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Existenzangst or fearing for one’s existence

Totally off topic today but I feel like sharing this famous German paranoia. In German we have a saying which is called “Existenzangst” and literally means being afraid of loosing your livelihood. 

Meaning you are constantly afraid of loosing your job, income, running out of money and ending up on the street. It’s ridiculous but ever since I’ve become an Entrepreneur I have this almost every day.

I admit, I too am scared (or anxious) and worry all the time so I wanted to get to the bottom of this. Am I the only one feeling like this? Let me try to get this off my chest. 

What’s the worst that could happen to me today? I am really just typing as I go and put out my thoughts. 

I really want to evaluate my very own situation and if you also have these “existence fears” feel free to do the same :) 

Lets take a look:

  • Amazon business tanks (30% of my income) 
  • Sourcing & Retail business tanks (30% of my income) 
  • Online courses, workshops, ebooks (20% of my income) 
  • Coaching, consulting (10% of my income) 
  • My eCommerce store tanks (10% of my income – just started)
  • All podcast & other interviews magically disappear and no one ever hears of me from tomorrow on (no income but leads and subscribers to my blog) 

Lets look at it in more detail: 

  • I am live on 3 Amazon market places and even if one tanks I still have 2. And I am not even live on many other sites that have third party selling (Lazada, Jet, Sears etc.) 
  • All my satisfied customers and potential leads that I built in over 3 years disappear tomorrow. I have many repeat sourcing clients who are very happy, how likely is it that they all disappear? 
  • I am currently live in 5 retailers, some re-order every month or so. I am even working on more retail customers. 
  • I have courses live on 5 platforms. Some with coaching, some without. How likely is it that they all get removed? Especially on my own site…
  • No one ever thinks my opinion or expertise counts and doesn’t book coaching with me anymore. I have built a reputation (I hope :) ) for being an expert in my field and I rather provide value than sell something just for the money.  Those that really know me well know thats true. So I guess that is very unlikely to happen. 
  • Just started with 1 eCommerce store (Outdoor & Garden category) and it’s going well so far. eCommerce is the future so even if I loose this I can build another store quickly. 
  • I gave about 30 podcast interviews, 4 or 5 actual print magazine interviews, 10-15 online blog guest posts, I spoke publicly at conferences and videos are available on that. Even so, I could start all over again and build my reputation from the scratch. 

Even though some of the above may be possible to happen but it is very unlikely that they all happen at the same time right? So what am I really worried about? Guess I am just another human :) 

Lets say one of these 30% income streams tanks. I still have 70% of my income and need to find a new way to make up for the missing 30%. 

Since I will still have 70% of my income & I’ll  actually be in a comfortable situation. And I would just have to increase workload for a few months. 

Lets just say all of this happens at once. It is not the end of the world. I still have some savings and my health. While I don’t really like the idea of going back to a job I have over 3 years where I ran multiple business and built income streams from the scratch. 

I’ll likely go apply for a job at a retailer’s buying office (Amazon, Walmart) here in Hong Kong and on top of my 17 years of retail experience I now have 3 years of running my own business, a best seller book about importing from China and a round of online courses, interviews, public speaking that I can add to my CV. So I am pretty sure that I will find a job again. And that’s really worst case scenario.

Then again lets take another scenario. Let’s just say I lost all my income streams but I still have saved up lets say 50,000US$ from all these ventures. Would I immediately look for a new job? Probably not. Reason being that I have yet to travel the world and see things. Not that I haven’t traveled yet but I haven’t really TRAVELED yet. I mean hiking the Pacific Crest Trail in the US for 6 months, going to Machu Picchu in Peru, living on a beach hut in Brazil for a year and so much more to do. And the best thing is when you travel on a budget or do what’s called “Geo Arbitrage” you don’t need much. Don’t know what that is? Geo Arbitrage is when you live in Thailand (or anywhere else where you have low living costs) for 500$ a month on the beach eating seafood and drink coconut water all day. Obviously if I would have a child, a car, a mortgage etc. things would be different and I’d have to get a job pretty quickly. But again – it’’s not the end of the world.

Think of the time that you worked for yourself as a time out in where you enhanced your own skills, tested your leadership abilities and hopefully had a lot of fun doing it. And you’ve added things to your CV. You didn’t really take time off for 3 years doing nothing, you tried to build something. And that’s worth something when you sit at an interview. I am pretty sure that will get you the job. 

But lets not get ahead of myself, I work hard every day so that I can keep doing what I am doing. And I guess you are too :) 

My message today I guess is that we should all stop worrying so much. It isn’t as bad as it looks like. My second message today and I keep saying this to everyone – DIVERSIFY

Just by looking at what I wrote I again realized myself how important it is to have different income streams. AND it is another reminder to build even more income streams. 

An income stream that is bigger than 30% is actually worrying – unless you make millions anyway :) 

Back in the day when I worked for the lighting manufacturer one of our biggest clients (a very large DIY store) went belly up. Over 500 stores (thats big for Germany) closed over the next couple of months and suppliers (the company I worked for) weren’t going to see any money anytime soon. That customer made up over 70% of the companies turnover. Thankfully the management saw this coming and invested into hiring sales staff and building more clients. But it was still a big loss for the company. Anyway, just a small story but same principle. Build more income streams and you don’t have to worry all the time. 

If you have these fears once in a while sit down and look at what you’ve built already since you joined the entrepreneurial world. 

Copy my thought process above and see where you stand. Look at what you have already accomplished. Let me know in the comment section, I am really curios to know if I am the only one feeling this way :) 

Even if you are just at the beginning and scared of the path in front of you, if you never try you’ll never know and you’ll miss out – I promise :) 

All the best to us in 2017 and happy sourcing!

Manuel 

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7 weeks case study update – I am out of stock

I have a problem. Well its more of a luxury problem. Don’t get me wrong, I am not complaining :)

I have sold 1008 pieces of my French Coffee Press and am out of stock after only 7 weeks.

How did this happen? 

If you re-call my last blog post (http://importdojo.com/case-study-how-i-went-from-zero-to-7000us-in-10-days-in-one-of-the-most-competitive-amazon-niches/) I was doing about 8-12 pieces organically after my initial launch.

After about 5 weeks I was doing around 20-25 pieces a day

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and in the last 2 weeks I was doing between 35 to nearly 50 pieces a day!!!

IMG_4359

I contribute this to the following factors:

  • My listing and photos are better than the competition
  • My product is superior to the competition
  • Great copywriting does matter
  • 79 reviews within 5 weeks  
  • Launch tactic and tools used 

So now I’ve been out of stock for nearly a week already and my ranking has obviously dropped significantly. The good news is I have 1 shipment (208 pieces) that will be arriving this Friday. Unfortunately it is only 208 pieces that the supplier had in stock for me. 

As soon as I saw that I am heading towards 30 pieces a day I ordered another 2500 pieces that are being produced right now but I have to send it in via Sea otherwise it gets too expensive. Also I will not do any give-aways or PPC until my 2500 pieces nearly arrive, otherwise I am running out of stock again. Luxury problems like I said :) 

Alright, numbers:

Start of the project: 17th of November 2015 (Chinese New Year added nearly two months to my production) 

End of the project (launch): 12th of April

Length of the project: ~5 months. It can be done in less time (2-3months) especially if you don’t forget to place orders before the Chinese New Year  

Total order value of product: 4500$ (1000 pieces at 4.5$) 

Total cost of inspection, photography, layout and packaging: 949$

Total cost of shipping: 2650$ (~900KG by Air – thats 2.94$ / per kilogram) 

Total cost: 8099$

Update numbers after 7 weeks:

Units sold: 1008 pieces

Returns, units broken: 12 pieces (1% return quote) 

Profit made after PPC, give aways & others: ~8400$ 

My estimate profit when I started was around 12,000$. So I am short about 4,000$ but I am not not complaining. 

I’ve taken these 8400$ and re-invested them in my 2nd (208 pieces) & 3rd (2500 pieces) re-order. 

Meaning that the following orders are pure profit because I covered my initial investment (8099$) and nearly covered my 2 & 3rd re-order. 

Conclusion of this case study

It’s been 6 months since I started this project and I thought its time to give you a recap of what has happened, what went well what didn’t and where I can improve.            

The fact that the Chinese New Year (CNY) was in between and that I have not worked full time on this project has delayed my project. 

If I would have focused on this project from the start and work more than the 1 hour per day I could have shipped out before CNY and would have had a total of 3 months from the start until launch of the product. Since I am aware of most things that need to be done for this project it is easy for me but if you are a beginner I estimate that from finding a product until shipment/launch you can do this in 4 months.

Now onto the things that went well and some that didn’t work well.

One thing that caused a long delay was my mistake in paying the wrong beneficiary for the sample payment. That delayed my project for nearly 2 weeks.

So make sure that you check all banking details when you make a payment. I also lacked the motivation in the beginning because I had so many other things and other products going on. That delayed my product for 2 months. Why? Because I won’t ship out before CNY. So make sure of the timelines when you want to launch a new product and be aware of Chinese holidays.  But I will explain in a little bit why this actually doesn’t bother me so much. Another thing that didn’t go so well was the misunderstanding on the extra filters that I wanted. 

Apparently I didn’t make myself very clear to the supplier on this point. Also the fact that I wasn’t able to get a price reduction bothers me a little bit but I can’t complain too much because every other modification that I wanted was accepted from the supplier even though I have a small order quantity.

One thing that bothers me a bit are the high shipment costs of Air shipment. Reason being that the quantity is low and forwarders charge high premiums for small shipments. With my re-orders I will order a larger quantity and go by SEA and that should bring shipping down to 20% at least. Which will improve my margin in the end.  Also the fact that the supplier messed up on the product dimensions and weights and that I was paying 270$ more than planned is not ideal but it is what it is.

Another thing that I didn’t plan well for was the re-order. I am now out of stock for another week and I have to get my ranking going again. Once that ranking is up again I should receive my large re-order by Sea. I should have projected my sales velocity at an earlier stage and simple send in a large re-order right away after seeing first results.

What went well was definitely the communication with the supplier and the quality of his work and attitude towards working with my small quantity. I attribute that for meeting the supplier in person at the canton fair and my clear instructions when I first made contact with him. Subsequently I also promised him more business in the future ,which definitely makes him more eager to work with me. The initial sourcing results were also pretty good, all suppliers had good prices and decent MOQs. But the fact that my actual supplier had exactly what I needed and the fact that I met him in person made my decision easy.  

I am also happy with the artwork and photos. I admit I paid a premium price for the packaging and photos but I want quality work. So often I read from people in the FB groups that they hire someone on Fiver or Freelancer.com and the results are either bad or mediocre. Or the seller of the service disappears completely or doesn’t keep deadlines which can be crucial for your launch. Think about it, a great listing and photos will set up your product for the long term even if the initial investment is bigger. I could also book a cheaper inspection now but that’s not the way I do it. I want this product to be of high quality and I don’t want unhappy customers or give my competitors the chance to give me a bad review.

I may go with a cheaper inspection for re-orders which are less complicated. There are services I work with that charge 100$.

The fact that my shipment was delayed for more than 2 months because of the CNY  actually doesn’t bother me at all because this course should be for beginners on importing from China who are launching their first product. So you actually should take your time for all the different steps. Don’t hurry the process just to ship as fast as possible. I had two months to prepare my launch, perfect my listing and think about different strategies.  Also I think many of you are just starting out or doing this on the side. The one thing I suggest you is that you take you time, do the research and know the process when dealing with factories in China. Don’t just quit your job because you heard of FBA and do this full time. Have a capital on the side, maybe do this besides your full time job and once you have a couple of SKU’s running you can think about quitting your job. If you can’t invest 5-6000$ for your first product try ordering a smaller MOQ.

However I personally think 5000$ is the minimum budget one should have and I am not saying it can’t be done with a budget of 3000$ but you will likely be in a much more competitive field when choosing a product because a lot of people look for the same products because of their limited budget. Save that money you would spend on a weekend out with friends and put it into your budget. 

Now don’t get me wrong, I have spent quite a lot of money on photography, inspection and logistics. It can be done for less, that is for sure. I could get an inspection for 100$ instead of 309$. I could get photos for 100$ instead of 650$. And maybe that would work also ok and in time I can improve photos and other things. But I don’t see it as that. I see the initial investment important because it will set up my listing for good. Now obviously a lot of people will see this case study and might copy me so I will have a lot of competition, but that is not my point.

I normally wouldn’t disclose my product and therefore (if I don’t disclose my product) the steps that I have taken will make sure I have a high quality product, great photos and a money maker for the coming years. If I were to cut costs everywhere maybe because of budget reasons I would have to cut into quality of the product, leave out the inspection, poor product photography and more.

That puts my Amazon account, Best Seller Ranking and everything else in danger. I want to have a reputation of a quality product and satisfied customers, because in the long run that is what you need to grow your business. If I were to try this as a one time thing I might make some money quickly when cutting costs and then what? I have to start all over again with a new product because someone copied me and made a better product.

See the initial investments as a road to success and don’t think about the number too much. I am not saying you should pour money into suppliers and inspection companies or photography, these have to be reasonable and negotiated but don’t be too stingy with investments either.

I think the saying “want cheap? Then you get cheap!” plays a big role when buying in China and selling on Amazon. Do your research on services that you need for your product, don’t pay too much but not too less either just to save 100$ that will hurt your product’s performance in the long run. 

I am a bit off on my initial calculations and profit projections (about 4000$ off) but I’ve added a couple of things and looked for the best so that decreased my profit. However I as I said I nearly covered both of my re-orders only with my profit. And I have no more photography or give away costs and that will certainly improve my margin. Keep in mind that your first product will not make you a lot of profit but the re-orders when launched successfully will.

Ok, so I am wrapping up here. I hope that this case study helps you to figure out the process in China and how you can apply my techniques to your own product. I have also learned that two of my students will launch the same product in Europe’s Amazon markets and in a few weeks I can give you some more results on the European market with this product

Looking back at this project I would call it a success. Here’s why:

  1. I have a product online that has quite some reviews already (mostly 5 star)
  2. No future investment needed (except re-order inventory)
  3. The product makes me 3,000$ a month minimum, possibly more.

Now onto YOU my loyal reader. Let’s assume you are still considering moving into FBA on Amazon. Imagine this was YOUR first project on Amazon and you are still employed. If you would have started this while working a full time job you could possibly quit your job now and have a guaranteed income of 3,000$ per month. If not, here’s a few scenarios what you could do with those 3,000$ extra:

  1. Escape the rat race and quit your job? Maybe not the safest decision but add one or 2 more products and you are good to go.
  2. Want to add additional income and keep your job? You’ve just added 3000$ to your monthly income.
  3. Want to go to tropical beaches on a holiday and not having to stay at budget hotels?  
  4. Want to send your kids to an expensive school? There you go. 
  5. Need more money to support your family? 

What I am trying to get to you today is:

“Focus on building a brand from the beginning. Keep this in the back of your head with everything you do. The majority of you just starting out has limited capital and can therefore not play around. So build better products from the beginning, have A+ photos and listings, great customer service and don’t be afraid to invest your money into higher priced and better quality products, be unique in what you do.

Look at this business not as a get-rich-quick scheme but rather see your investment as an opportunity to build your brand and in turn make more money in the long run (Do this as opposed to release and launching a product every week). Build it slowly and keep quality and focus in the back of your head.”

One last thing. If you are just starting out do not take your first profit and spend it on a Vegas weekend :) 

I hope that this case study has somehow inspired you to start your own business.

Be it on Amazon or other eCommerce (or offline channels)

If you are interested in the step by step video lessons (over 50+ video tutorials) and the other great parts of my course have a look at my Masterclass:

http://importdojo.com/importdojo-masterclass/

All the best and happy sourcing,

Manuel

http://importdojo.com/importdojo-masterclass/

CE Steele pl v

Private labels & packaging differences

Private labels & packaging differences

 

Introduction

The obvious and most profitable way to create sales is a private label with a nice packaging.

In German we say “Eine gute Verpackung ist die halbe Miete” which literally translated means “ A nice packaging is half the rent” or in other words with a nice packaging you “win half the battle”.

Meaning that a nice packaging will convince your customers to buy your product by 50% already. That saying even goes when you are selling online and your customers won’t even see your packaging.

BUT say you sell online and your customer receives your item and he sees the nice packaging he sure will give a better review just because the packaging is nice already.

Note: Even if you sell online, you should put a picture (high resolution) or even a 3D-rendering picture amongst your product listing so that customers can see your packaging.

It is even easier if you sell offline (in retail stores). Just think about it, how often have you made a decision buying a product because the packaging was nice.

Look at Apple’s packaging.

Nice and clean, no fancy colors, UV coating (the logo and product), clear and to the point descriptions with high resolution photos. They got me, I buy their products also based on their packaging.

Now lets look at the different options in packaging’s.

 

Differences in Packaging

 

You basically have 3 options:

– Private label packaging (color box or white box with private label sticker)

– No name packaging

– White box

 

Private label packaging:

Read more

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Selling your products (Ebay / Amazon)

So you received your goods, everything went well, and you are ready to sell.

A very popular way of selling your goods from China these days is FBA (Fulfillment by Amazon) or fulfillment centers that cater to eBay or any online store that you sell on (e.g., Shopify).

 

I have written another book (available on Amazon here) but also available within the course & members area of my blog:

 

http://importdojo.com/importdojo-masterclass/

 

In our Master-class you get access to:

 

1) The Import Bible – a 65 pages ebook covering the essentials when starting out importing from China

 

2) The Professional Import Bible

– 70 New Pages Full of Essential Sourcing Knowledge

– 5 hours of Video lessons

– 2 hour video screencast on how I work on Alibaba, calculate shipping and duties and a lot more!

 

The first Import Bible showed you the basics of how to source in 64 pages full of straight forward, practical advice. The professional edition adds over 130 new pages as well as 5 hours of video lessons to this and is constantly updated whenever things change.

 

3) Business in China

– 50 new pages on Business in China. Taking your import to the next level when you visit China and talk to factories directly.

– 2 hours of video lessons 

 

4) Our private forum & community – Get my advice and help or chat with other importers, FBA sellers from all around the world.

 

5) The Amazon FBA – Bible

 

The complete entry guide to successful selling on Amazon using importing from China to ship inventory (Fulfillment by Amazon – FBA) a 60+ pages ebook on successful selling on Amazon

 

 

Check it out here:

http://importdojo.com/importdojo-masterclass/

 

The book only is also available on Amazon here:

http://www.amazon.com/gp/product/B0141IEOR6?*Version*=1&*entries*=0

 

If you are not selling on Amazon here are a few more ways to set up your e-commerce store:

 

http://www.worldfirst.com/uk/blog/selling-online/ecommerce-fulfilment-process-top-tips/

 

Shopify is a great way of getting your products out there:

http://www.shopify.com/ecommerce-plugins/shipping-and-fulfillment

 

They also provide a lot of links to fulfillment centers:

http://apps.shopify.com/categories/shipping?filter=newest

This concludes the first part of the e-book.

Don’t be scared of what may seem to be a lengthy process. Once you have mastered the important steps what you need to focus on comes naturally and the rest will be like a walk in the park.

These steps should help you to cover every aspect of importing goods to your home country.

For any questions or follow up that you might have please contact us at manuel@mandarin-gear.com or through our website: http://importdojo.com/

We also provide sourcing services for “first-timers” or even experienced buyers who would like to take their import business to the next step. Please contact us at manuel@mandarin-gear.com or through our website: www.mandarin-gear.com

 

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