Things we discussed in this session:

A. Part 1

B. Part 2

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Transcription in this episode:
[00:00:01] spk_1: Welcome [00:00:02] spk_2: to the seller roundtable e commerce coaching and business strategies with and er not and amy, we's [00:00:08] spk_1: hey everyone, what's up, Welcome to the seller roundtable uh, and he's out today but that's okay. I got him covered and I'm here with my friends who Sana bermudas and we're going to be talking about something that everybody has wondered about sourcing outside of china, getting your products from somewhere else besides china. So today we're specifically going to be talking about sourcing from latin America and what that looks like and how it's different and how you even get started with that. We are an episode number 121 of the seller roundtable and I'm just so excited to have Susanna here because he was just a wealth of knowledge. So welcome Susanna. Thank [00:00:59] spk_0: you Amy. And I'm like glad to be here. And uh if I can answer your questions or the doubts that you could probably have about like how I change my sourcing from the, I mean the rest of the world because I have clients for many countries that are trying to change their sourcing mostly from Asia. But yeah, to do it in latin America. [00:01:23] spk_1: Amazing And tell us a little bit, we always start off our show with just learning about our guests. So tell us a little bit about you as much or as little as you want, a little bit about your background where you grew up, all that fun stuff. Uh yeah, we'd love to hear it. [00:01:42] spk_0: Yeah, well I'm, I'm from Costa rica, I born in Costa rica. Um, then I moved to Mexico Mexico city and I started my journey in like Let's say on this on 2018 probably because I was helping manufacturers in Mexico with their procurement side, you know like trying to find other sources in the U. S. [00:02:14] spk_1: And then they were [00:02:15] spk_0: like asking me can we sell our products in the U. S. And so I start digging on how to sell products in the U. S. And my first thought was like retail right? Um because we're used to retail in latin America, that's that's the way we do business ecommerce. It's so so new for us even now. Um So I started trying to help them on that and I started to learn about e commerce. I thought like amazon was a big store and they were in charge of everything and they were selling like everything for for from their themselves. You know I didn't [00:02:58] spk_1: know it was [00:02:59] spk_0: people you know like selling stuff there. So when I understand more of the business um I make it like a little ad saying Mexico is the next china right? And people start like what what are you saying here? And they start asking like for things I don't know supplements uh things made from leather from wood and I was like they want this and they also want the package with the different brand. And I I started like realizing this was something here, you know it was different from everything that I knew in the past so helping them that's that's how it starts, you know everything starts there and and it was not just with the manufacturers but also now with the e commerce sellers and that's that's how I'm starting all this crazy world. [00:04:05] spk_1: Yeah, you know it's so crazy because I love Mexico you and I have talked about this, we met at Prosper and you know we kind of bonded over this and I love Mexico and my family and I go all the time and I have been I always have conversations and just try to learn more, you know there's no big amazon seller community in Mexico and I started trying to learn more about manufacturing in Mexico in particular because I was always going there, right and I was wondering is there trade, are their trade shows here, is there is there different what types of goods are manufactured here? And I knew from my M. B. A. Program that there were a lot of major brands like Toyota, like many clothing companies, lots of different major brands that had already moved their manufacturing to latin America and that's really how it starts, you know it really starts with these big brands that have the resources to open up their own facilities in these countries and uh you know it kind of makes the rest of us think what about the possibilities of meat eventually manufacturing there. Um it's really, really cool, so it was so neat to meet you because you were working on sourcing from latin America on a smaller scale and normally when you hear about a new country like that you could potentially source from such as Vietnam or Taiwan or something like that. You normally only hear about big brands doing that and the rest of us kind of feel like oh wow, how do I crack that code? Um and I think the big thing about sourcing from latin America is that there, let's talk about kind of the atmosphere there, right, so the pandemic actually brought a lot of these manufacturers to the realization that they needed to provide for others outside of their own countries. Can you talk a little bit about what manufacturers in latin America are like and what they have primarily been doing and what they are now realizing you the pandemic. [00:06:24] spk_0: Yeah, actually that that was one of the things I was, I have a big group of manufacturers that I know the owners particularly and they were like at the beginning before the pandemic, I start telling them oh if you wanna sell in the US, it converse is the, is the way to do it. And they were like no no no no we don't want to do that, we don't see a need on that. And then the pandemic hits. And they had most of them were like very worried because their their facilities were closed or they could just work work with a little um a group of people so they could not fulfill not even the demand of of their own uh country because sometimes it was hard to get the materials or the other companies were closed or the stores that they used to sell were closed. So it was like this mess all over because they didn't know what to do, right? And then they start contacting me and say you know what we need to get out of Mexico, we need to sell outside of Mexico. So when we open our doors, uh we have clients because most of our clients, little shops or medium companies, they were gone [00:07:52] spk_1: toilet. [00:07:53] spk_0: Yeah. Yeah. So it was something that they started like looking and and that's that's why I try to educate them because it's all new for them, you know? And [00:08:11] spk_1: so these manufacturers are mostly used to supplying smaller shops and things like that in their own country. And this also happened in the US as well. Like small shops started pivoting to e commerce because they were closing and they realize like I have to have some other way to sell my goods. So it's even worse in these countries where like you mentioned it's not a humongous e commerce presence. Most people still do shop in stores. You know in these manufacturers, they had more than enough work just manufacturing for their local stores before the pandemic and then suddenly the pandemic hits and they're like, whoa! You know, it's kind of like us, we realized, wow! You know, I put all my eggs in one basket and now that basket is in trouble. Like a bunch of us amazon sellers when amazon stopped delivering non essential goods, right? If it wasn't, it wasn't an essential good, it didn't get delivered. And all these amazon sellers had their inventory just held hostage and suddenly their income, it wasn't, it wasn't that people didn't want to buy those things. It was that amazon couldn't deliver them. They were maxed out. And so, you know, I think we learned that in any situation where we have a pandemic, where it's like, wow, okay. You know, I never want to put all of my eggs in one basket, so we all get to now experience these manufacturers who want to grow beyond their own borders. But at the same time, there's challenges. Yeah. A lot of people have been asking me in the facebook groups have been a mean, how are you getting products in latin America? And the answer is I'm not yet, I'm figuring it out, but there's a lot to figure out. And what I'm realizing working with Susanna and some of the other folks that are in latin America is like geez, there is a huge, it's completely different than anywhere else you've ever sourced from. First of all and people are like, well how do I search for manufacturers, You can't, I mean you can, I found a few finding the spanish word for that, whatever it was called. And then I found a few of the websites, but unless you're there in person, it's very tough. Unless you have those relationships like Susanna has, she has those relationships with manufacturers, she can talk to them in their language, she can work with them, she can explain to them the benefits of working with a supplier or an importer um that is working in smaller quantities like a micro brand, those kinds of things versus what they're used to working with. So this is completely new to them [00:10:58] spk_0: and [00:10:59] spk_1: we finding these manufacturers, there's no alibaba, there's no, a lot of these manufacturers don't even have their own website. So it's really about learning the culture, learning um what is there, what types of products you can source? And Susanna and I did kind of a project where we were listing out all the different popular categories to source from in china And we identify what 400, no, [00:11:28] spk_0: 200 [00:11:29] spk_1: 30 categories from the Canton Fair website that could be sourced from somewhere in Latin America. Right? There's a lot of products that you can get in latin America. The problem is not that the products can't be made. The problem is that it's completely different than sourcing from china or sourcing from India or sourcing from any other country and we need an education, we need and the manufacturers, they need an education. And it's like we have this kind of wall between us that we're slowly trying to break down. So I know we've got folks that are really interested in doing this. So what's the first step Susanna. If I want to source my product from latin America, I want to find an alternative supplier. There's no alibaba, There's millie that manufacturer might not have a website. What is the first step to find being a manufacturer in latin America [00:12:28] spk_0: work in your patients? [00:12:30] spk_1: No. Yeah. Well [00:12:33] spk_0: that's one of the things but also it's very important. And you and I talk about this many of the sellers, they don't know what they're selling, you know, and they pretend that with a picture, oh if I show you a picture, you're going to be able to go and find this in latin America. No. Yeah, probably. Yes. If it's something you know made from wood, but I don't need to understand the dimensions, the type of wood. All those things that most of the of the sellers are used to just show a picture and that's it [00:13:11] spk_1: and the supplier in china just figures it out and gives them packaging and everything else. It's like, you know, it was so funny because you were telling me, you know, my my clients that come from me that are in our program. They are not allowed in the amazing at home program. They're not allowed to talk to a manufacturer until they know their manufacturing process? And they have a spec sheet fully filled out. That's when they're able to search for manufacturers and start reaching out to them. So you are getting a lot of clients from other people. And they would just be like, can you make this? They didn't do a picture where can you just find me a supplier of this? And you're like, what is this again? You know one of our girls, Carla, I had her reach out to you and you were like, oh it was so nice working with Carla because she knew her material. She knew her dimension. She had everything. And I could find her that process. Because a lot of times it's not just it's not the manufacturers not just going to make this right? It's okay. What's inside the bottle? What type of process is used to make this oil? Right. This this products from Pakistan, believe it or not. But you know, there's so many things. So what we're telling them is step one from sourcing from latin America is no your product know your manufacturing process. And make sure you have a spec sheet, this is not Alibaba. This is not, can you make this lee, What is it? Is it ceramic? Is it You know, glass? What is it? How big is it? How wide is it? What kind of printing is here? You know, we need to know those things, Right. And then what do you do when you get that information? What how are you able to kind of find the manufacture? What's the next step? [00:15:13] spk_0: Well sometimes I have like from the many manufacturers that I know sometimes with, with that specification, I can, I can tell, well maybe this one can do the work, you know or the or the product or whatever. Um and from from there if if I make sure that they can manufacture that because sometimes people is like, oh can you give me three or four options? And I'm like okay I'm gonna work first in one and then we will realize how that looks like because if we don't know we don't have enough information for example target price, that's something that they say, oh my target price is [00:16:02] spk_1: this one [00:16:03] spk_0: and they are just thinking in their target price in china. You know, it's not the same again, we're not china, it's different. Labor is different in latin America [00:16:16] spk_1: whole negotiation process is different because you know my folks they know to work in target prices because that's just a general term that's used. But the thing that I learned, so I started I found a manufacturer in Mexico city and I have a friend that lives in Mexico city who's in the industry and who speaks spanish and who can go over there and naturally meet with the manufacturer that I was reaching out to. Right? And uh so first of all I found the website for that manufacturer and I sent them a message in spanish and I didn't get a response at all. So they were very responsive. The chat, the chat like you know they have a little chat about built in on their website that was very responsive, you know it was probably some kind of answering service. And then I went and I sent them an email in spanish explaining like hey this is what I'm looking for and did not get an answer when he went and called them and talk to them and explain everything. He did get an answer and he said they for sure can make your products but the price I pay in china. Now let me just explain this you guys the price I pay in china. First of all you guys have to know something about me. I don't pay the same price as you pay in china because I know how to talk to manufacturers But this particular product, I source it for $2 and I sell it for 20. Okay and I have another product is made of the same material is very similar and I source that for about $6 landed with shipping from China and I sell it for 40. Okay now We went to this manufacturer in Mexico in Mexico City and their quote was $25 and I was like $25. I can make it myself. I mean I can make it myself for less than that. You know like it was just really crazy and what my friend explained to me as he said, Okay but that's not, you know that's not how it works here, how it works here is you have to, this is not even you haven't even begun negotiation. You haven't even really talked about prices. They want to get to know you, they want to know, they can trust you in latin America. It's about trust, who are you dealing with? Right? It's kind of like if you reach out to a supplier on Alibaba and you don't know what you're talking about. They don't trust you, they give you the super high price and you're just like, oh that's crazy right? But if you take the time to set up a meeting with them and talk to them and gain their trust and you're there to be partners in business together than your prices look a lot different. So that's why I was explaining you guys, I don't pay what you guys pay for products because I build relationships, right? So that's what we were experiencing in latin America is in Mexico is this supplier basically said Yeah $25. But then I told my friend I said that's crazy. You know that's what and he said, well we haven't even started we haven't gained any trust yet. We haven't talked to any really sat down with them or anything yet. So what is your experience been Susanna and how should we learn about what it means to deal with the manufacturer to talk with the manufacturer to build a relationship. You know if we get that high price in the beginning like I just did, should we be afraid? Should we be like, oh there's no way I can work with that guy. How should we look at it? [00:19:53] spk_0: No, I think and and that's a cultural thing. You know like at the beginning yes you're gonna give that price. And I get that to you know like me trying to help like amazon sellers or e commerce sellers and and and mostly the, well the manufacturers could say well this is the price right? And I talked to them and explain them why it's important to lower the price because this could be a long term relationship. So sometimes I do that for for my customers because they have like a couple of clients that says no, no I'm going to manage the communications. You just tell me one manufacturer can do this for me. And I say okay here it is. This is the contact. And then they came back to me saying they are not responding. They are not giving me prices. I want samples and and and and that's why I say, well that's why we do that because we speak the same language sometimes on many of the connections. I can talk with the owner of the manufacturer and say, hey, I need help with this actually with many of them. I've been setting [00:21:10] spk_1: up like [00:21:11] spk_0: regular meetings because they need to learn to and and they need to experience that part because other things that is happening is that there is some products that again you guys are too used to have like a bundle of five products. It's one product, but it's [00:21:30] spk_1: With five different items, right? [00:21:33] spk_0: And then they're like, what I'm gonna do with this, I can do this too, but I can do this all the other three products. So they don't understand that. It's a matter of patients, you know, like if I have to look for this or this or this and put it together is gonna take time. And you and I talk about like the importance of, You know grow with your manufacturer. If you see that their quality is good, let's say you order, they say Okay, um it's $25, right? You order a sample from them or whatever. You have to check that sample and go with them and say, okay, let's set up a meeting because I think we can do this this way that way, you know, grow with them. Talk to them and then they will go, oh you're teaching me too. So I, I want to do this because you're going to help me with my process. You know [00:22:34] spk_1: what I'm saying? Exactly because that's how china was 20 years ago, you know, people went to china and started working with these manufacturers and grew with them and said, okay, let's learn this together, right? And they were able to gain, you know, certifications and they were able to gain retail badges and things like that. And now that's like a badge of honor for them. You know, they show it on their banners and stuff when you go and you visit. So whenever we're working with countries where the manufacturers are not, of course Toyota, their manufacturer in Mexico is going to be very built out, right? They're going to be grown because Toyota grew with them. They went and they put their resources into it. And so some of you private label sellers who might be here listening today to this podcast and going, okay, but I'm not Toyota, but you do have skills and you do have resources and you do have something to bring to the table for a smaller manufacturer who might have never exported for their outside of their normal boundaries, right? They might have never done that. And you may be able to be able to bring something to them that allows them to grow as well. And the relationship that you can build together and the things that you can make together, your supplier should be your partner. They're basically like half of your business, You don't have products, you have nothing right? If you're if you're in product business, you don't have anything and if your products on quality you have nothing right? So you really have to make sure that your supplier is your partner and we've gotten spoiled in china because we can just be like, oh yeah, here make this right. Um and there's a lot of resources and they're used to inspecting every product and they're used to the way that things should look. But it isn't like that. It doesn't mean that manufacturers in latin America don't make quality goods quite the opposite. I mean if you go to latin America and you go shopping at a store and you see, I mean you're going to see that there's quality stuff, there's really great stuff. Some stuff you might want to bring to the US and self but but it just takes that communication, it takes an understanding, it takes working together. So to recap, first step is know your product, know your process have respect dots, figured out. The second step is don't think you're going to be able to just message a supplier and get an answer back or that that first price that if you do get an answer that that first price that you get is going to be perfect, take go the extra mile and build a relationship, work together. Talk to them figure it out, right? And then the next thing is utilize resources on the ground. So you have people like Susanna who can help you. She's only one person right now. I just got a lot of work going on but you have people like her who can help you to have those get those conversations started and just start working together and to start doing that. And then the next lesson is that's going to take time, it's not going to be like you sent a picture today and tomorrow you're going to have a manufacturer. So if you're wanting to move your production outside of china and you want to move it into latin America you need to start today because it could take you six months to a year to find the right manufacturer and to get the quality right and to get working together where you need to go to. [00:26:23] spk_0: Yeah [00:26:24] spk_1: thanks for tuning in to part one of this [00:26:26] spk_2: episode, join [00:26:27] spk_1: us every Tuesday at [00:26:28] spk_2: one PM pacific standard time for live Q [00:26:30] spk_1: and A. And bonus [00:26:31] spk_2: content after the [00:26:32] spk_1: recording at cellar round [00:26:34] spk_2: table dot com, sponsored by the ultimate software tool for amazon sales and growth [00:26:39] spk_1: seller, S C [00:26:39] spk_2: O dot com [00:26:40] spk_1: and amazing at home dot com