Finding E-Commerce Suppliers at the Canton Fair in China

Episode 31

On this episode we will be discussing our experiences at the first virtual Canton Fair in China.  To start off the episode, we will discuss what the Canton Fair is and why it is so important, then we will go into detail on how we interfaced with suppliers using the online portal, and lastly, we will share some lessons learned on how to maximize results when scouting for suppliers virtually.  

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David 0:00
What products do you see in this market doing great in the next 12 to 18 months? And the reason I think that’s a powerful question is because, you know, right now I have visibility into the US market, and Canada and Mexico. But I don’t have visibility into what’s going on at all other parts of the world. There may be products that are trending over in the UK that just haven’t caught up to the US market yet. It doesn’t cost you anything to ask this question.

Intro 0:28
Welcome, everyone to the Firing the Man podcast show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you were capable of more than join us, this show will help you build a business and grow your passive income streams in just a few short hours per day. And now your host serial entrepreneurs David shoma, and Ken Wilson.

David 0:51
Welcome everyone to the firing the man podcast on today’s episode we will be discussing our experiences at the first virtual Canton Fair in China. To start off the episode we will discuss what the Canton Fair is and why it is so important. Then we will go into detail on how we interface with suppliers using the online portal. And lastly, we will share some lessons learned on how to maximize results when scouting for suppliers virtually. Ken, welcome to the show.

Ken 1:17
David, thanks. It’s good to be here. Excellent.

David 1:21
So in terms of the Canton Fair, you were the first person that told me about it and when I think Canton Fair, I think Iowa state fair I did it That’s not it. And so where did you first hear about the Canton Fair

Ken 1:35
so you know sourcing from China and I’ve heard I heard you know, I got these marketing like hey go you know cook travel with us to come source products and like okay looking into what’s this? And these trips school they go to the Canton Fair, so that’s where I that’s where I first heard about it. So yeah, it’s you know, if you’re been in the business a while sourcing products from China, then it’s it’s one of if not the large Just place to go and, and to get all the suppliers in one spot.

David 2:06
For our listeners that are wondering what is the Canton Fair, it is a trade fair that is held in the spring and fall seasons in Guangzhou, China. It is the oldest and largest fair in China, where over 24,000 foreign trade corporations take part in the fair. These include private enterprises, factories, scientific research, institutions, wholly owned enterprises and foreign trade companies. Whenever I hear about the Canton Fair, I always hear about the size. And for context it is 12 point 1 million square feet is the convention center that it’s held in, which is equivalent to 218 football fields. That’s massive, huge. I mean, I can’t even I can’t even it’s hard for me to close my eyes and picture what 218 football fields looks like. jam packed full suppliers and so this is something that I would really like to go ever since I heard about it and have gotten pretty involved in e commerce. My goal has been to go to the Canton Fair

okay you had a trip planned right?

Ken 3:16
I did I was gonna go last fall and that didn’t that didn’t materialize. And then I was going to go this spring that didn’t so yeah, I’m really excited to go there in person and if you’re listening to this podcast, don’t do this while you’re driving but Google Canton Fair and look at the images of this of this venue. It’s massive. You’ll you’ll see what David and I are talking about. So yeah, but I am excited to go as soon as the Coronavirus COVID-19. As soon as this kind of blows past and it’s kind of safe to travel. I’m definitely going to go in person and have this experience.

David 3:52
Absolutely. If you listen to our episode with Carlos Alvarez, he talked about the group that he takes over to the Canton Fair, and I think He would likely be somebody that I would link up with. Should I go to the other side of the world?

Yeah, absolutely, definitely want to, you know, from from the people that I’ve talked to that that’s been there, it’s really good to go in a group and have an agenda because it’s massive, and you can easily get lost, you know, lost or not know what you’re doing. And there’s so many you know, if you have if you have one thing, you’re looking for two things, you know, you need to go exactly where you’re going. So now, the online Canton Fair is kind of what we’re talking about. So can you explain that David?

Yeah. So this year they because of COVID-19, they decided to cancel the in person Canton Fair, and supplement it with an online Canton Fair. So this was the first time this organization has ever done this. And it was apparent there were there were some major hiccups throughout the process, and I’ll talk about some of those but basically, what would have been 24,000 vendors, you know, lining up in their booths at a trade fair, this was all happening on a website, hosted over in China. And so it was a good way to find suppliers. But I would say there were some barriers to entry. So because at the time that we’re recording this, it’s over. I’m going to tell you about my experiences, finding suppliers, but we’re also going to talk about other virtual ways to meet suppliers. And so it would not surprise me if the fall Canton Fair is also online. Just because, as of the time that we’re recording this, there are a lot of resurgences of the COVID-19 disease. And so who knows what’s going to happen it changes every week, but it would not surprise me if getting together in person, you know, people from countries all over the world, if that’s something that dies down for the next couple months or years. Who knows.

Yeah, I would definitely agree that this is probably going to be online in the fall, too. One good thing is that maybe they got all the, you know, the bugs worked out in the spring. So maybe the fall experience will be even better,

for sure, for sure. So, this website for the online Canton Fair, the first barrier to entry was getting logged on and getting a username and password. So one thing that I did not like was you had to give a lot of sensitive information, like I did take a picture of my passport and send that. And I’m not sure if you can take someone’s identity with just that information. But I just didn’t like doing that. And I’ve never had to do that, you know, elsewhere. But that was one piece of it. And there was just a lot of glitches in getting you into the fair. And this is something that I’ve heard a lot about on Facebook groups that there were people that wanted to attend, that just when they put in their information to sign up. They weren’t allowed access, and so I’m not sure what caused that. But anyway, I eventually got access to the Canton Fair. And when I got in, I would compare it to Alibaba, where you could search keywords, and those keywords would present you with a list of suppliers. And so there was a message messaging interface as part of this website and that was a good way to reach out to suppliers. However, I would say I got a response rate of like one and five and I don’t know if that was a function of and I’m not talking about like response right away. I’m talking about response at all.

One in five suppliers got back to me, so I don’t I don’t know what caused that. But the vendors that I did contact that messaged me back, that was great. I got a lot of good information and the interface very similar to like a WeChat. So I like that and my goal here was to identify just kind of get a list of A bunch of different suppliers that I can reach out to in the coming months as I develop new products.

Ken 8:06
For me personally, I went to login Monday and could not get in, they had the registration had already been shut down. So you had to do this early. So I did not have the same experience I I was able to search the front end of the Canton Fair site, but I didn’t get access into you know, I didn’t get my passport and all that I didn’t get access into the main. So when you say communicating with the suppliers via an interface similar to WeChat. So if so if our listeners don’t have WeChat, can you explain kind of how that went? Because unless you speak Mandarin or you know Chinese, how does that work?

David 8:41
For sure, I would, I would say that it interfaced very similar to like an instant messenger. So like if people use Skype where he just type messages back and forth. And my guess is that there was some translation component. I would send things in English and I would receive responses in English. That seemed like they were Run through Google Translate or something like that. I’m not sure if there was a translation component, but it felt that way when I was communicating. And so there was also opportunities to engage. You know, with video. I didn’t explore that at all. But that was an option. And I, you know, we talked about building relationships with your suppliers, I think that that would be a good way to go. Now, that assumes that you have a, a common denominator for language, right? We were able to, you know, when I use WeChat, I can talk to someone in Mandarin, and we can communicate back and forth. If someone that speaks Mandarin gets on a zoom call with me. We’re just gonna look at each other and smile. I think there’s not a lot that you’re able to do. Yeah. And so that’s something that, you know, you ought to look into before before you engage in any type of video.

Yeah, I wonder if they had the translator, if they could get With the video, video and audio, cool, yeah, I mean, it might, you know, like a movies, right? It’d be a delay, but that’d be pretty awesome.

So a couple pro tips when you’re communicating with the suppliers, I found myself typing the same message over and over and over again. Hi, my name is David. I’m from such and such company. I’m interested in these types of products that you manufacture. And so what I did was I just copied and pasted that into a work doc. And that was helpful as I was reaching out to, I would say, I probably reached out to 50 suppliers. And it was nice just to copy and paste in that type of language and, and so I had that open. I also had an Excel spreadsheet open, where I was just logging the names of the different suppliers and I was looking to cast a very broad net here and get as many suppliers as I possibly could. And so in the reason for that is you’ll hear a lot of people talk About off Alibaba manufacturers, and I think we should talk about why that’s important. But I was just trying to find anybody that manufactured the type of products that I’m interested in. And when it comes to manufacturing or changing the product, or getting suggestions on how to make it better, the more people I have to reach out to the better, right. And so in terms of pricing, if I have a certain product idea, I am going to feel a lot better about my end pricing. If I reach out to 10 people and say, Hey, give me a bid for this as opposed to just finding one person on Alibaba. And, you know, assuming that they’re giving me the best price. So that was that was one thing that I would do. The other thing that I did, very early on in the conversation was I would say, What is your preferred method of communication. And in the United States, typically, that’s email. I know like that’s the easiest way for me to get ahold of me. communicate with me his email, not the case in China. And so oftentimes people would respond with WeChat or WhatsApp, and I just described those couple minutes ago. But I do think you’re trying to build a relationship in by catering to them, and going to where they are communicating with family, friends, etc. You’re going to get quicker responses, and you’re going to start building that relationship faster. And so the other thing I’d mentioned is, I don’t know what happened to that Canton Fair website. I’m guessing it was closed down, they probably should just, you know, terminate it totally. But I, I don’t I wanted that history of our conversation somewhere that I could access it. And so when I was on the Canton Fair website, I don’t know what happened to that chat history. But when I bring those conversations over to WhatsApp, or over to WeChat, I can reference that Those in a year if I want, you know, hey, I was talking to this supplier, and they told me that they had access to this special material. I’ll be able to access that it’ll all be in one spot. So just some pro tips on on communicating with suppliers. Again, the Canton Fair is over. But I do think that this is going to be the new normal, at least for the next couple months or years. Who knows?

Yeah, or maybe they could do both. Like, you know, if this spring, you know, they learn from this experience, they improved in the fall. You know, it might save a trip. I mean, it’s it’s always better to probably go in person and build those relationships. But yeah, you’re right. I don’t think you know, there is going to be let’s go back to normal. It’s going to be Hey, what is the new normal? Maybe it’s both, you know? Absolutely. And, you know, from a business perspective, you’re opening this up to a wider audience, right for people that could not travel to China. You know, I wonder what the participation rate was, and you know, when they whenever they decide to fix the whole access as you write that the what the wonky passport type stuff, once they get past that, I would say it would expand exponentially.

One of my complaints was not getting responses. And I think if I look at the time of day that I was sending messages, it was probably the middle of the night in China, if I would have sent a message at noon, it would have been 1am over in China. And so, you know, most of these people are not up at all hours of the night responding to messages. And so, I think, again, this all comes back to building a relationship. And if you can, you know, send messages very early in the morning or very late in the day, so you’re catching them during business hours, that just goes to show that that you care about that relationship and and you’re more likely to get a response. And so, just something to think about when you’re you’re dealing you know, internationally with supply

Ken 15:01
So David, you mentioned earlier off Alibaba, can you explained in a little bit more detail?

David 15:06
Yeah, absolutely. So off Alibaba manufacturers, that just means that that manufacturer does not put their products on Alibaba. And the reason that’s important is Alibaba is really easy to use. And I think when people first get into e commerce, it’s the first place they go to source products. And as a result, a lot of the products that you find on Alibaba are already on Amazon. And so you are always in this business, you’re always trying to find something unique or separate yourself from the pack. And if you are going through the same manufacturer, you’re likely going to be selling a product with the same materials manufactured in the same way and it’s hard to differentiate yourself. And so I i really like to look for suppliers that are not on Alibaba at all, just because they’re harder to find, you know, I mentioned on previous episodes, I have manufacturers that are Amish. They’re great people and great to work with. One reason that I like working with Amish folks, is they’re a pain in the ass to get hold up, because they don’t have a phone, they don’t have email, they don’t have electricity. And the only way to get ahold of them is to drive to their house. And a lot of people aren’t going to do that. And so I would say that I have that same sentiment about non Alibaba manufacturers.

Ken 16:32
I had never really put two and two together but well you just mentioned I always knew that you had some the suppliers that were Amish but that’s almost like next level protection, right? Like you’re not going to get any competitors that are gonna that are going to have the same supplier as you.

David 16:47
Yeah, you will you will you as bad as you will never find if you find an Amish website, you can get it is guaranteed that it is it is false. those are those are Amish imposters. Got it. So I, yeah, I think that there’s something to be said about finding, finding, you know, manufacturers that that aren’t out there advertising to the masses. And so, you know, in. And I also think that just because I’ve been fetchers, on Alibaba, that doesn’t speak to the sophistication of their manufacturing process, I think some of the best manufacturers have a steady client base, they don’t need to advertise, they do an awesome job, and they’re plenty busy. And those are the people that I’d like to find. And so, you know, in this business, unless you are manufacturing a product, you rely very heavily on the supplier. I mean, if you want to sell an awesome product, and you don’t know how to make it, guess what, you need an awesome supplier. Right. And you need an awesome manufacturer. And so I think spending a lot of time here. You know, I think a lot of people, they will spend two or three hours on Alibaba, the order samples. And that’s it and Think that you do yourself a giant disservice by not spending a lot of time finding manufacturers because it’s so important. That’s what you’re selling. You’re selling great products. And unless you know how to make great products, you need to look to a great manufacturer. Can you had mentioned that you’re recently looking for a supplier for one of your existing products? And at first that seemed kind of odd to me, right? You already you already have someone manufacturing this, why would you go somewhere else? And can you go into that? Sure.

Ken 18:34
Yeah, absolutely. So it does kind of sound redundant and silly, but the strategy behind it is, you know, I’m building my companies for an exit. And even if I wasn’t, I would build them for an exit anyway. So you know, so we’re talking about sourcing products at Canton. Now, there’s two reasons why I would sources one is I’m expanding my product catalog, my product portfolio, and I’m looking for a diversified supplier so in my business unlikely yours and everyone else’s in the last six months we’ve had issues with inventory right you can order enough inventory you’re out whatever the case is ship logistics has been absolutely horrible. So I’m in the process now of diversifying my suppliers because one suppliers like I can’t get the raw materials so I’m limiting myself right I’m single threaded with one supplier. Now, by adding a second supplier diversified supplier, I have to so if supplier a cannot get raw materials I can order from supplier B. And that you know as well as next level would be Hey, once I have these functioning supplier a and supplier B, I split the orders and then I say okay, which you know this this supplier has given me terms of 10% down and you know, 90%, you know, net 60 or whatever the term I can negotiate, I can tell the other spy Hey, I have another supplier that’s giving me these terms you know you can negotiate you have more negotiating power. So now taking that to the exit so when I go to offer my business for sale, and I you know, the the the prospect buyers are like looking at it and they say, Oh, you know, there’s, there’s diversified suppliers on all these products, that adds a adds value to your business. Right. So that’s the strategy behind that David,

David 19:56
You know, after hearing your response to that, I’m thinking that I need to do a little better job of finding second suppliers. And I’ll give you a really good example. One of my best selling products right now, I was communicating on WeChat the other day with the supplier and I said, when I first started out, my initial order was 500 units, and he was the pricing I think it was like 550 per unit. And now I’m placing an order with you for 5000 units and my price is the same So I said, I would like a 15% discount, because my quantity with us increased quite a bit. You responded with no. And guess what? I don’t have any other option. It’s like, Okay, well, I already have, I already have pictures. I already have a listing, I already have video, I’ve invested a lot into these products. And if you don’t want to give me better pricing, I’m just gonna have to pay you what you want, if I want to continue to sell this product. And so I think the bargaining power of having two suppliers is huge. And, you know, I could tell him that you know, you give me 15% or I’m going to take a hike and but if but if he says no again, well guess what, I have to take a hike and I art it’s a profitable product. I don’t want to stop selling it. And so I just think that Yeah, there’s a ton of value to having multiple suppliers. Yeah, absolutely. So David, as we wrap up this episode, it was packed full of great stuff. Can you give the audience one pro tip on the Canton Fair? Absolutely. I would say when you’re communicating with suppliers, ask them, What do you see? What products do you see in this market doing great in the next 12 to 18 months? And the reason I think that’s a powerful question is because, you know, right now I have visibility into the US market, and Canada and Mexico. But I don’t have visibility into what’s going on at all other parts of the world. And so there may be products that are trending over in the UK, that just haven’t caught up to the US market yet. And so it doesn’t cost you anything to ask this question. But, you know, you’re always trying to find the next best product and asking them what, what their opinion is over the next 12 to 18 months. I would say in general, when you ask somebody, hey, what’s your opinion on this? They appreciate that you’re asking them about their opinion. I mean, I think typically manufacturers probably are answering the same questions like, yes, we can add a handle, yes, we can change colors, but they have a lot of expertise in that industry. And they’re connected to a lot of different people around the world. And so my pro tip is ask them what they see succeeding in the next 12 to 18 months.

Ken 23:26
Excellent. Thank you, David. You bet.

David 23:28
Thanks, everyone for tuning in. Thank you everyone for tuning in to today’s www.firingtheman.com podcast. If you like this episode, head on over to www.firingtheman.com And check out our resource library for exclusive firing demand discounts on popular e commerce subscription services, that is www.firingtheman.com/resource. You can also find a comprehensive library of over 50 books that Ken and I have read in the last few years that have made a meaningful impact on our business, or that head on over to www.firingtheman.com/library. Lastly, check us out on social media at www.firingtheman.com on YouTube at www.firingtheman.com for exclusive content. This is David Schomer and Ken Wilson, we’re out

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