Once upon a time I used to do international trade sourcing. Actually a few times to be more fair. I used to source out silicon dioxide particles (derived from sand and quartz) for a research lab specializing in photovoltaics / solarcells. Years later I did sourcing for a company specializing in industrial equipment.
I hated using Alibaba back then. I couldn’t tell which vendor was best. They all looked the same to me. E.g.
- “Look at me, here’s my MoQ (minimum order quantity) price, I make good stuff please msg and buy”.
- “I supposedly manufacturer things for big corporation X because I photoshopped their logo on my product”
- “I’m a gold alibaba vendor you can trust me over the non-gold vendors! (JK I just bought the title)”
- “I’m cool cause I put a white guy as my sales rep so my factory employs the best!”
- “I’m going give you a ballpark price range for my goods, its between 1 and infinity”.
It was very hard as a complete noob sifting this out. Note that this was around 2011 and then 2013, so things may have changed since then. I did what every “guide” recommended I do – reach out to every potential vendor.
Boy was that a bad decision. I registered with my personal email on alibaba. Terrible idea. To this day I still get spam messages from vendors asking me to buy silicon dioxide particles. Once your email gets out there, you can’t get it back. Its even worse than throwing your friends phone number into a local dating hotline. At least, those expire after some time.
The real kicker was everything I did through Alibaba was really just guesswork. I did not know if what vendors said were true. I also did not believe the metrics Alibaba put out either. For instance has this person done business for 6 years? Are they as good as their gold vendor rating says they are? In fact, later I actually found these metrics to be many times inaccurate – or even bought out. Much like today you can buy fake BBB review, artifically inflate/buy your yelp rating, etc.
I thought there must be a better idea on how to source X items from Y industry.
The beginnings of a great idea
I got bored one day and was reading news. Boeing had some rough starts streamlining 787s to airline industries.
Then it hit me. I knew the solution. Several months ago I had went to a boeing seminar lead by an industrial engineer. She talked about how Boeing had run into some problems sourcing products overseas. It would be freighted over, but then get stuck at customs for whatever reason.
What did they do? They ended up putting in nuclear materials inside of each container, so it would go through a seperate stream at customs. Expedeting the entire process.
That got me thinking. After 9/11, many stringest systems were implemented to tracking what came into the US. These include airlines coming from other countries, container freight, etc.
I figured all this data was out there somewhere. I did some research and found all US customs data were publically available. I could look up trade records, but it was just as bad as looking up patents through the USPTO.
Through some digging I found a few companies that specializing in visualising this data. Things like panjiva, importgenius, and piers were some of the ones I tried. I eventually settled for importgenius due to its price range / data visualization mapping tools at the time. It costs me roughly $400 for one month.
So what did I do with this platform?
I figured there was absolutely no point in doing more work than I had too. Why source things out, when your competitors sourced it out already?
What I did was the following in my industry:
- Search the top 20 ecommerce retailer sites
- Check how many times different vendor names came up
- Determine their main warehouse / freight forwarding address
- Grab the top 20 vendors in alibaba
It might have been more than 20 but you get the point. I ended up finding where everyone bought everything in that industry. Yes, everything.
It took me exactly one month and hundreds of queries to get this to work properly. Along the way I found the following things out
- Some US companies would have secret company names for purchasing overseas. I used the shipping cosignee address as the final say instead.
- 1-5 companies dominated the mass majority of private labelled goods coming into the states.
- Some buyers in the states discontinued buying from certain vendors. This was for a number of reasons – either (1) the vendor was bad or (2) the US business stopped private labelling. I saw some of both.
I reached out to the 1-5 vendors on alibaba / their website. One hit it off really well and was very communicative from the get-go, so I wanted to meet them.
Going to China
I got scammed when I got there. I actually speak the Chinese dialect in that region too which is the more ironic part. I was fully aware of the taxi scam happening but my luggage was in the cab, so I just coughed up due to the implications.
Before I went there I read the import bible among a few other books before going to China.
There really isn’t much to say here except that it was much different than what I envisioned. And what I read. Namely:
- I didn’t have to negotiate at all. There was a pricing excel catalog with 1000+ items for all US customers. I had every intention of buying a 40′ container worth of goods anyhow.
- I got sensory overload. It took me I believe almost 50+ miles of walking to see everything at the show. Over the course of a few days.
- Visiting the site confirmed all the US vendors buying their goods
- I learned just a lot of interesting things. How things are made, etc. Checkout strangeparts on youtube, everything he does there gives me flashbacks
From there I just worked with the vendor via email. Then I built a custom application for sending spec sheet / reference models #s (another blog post some other day). Partially because I got frustrated at dealing with so many back and forth email clarifications on specs. And version control for specs / organizing all these spec sheets was a nightmare. That reminds me there really isn’t a solution out there for managing Chinese companies easily, at least not that I’m aware of.
Then I did the logo / box design, worked out kinks with CAD files they sent back, etc. From there, I worked with my logistics provider who did all the shipping work. Then I got to see the product firsthand. I have some other stories where I completely ****ed up $20k worth of goods as well by not QA’ing the specs properly (another blog post some other day)
Overall it was a fun learning experience on how to source things internationally. I had next to no knowledge going in. I purposely omitted putting any specific information about what products they were, but I really don’t feel that its necessary though. I also omitted a lot of excel spreadsheet US customs data as well, despite the fact I still have it.
What it really made me truly appreciate is the shipping industry as a whole. I later visited the Boeing Factory and Long Beach Port in California to see where all the magic happens at.