 11 to 17, I believe next year. So people go out for almost a month, usually, it’s like a week holiday. But because people with people travel so far away back to their own town like two three day journeys. It takes a while for them to come back. So they always stay away for up to three weeks, sometimes. So Chinese New Year’s coming, and how do we better prepare? I would say to double up on your orders. If you can still order more now, to be able to get it out of China before February 5, I would say, it’s going to be well worth it. Because if some companies never make it back, or you’re counting on when China is going to resume from Chinese New Year before you place your order, it’s too big of a risk, because some of them might not resume again. If they do resume, it’s going to take at least 30 to 45 days before they can ramp back up again into full production capacity. Sometimes as much as 60 days for them to get back and now was severely you already lost q2.
Norman 12:32
Right and I mean habits or habits. People that are going to wait to the last minute are going to wait for the last minute. But unfortunately, I don’t think if you’re waiting to the last minute to do this and that might be just human nature, or that might be you’re trying to wait for shipping rates to come down. They’re not. I don’t think they’re gonna come down right now. Nope. Like they’re up there. They’re artificially inflated. But like usually in January, you’d see them start to come down, I’m not sure if that’ll happen. But I’m not going to take the chance to either and when you say double up your inventory, we’ve talked about this before, but it’s a good time to talk to your manufacturer. They probably want the work and this is where a sourcing agent or yourself would go in and negotiate that and Okay, we’re going to be doing it. They’ll probably say no at first, but then you have to explain why and number one is you’re taking those marketing dollars in a very tough situation right now, and applying them to move their product. That’s probably the biggest thing. One of the things that we have to take a look at is just trying to see if you could do 20% deposit, and we’ve done it, like the knives that we work with. So we’ve done that and we’ve got like crazy terms, we ended up doubling the order. So 2500 units, and like 5000 units, so it’s 2500 units normally. We got to put a very small deposit down, I think it was 20% and then 20% when we were shipping, and then they gave us the rest in 90 day terms. Not that we even asked for that. They gave us 90 days. So you never know what’s going to happen. But if it’s cash flow that’s causing you to stop right now. Solve it. There’s lots of different ways that you can go out and solve cash flow issues. There’s all sorts of different ways we’ve talked about it. There’s episodes that we’ve done here. I think there’s two that we’ve done. Kelsey could probably post them, but they’re definitely different ways, you don’t want to be undercapitalized, that’s for sure. Yeah, but at the same time you have to prepare I don’t know what you think about this. But out of those 5000 units, my way of doing this, my inventory strategy would have been keeping the half over and Amazon half at 3PL and 2500 units I’m talking half, 2500 units came in, half would go up, those would go to Amazon, half would stay in the 3PL, the other 2500 units would typically stay at the warehouse. Now, I don’t know if I would bring over more, I probably would, instead of having 2500 just hanging back, because again, we don’t know. We’re going through it right now, look at how many conversations we’ve had. I don’t know if you want to say good conversations over the last couple of weeks about getting inventory into Amazon. But, you’ve got the freight, you’ve got to receiving, so you’re at the port. We’ve gotta get through that. You got to clear customs. You’ve got to get it into Amazon and along those ways, there’s hold ups everywhere you can imagine.
Afolabi 16:08
Yes, yes. So we will talk about the holdups in China. But even in the US now, USPS, FedEx, UPS, they are a mess.. They are dealing with the largest surge in eCommerce, they can’t even cope. Many times at us, 3PL here, we have to almost call for UPS 53 footer truck just to come pick up products, because all the small SPD orders, the vans are carrying about huge boxes all over town. They don’t even have room for anything. So we have to two times your plant time. So if you find that once your goods shipped out of your 3PL is going to get checked in a week. No. You have to plan three weeks now.
Norman 17:04
But that depends on where you’re located in the US. If you’re trying to get it into LA, you could be forever. I think it was Tim Jordan and I were talking and he was saying that, he’s trying to take any product that he was going to ship over to LA, go around, take a few extra days and go to New York instead and then have it distributed to your 3PL on the east coast. Typically, that’s better late for us, for example, the Pennsylvania warehouse. We shipped out some products the other day. It took about a week, but we got some of it in; they didn’t put it all in; they put in a portion of it. I don’t know where the other stuff is. But that’s probably a better bet. It’s all about positioning and if you can wait a few extra days, then going to New York might be faster.
Afolabi 17:59
Yeah. At the moment, the East Coast is faster. There were some products that I shipped last week, Tuesday, and by Friday, they were already checked in. Yeah and it was treated as a UPS freight. So the truck came and they were going to Pennsylvania, New Jersey and Illinois. We got checked in within four days, done.
Norman 18:29
So AVP one is, that’s Hazelwood I believe. That’s doing pretty good.
Afolabi 18:37
ABE8 is doing well. That’s in Florence, New Jersey.
Norman 18:41
These are some things to remember when you’re doing it. Right. Yeah. But again, it’s all about positioning and where your 3PL is and, again, if you can’t take the time, take it now. I don’t know who told me this. I think it was Tim. He, I think it was Tim that was telling me this, that if you order, if it’s LTL, less than a truckload, and you get them picked up. It could take weeks. The trick that they had was ordering the whole container, like if you had the money, and you could order the full transport container, then if you loaded like for us, this was the discussion we were having. Two pallets, it costs a heck of a lot more. But what are you losing in sales? Yeah and then the other way of doing it, which I mean, we’re not that far away. We’re about an hour away. But if you can take the products, put it into like just make your own arrangements, call for an appointment. That’s another way of speeding things up. But right now, just ordering that full truck load. That seems to be one way of working out. So this is a shortcut and I believe it was Tim that told me that if I’m not crediting the right person, let me know. But I think it was Tim.
Afolabi 20:08
Yes. One of the things I think you said that I tried, it worked and I think you said you heard it from Tim was the UPS freight truck.
Norman 20:19
Oh, yeah, that works.
Afolabi 20:21
You gang up all your SPDs. As long as it’s more than three or four pallets, the UPS van will not take it, they have to call for a UPS truck. Now once the UPS truck comes and you load up those files, even though they were SPD boxes, once the truck comes, they upgrade you to a UPS freight status and once you get on that status, it goes direct.
Norman 20:48
I think there is a weight limit on doing it. I think it’s 600 pounds, I think 600 to 650. But you order it twice, and then you can do whatever you want with it. Yep.
Afolabi 20:59
Yep.
Norman 21:00
Okay, Kelsey, are there any questions?
Kelsey 21:03
Yep. There are two questions that came in. First one was from Tom, what would be the latest to place an order before Christmas?
Afolabi 21:15
Now.
Norman 21:16
Yeah.
Afolabi 21:17
No, before Christmas, it’s almost too late, depending on how long it takes for your supplier to make your order and if you’re even going to go as close as January or anybody moving, placing order very close to January or whatever I’ll say you make sure it is trade assurance, because just in case your supplier doesn’t make it to come back after the Chinese New Year, at least you can get your money back. But I will say do it now. If you need to order, please do it right now. Don’t wait till later. It may be too late.
Kelsey 21:55
Yeah. Okay and from Rad. Hello, Afolabi. Do you have a 3PL in Canada? If you have, there are a few Amazon sellers asking for 3PL services on Facebook.
Afolabi 22:07
I wish I do. I don’t have at the moment, but I wish I do.
Kelsey 22:14
Simon had some comments. There’s a massive shortage of shipping equipment, containers, trucks to move the containers from factory to port and ships. There’s also a total chaos at ports. The next few months look pretty ugly and due mostly to the massive increases in online sales. There’s a real shortage of cardboard that is going to hit hard in q1 with shortage and price hikes.
Afolabi 22:36
Anon, I know you have all this data. I heard that Black Friday sales in Brick and Mortar stores went down 52% for the first time.
Norman 22:52
Wow.
Afolabi 22:53
52% in Brick and Mortar stores.
Norman 22:55
Yeah.
Afolabi 22:57
Yeah, people didn’t go out to get anything, everything was online.
Norman 23:02
Tony Sagar is here too. I don’t know if Tony wanted to pop on for a second. He’s got a retail store, I believe. It’d be interesting to see what his store did this Black Friday. So hey Tony, if you’re able to either get on or if you can let us know. How did your retail sales go?
Kelsey 23:23
Yeah, I can send you a link Tony to join the chat if you’d like. But let’s read his question. Hi, guys. Have you used the Amazon Global Logistics Program to ship direct from China into FBA? I heard you can save an oversized and pay later.
Afolabi 23:40
I know people, I’ve heard people using that. The only caution with that is just make sure you use a buffer. Don’t let them tick off from your factory. If Amazon knows your factory, not good. So use a 3PL inside China or like a logistic center in China and let your factory ship to that logistic center and the Amazon Global Shipment can pick it up from there.
Norman 24:07
Right. So okay, so why is that important?
Afolabi 24:12
For you to use a buffer?
Norman 24:16
Yeah.
Afolabi 24:17
Because if you don’t, then Amazon will go to your factory to pick up then they know your factory.
Norman 24:23
They know it from the invoice, don’t they?
Afolabi 24:27
They don’t require invoices unless they have a problem with your order.
Norman 24:32
Yeah, I’m just talking about your initial getting on board. You have to provide invoices.
Afolabi 24:39
The ones that I know is the issue, if somebody reports you or they’re trying to verify something, they can ask for the factory. But typically, they don’t know all the factories we all use. But if you’re going to use Amazon Global Logistics, then they would rather want to pick up from your factory. There was a guy in Florida, he says he saves, but he also has a buffer. Whereas in China, he has to ship this product because he just doesn’t trust that if Amazon comes to pick up at his factory, because he’s selling a very, very high grossing product, someone Amazon to become his competitor.
Norman 25:26
I have a feeling Amazon wants to find. Find out and I mean, really, we can’t even worry about that. I mean, they’re going to find out and if they don’t find out and it’s selling really well a product, they’ll go and find a factory that does make it. But okay, so let’s go back to Chinese New Year, it’s gonna be a little bit different. We’ve already talked about, if you are going to place an order, maybe do it a little bit differently. Is there anything else that we can do, and I’m looking at economics. Like, COVID 2.0, I don’t know if there’s going to be another round of stimulus checks. I don’t know if there’s going to be but maybe we’re going to get hit hard. Maybe it’s not going to be, maybe people are going to not buy as much. I don’t want to say that. I’m an eCommerce seller. But reality is, if all of a sudden there’s a downturn in the economy, that could affect us as well. So you don’t want to overstock. I’m going to be very, I’m going to contradict myself, but it’s just something that I always have in the back of my mind. Is there and I’d be interested to see some of the comments here, especially Victor. I like to see what he has to say about that. But anyways, if anybody has any thoughts on the economic downturn, everything looks peachy right now, but I don’t know. I don’t know what it’s gonna be. I’m not a mind reader. What are your thoughts?
Afolabi 27:02
I think that this still is, there still gonna be several rounds of stimulus. Because especially in the US, they will not let the economy go down, they will pump as much money just to keep everything afloat, which means they’ll be a lot of money also in the economy tool to make purchases. But you said something like that a few seconds ago, what if everything bounces back and COVID 2.0 didn’t really make a dent, like it did in the first time? What happens at that time, you probably overstocked or what happens? I still think it’s better to stay in stock, than to gamble, and not have enough because there’ll be money to buy, people will still be skeptical. There’s a lot of people that have gotten used to staying working from home, and homeschooling. So I still think that it’s just going to be a shift from some products into different kinds of products. It will still go very, very way up, it will just be like a shift.
Norman 28:28
I think that may be one of the things you can look at too and this is really a point we always talk about, is not putting everything in the Amazon, having a 3PL hold back. So if it does go slower than anticipated, then you have it at least back at your warehouse and you’re not getting long term storage charges. The other thing is that this is where Amazon Seller 2.0 has to come out. Especially if you’re making money on Amazon, sometimes you get a little lazy, oh, it’s just we’re making sales. We’re not tuning in our PPC, or we might not be looking at any other forms of advertising, driving sales from your website over doing other forms of external traffic and Seller 2.0 I think has to look at all those other areas to help build up their sales. You can do it right now and that’s awesome. Gift Guides, for example. Our knife guy had a very good bump. When was it, the other day because of a Gift Guide, a very well known Gift Guide took on his product and when they announced it, all of a sudden he had a bump in sales. So that’s great. But there’s all these things that we can consider while we’re doing our inventory management. If sales are going slow, well what can you do? What other forms of external traffic can you build? But here’s another question about Chinese New Year manufacturing in general. So you’ve got your product out there, you’ve negotiated your terms, you’ve signed off on a production sample. How far in advance do you book your inspection?
Afolabi 30:15
Right now it’s about two weeks out. Inspection and shipping should work hand in hand, because you have to do the two together. Somebody posted before that, she just placed an order where she would book the shipping? I will say, to book the shipping, right around in less than a week, from after your product is finished, and inspection should be done around the same time. So it’s about two weeks out now. We don’t know if it’s gonna get worse. But two weeks out, do the inspection. In some cases, the factory may be delayed, and it may push inspection back a little bit, because they are not done yet with your product. So in that case, maybe maximum three weeks out is ideal. But two to three weeks, I will say to schedule your inspection out.
Norman 31:10
Okay and if you’re not doing inspections, if you’re new to Amazon, or private label selling, you definitely want to do an inspection. They don’t cost a lot of money. What do you think, on average, 300 bucks?
Afolabi 31:25
Yeah, less than that. Yeah and you know what kind of inspection your product requires. If it is a spot inspection, or maybe to 50 to 80. If it is a full inspection where we have to know, the inspector has to touch every product and examine let’s say, thousand pieces. In 1500 pieces, it could be any 500 to 600 and then you could do production monitoring, whereby they have to monitor while the production is going on. So depending on the type of inspection you need, it would determine which one to get and they’re well worth it, especially Chinese factories will rush your order. They will rush to order before the Chinese New Year, they will rush it and you need to be prepared to do your inspection so that you don’t get into trouble.
Norman 32:20
Yeah, and make sure if you’ve got a production sample that you guys signed off on, make sure that you put on the pro forma, that it must match the production sample. Okay and also, when you’re starting the process, you want to make sure that the manufacturer knows that you’re not just trying to get a price at the cheapest. if you’re nailing your and there’s ways to negotiate this. But if you’re trying to get something that’s worth $1 for a quarter, there’s gonna be some corners cut at some point in time for sure. It might be in the quality of the goods, it might be I don’t know, but you have to be very careful about that and let the manufacturer know that you’re looking for quality. If not, the typical manufacturer, tell me if I’m wrong here, basically thinks that North Americans, or Westerners basically are looking for cheap.
Afolabi 33:27
Yep. I mean, a lot of people come to us, they have a target price.
Norman 33:32
Oh my gosh.
Afolabi 33:34
I said okay. Your target price may not be realistic. Oh, but I’ve worked out everything on Helium 10 and Jungle Scout. This is my target price.
Norman 33:46
Well, 1688 it says this on 16 and it’s just like.
Afolabi 33:53
I said no. There’s a target price and there’s a realistic target price. You don’t want to buy a $6 item expecting you to pay three bucks. Yeah, you are going to get trash and I try to explain. It’s got to be a win win situation for you and the supplier. The supplier has bills, he wants to make money, he has employees as well. You’ve got to find that harmony between both of you. It’s a relationship with building, you’ve got to take care of your suppliers, they will bend over backwards for you that will give you very good terms if you have good relationships with them. It has to be a win-win situation. So what kind of price should you be looking for? I will say the best price. Go for the best price, not the lowest price. What is my best price? It is the lowest price I can get for the best quality.
Norman 34:52
Consolidate. Like if we if you can check two or three four or five different manufacturers of plastic shoe stretchers, get them all in and see which one’s best and usually what’ll happen is if you’re using a sourcing or trading company, you can consolidate them, and they’ll give their opinion on it and then you can at least have a fresh view of what should what they think. But yeah, it’s so dangerous going out there and just, oh, the other thing, too. I think it was in the group or on the Facebook page, somebody was asking about, they wanted to launch. It was a first time order and they were talking about packaging and they wanted to do this very quickly. I don’t ever recommend this, under most circumstances, but it was rushed to get it out, needed to get it out and what I said was go to the manufacturer, and just see what their best possible packaging would be. But if you do have time, that’s not the way that I would go. I would definitely try to find a packaging company, a good designer, and then make some really high quality packaging. But sometimes if you have to go with the manufacturer for your first run, get it out there and then on the second order, third, order, fourth order, constantly improve, read reviews on what people are really saying about your product and don’t think that every three, two, one star is a fake review. Just take a look at what the common elements are, common denominator and try to improve it and I don’t think we see that very often. People buy a product, a lot of people never buy their own product and we don’t get a lot of revisions and I mean, we really hope that we see that, and I’m just talking from our end. But, there’s no way that you’re just sending out a plastic shoe stretcher and it’s out there and there’s no revisions. I mean, there’s got to be something wrong with it, either the quality of the spring, quality of the plastic, the thickness of the plastic, the quality of the packaging, how can you beat your competitors, on page one and that’s basically like we were talking about with John Li PickFu, is take a look at everything that’s happening and go to a focus group, or PickFu and check it out and then come back to a guy like Afolabi and say, Look, can you do this? Or can you do that? Or ask the trading company? Is there anything that they would recommend? Any thoughts on that?
Afolabi 37:43
Yeah. In terms of the realistic and also realistic expectation and the quality, I mean, somebody just posted, I think it was Alan that just posted that you get what you pay for and I want to talk about rushing the order. People come and they say, Oh, I want to make this product and I want to launch it in one month. The product has a lot of customizations. If your product has customizations, you can get it done in one month. If not, you will be rushed and manufacturers in China: they always say yes to everything. You said something that if they don’t get you now, they will get you after. Some people come to us and say, Look, I was able to get it for 20 cents cheaper than you guys. I’m like, Okay, no problem, it’s fine and then they come back later. They’re having problems because the factory will tell you, yes, the factory will rush your order. Which brings me back to that you mentioned something about what to do before Chinese New Year of COVID 2.0. Another thing we’re seeing real quick is factories are getting fully booked at the moment. So orders that should take 30-40 days are now 60-70 days.
Norman 39:23
We’re seeing a lot of that.
Afolabi 39:24
Yeah, it’s starting to happen. That means you should almost have a multiple or a backup factory for your product so that if one factory is filled up, you can always use or you can split your order between two factories that will make you avoid this long turnaround times.
Norman 39:47
Okay, and you should always have, I know it’s hard for a lot of people to go out and find another factory or two or three. But usually when you’re looking for a product, you want to at least have two or three, you don’t want all your eggs in one basket. I’ve seen it, where all of a sudden something happened to a factory and this was in North America, by the way. It almost killed this one company when they didn’t have a different factory that could easily have got their product done for them. Same thing overseas is that if you can do two or three, or four or five, we try to target between three and five, if we can find them. But anyways, if you can do that, that’s always better and then you don’t have to split your order. You might want to, but typically, once we find one good supplier, we’ll stick with them. But we’ll always have that other supplier in our pocket. Here’s another thing, certification. So this has come up, we’ve heard people talk to us about certification. Well, again, you’re gonna hear me say this, again, 1688 people. We’re gonna do a podcast on, and I don’t want to ram any sites, but 1688 is owned by Alibaba. It’s more for the Chinese community. A lot of people have said, Oh, go to 1688. It’s the “secret” website for sourcing and this is where the Chinese get all their stuff from. Well, first of all, well, maybe people are from China here. But if you’re not from China, and you can’t read the website, it’s very hard. Now there’s going to be people on here that say, Oh, I can do it. Yeah. But there’s a lot of reasons why you could go there. But there’s probably more reasons why not. First of all, they’re not bound by North American law. The certifications’ not there, the price that’s given, if you were able to translate it is only for listing it, that’s it, they don’t have to honor it. I’ve got probably 10 things I know I’ve written an article about using a site like that, not that I want to ram it, but it’s not for North American or Western buyers to use. It’s a loophole that people think that they can get a lot of cheap product from or cheaper. You can go there, check out your product, and then go to like a either an Alibaba, see what the sites are, or send it over to a sourcing agent and they can get it, you’re going to notice that the taxes, Oh, I’m going to talk about Kelsey, make a note of this and we’ll put a list attached to about the being careful about 1688.com and we’ll give everybody a copy of that, if you’re interested in learning more about it. But people do think that they’re getting around the system and you’re not.
Afolabi 43:05
You need an export license too.
Norman 43:08
That’s the other thing. Yeah. Like they don’t have export licenses. A lot of them.
Afolabi 43:14
I just, it’s good that you mentioned that. About two, three weeks ago, one brand, one of their products just got shut down and they asked him to bring MSDS just to verify that toy brought up and they got it off of 1688, they couldn’t provide certain provided MSDS for that product. So that kind of ended a two or three year reign of that product, because they just were responding because one, they don’t speak English. Two, they don’t have a clue what the child safety certification is and they just sell it for the local market. You bought it. It’s made for the local market, if you have to export it, you have to get an export license to be able to export it out of China.
Norman 44:13
I just remember this. One of the other things about a site like that is the quality standards in the Chinese community in China are much different than in North America, where the standards have to be here. If you’re listening to this, or watching this on video here. Where in China, they don’t have to meet those requirements and so you could get a far inferior product. But Kels, are there any other questions here?
Kelsey 44:49
Yeah, there’s a couple of questions. But before we do that, should we discuss a bit about the giveaway today and what it is?
Norman 44:58
Sure.
Kelsey 44:59
Yeah.
Norman 45:00
Afolabi, why don’t you describe the giveaway today?
Afolabi 45:05
Alright, so today we are giving away our Tariff Terminator service and everybody knows what tariff could do. If you put the wrong tariffs on your product, it could make or break you. Most of the most of the forwarders or agents, that are putting HTS code or your product from China. Most of them are wrong. Most people are using the wrong HTS code. They’re using HS code instead of HTS code. So by the time you bring your goods into the US border, you’re paying so much it could mean to some people 20 – $30,000 in savings, if you can use the right HTS code. So today, we’re giving that away, we would help you reclassify your product. So that’s what the Tariff Terminator is. The lucky winner gives us his top selling product and we’ll help you reclassify to make sure you’re paying as low as possible in tariffs.
Norman 46:11
Right and that’s the HTS codes, we’re talking about. Harmonized Tariff Schedule.
Kelsey 46:18
Yeah, I’m gonna put the link in the comments if anyone’s curious about it. But, to enter into the contest, let’s say #CyberMonday. Because it’s Cyber Monday. Nice and easy.
Norman 46:36
That’s easy.
Kelsey 46:37
Okay.
Norman 46:38
No, No. We could do that. #CyberMonday and by the way, this is $500, 495 regular price. If you go to the website right now and try to buy HTS. It’s worth it. You’ll save a ton of money. But this is free. So it’s a $500 giveaway from Afolabi. Thank you, sir.
Afolabi 47:00
You’re welcome.
Kelsey 47:01
Yes, so Cyber Monday in the comments, and you’ll be entered into our fun little wheel that picks the winner. But yeah, we had a couple questions. We see. There’s a large conversation going on right now. There is one about Biden and the Trump tariffs if he’s changing them or not. Do you know if that’s happening? Is Biden going to reverse the Trump tariffs?
Afolabi 47:31
Tricky, tricky, tricky. I will see yes. 60 40. What do you think, Norm?
Norman 47:41
I’m keeping my mouth shut about all of this.
Afolabi 47:44
Politics. Yeah, it is politics and I don’t know, I’m just thinking, maybe to get back to Trump, you might want to reverse some of them. I’m thinking 60 40 that he might reverse them.
Norman 48:04
So this is on topic. So we’re not going down another rabbit hole. But a lot of the time with HTS, okay. We’ve seen it, we’ve actually, when we’ve done presentations, we’ve shown some real examples, where people were paying the Trump tariffs and without doing anything illegal, it just reclassified exactly what the product was. But without so you save the 25% that went right back into your pocket. Yeah. So I mean, making sure that you’re using the right tariff is so important and the other thing, I was gonna ask you another question about splitting countries, but this also gives you the ability to go to a country that you might not have gone to, it could have been Taiwan for electronics, or it could have been maybe Korea for beauty products or cosmetics. Not that I would buy cosmetics from China. But, that could be why you went to China to do it, because Korea has incredible beauty products, but they were that much more expensive. But now, if it’s gonna cost you 25% more, you can go over there. It’s gonna cost you 17% more, you’re still winning.
Afolabi 49:26
Yeah. It’s not even, it’s not just about Trump tariffs. I think it’s about a tariff in general. Yeah, there are some tariffs in the 25% range, even before Trump added anything to it. So the good thing is it is a good practice to actually start paying attention to your tariffs to make sure you’re paying as less as possible. Why should you pay 15% when you’re supposed to pay to be paying 3 or when you’re supposed to be paying 7?
Norman 50:00
Yeah. So back in your pocket.
Afolabi 50:02
Yep. Trump tariffs or no Trump tariffs, you should be using the right HTS code. Your Chinese factory always gives you HS code, which is the wrong one. You should be using the HTS one, which is the 10 digit one that we use in the US here. It will save you money. Trump tariff for no Trump tariff.
Norman 50:24
Right. Yeah and I just noticed something from Alan. He was talking about Meghla and yeah, she knows her stuff. Source in Asia, I believe her site is.
Kelsey 50:36
Yeah, there’s some people mentioning.
Norman 50:39
So sorry. That was Elena Saris’. It’s Source in India.
Kelsey 50:45
Okay. Wow. Yeah, we got our most ever entrance into the contest today.
Afolabi 50:53
Oh, boy.
Kelsey 50:54
We got like 10 people competing right now. Yeah, Victor’s saying India Sourcing Trip. Okay, there’s one other question. Let me see.
Norman 51:08
By the way Victor, Meghla does have an incredible India Sourcing Trip happening. I don’t know when it’s gonna happen next. It might be next year. But I will let everybody know in the group and on the podcast when it does happen. I definitely want to go on that one, too.
Kelsey 51:29
Okay, so Darwin is asking, Is there any general tips on optimizing logistics? I’m doing standard things, currently have a 3PL that I have inventory send into ideal to shipping companies directly that gets good overseas. Get goods overseas, yeah.
Afolabi 51:48
Yeah, I mean, look, optimizing logistics, it’s a broad subject. I t’s gotta be specific to your type of product and the turnaround time, the goal, your goal in logistics is to get from point A to point B at the most affordable cost and the easiest way without wasting time and the planning is the most important thing that got to plan ahead of time. 3PLs, they don’t like your product sitting for a long time. So if you can get your logistics streamline to a point that you don’t spend more than a month in storage at your 3PL, you’re going to save a lot of money and your goods have to be packaged the right way. I’ve seen goods coming to us and they’re all, they’re not good. Anytime we touched goods at the 3PL center, you’re paying money. So make sure you put your suppliers to work, make sure they pack things exactly the way you want them to pack it. Don’t let them mix boxes together, let them label your boxes the right way. Let the pallets be in the right size. All those kinds of things are very, very important. 3PL centers, anytime we have to rearrange your stuff, anytime you have to sort your stuff out, you have paid a lot of money to do that. But put your supplier to work. Let them do all the work for you for free before you ship it to any retail center.
Norman 53:23
Right. Okay, next question Kels.
Kelsey 53:28
That was pretty much it for questions. There are a bunch of comments. Can go through a couple of them. So this is what started the Indian selling, check out IndiaMart it’s the Craigslist of Alibaba. It’s weird and you have to be careful but there are real factories there, I found a great one.
Norman 53:53
Oh great.
Kelsey 53:54
Victor said, I’m also evaluating Indian Sourcing options, a good sourcing agent there can add tremendous value and then Meghla, his name got thrown into the mix and yeah, that’s it for there and then Marsha just came in with a big comment. Recently, I had quality issues. Unfortunately, I had a large retailer come to our aid to get China to understand our quality is not there. I was sorry. I did not have a quality inspection. We now make all of our products in the USA much better on many fronts.
Norman 54:24
Oh, nice. Yeah, there’s so many options, the US is definitely one of them. I know Amy Wees. She has her product. We did the packaging. We did the packaging for and she’s getting into retail right now. But she had her molds made overseas, it costs her $60,000 to get the molds done, but if they would have been done over here, it would have been double that probably or more. You don’t have to have everything done in China. China’s convenient. There’s all sorts of other countries that you can look at. India is the next big one on the list. But I know when I got started doing this 20 some odd years ago, we set up factories in Taiwan. But then it just got too expensive to run them. But okay, I want to go back to certification for a second. So how do you ensure that you’re getting the proper certification? So let’s say it’s a wood product? Or it’s a plastic shoe stretcher? It’s a toy? How do you find out if the factory is properly certified to provide those things, and that they will be able to provide them so you can get them onto Amazon?
Afolabi 55:48
You do a factory audit. You get the certification, the certificate, and you cross check the certificate, or let’s say you’re dealing with CPSI, or you’re dealing with UL certification, or you’re dealing with CMA, or something or CSA. Under the CSA and UL website, they all have the names of approved factories there. So if the factory you’re using gives you a fake or phony certificate, you can always verify on the main associations website. The first step is to do a factory audit. Alibaba sometimes has the certifications listed on the Products page. So that’s one of the things I like about Alibaba, they’re very extensive in doing stuff like that, even though some phony factories do come up with some fake stuff in there, but you do your own factory audits, just to have your peace of mind. Most of these fashion companies will do a factory audit for you, and tell them to show you the certificate, and go and confirm the factory name on the associations website.
Norman 57:06
That’s a good starting point. So, I always like finding suppliers on my own or with you. But going over to Alibaba, and checking out let’s say it’s a plastic shoe stretcher and you can see if there’s any certificates that are associated with it. If it’s a wood product, is it fumigated? There’s different things that you have to look out for. The other thing of, like, let’s say that you have essential oil, or, like in our case, we make wipes, screen wipes and stuff like that. Well, is the alcohol content proper? Is it the proper chemicals? We’ll get that tested, because a lot of the time you want 10% essential oils, you could find yourself with fragrance, which is a lot less expensive than having an essential oil. So you send them out to a lab. But these are all things that would be done during an inspection, you can find this out usually on Alibaba, but you also have to tell the inspection company sort of the different about your product. So they might recommend sending it out to get it analyzed at a lab, rather than and they might not suggest that until you tell them about it. So anyways, that’s just a couple of other things to look at when you’re buying a product especially for the first time, you could check out Alibaba checkout certification inside and check any of that.
Afolabi 58:43
Norm, can you say something a little bit more? Because I know many people because of COVID 2.0, they want to go more into disinfectant and into wipes and stuff like that and I know your family does that. Can you say more about what they really need to pay attention to in terms of certification? Because many people will still go and be selling wipes and stuff. Can you see anything on what they should watch out for? FDA, or ETA, all those kinds of things?
Norman 59:16
Yeah. Like, there’s different qualities and I’ll just mention this really, really briefly, but something that you would use an alcohol that you would use on a screen, okay. An Apple computer with a glass screen is completely different from what you would put on to a plastic lens. Most people don’t realize that and it’s completely different than what you would put onto your hands. So it and there’s different and this is important for labeling, you have to understand labeling. So for me it was soap or for hand wipes or for glass. You have to put on certain symbols that show that it’s flammable, or that if you breathe it in, it could be harmful. But there’s all sorts of legal disclaimers and if you don’t do it properly, it will come back and bite you, you’ll end up with a container full of product that is a container full of product because you can’t sell it anywhere. But okay, so I think that’s it. Any other questions from anybody watching today?
Kelsey 1:00:35
No more questions. I think we got them all.
Norman 1:00:39
Okay. Oh, I see. Alan attended a workshop in India last year from Meghla. Yeah, it looked like it was a really good one. I think Tim was there as well. Tim Jordan. Okay, so I think that’s it for the episode. Let’s try to see who won this 500.
Kelsey 1:00:57
Okay, just a second. I need to find it.
Norman 1:01:02
Oh, there it is. Oh, the wheel of fortune.
Kelsey 1:01:07
Alright, so we got if my calculations are correct, 11 people that enter today, which is our highest yet. So thank you everyone who entered, but there can only be one winner. So let’s see who it is. So 3,2,1.
Norman 1:01:31
There you go Alan.
Afolabi 1:01:32
Alan.
Kelsey 1:01:34
Alright. Alan is the big winner today.
Norman 1:01:39
All right. So yeah. How does Alan claim the prize?
Afolabi 1:01:46
Ah, he would just, I mean, he will reach out to me and have Kathleen, he will tell us which product, we send him a link and he will fill out a questionnaire of what product he wants us to do an HTS on and we’re doing one.
Norman 1:02:08
Okay, so Kelsey, why don’t you reach out to Alan on Facebook, grab the information, and then we’ll send over the information to Afolabi and yeah, congrats Alan. All right. So that’s the end of the show today. Afolabi, thanks for joining me.
Afolabi 1:02:25
Thank you Sir. Thanks for having me.
Norman 1:02:27
Yeah, and I hope we can get you back on shortly and see what’s happening in January. I don’t know where it’s gonna go. I hope it continues.
Afolabi 1:02:42
Nobody knows. We’re waiting for January to know.
Norman 1:02:47
All right, sir. So we’ll talk to you soon and that’s it for today’s show. I hope everybody enjoyed it. Once again, if you’re interested in looking at the whole podcast and clips and content, other content, go to Norman Farrar aka The Beard Guy on Facebook. If you want to see this face, you can go to YouTube to Norman Farrar, and we’re uploading new videos and clips every day. Also, we do have that newsletter and the newsletter is it doesn’t suck. I think that’s what we always say, it doesn’t suck. It’s got tons of content and you can find it on Lunch with Norm or normanfarrar.com and Kelsey, where are you?
Kelsey 1:03:36
Yes. Yeah. Thank you guys, for joining us today. If you haven’t yet, you can still like and share this video. We got a couple thank yous coming in. This is from Rad, Jackie, Mark, Alan. It’s great having you guys. We really appreciate you spending the time with us every Monday, Wednesday and Friday. Yeah, if you want to join our community, you can head over to the Lunch with Norm Facebook group. It’s getting bigger every day. Got some people discussing. We had some questions about Amazon selling today, I think from Dr. Koz, actually. So if anyone knows anything that can help him out. That’d be great. But yeah, we look forward to having some discussions with you guys and I think so. Oh, and anyone who won the prize, I think from Friday for Carlos, we will get you the prize. I’m just waiting for the code and then I’ll send it over to you guys. So I think there’s like five of you. So we didn’t forget about you. Yeah.
Norman 1:04:39
Okay, so Wednesday. We got the one and only Helium 10s Cassandra Craven. So that’s always a fun show. But she’s going to be doing a social media update. Is that correct?
Kelsey 1:04:57
Yeah, it’s like a recap of 2020 and the apps to look forward to for 2021. So any strategies, kind of what’s happening and what you should look out for, for that.
Norman 1:05:09
All right, so that’ll be good. I always love having Cassandra on. She’s great. Okay, so that’s it for today. Tune in every Monday, Wednesday and Friday at noon Eastern Standard Time at noon and thank you again, everybody for watching today’s show.
