Afolabi Oyerokun 5:25
Awesome, awesome. Thanks. So I noticed that, especially in the e-comm world, or Amazon world, you know, the word supply chain is kind of ambiguous. And people were like, what is that it looks like the words that IBM or these big companies will use all the time. But see bigger companies, they figure it out already for years, and they actually have director of supply chain manager of supply chain, because it’s a very big component of their business. And it could be where businesses are bleeding, if you don’t take care of that pie, I have a simple, you know, you know, 5th grader definition of supply chain, it is just like, it is the, it’s the journey, or the path your products take to travel from your mind, till it gets to becoming a physical product, till it gets manufactured till it gets shipped, cleared, warehouse and ultimately fulfilled to your customer. And then there is another component whereby it’s what about the returns, you know, many people don’t actually realize that you can actually make money with returns as well, especially on Amazon. So there are all these different points, that if we do it the right way, it’s going to save us a lot of money. I like using my personal, whether good or bad stories in the past. So we were designing these guiding signs. And, you know, everybody wanted a bigger sign, you know, we launched one version, and people say, Oh, we wish it would it was bigger or something. So we were trying to design it as big as possible. But wait a minute, if we go past the 18 inch mark, we’re in trouble with Amazon. So we designed it in such a way that it was smaller than 18 inches. And all the packaging was also smaller, we use a different packaging, we use a different labeling. So supply chain, saving money across our supply chain requires a lot of thoughtful thinking from the very beginning. You know, I had a guy about three or four years ago, he wanted to compete in a large products market. And I’m like, Look, this product, the way you’re going about this product, you’re going to pay a lot of money in shipping and storage and processing this order is like what what do you suggest I say, look, if I were to sell this product, I would shrink the packaging into half. It’s like that’s impossible. This is this is a six week long process. Yeah, this breaking into pieces, chop it up, you know, all the long rods, let’s turn it into telescopic rods or chopping, you know that you can connect it in different ways we can pack it. And by the time we were done, this packaging actually was half the size is like oh my god, it actually is assembled. Now let’s go into the materials, what kind of materials are you going to use? If you use steel is going to be heavy. If you use aluminum, it’s lighter. If you use composite slider, if you use these is liner, so we’re talking about the weight, you know, because when you send your product to VPLS, or your warehouse, wherever you’re using, they’re going to charge you also based on weight. So all these things have to be factored into our product from the very beginning. Instead of being reactive. I think we shouldn’t be proactive.
Josh Hadley 9:04
Yeah, awful lobby. I think you summarized it perfectly. And I love your fifth grade explanation of what the supply chain actually is. Here’s I think one of the important aspects of supply chain, I think gets neglected by most sellers. And as I’ve spoken to many aggregators or people that acquire Amazon based businesses or just e commerce based businesses, one of the first things that they look at is where are they getting the product from? How much are they paying for it, and what inefficiencies exist within their supply chain? Because they know most sellers technically are lazy. They just they sourced the product once up front, and then there they just keep hitting the repurchase button, or and that’s it, but to your point off the lobby, there’s a lot of sellers that I’ve even seen that have product packaging, that pushes it just slightly over that 18 inch threshold on Amazon, which completely changes the game for you, you’re now pushed from a standard size object into a oversized object where your fulfillment fees are essentially triple that of a standard size product curve. Imagine how much money could be saved there, if you just shave off an inch or two, right? If you’re right on that 18 inch border. And then like you mentioned, the weight of a product, right, that’s a big component of the way you know how much you’re being charged for freight, right, getting that product to a warehouse, all right, then also in the end fulfillment to the customer. So at the end of the day, this is where a lot of the aggregators and people that are acquiring businesses are finding gold mines, because they find sellers that have been lazy, with their supply chain product sourcing efforts. And then all they have to do is spend a few months cleaning that up changing and redesigning something, and then bam, they have now just added hundreds of 1000s of dollars in profit to a business. And that’s how they’re making their money back. So I want to kind of set that foundation for why people need to be paying attention to what you’re going to be sharing today. Because it can add hundreds of 1000s of dollars into people’s bottom line. So awful lobby, let’s start at the very beginning with kind of that product development. And then we’ll kind of dive into sourcing what hacks, tips and best practices do you have with product development.
Afolabi Oyerokun 11:34
So in product development, we talked about the size of your product, and the size of your packaging, we really need to think it through and then we move into materials, then we move into tariffs. So if you’re especially if your products have been made in China, you need to realize and then I usually recently I have a knife project, like someone wants to make the knife and I’m like, okay, and give me the specs of this knife and give me all the specs. Like okay, do you know that if the knife handle is made of wood, you’re going to pay a different tariff from if it’s made of some plastic or some composite materials. The customer may not care about what material you use on the handle, but your pocket will care because because the kind of tariffs you’re gonna pay is so different. Another example I had was, I was I used to source a lot of vinyls, and magnets some years back, and when the Trump tariff hit, I started looking to find a way to to to outsmart that system. So I told my customer, wait a minute, I said, I found a better quality vinyl from Korea. I’ve always known Korean vinyls were the best. And I said but they are more expensive. I said, Well, let’s do let’s look at some numbers. They were 7% More expensive than Chinese made vinyls, but they have zero tariff. And from China, they had maybe 25%. So I’m like, Look, even though China is cheaper by the time you had the 25%. Korea is now cheaper. So even when we are talking about supply chain we need now we need to start talking about the country of production. Some products. You know, I used to sell crafts, and some products some of our products were made here in the US. And we were like Ooh, let’s go and see if we can find this cheaper in China. Yes, it was cheaper in China. We used to buy it in the US for like 12 bucks in China. It was like seven box. But I’m like do I want to take the risk of my five stars. Reviews. What if China messes something up what if and then I also looked at the time it takes for me to outlay cash. So if I buy it in China, I’m outlaying cash for almost 60 days, but if I buy it in the US the cost that my product might my supplier in the US will ship it for free. And you’ll get it done in seven days and I’ll pay with my credit card which is not going to be due until at 30 days. So I have about 37 days, you know to actually pay for this day and I don’t I’m not paying for shipping and I have a better quality. So I’m looking at all these little things that we can take a look at to redesign our products. So in terms of product design, we have to look at packaging size. We have to look at the Have you know the materials you’re going to use? We’re also going to look at the cotton. Cotton label. There was a friend of mine reached out to me, July of last year, he’s like, look, I think I’m losing money with my three PL. And what do I do? I said, Okay, start sending your stuff to 3pm, I want to take a look, when the product arrived, I’m like, No wonder your supplier is having issues. So one of the problems the suppliers were having is they will put color blue products into the same box as color red. So they will or sometimes they put color blue, you know, products into a cartoon that says color red. It’s like, why do you just keep making that mistake? I said, Remember, these workers in a Chinese factory, they don’t understand English, you have to communicate to them or wisdom with images. So how about we redesign we do a very big color label for your boxes. One on the sides, there are angle in an angle 90 degrees, there is one on this side and one on the side to form an angle, degree angle, 90 degree angle. I said. So you put color blue of your product, you put it right on that label in full color, don’t bring black and white in full color, write the color blue and write everything I said, I guarantee you that will solve your problem. And he said if you said my supplier is not even charging me anything for that, say they don’t charge this few cents, like how much would it cost to print the eight by eight and a half by 11 sheet of paper since then the supplier stopped making all those mistakes, because now they can see visually that Oh, blue, this is blue. And this is the blue box. We’ll put it in the blue box. Simple things like that. Without even spending any money. He didn’t even spend more any. And I asked him I like how much are you saving I said, you don’t want to know. This is it’s a eight figure salary. Right? It’s like you don’t want to know how much we’re saving. And then if we you know where we get to that point from him, taking two weeks to ship a product to FBA now sticking him about three hours. So his products arrive at our facility. And within three hours from them arriving, it’s out. It’s amazing, you do it so simple. When we see your product, we see the labels very big and bold. When we’re offloading your container, we set them aside, it’s so hard for our code for our warehouse workers to make mistakes, because this is big bolt labels on your boxes. We can’t it’s so hard for us to make any mistake the same way your supplier is no longer making mistakes. Your three PL also you have to help them whatever three PL you’re using. If you’re writing tiny prints or your master carton, that you’re writing blue, and it’s so small, or you’re using B and it’s not so legible. Guess what? They’re gonna make mistakes that human beings what? What if someone a walker, at your three peel the one you’re using the worst? What if they’re colorblind? But what are you gonna do about that? Right? So we need to help them, you need to put that in consideration when you’re designing every aspect of your product.
Josh Hadley 18:35
I love that. All right, so to kind of recap here, these are some great examples. When it comes to product development. There’s a lot that needs to be taken into consideration the material, the way that it’s going to be packaged off the lobby, is there any advice or recommendations if somebody’s not an engineer, right? They’ve got this product idea. And they’re like, I don’t know, you know, going back to your example of your friend with, you know, a six foot box. He didn’t know that he could get that reduced, like, what are your recommendations? If somebody’s like, I’ve got this weird box. And I know it’s an oversized product right now. But how can I get it into a standard size? Like, do you have any recommendations or people that you would recommend people reach out to in order to help them with that product development so that they make a product that’s efficient on their bottom line just as much as it is a quality product for the customer?
Afolabi Oyerokun 19:33
Yes. First, you’re looking for an industrial designer. So you can go to Upwork and go search for industrial designer you can go to I think they pronounce it extramedullary oximetry Expo and etry.com. You’re going to find a lot of industrial designers on that site. But you really have to help your industrial designers as well because they don’t know Amazon’s standards. So you need to Then then the Amazon standard as hey, my product is now so big. What can you do to help me? These are the Amazon standards, right? We have, we work, we were working on a project recently. And we had to, it’s like a furniture. So we had to redesign it in such a way that the end user will be the one to put it together. All these all these products used to be shipped, in us whole is as a whole product fully assembled. I’m like, you understand your fortune? To do that? Why don’t you make it sexy? Why don’t you make it IKEA style? And say, Okay, who in just three steps, you know, you can put it together. So we had to redesign everything, but you’re looking for an industrial engineer. Don’t go for CAD artist card. This is not what you need a CAD or this was just put your rendering on on a 3d designer or whatever. But your industrial engineer would think creatively on how do I solve this problem? How do I do this? How do I do that. And if you go on Upwork, you can find if you don’t find you can reach out to me, I love
Josh Hadley 21:13
So off the lobby, your recommendation there is make sure you go find an industrial designer, industrial engineer, and a great resource that you gave everybody is it sama tree, that is a website that you could go visit, it says this is where big ideas are built. So anyways, that’s a great resource that we should point people towards so great. All right, we’ve talked about some tips with product development. Now let’s talk about product sourcing, because I love what you talked about here about, you know, you went for vinyl products in Korea, because you were now able to avoid the tariff, you ended up manufacturing a product in the US because, you know, the additional cost of maybe tariffs and importing it. Right. And the amount of time it takes to you know, sit on the water. Yeah, would not more than compensate what it was that you were paying here in the US. So as it relates to sourcing everybody’s first thought is a everything’s made in China, China’s the cheapest I’ve got to go source in China, off the lobby. Is that true? Or are there more places to manufacture your product than China and give us kind of the lay of the land?
Afolabi Oyerokun 22:32
Well, it’s the assets really depends on what you’re looking for. China is still leading honestly, there’s nothing wrong with China. I think the reason why people have a bad taste in their mouth about China is because they’ve dealt with a lot of bad suppliers. There’s nothing wrong with China. And then COVID also kinda give everybody every one of us a wake up call. When you when all our products are stuck in China. We couldn’t ship them out. You know there was so much you know, you know ship high shipping cost and everything like that. So China is not the only place to source Korea is right there. Malaysia is right there. Indonesia is it I have a really big customer in our Threepio you know, all our products are from Malaysia. Very, very beautiful, wonderful products. I mean not as sick we don’t have any issue with that product or packaging is pristine. Everything is perfect is in the big size category. Malaysia, Indonesia. You know, Korea is there Vietnam is rising. So anytime you want to do welding products, Vietnam is there for the US. US when you’re when you’re making products that are that could be robotic in nature. I love the US for that.
Josh Hadley 23:55
Interesting.
Afolabi Oyerokun 23:56
What are these products, you know, there are like DIY like furniture, if you want to go into premium product, where there is not a lot of competition at the moment, big and premium. I will say really, really think about the US because the US especially when you when it comes to furniture style product, they just feed it into a CNC machine to cut it. So it’s 80% 70 to 80% robotic 30% labor. The US is very expensive, is more expensive than other places because of the labor rates here. Labor labor rates of an average warehouse worker is from 30 to 50 bucks an hour in some cases. 100 bucks an hour in China is $1 to like four bucks an hour so you can see the difference. So in the product, the real challenge is in the labor. But if you can make products that are not labor intensive, that’s where you go to start seeing savings in the US. And then the US has more and better nearly a colic innovative materials that are being done that are being created now like series of really good composite really great MDF, MDF used to have a bad name, right, because it’s like you look at the side, it’s all grainy, it’s all falling off. But now I have seen some really cool MDF Jof. Josh, wow, this this this cool stuff that you could actually charge more, it’s cheaper than wood, but you can actually charge more for them. Because they’re smoother, you can imitate, you can get an imitation, bamboo, you know, boundaries, no grown in the US, maybe some Georgia area. But you could actually have imitation bamboo overlay, like a film overlay on your on your material. And it’s going to look like bamboo. If you don’t tell anybody like something you have on the back, keep looking at the back of your water right there. Like that’s a really cool material. And these are all stuff that can be made here in the US. So if you’re looking into premium product, I met a lady and Amy’s jewelry made on a cruise recently. And she makes premium products are probably like 400 box. That is the category I am seriously interested in. I don’t want to mess it around with the smaller categories, I want the bigger categories and the US, Japan, Korea will deliver even Canada would deliver on both kinds of categories. So China is not the only place it’s time to look at other places, it’s time to diversify into other products, categories that will make you dominate the market and just kind of be the big fish in the small pond.
Josh Hadley 26:45
I love that though. Those are some great strategies and a good lay of the land. So my next question off the lobby would be alright, I’ve got my product development down. But I do need to go find a supplier. And I have no idea. Ideally, I would like to keep it in the US right? It makes everything that much easier. But again, some of those labor rates are going to be higher. So where do people begin? If they just have this idea? They’ve got the product development done? Where do they even begin? They don’t have any contacts in China or Korea or Malaysia? Where should somebody begin?
Afolabi Oyerokun 27:21
If they want to source products, especially in the US. I use Google, honestly, I use LinkedIn. I use Facebook, sometimes I may use. There’s this company, I forgot the name. It’s used to be Thomasnet. They’ve been brought over. And now they’re cleaning up a lot. They’re getting there. They’re not there yet, but they’re getting there. They used to be very static. Now I can see a lot of momentum in that. On that website. They’re getting to be dynamic. And they updating all their contacts now because a lot of the US manufacturers are so old school, you talk to them, they don’t reply you in like a week. And then you say you want to manufacture like 5000 units, they’re looking at you like you’re cleaning. Are you going to how are you going to sell it? They are they don’t know anything about e commerce. They so we you have to pretty much school them have to train them. You have to educate them. It’s a long process, but at the very end, it would work for you but so you you go to Google you go search for
Josh Hadley 28:28
so awful lobby on that us. website, right to source some products in the US. So that’s hamas.net.com. So don’t be confused. It’s not Thomas dotnet. It’s thomasnet.com. Yes. And what I found interesting is this, you’re correct. It was sold. It now says underneath there, it’s an X xometry company. So look at this your you get your industrial engineer and designer, firm xometry. And then you just follow suit, go to Thomas net, and all kind of part of the same big parent company. So yep. little hat
Afolabi Oyerokun 29:04
each other now. Yeah, they’re very integrated into each other now. Yep, yep. Yeah. So you go there, and you’re going to be able to find a lot of resources there. If you don’t look at Google, look at another good places, YouTube, believe it or not. So YouTube and I typing, if I want to make wooden products, or typing wooden product in the USA factory tour, because a lot of these companies are doing the factory tours and they’re putting it on YouTube as I’m watching the factory tours, so this company does this. Okay, interesting. I’m looking at the capabilities. As I’m looking at the factory to a video and watching for the capabilities and Watching for the potential what they’re capable of doing. They might not be making the products I want, but by the type of product I see them do I can tell if they have the capabilities to do what I want, I’ll just tell them do what I want. And I have an industrial designer draw up the plan. And the US manufacturers are very, very Nietzsche in the sense that they want you to have all your designs done. That’s the best way to move to have your products moving really fast. If you if you’re starting from concept, or you go talk to a US manufacturer, they were like, Yeah, with us, our production line is all done books. Now we, we can really take on another project. But if you say, Hey, here’s my design, catch my material specs, here is everything ready to go? Just do your CNC do your stuff. And, you know, I have three months to pick it up. Don’t worry, I have three months. You’re like, oh, okay, we can do that. Right. So those are some of the things I discovered YouTube is a good resources, for watching factory tours, videos for injection molding, if you’re doing plastic products, right? Injection molding is very robotic in nature. Just, you know, go to YouTube, watch some cool videos, go to LinkedIn with some cool videos about the factory, and you will be able to contact them.
Josh Hadley 31:10
Interesting, that is a fantastic hack. Now what about if we’re trying to source something overseas? Do you recommend somebody that doesn’t have any immediate contacts there? Do you recommend that they go to a broker? Or you know, go to a product sourcing company like yourself, you own 100 worldwide? Is that something you would recommend? And why rather than going alone?
Afolabi Oyerokun 31:35
So it depends on? That’s a really good question. Question. It depends on this. The skills that they already have, sourcing companies or sourcing agents are your insurance policy pretty much. Because if they source something for you, and something goes wrong, then they have to stand in and get your money back for you. Whereas if you go and deal with the factories by yourself, you and something goes wrong, you’re pretty much on your own, but it’s a skill you can learn. I put it down in my newly released sourcing mastery course, how the step by step you should follow. By the time you take that kind of course, you would not need a sourcing agent, especially if you’re doing if you’re you know DIY person, you’d like to do things by yourself. There’s a guideline that I put there to avoid so that you can avoid fraud scam, you can spot scam, Spot trouble from afar, when dealing with Chinese suppliers, I will still say I know you asked the question about platforms, I still like Alibaba better, honestly, because I think they’ve done a good job in making it safe, safer, they use the word safer for you to do business with China. Just make sure that when you are ordering your product, you go through the trade assurance, you know, trade assurance, insurance pretty much to say that if something goes wrong with your order, Alibaba would repay you for it and reimburse
Josh Hadley 33:12
you for it makes a lot of sense. Are there any sneak peeks that you could give us of kind of the best tips, you know, if you are working directly in terms of how do you make sure you’re you know, you’re not getting, you know, there’s not going to be fraud, they take your money and run? Or what are some tips in terms of I think most importantly, getting the best price possible without sacrificing quality? Do you have any tips or sneak peeks that you could give a give us from your course of the quarter relates to you know, working directly with?
Afolabi Oyerokun 33:46
Yes, one of the great, one of the funniest and interesting things I put on the course is to set up a bidding war with your suppliers how I do this. So when I’m sourcing products, I source product from, let’s say, five different suppliers. Sometimes it could be up to 10 suppliers, and then they give me their pricing. I don’t negotiate at the first time I wait till the end before I negotiate my prices. And then when I get all these prices from the suppliers, then I call for a video of or image samples. I’m like, let me see your samples, do a video or do a follow. I see that okay, from the 10 suppliers on my shortlist only five or six. So from the six I said, Okay, can you send me samples? I need physical samples. They say Oh, you gotta pay for sample, no problem. Okay, so I paid them for sample or pay for the sample shipping. They send me the samples and I take a look at them. And maybe I like only three out of the six people, six suppliers that sent me their samples. So I cut off three, I keep three. So out of the three, I would say something like hey, without them knowing see They don’t know that all these three, all these supplies don’t know each other, and they don’t know I’m getting samples from different supplies. So let’s say one comes out at $2. Another one comes up at $1.50. And another one comes out and dollar 75. So I know Okay, $1.75 is the middle range $1.50, I look at the quality of the dollar 51 of my, it’s almost the same quality as the $2. One, okay, that means this product can actually go with go for $1.50 or less, then I look at how can I create a bidding war with these three guys still get what I want in terms of product quality, I want product quality. So I would use to enter two things, I’ll use quantity purchases, and I’ll use price match. So say to the one, let’s say the 175 one has the best quality, I’ll say, hey, well, I looked at your product, and other suppliers product. I like your product, but your price is way more than other suppliers. And he’s going to come back to me and say, what are they quoting you? Okay? I’m trying to get to $1.25 for these. And if you can do $1.25, I’ll give you a 5000 piece order right away. I’ll choose you if you can beat their prices. So he’s going to come back and say, Hmm, well, I’ve let me talk to my boss. And okay, no problem. And then he tells this, well, we can only do $1.45 or dollars, whatever. Okay, that’s a good one. I know, I can actually buy it at $1.50. Right? Because that lower range of my price is $1.50. I’m like, okay, all right, dollar 45 is fine. I said, but so when it gives me a price of $1.45, I keep quiet, I don’t reply him anymore. And he’s gonna keep blowing up my phone my email, because he can’t wait. He knows this at the tipping point is that the price at the point is about I’m about to hand him money. Because I already showed him money. I’m like, I’m gonna order 5000 A unit, but I want it at $1.25 and it comes he comes back with $1.45. Okay, I keep quiet. And it’s gonna say start saying Hello, are you are you there? Are you there? I’m like, I want people ask me, How long do I keep quiet sometimes a week. I just don’t see anything. And then it gets to a point is getting agitated. And it’s like, okay, okay, my boss says $1.35. Then I jump back in. I’m like, Oh, I’m so sorry. I didn’t reply you earlier to your quote. Do you think we can do $1.30? You can because he’s already at $1.35. I think we gotta do $1.30 Like, an hour or? So you have to always dangle the carrot. Ya have to always stand with the gap. Can you do $1.30? If they do $1.30 And I place order tomorrow, they want to know that you’re about to pull the trigger. You’re about to push the money button. You do $1.30 And we order tomorrow, it can come back and say okay, dollar 32 Whatever it is, because I want him to make money as well. I also want to know his breaking point. If his breaking point to give me the best quality is $1.35 I’ll actually settle for that. I don’t mind this. I know he’s got to pay bills. I know he’s one that he wants to make money as well. So I want to develop relationship with him. That’s the most important thing. It’s a relationship you’re about to build a beautiful relationship with your supplier. If you build a great relationship with your supplier, they will move mountains for you. I have suppliers that would give me that will send products to me to the tune of half a million dollars and they won’t charge me anything. Wow. It’s all relationship, relationship relationship. Know that there are people that wonderful people wherever they are, even if they’re in China, India, wherever. Look at them that these are wonderful business people. These are wonderful people. These are great partners that I want to have on my team. Right. Another thing another hack I use is if I’m talking to a sales rep and maybe she’s a lady and she has like a baby in an hour look at a WeChat profile. Right as oh my god you were traveling Where did you go to? Oh, I went to see my family somewhere. I’m like, Oh my God, this place is beautiful. Wow, that’s nice. Or if she has a baby of like, wow, how old is your baby? Oh, she’s four months old and the Oh she’s so cute. Wow experience will you know how you parents? They want to know that somebody cares about them. Especially in the Chinese culture is not so like Walker boss to Walker relationship is not so great. You know, some of these guys are kinda being pressed down all the time, like they don’t, then they nobody but to find somebody, you know, from our side of the world actually complimenting them, and just being friendly with them and just treating them very nicely. They can do, they can move mountains for you, like they know the breaking point of that they know the low ceiling of the of the product, you don’t know, but they know because their sales rep right? So and then they can go, they can they can talk to their boss, they know how to talk to their bosses, they know how to get to a point where they will get you to the price you want. Because they just like you, they just like you. I do it all the time. It works.
Josh Hadley 40:39
I love that awful lobby, that is a fantastic strategy for negotiating prices. So everybody hit the rewind button, pause and take notes. Because what author lobby just shared is very powerful. one follow up question on that awful lobby? Did they ever require you to send over like the quote from the other competitors? Right, that you’re claiming you’re getting other quotes from? Or have you been able to just kind of state a number and then they work with it.
Afolabi Oyerokun 41:14
I just did a number. If they require a code, I just copy the area of the code and send it to them. And I don’t let them see the name of the supplier, or by most of them just say some sometimes they say oh, no, it’s that’s too low we can do we were so sorry, we really want your business. But we can only go as low as $1.40. That I have to respect it because I don’t want them to make me crappy products. Right? So I will let article dollar 40. That’s fine. If this is the lowest, I just want to find out what the lowest point is, right? Yeah. And accept? And I’ll accept it. And I’ll be like, Okay, that’s fine. No problem. Let’s do it.
Josh Hadley 41:53
How do you ensure that you also get the best price for your follow up orders? Right? So let’s assume you are you’re placing a 5000 unit order now. But what happens if you, you know, you only need to place a 2500 unit order next time? What happens to that price? And how do you ensure that you’ve kind of locked in good pricing for the future reorders?
Afolabi Oyerokun 42:16
So when I’m doing reorders, and I want to drop my order, I would just say something like, Well, next order, we’re dividing it into two, we want to do 20/501, and then we’ll do 2500. Later, I sometimes I can give them like a year commitment and say, hey, look, we want to do our first one went really well. But it took us a while to do it, in order to maintain the same price you guys are giving us, we will just divide our orders into quarters, instead of ordering 5000 in one shot, we want to divide it in 2500. Or, you know 1000 1000 1000. Now, I found that the reason why most of these suppliers have high MOQ. You know, for people that don’t know what that means minimum order quantity. The reason why is because they also they also have MOQ is from the material suppliers. Like for the box maker, the person that is going to supply them the fabric for your product, the guy that is supplying the PVC board that you’re going to use in making your product, they also have mo Q’s, so they just transferring this MOQ to you. So in some cases, I can actually come back and I said I said this in my sourcing mastery course as well. You can just even tell your supplier and say look, I’m going to order 3000 packaging, if packaging has MOQ Don’t worry, let me pay for the packaging, you guys keep it for me. And as I’m making my products, you can just use the packaging that already ordered this way, we will fulfill the packaging suppliers MOQ. And you guys wouldn’t get any into any problem. And we just keep our prices. That way. They usually will say okay, all right, we can do that. That makes
Josh Hadley 43:59
a lot of sense. At the end of the day, what I’m hearing off lobby is that as you work with a supplier, you need to create a relationship with them, you need to form a partnership with them. This is not just a transaction. This is one of your just as you see Amazon as a big partner in your business even though there’s not a direct person you’re working with at Amazon. It’s fundamental to your business. Well likewise, you need to see, you know, sourcing your product as the lifeblood of your business. And if you don’t have that relationship, you’re going to be in trouble because you’re going to get run over by sellers like off lobby that are working with their manufacturers, their suppliers on a personal relationship basis. They can order lower mo Q’s because they’re having those conversations like yeah, this cost 10 cents for that packaging. I’ll buy all of that for you. That’s fine. I just don’t want to buy all 10 times 1000 units are in one shot, because now I’m outlaying a lot of capital, all right, I love that awful lobby anything else you want to add as it relates to working with suppliers, any other quick tips or hacks to share with the audience.
Afolabi Oyerokun 45:15
Another thing that is so important in your supply chain is your trade times. So, some suppliers will say you will pay 50% now and pay the remaining 50% After some supplier will say okay pay 30% Now, so there is price negotiations and there is terms negotiations, which both of them can save you a lot of money, the terms negotiation kind of happens organically over months of trust, you know, with your suppliers, I have suppliers that will say just bring 10% Now, you know, and you can pay 30% when you ship and then you can pay the remaining balance when your goods arrive in the US before you clear it or after you Clary, before we release the bill of lading to you, we can pay the final. So it comes back to relationship. But you can negotiate your terms. No term, no treatment is set in stone, it’s honestly, it could be negotiated based on how nice you are, how you know, relatable you are to your suppliers, they are the factory they can do so many things that you don’t realize they can do. So I will say terms is a big deal. Because it will help you with your cash flow. Right? If you can have a good terms. And you know, maybe after a year, a year and a half of working with the same supplier, you can now say hey, you know, I’ll be working with you guys now for a while, you know, I saw somebody else, you know, another supplier reached out to us they want to make it for us for cheaper Do you think you can give us you know now that our our order frequency is stable and our quantity is increasing? Can you Can we talk about lower price now? You know, even if it’s just 10 cents? Because Okay, all right, no problem. We work with you. Another thing your supplier can do that I found I put it into courses, which is people ask me all the time. Oh, do I use Jungle Scout or helium 10 to kind of find new product ideas. I say one of the best way to find product ideas, just ask your supplier tell them your categories of all your products, which ones are doing so well. Five Best Selling products right now. What are the hottest products? Or what are the newest products you just released? without telling anybody? I would like to take a look. I like to be the first one to take the first deep into this new product. They’ll tell you they’ll gladly tell you. You just need a single email or text years or plastic. I’m looking to source new I’m looking to launch new products. What are you hot, fresh off the factory hot, hottest selling products now. They will tell I love that.
Josh Hadley 48:17
That is huge. That is another amazing hack. Lobby just shared rather than go into Jungle Scout and helium 10 that everybody in the world has access to and is using right now. For product research. Go directly to your supplier and say, Hey, which product are you shipping the most of right now that’s just lying like hotcakes. You can let them tell you and then say holy smokes like we can do that. Exactly. Create that product and man so much easier than follow everybody else. Or maybe you catch on to a trend faster than everybody else. Off the lobby. I know we’re running out of time here. But I want to definitely just touch on logistics, getting them product from maybe its overseas and into a three PL. What are ways that people can save money up and down that supply chain of importing a product?
Afolabi Oyerokun 49:17
Oh, thank you first, the most savings will come from your tariff. We talked about it the other time. Quick recap. You have to know what tariff code to use when you’re bringing your product. If not, you’re going to you’re going to be pouring money into the toilet easily. You have the supplier will usually give you an HS code which is not recognizable in the US system. So if you’re selling your product in the US, you need an h t s code, right? If your supplier and your supplier doesn’t know how to get it, that’s the problem. So you have to go to US website I forgot what the website is just typing Thai with code us tariffs Hold on just typing HTS code and you’re going to, you’re going to see a government website, you can use that. Or you can use that type Terminator service. We have people that are trained to help you find different combinations of tariff codes that you can use, because your tariff code is based on your materials is based on either your use of the product, you know, and the material you’re using. So that’s the first one to do to do your savings. The second one is people always try to go to the cheapest shipping carrier, I wouldn’t go for the cheapest because we see boxes are Threepio. By the time they show up from China, wherever they’re coming from, they are in them pieces. And in most cases, nine out of 10 times is your shipper is your shipper that is messing up your product. Your shipper is measured messing up your product they’re using all your other boxes you’re using from your supplier is not a good box. So by the time your products arrive, it’s already in pieces. So when you need to go back to the Caribbean, just stop now rewind and go back to where we were talking about product design, because your packaging is going to help you as well. So when you’re shipping your products into the US, make sure you use the right tariff code. Make sure you shop around for a very good shipper. And then when it comes to your three PIO, you have to decide am I shipping a full container or shipping pallet? pallets? Yes, it’s easy to bring it out. And it’s cheaper to bring up pallets. But pallet is not the best use of space also in the in your container. So talk to your Threepio first get their rates on how they’re going, how much are they going to charge you. If you floor load your container floor load means just you put all your boxes on the on the floor and just stack it up in Europe container. Another thing you need to bear in mind is when you’re sending your container to a three PL make sure if you have multiple skews, make sure you arrange you load your container by SKU type. Don’t just say, you know, if you have 10 skews coming, don’t just mix them up in the container, make sure you do SKU number one first, then SKU number two and then number three and number four and just load them up like that. And remember to tell your shipper to put a net to cover your container. If your container is not full, like it’s an underrepresented food, if it’s 80% full, make sure they put net to cover because when the container arrives at your three peel and they open the door, your boxes just fall off, or the net covering, then your boxes stay intact, right. You know, your Threepio will charge you extra if they have to be doing excess handling. You don’t want them to an excess handle. You want them to get your product out of the container really fast. And get it out the door to Amazon.
Josh Hadley 52:52
I love that. Any advice real quick that you would say or recommend for how do you find a good shipper, right? Because obviously you could say oh man, I assume that the person giving me the highest shipping quote is the best. Any advice for finding or any recommendations with any shipping logistics or freight forwarding companies?
Afolabi Oyerokun 53:14
I would say the best is your referral from your friend. Just ask around if you have a mastermind group. The same thing for three PL to ask around in your mastermind group. Ask your friend ask your colleagues and see what are you guys using? Are you happy with them? Can you give me the color you the connection or give me the contact let me contact them because that referral is worth a lot to you. You don’t want to go shopping around because everybody’s going to tell you oh, we are a good shipper. We are a good forwarder we can take care of it. I get tons and tons of emails every day from shippers. But I’ll say it’s better to use a shipper that somebody else has used before and they’re very happy with it to talk to your colleagues, talk to your people, the same people you’re in the same mastermind group, ask them what they’re doing. If you still can’t get anything, reach out to us, we read shop for you, you know, just go on worldwide and just click on freight or something. But other than that, your referral from your friends and your colleague will be my best way to find a good cheaper.
Josh Hadley 54:17
I love that. And thus the importance of making sure you’re hanging out in the right groups of people right, or ranked joining. And there’s so many of those and we’ve had many of them on the podcast. Off the lobby. This has been amazing. Here are kind of the three takeaways that I’ve noted from today’s episode. There are probably 100 takeaways to be honest with you. But these are going to be my three let me know if you think I’m missing something or if there’s something we need to add here off the lobby. So number one is your product development is actually a very crucial step in your product. And if you haven’t actually, you know gone back and maybe taken us I can look at your product development, now may be the time to do that. Is there? Is there a way for you to reduce the weight of the product? Right? without reducing the quality? Can you reduce the weight? Is there a way that you could better package the product for a multitude of reasons? Can you reduce the product packaging, so it fits in one of Amazon’s lesser FBA fulfillment tiers? That would be step number one. Yep. And then secondly, on top of that, would you be able to find a better packaging solution so that when it is being shipped, right, it actually stays intact, it doesn’t get damaged, because it’s gotten a long journey to end up in that customer’s hands. So that would be action item number one, action item number two, is creating a solid relationship and partnership with your supplier. And Afolabi shared an amazing hack. Amazing, not amazing knowledge bomb as it relates to the bidding war strategy with suppliers. So hit the rewind button, I’m not going to walk through that strategy right now. But go back and listen to the bidding war strategy of how you can find that bottom price and get the best possible price for a quality product, while also creating a good partnership with your supplier. And then last but not least, is importing your products, I would kind of say two things. My final takeaway here is pay more attention to those payment terms. And that’s probably where I’ll leave it on this one is because your cash flow is one of your most important things in a physical products business, you will live and die by your cash flow. Cash flow also allows you to invest in new products and to be able to continue to release new products quicker. So if you can get payment terms like off the lobby talked about somebody who’s willing to send you half a million dollars worth of products, and not charge you for it until it hits Amazon, that can be a game changing situation for you in your business. But that is the type of payment terms that are created. If you have a good partnership, first with your supplier. And you’ve created that over a period of time and have built up that trust off the lobby is there anything else you would add here is a good takeaway for our listeners that I haven’t mentioned? You
Afolabi Oyerokun 57:29
everything is perfect. Inventory management is also a major thing that I found out that it’s almost like number two or number three reasons why brands fail is because they run out of stock a lot. Even some, you know, company that I sold the brand to, you know, and I’m I’m watching? And I’m like, wow, why did he take order now, you know, they don’t know the production timeline. They don’t go by the production timeline, you’re supposed to order in or 90 days or whatever days before you actually need that product in stock. So production, inventory management is could break anybody. Because the moment you do make you run out of stock, Amazon kind of punish you, they will punish you because your ranking will drop. You have to re rank you have to do these you have to do so many things, just to get your products back in stock. So inventory management will be a big deal. And so stock is one of the tools that I use, they do a good job with it.
Josh Hadley 58:32
Awesome. I completely agree off a lot. But you’ve shared so much knowledge with us today. In part one episode, you already shared your favorite book, your software tools and people that you would recommend other sellers follow. So the one question I’m going to ask you is how are you using chat GPT to assist you with it. Anything in your supply chain management right now?
Afolabi Oyerokun 58:59
Yes, Chad GPT has been going all crazy. So I like to play with it like a little kid. I’m like, let me see what he will see if I tell him to do this. So when we started building our new Threepio facility that it’s just recently launched. I just I just put into Changi PTM like five me the five best construction materials suppliers in China. And I was impressed. You know, it just listed me a whole bunch of, you know, sourcing companies or material suppliers that specialize in the kind of products I was looking for to buy for the warehouse. And I’m like, wow, this is genius. I don’t have to I know people are worried about copyright and stuff like that. But in this kind of situation that I use it for copyrights don’t really matter. Because I just want information and sometimes also I was dabbling into where I wanted to write some. We wanted to write some blogs for the for our website and like, maybe see what is going to best suit what is going to come up with. If I give him the key bullet points I’m like, so I said, Write me one paragraph. On sourcing mastery, I use these bullet points. And I kind of give him the bullet points of like, oh, my god, wow. He actually wrote the paragraph. Amazing. So it’s really cool. Now I’m using it on Bing, I go to the Bing search engine, and I type in what I want to tell me what’s going on here. And you know, and it spits it out. I love it. Love it.
Josh Hadley 1:00:53
Those are some great ways to use chat TPT and millions of others, which is great, awful lobby. Thank you so much for your time. Before we wrap up, where can people go to reach out to you if they need assistance with you know, the tariff Terminator, or even sourcing their product? Or utilizing a three PL those are all services that you provide? Where can people reach out to you or if they want to go through your sourcing mastery course, where can people go?
Afolabi Oyerokun 1:01:20
So for the sourcing mastery course you go to sourcingmastery.com. For other services, it will be honuworldwide.com. And if you’re trying to, you know, if you want me to guide you, or you want to consult with me to for your product design or to want to overall your entire product development or supply chain, you know, you can reach out to me there to, you know, on honuworldwide and or send me an email, afolabi@honuworldwide.com. I’d be happy to help in whichever way. Even if you just want to, you know, brainstorm with me or whatever, I’ll be happy to help you out.
Josh Hadley 1:02:06
Awesome. Afolabi, you are definitely an expert in this supply chain space. And I encourage our followers to go pay attention to everything that you put out because you’ve dropped a lot of knowledge on us today. So thanks so much for your time.
Afolabi Oyerokun 1:02:20
Thank you so much, Josh. It’s always I’m always happy to join the show and have a great time. Thank you so much for having me here. It’s an honor to be here. Thank you.
Outro 1:02:32
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