Finding people who need what you are selling already and I talk about my buddy Paul here that does a limited extrusions. Another person that I know, goes to restaurant chains like Quiznos and Starbucks coffee. As a matter of fact, he has a Starbucks coffee account, if you can imagine, and he physically goes to Starbucks coffee and finds a chair and tries to get one when out of Starbucks if he can. If he can find a broken one and get the manager to get him one (a
broken chair), he will literally take that chair and send it to China and have an exact duplicate of that chair built and then fly to Starbucks headquarters in Seattle and sat down and say, “Hey you guys are buying 300,000 of these chairs
a year for probably $60 and I have got this chair here I will sell you for $30”. It means almost zero resistance selling, they will say “Absolutely!. He is going to make $10 a chair on 200,000 chairs and he will make $2 million in one
But it is so much easier if you know somebody is already buying something, you don’t have to look for a market. If you have a gasoline right now for $2 a galloon, you would not have to worry about marketing a whole lot. It would take care of itself because you know people already consumed gasoline, you don’t have to worry about whether there are a buyer or not. So all you go to do is find the people who are already consuming the things that you can make form and the
opportunities are absolutely everywhere – that is how I came up with stanchion business actually.
But the opportunities are absolutely everywhere that you look and there are consumers of different product. What you want to try to find in that model is people who consume a product not people who buy one occasionally. Starbucks
consumed chairs, manufacturers consumed only limited extrusions in their manufacturing process. If you got a guitar keys, you know that go in tuning key to go on guitars, there are guitar manufacturers here in the States that consumed
those keys that they need so many thousand keys a year to make so many guitars. That is probably the easiest model for taking all of the risk out of the import process.
All you spend is a little bit of money going back and forth on sampling until you get everything right and go make a presentation. And a lot of times, you can just go to people once you have a reputation, say “Hey, look this is what we did for Starbucks, what you got here that you are buying a lot that you feel you are paying too much money for?” That is the most money I ever made in the mass market retail side of business.
I build my business, when I sold the mass market retailers like WalMart and Wallgreens and Sally Beauty Supply and all those guys, my biggest secret, I would go to present whatever I had to sell and whether I sold it or not, when I got
ready to leave the buyer’s office, I would turn around and say, “Oh by the way, you know I source a lot of stuff, what if you have seen lately that you wanted buy but it was just too expensive?” Or what you are selling a lot that you feel you are paying too much money for it?” And the buyers will almost always had something in mind. And my job just got a thousand times easier, because all I got to do now is find that product and figure out how to produce it and get it made for less money. The buyers already told me that they are buyer. The 2nd thing is dry testing, a lot people are not a fan of dry testing. I am a huge fan of dry testing. And what that means is, that you basically going to go out build a website and try to sell the product before you buy it. And after a period of time, you will going to determine if you will have a viable market or not and if you do, you turn off the site, you go back to people who ordered and say, “Hey say sorry
we don’t have this product and stocks anymore”, you don’t charge their credit card, you don’t charge them anything, you just trying to find out, if they will going to buy it when you have it. And just say, ”Hey, as soon as we get this in, I will
send you one for free or will send you one for 50% off”. And I think if not, if think this who will sell, you will know if they will sell.
EBay is a great way to find that too, it will tell you exactly what a products really worth and if it will sell in a lot of cases. But building a website, putting up 4-5 products is quick to do, it is easy to do and you dry test. It’s not that big a deal
and major companies do it all the time, you don’t want to do it with something that is critical with somebody, you don’t want to dry test with somebody’s oxygen generator that has to have it for life or death but as far as decorative items and
hand bags and office supplies, if you want to dry test some staplers to see which one is going to sell the best, its not critical that if that person does not get their stapler their life is going to stop. And say, “Hey we don’t have stapler stock right now, go to Home Depot and buy one and when we get one I will send you one for free”. It’s going to give you a lot of good data.
The next way to do it, this is my own term, I call it “moist testing” and what that means is (and this was been real successful for us in the past, we did have dry erase board business). You buy the products that you want to sell domestically, in the dry erase board for instance, a dry erase board was like $400, a big metal dry erase board. My cost on the dry erase board was $200, so every body else sell them for $300-$400, somewhere between a discount of $300 to a full retail of $400. I knew that I can import dry erase boards for $30 a piece but I did not know how may I’d sell or which ones or which sizes, so I bought from a domestic
manufacturer and then sold a dead cost for $200. Well it told me pretty quickly
that there was a market because I sold $100,000 for the dry erase boards in a
month. But it also told me that half of everything that I sold was a 4 x 8, the next
best size was a 4 x 6 and the next best size 3 x 4.
I did not only know that I have a market, I did not only know that I have a selling product, I know which sizes, shapes, styles and colors of frames and all that. And I delivered the products, the only thing that I lost was a supply amount of
marketing cost in the front end but I was also building a customer list. So during the period of time that I was doing this moist testing, I built a customer’s list and I could have sold for $225 or $250 or probably a little even more. If I have wanted to probably get to break even and I was willing to take a slight loss or if some what may not be able to do, I can take a slight loss to get a faster data, so I wanted to do that. But moist testing works just as well and there is domestic
supplier for almost anything. So all you need to do is find a domestic supplier’s, sign up as a dealer, sell it cost and see what happens. And as soon as I sold $100,000 for the boards and made no money for month, by the time I got dry
erase board from China, the next month I sold $100,000 excess more than that, I sold $120,000 on the boards and I made $100,000 of gross profit. It just that’s simple to do and you can make it incredibly complicated if you want, if it’s really that easy.
And the last method is just “going naked”, (it’s what I call it anyway), its where you think something going to be really good and you do your research and you buy it and you take a chance, or you roll the dice. The good news about that, that is not even as risky as it sounds because typically speaking, you are buying things so inexpensively from China, unless you are just buying that is really obscure and really odd. There is a market for almost everything, so you are going
to be able to liquidate it out to somebody else and get most if not all of your money back through a liquidation dealer, if you make a terrible mistake. In poor business is a little bit cash intensive on very risky sometime but not really that
risky long term.