Working with a Freight Forwarder ⎜ Forceget ⎜ EP 128
Ryan Cramer: What's up, everyone? Welcome to my corner of the internet. I'm your host, Ryan Cramer, and this is Crossover Commerce presented by PingPong Payments, the leading global payments provider helping sellers keep more of their hard- earned money. Hey, what's up, everyone? Thanks for tuning in and happy Friday. I'm your host, Ryan Cramer, and welcome to Crossover Commerce. This is episode 128 of this wonderful show that I've created. This is my corner of the internet where I bring the best and brightest in Amazon and eCommerce industry to help you grow and share their insights on the most important aspects of selling online. That being said, this show is presented by PingPong Payments, presents with Crossover Commerce. I'm going to get this correct here on a Friday. PingPong Payments actually transfers more than$ 150 million a day for over one million customers now worldwide, helping cross- border payments now to over$ 90 billion in payments. That being said, how does that affect you? I'm glad you asked. That you can pay your VAs, your suppliers, your manufacturers, freight forwarders, which we'll talk about today, all in local currency. Why is that beneficial? Put margin back to your bottom line. It's free to use. It's easy to sign up. You can actually click on the show notes below, where you can sign up for a free PingPong account today. That being said, thank you, PingPong Payments, for sponsoring Crossover Commerce. But why I'm excited today, besides being Friday, it's the weekend leading up to the Prosper Show, which we talked a little bit about on our last show with Eytan Wiener. He's now with GETIDA, who's the co- founder of Prosper Show. We were talking about getting back into with in- person events, but why I'm excited about today is not just because of... We'll talk about events in a little bit, but because of the freight and logistics aspect of what is going on in the world today. I've been really focused on finding the right individuals and people in the space who've done it both in years past but also decades in the past and that actually, they don't just talk the talk, but they really do walk the walk. Because they've lived there, they've been there. They're helping out customers get their goods to their warehouses effectively, efficiently and cost effectively. That's what this is all about. We had a webinar yesterday when we were talking about 80/20 Sourcing, China sourcing, and then also we were talking with Alibaba directly about how to effectively take what 2020 barriers threw at us and how we can overcome those effectively today and what applications we can do that. So I was really excited to talk to those individuals, but this is no exception with today. His name is Burak Yolga. He's from Forceget digital freight forwarding. Obviously, we want to know with about working with freight forwarders, I personally think the concept is a little confusing. Freight forwarding, what does that mean? We're going to get into that. You might be thinking, what's the difference between a freight forwarder, a logistics third- party warehouse, working directly with the supplier/ manufacturer. All these different questions we're going to get answered today. That being said, I want to welcome to Crossover Commerce Burak Yolga of Forceget. Burak, welcome to Crossover Commerce. How are you doing today?
Burak Yolga: Thank you, Ryan. I'm doing fantastic. Yourself?
Ryan Cramer: Man, it's Friday, like we were saying. You're down there in beautiful Miami, which is no place that I'm thinking worldwide anyone would rather be besides in the summer when it's hot as all get out. It's probably humid down there right now if I'm going to guess.
Burak Yolga: Right.
Ryan Cramer: It's very similar up here in the Midwest where I'm located. But that being said, you're in Miami right now, but you're an international man, right? We were just chatting before we hopped on live that you just had your birthday and you've never spent it outside of China on your birthday. That's what you were mentioning?
Burak Yolga: Yes, correct. I mean, I moved to Miami three years ago and I lived in China seven years before I moved to Miami, Florida. My birthday is when people who travel to Asia for Canton Fair, Hong Kong Electronic Fair, toy fair. People know that it's the biggest exhibitions in Asia time in every airport every October, so this year, first time I actually had my birthday outside of China, so that was a little bit weird for me. I was like, " Should I go back to China or not?" Unfortunately, I cannot go now, but I'm hoping to be back. People who do business with China and who travel for Canton Fair or Hong Kong trade shows, they know the excitement to meet the suppliers in person, compare the prices, sourcing new products. It's very, very important for eCommerce sellers, especially since the competition is growing. The market is growing as well as competition is growing. Unfortunately, the margins are... People don't have enough margins as they had three, four years ago, especially because of the freight cost increased a lot. I would say 300% to 400% compared with two years ago. I think that's something that we'll be talking about more today, but there are a lot of things going on in the global world, especially in China. So I think a lot of people are curious about what is going to be next, especially fourth quarter is coming.
Ryan Cramer: Absolutely. We just passed the midpoint of this year. We're in Q3, going into Q4. Lots of people are already planning their strategies here going into 2022. If you're smart, you're planning out that strategy. But that being said, before we get into it, how tough is it for an industry like yourself, I'm assuming you're traveling as often as once every couple of weeks, if not more. What's it been like being either stuck in one location and helping your customers just from one locale instead of traveling around and being boots on the ground?
Burak Yolga: I think that's a very interesting question because there are a lot of cons and pros. I think what happened last one and a half year with the pandemic, I heard that eCommerce business is actually building because a lot of people who are home, they decided to start their own business. They decided to do small startups. So from that perspective, I think it's been a very interesting year. There are a lot of new idea, fresh ideas. I think that's great for a lot of people try to enter something new, new business, new ideas, anything. On the other hand, for people who actually do physical business like eCommerce, like wholesalers, it's been a very tough year for them because we never had a pandemic. We didn't know what to expect and nobody thought that it's going to be like that year. I think we had the first case in United States last year in March, so everybody was thinking it's going to be maybe a one or two months thing. But then it was right after the Chinese New Year, so a lot of people didn't expect that Chinese New Year was going to extend almost to two and a half months and three months. Nobody actually planned their inventory. Nobody knew that it's going to be three months closed. Most of the private label or a lot of wholesale companies, they work with China, Korea, Taiwan. Now a lot of companies are... As you know, Chinese market is getting expensive because of the RMB, because of the raw material prices increase. A lot of people are looking for an alternative market, like trying to go to Vietnam. If you're into textile, you go to India, Bangladesh, or East Europe, Turkey. I'm originally from Turkey so a lot of my friends who are in the textile business, they're asking for some options. For people who wanted to start something new, that was a great year. People had a lot of time, but with the people with the existing business, they suffered a lot, especially eCommerce sellers. The prices increased. The international logistics delay a lot, so the cashflow, it's becoming more and more crucial for a lot of companies and a lot of people. Let's say you were producing a microphone and now you place an order at your factory in China. It used to take like a month, 30 days to produce that, ship it to United States or Europe, let's say 20 to 30 days. And then it goes immediately Amazon FBA warehouse and you start selling, you get paid. Then probably you will have cashflow within three months latest. But right now what we're looking is something in the best case, five to seven months, eight months. So before you even start selling your product, there's so many delays with the private label. There are a lot of delays with the Chinese factories with logistics, so a lot of people, before they start selling it, they have to actually place a new order. It caused a cashflow problem. There's so many things going on, actually. I don't even know where to start. You know?
Ryan Cramer: Well, that's the beauty of this show. Every time I have a guest or a guest, even that's just one person, it's a multitude of a round table. Everyone can throw out all these different areas and pain points, but it's funny where everyone's mentioning four, five, six, seven, eight things that can effectively hurt your business or it can help your business. Maybe let's start here. What is a freight forwarder for the listener who may not know the difference between freight forwarder, a logistics specialist, or a supply chain specialist? What really is by definition a freight forwarder?
Burak Yolga: I think this definition is getting more and more important right now. Two years ago if you were running an eBay or Amazon business or a wholesale business, you had just the freight forwarder somewhere around the world and then you asked them to ship it now, to ship it from your factory to your warehouse or Amazon directly. But now it's getting more and more important for companies to work with the right freight forwarder because you basically need them as a supply chain team right now. You have to plan everything in advance. You need to book the space in advance. Right now it's not even about paying double, triple for a container price, but it's hard to find available. Because I think freight forwarders, especially digitalizing this industry last year, got$ 20 billion investment. It's a very growing industry. It's getting more and more important for companies and for individuals to work with the right freight forwarding company. I think now what I would say is finding or choosing the right freight forwarder will be the key actually to the success. The reason is you have to manage everything perfectly with timelines, place the order on time, book the space in advance, carry it, bring it, do the customs clearance. If you are lucky enough to deliver it to, let's say, Amazon FBA warehouse, make an appointment. Even this is a big problem in the West coast right now. Most of the Amazon sellers, they're trying to ship their products to the West Coast. Number one, it's time efficient. Number two, it's cheaper than shipping to the East Coast. I would say almost 20%, 25%. It's even hard to find a truck in the West Coast now and the truck price has increased double. If you ask me, what is the right way to explain a freight forwarder, it's I would say now almost key to the success. It's one of the most important role right now for success in eCommerce. As long as you're staying in inventory, then probably you're going to be successful in this business.
Ryan Cramer: So someone who is very efficient in the logistics supply chain all the way from supplier to getting your goods into an FBA warehouse or to a third- party warehouse. Is that correct? Is that the most efficient, dumbed down version that I can absorb? With that being said, we had mentioned there's all these different little nuances of the supply chain. We're talking about working in supplier, manufacturer. What's the benefit of working with these? If I'm a seller for the first time and I said, " I just don't have time to figure out logistically all these different nuances in getting my goods. I know where I want to work. I know what I want to sell. I just need to get it to a fulfillment center and start selling right away." I'm going to go to you, Burak, and say what? What do we need to do to get going and work together?
Burak Yolga: There are a lot of, obviously, logistic companies in the world that you could choose, but I think it's very important to work with the company who knows actually Amazon, who knows eCommerce, and who's actually expert in shipping door to door. What we are specialized in is actually door- to- door service, which means we pick up your shipments. We carry it by air or ocean, deliver it to the destination port. We do the custom clearance on behalf of you and then pick up the cargo and deliver it. A lot of people think that it's a very complicated process, which actually it is, but we specialize in eCommerce. That's why we are actually offering this door to door. A lot of people in the market probably will know that term DTP, which means duty delivery paid. So basically, we are handling this for our customers A to Zed and we have a digital platform where you can track your shipments online. You can check your invoices, pay them online, see your active offers. One of the most important thing recently is everybody's working remotely. With the pandemic, a lot of people travel to their dream places after the borders start opening. A lot of my friends, they go to Mexico. They go to Costa Rica. Some of them are going to Bali, Indonesia or Europe, and then they work from home. The time difference is a big actually problem for a lot of eCommerce sellers to communicate with their suppliers, communicate with their freight forwarders if they work with a company in Asia. I think it's very important to stay in touch with your supplier and freight forwarder time wise, so that's what we are offering people to communicate with us 7/ 24 to our digital platform and you can track your shipments. Because imagine you have five different shipments, you're selling in Germany, UK, Canada and US, and all of those shipments are going to different destinations. Each time you want to know when your shipment is going to arrive, you want to ask your freight forwarder. I don't know, a lot of people probably use WeChat, WhatsApp, Skype, email, texting or phone calls. It can get complicated to know more abour your shipments unless you can just log in to your platform and see where's your shipments online. And then you can see your estimated arrival time, the delivery time. This is very important because the market is getting very competitive. You maybe would like to open a coupon to boost your sale or you want to increase your PPC budget, or you're running out of stock and you don't know when your shipment's going to arrive. Then you can see your competitors are actually opening a coupon, so you want to know actually... You want to plan your inventory level. You want to know your strategy daily base, so it's very important to track your shipments online and see when they're going to arrive. I think especially with the four quarters coming, I strongly, strongly recommend people, if they haven't placed their fourth quarter inventory yet, they should do it because I think the delivery time is going to be longer than normal time for China, especially raw material price is increasing. If you're doing an electronic business, there's a huge chip shortage in the market. As you know, a lot of car manufacturers actually stopped producing. Stainless steel price has increased 30% to 40%. I don't want to sound like giving you all the negative news, but this is something I think very important to know what is going on in the market and then you plan your strategy accordingly.
Ryan Cramer: Well, right. We actually had a question that came in already from YouTube from Brandon Young. Brandon asked, " You know shipping prices are increasing day by day," which is true, which we had already talked about. " How do you ship to Amazon FBA fast and cheap?" Is that working with the digital freight forwarder, do you get nuanced pricing because they're working directly with you or is that just a negotiation on the seller with direct suppliers?
Burak Yolga: Right. I mean, we're pretty transparent with the pricing. I think the most important thing to know right now is to understand your cost. Working with a traditional logistic company only shipping from port to port or offering you with the custom clearance or without including all the costs might cause you surprises at the end of your shipment. A lot of Chinese freight forwarders, they charge their customers upfront before the shipment leaves the port. When it arrives in the port, they say, " Oh, we forgot to add this. We forgot to add that. There is the fee of the destination port." There could be a lot of extra charges. This is something people should actually pay attention. What we do is for eCommerce sellers, we have flexible payment terms that if we have an established relationship with our customers, we can offer them a payment option after their shipment is successfully delivered. That's why we are actually trusting our price transparency. So once we offer the price, all- in price, include everything, our customers are very confident to wait until their shipment is completed, the product successfully delivered to Amazon or the third- party warehouse, which we also offer a warehouse servicing in California. After their shipment is delivered, we charge our customer. It's very important to understand your cost. Brandon is right. Unfortunately, I've never seen this in my life. We try to book a space today and then until we book the space, get the confirmation from the shipping line, especially for ocean, the price can change the next day or the space can be sold out. I think the best way to ship fast and cheap to the Amazon FBA or the third party or the destination you're going to do is to plan your inventory, plan your production in advance. I know that a lot of people will think that, oh, I need to pay 30% deposit and I don't have too much maybe cash to pay and keep a lot of inventory in China, but I think not to book last minute your shipment is one of the key way to decrease your costs. I would recommend people to book their shipping space at least 10 days before the production is over. It's very, very important. If you try to ship the last minute, it's hard to find a last minute space. Even if we do, the price is going to be increased. The price is going to be higher than regular booking. That's very important. Actually, if you're a small seller or if you have often shipments, let's say, 300 kilogram, 500 kilogram, less than 1, 000 kilogram, people can consider air shipment recently. The prices are getting lower compared to ocean. We had a customer in Texas the other day. She wanted to ship 300 kilogram so door- to- door ocean maybe takes 30, 35 days. Air is seven to 10 days, calendar days, not business days. The price was almost the same because it's a light shipment.
Ryan Cramer: Yeah. I was going to say, with a lot of our partners that we are speaking with in the supply chain industry, some of them are not even offering water freight anymore. They're actually just only strictly doing air freight for multiple reasons. One would be cost. If you're working with a good that doesn't take, like you say, under 1, 000... You said 10, 000 kilograms or a thousand kilograms?
Burak Yolga: A thousand, 1, 000.
Ryan Cramer: A thousand, okay. So under 1,000 kilograms, right, it would be cost effective, but look at the time aspect too. Everyone knows that time is money. And even at PingPong, and this is my kind of podium and my platform that I always stay on is time is money. If you're going to be sitting an extra 15 days with your inventory on water, that's investment that you've personally made. You're not selling in that timeframe. If you can make the time work for you and get it to your inventory warehouse or you can get it to a fulfillment center quicker, that's exactly what you need to calculate as well now is for that extra 17 days or 15 days between air and freight or air and water, you have to look at what you can potentially be making in that time, turn over quicker, get more goods in there. And obviously, that makes yourself look good and makes revenues a lot more easier to consume and go from there.
Burak Yolga: Another thing to consider is actually there are a lot of delays with the ocean freight right now. I don't know if you guys heard about it, but the south part of China there's a very big ocean port. Name is Yantian, which is in Shenzhen. They had a COVID breakage maybe three, four weeks ago. The port was closed two weeks, so imagine there's no container ships could enter or leave the port. So the entire world... Same thing happened in the Suez channel. One container vessel blocked the channel and then there were a massive impact on the entire world. We had a shipment to Africa and then they have nothing to do with the Suez channel. But the container ship couldn't reach the destination and make the way back to that port. That's why it's like a domino effect. That's why people should actually consider about at least one or two weeks delays with ocean freight right now. Unfortunately, this is something no one can control. A lot of companies are struggling because of this problem, so air freight is a good option. I know it's an expensive option, but people maybe can do, let's say, 20% to 25% or 30% by air, the rest of it by ocean. This way you can make sure you can stay on inventory. Another thing, Ryan, what has started to happen is with the Amazon FBA limitations right now, with the inventory limits, a lot of people's shipments start getting closed. The reason is Amazon is now giving 90 days window the day you create your shipment. Then until it arrives to Amazon warehouse, there are a lot of delays with the manufacturer. There are a lot of delays with the transportation. So many people right now are having this problem of they cannot receive their shipments before it closed, and it's a massive problem because imagine you sent all the labels to your factory in China. They put the labels. Let's say 200 cartons. You're shipping directly to Amazon and then the day it arrives to the destination port, your shipment's closed. What are you going to do? You have to relabel everything or maybe you have to store it. If you have the limits, you cannot even ship it anymore. There are a lot of things happening right now, so people should be very, very careful about this also. We start hearing this from a lot of people. They're like, " Hey, when my shipment is going to arrive, my shipment is almost going to close." It's a very, very big risk. Imagine you tied up a lot of money and your shipment cannot deliver to Amazon because the shipment is closed and there is no way to activate it back.
Ryan Cramer: Absolutely. Also, Amazon's now counting any inventory that's on the water or in air now against your inventory limits. So the longer it sits on water or in the air, the longer you can't turn that inventory. If you're trying to get rid of inventory, if you're having issues with that now or if you're just effectively trying to not sell through inventory quickly or you're just trying to manage that level entirely, it is super important to understand how quickly your goods can get from port to port and then obviously into a warehouse to sell through as well. Another tip I would also suggest would be to pay in local currency obviously with PingPong. Brandon, if you know this, you can pay in local currency to mitigate that time from longer weeks on end potentially down to a local currency like the yuan if you're in the China marketplace. You're paying in that currency. You can actually effectively cut down days if not weeks of time when currency gets converted over. So another little tip if you are looking to effectively save and put more money towards your bottom margin as well. That's my little tip, if you will, to effectively work on that. Burak, with obviously ocean freight and all that going on, it's expensive right now. We alluded to it with inventory limits right now. Amazon has put this crackdown on not just smaller sellers who are getting going throughout this year but they've actually effectively across the board made sellers understand that FBA warehousing is not a storage facility. It is now effective a fulfillment center.
Burak Yolga: Right.
Ryan Cramer: A lot of people think that that's a ridiculous aspect, but with costs of just storage, they're trying to now effectively get goods in and out of their fulfillment centers quicker. That's effective what they built them for. With that being said, what's the pivot that you and your team are doing with clients to effectively take that into account now moving forward?
Burak Yolga: Yeah. Since last year, Amazon is changing a lot of rules. Amazon actually start making their own news strategy. As you said, they used to be a storage facility, now more like a fulfillment center. So a lot of people wake up in the morning and then see that there's new news on their seller central. People are getting really frustrated and furious about the changes, but that being said, Amazon is doing what is the best for them. Basically, if we're laying this game, according to Amazon rules, we have to stay on the game and we have to find solutions. We had some customers, they used to keep their stocks in China. And as soon as they have the limit, they just ship it to Amazon. But now you cannot just ship as many quantity as you want, so it's not really easy to ship bulk cargo directly from China to FBA warehouse. Basically, what people are doing right now is they find the third- party warehouse in United States or Canada or in Europe. I'm not talking about fulfilled by merchant. I'm not talking about selling inventory or fulfillment, but more like your storage facility team. And the more limits they have on Amazon, they can ship it immediately within three to four days. Because let's say you're selling a microphone and you sell 1, 000 units per month, and if you sold within 15 days around 500, Amazon is allowing you to send only another 500 or maybe 300 or 700. If you have active inventory in whatever the country you're selling the product in, then it's a smart way to ship it immediately and they receive it within, I don't know, three to five business days. So it takes actually until you prepare, you ship it, almost it takes 10 days. Then Amazon is transferring that within their fulfillment center. It takes another, I don't know, 10 to 15 days. Actually, even if you have active stock in whatever the marketplace you're selling in, it takes still almost 15 to 25 days to receive them full in inventory. Imagine you're sending from China with the delays and Amazon checking process and this and that, it might take up to 40 days. So I strongly recommend people to find a fulfillment center or let's say a storage facility, warehouse service in the destination. Especially the fourth quarter, I think the delay is going to increase more, so it's very important to have a plan B. For most of the people, I think they already did this establishment, find their right storage partners. I think if you haven't done it yet, I think it's the time.
Ryan Cramer: Absolutely. Brandon, who is very active, he already said thanks for the first question. His second question was... Again, if you're listening, you can actually submit your questions. Whether you're on LinkedIn, Facebook or just listening on line, feel free to submit your questions. What can I do for not being out of stock? Where can I manage my FBA inventory because my products always delay because of sea shipping? I've heard in the past from a lot of other experts in this field of almost a trickle of fulfillment back to Amazon. You were saying that if you're selling at 500 already, just sending in 100 there or 300 there and just making sure it's not bulk all at once to refill to your limit, having a consistent flow of smaller inventory, whether it be a week or two weeks' worth of inventory to effectively just make sure that it's selling through. Then over time Amazon will see that turn as more effective throughput and the trust into the seller is so that they would start bumping up your limits even more. Is that an effective strategy that you're implementing with your customers?
Burak Yolga: Yes. I agree with what you said, but I think I'd like to back up a little bit more from the time you place an order to your factory, whether in China or another destination. I lived in China. I did sourcing long years before we start our freight business. I had a B2B business in China. I moved there when I was 22 years old and I didn't know anything about business. I was traveling middle of nowhere to factories and trying to negotiate with them. Whatever the language, I was trying to talk to them, half English, half Chinese. There's one thing I understand is Chinese factories, they love to receive big orders. So if you have a good, established product, if you have a good sales rank, if you know you're selling that product, I would highly recommend instead of placing monthly orders or every two months, you can negotiate. That's a good hack actually that I'm going to tell now people. Try to make your orders one time every six months and place an order enough for, let's say, next six month sale. This way you can fix the price. That's a great way to not be affected from the small sparks in the market, like ups and downs. So you don't have to worry about if the price is going to increase two months from now if you have enough stock. Another thing people will think, " Okay, but I don't have that kind of money." If you place a larger order to a Chinese factory, you can get a better price as well. 2, 000 unit price is different than a 6, 000 unit price, so you're going to get at least 5% to 10% cheaper price because they're going to get the raw material bigger quantity. They can make your product. There are two ways to negotiate this. Number one, you can tell them, " Hey, I want to place an order, let's say, larger quantity, and I can only pay you 10% or 15% deposit instead of 30%." Most of the Chinese factories right now, they accept this payment term because they need order. They need to secure an order. The worst case, if it doesn't happen 10%, you can still negotiate 15% or 20%. The way we recommend to our customers or the way they do this, let's say you order 6, 000 microphones. It's enough for next six months' sale. You put 15% deposit. You can tell them not to produce everything. They can keep half of the raw material for you and produce the 3, 000 units first. Then you can ship that partially. Let's say you need only 2, 000 products next order that you receive. You just basically order 6, 000 piece. They can produce everything and keep it in stock. Let's say you ship 2, 000 piece and you pay full amount of that 2, 000 piece. Then you can keep your deposit in the factory 10%, 15% or 20% for the rest of the product. This way they can be sure that you're going to pay the balance and take the product, because it's also a risk for them to place an order and produce 6, 000 piece without you paying in full. This way, Brandon's question, I know it's a little bit long answer, but it's more about experience also. If you always have enough inventory in China and you have an affordable warehouse service wherever the marketplace you sell, actually you can ship them in advance, not the last minute that you need. This way you will always have ready stock in China. If your sales is going high, you can ship more product because it's already ready. You don't have to wait. Because recently what we are hearing from the suppliers are they cannot find paper, they cannot find carton box. The price is increasing. Delays with the raw materials. Instead of delivering in 30 days, some of the products delay is like deliveries in 60 days, 90 days. But if you have ready stock, you don't have to worry about the price change. You don't have to worry about the delivery time. This way you can also have more time to ship by sea and you can do it in advance. I think in the very beginning of the conversation when I said that logistics or freight forwarder is your supply chain partner now, this is something that it's important to work with the freight forwarder who knows eCommerce business, who knows the factories, and then we always help our customers in a boutique way to recommend them the strategies. They're calling me every day, my customers like Brandon. " Hey, I'll be out of inventory. What should I do?" This is a way to actually consider other options. Maybe you cannot do this very soon, but this is something you should be conscious. Start talking to your suppliers that your order is coming. The worst thing is right after fourth quarter, Chinese New Year is coming, so the delivery time is going to be even worse. It's going to be even longer. That's why if you have some cash, if you know that the fourth quarter sales is good, you're selling, I don't know, maybe gift items or something related to winter or of the time, it's very important now to plan it well and maybe negotiate larger quantities. Try to ask lower deposit so this way you don't have to put too much cash and then maybe you will have the ready stock in China. As soon as you need to ship, you can do it. This way you will be impacted less with the ocean freight delays.
Ryan Cramer: Right. Actually, I think that's a really good tip effectively for advanced sellers or intermediate to advanced sellers. Effectively, we know that when you're starting out, it's hard to forecast sell- through. Even negotiating higher rates, you might not have the capital, like you mentioned, but for those who have sold through, have revenue that you're reinvesting back in your inventory limits, again, this all comes back to playing with your margins and making sure effectively that every dollar counts towards your bottom line. Therefore, you can order larger quantities. You can actually prepare in advance and plan out further, and like you said, I like the tip of place a 6, 000 unit order, effectively make 2, 000. Have the deposit on for the rest of them. They also have the goods and materials, I'm assuming, on hand is what I heard earlier. And then, effectively, when you need to make those additional orders, you're still working on that first" order." You're just having them produce it and getting it over to you effectively in time like we're all used to but planning in advance. I think that's a really good strategy in terms of that regard. Hopefully, Brandon, that answers your question for some effective ways to help with your inventory issues or just planning in general. For Burak, for my question for you, we talked about Chinese New Year and you said, " Now is the time you have to order." Because for those people who might be new to eCommerce, we know that for a fact in your experience this Chinese New Year affects a lot of different things. It affects shipping time. The whole country actually effectively goes down, not goes down. They don't break down or anything like that. They shut down and they're going back to their own either towns or their villages. They're going away for almost a month.
Burak Yolga: Right.
Ryan Cramer: When they return back in January, they're actually still retraining new employees because a lot of the same employees don't come back. There's turnover. They're effectively turning out new product. That delay actually carries over into January and February time. Let's say, for example, I'm a seller. I have a two- part question. First, when is the deadline? When's the latest you should absolutely make an order for you to get inventory for Q4 and into Q1? What's the absolute latest that they should be making that order?
Burak Yolga: I think before 15th of July. I think people should be looking at their sales of last year, maybe even two years ago and see what is the... I mean if you're a new seller or you're just new to eCommerce or you do Shopify, eBay, Amazon, whatever you do, you might think that Chinese New Year is not a big deal. You just place an order, but it actually is. It is a big deal. And you're very right, a lot of people, they go to their hometowns and they never come back. The factories don't have enough employees to manufacture or operate. Even the thing is your product before Chinese New Year and after Chinese New Year can be completely different quality.
Ryan Cramer: Right.
Burak Yolga: This is a lot of people actually facing this and it's very important, Ryan, to make sure that you're talking to someone senior in the company. This is the first time when we talked to... In my past experience, if I was going to ever source any product from a Chinese factory, first thing I ask is how many years do you work in the company? If they tell me, " I work only six months," or one year, three months, anything less than two years, I would definitely ask them to help me to connect with another colleague of theirs, like maybe the director or owner, depends on the size of the factory. This way, unfortunately, because of the cultural thing in China, a lot of the salespeople are not decision makers. I mean, as a seller, you should definitely want to have the control of everything. We should at least talk to two or three people from the factory, get the business cards, get the pictures. A lot of people now are using Alibaba only to communicate, but once your salesperson who's in charge of your account, if they quit, they leave the company, you have to restart everything, which is a big, big, big waste of time. And then you have to maybe if you're doing a bundle, you're doing a special material, like special packing and a gift card, maybe you have a special packaging requirement and then you have to tell everything from zero. This is very important to do. Also, as we mentioned, the Chinese New Year is end of January, but the impact actually started in little factories. They stop receiving order, let's say, end of December. Let's say they don't stop receiving order, but they tell you they cannot ship before the Chinese New Year. So if I were you, I would just say, " Hey... " A lot of factories are planning their Chinese New Year now. Just ask your supplier, and even if you don't work with China, you work with Taiwan, you work with Korea, you work with... All these Asian countries are actually affected from the Chinese New Year somehow in shipping or raw material, or even you work with the Indian factory, you maybe manufacture tee- shirt, but they buy the machinery maybe spare part from China. It's very tricky. I don't want to confuse people or I don't want to create a chaos now, but it's very important to check your inventory, start placing your orders now for the fourth quarter for Chinese New Year, and ask when is their deadline, when the Chinese factory's deadline for receiving the order before they can deliver the products before the Chinese New Year. I think it's the right time to do it in July, so it's also important to fix the price now because I think the last quarter the raw material prices will increase, unfortunately, more.
Ryan Cramer: Right. You're talking about not just paper, but we're talking about wood. We're talking about metal, any of those raw materials that they're going to be purchasing and getting into the country. Again, depending on also where your factory is, it can also be the difficulty in delay nature. We didn't even talk about that. Depending on how close your factory might be to a port or how farther inland your factory might be located, getting those goods from those locales or those regions all the way to the port can also delay or effectively change the price or just the timeframe of when you can get your goods. July 15th, we put it on there for those listening. Hot tip, make sure your inventory is either ordered or secured by July 15th so that you can get it in time, whether it's by air or by ocean freight. It's certainly important to make sure you're working with that, especially in China when delays are so impactful and shipping to the West Coast as well. On the upswing of this, or I call it the back nine for your golf term, of this podcast episode, Burak, so we talked about Chinese New Year. Let's talk about if we're switching a factory in general, maybe I've outgrown or the relationship isn't where we want it to be, whether it's working through Alibaba or we have boots on the ground and we actually found another factory that can grow with us and scale, what is the best way to go about that in your mind? And also, maybe when is the best time to switch a supplier throughout the year? Like I said, I wouldn't guess it would be in July when you want to make a Q4 shipment. When's a good time to do all these kinds of adjustments to your supply chain?
Burak Yolga: It's a very tricky year to make changes, I believe, a lot of different factors involved. China, for private label sellers it's an amazing place to source product. They're very experienced with communication. They're very experienced with shipping process. They're very experienced with placing on Amazon. Most of the factories, unfortunately, sell directly on Amazon, so they know a lot of things about Amazon. So sourcing product from Amazon, sourcing product from different countries for Amazon could be a little tricky. A lot of people start looking for... Obviously, the prices in China increase because of also the currency. I don't know if people do business with Amazon, they will hear a lot this, unfortunately, from their supplier. " Oh, you know, RMB depreciated against US dollar. It lost value." It's a bad thing for Chinese factories. So they're receiving US dollar from their customers and then they convert to the RMB. They're losing money daily basis. In the beginning, you mentioned PingPong is a great way to pay in the local currency, but a lot of people actually can fix their costs in RMB and place their orders in RMB. This way you're not going to have problem at the end of your order delivery. Factories try to adjust their price. They're like, " Oh. You know, you placed order in July. We've got delivery in September. Now we are losing 3% to 4% in US dollars, so can you help us with 2%?" Every dollar counts, as you said. It's very, very important to know your costs. It's very, very important to know how much you're paying and whether you're going to have a currency risk or not. It's the same in other countries, especially the countries like, I don't know, in South America, Middle East or East Europe countries who don't use euro or US dollar, they have this problem this year because of a lot of impacts. It's important. Even if you source from China or outside of China, it's important to have the option to pay in the local currency. I personally always ask factories, " What happens if you pay in yuan? What happens if you pay in RMB?" Or you work with maybe Vietnam or India, you can say, " Can we pay in your local currency?" A lot of people think that hey, I cannot do that. I don't have a Chinese bank account. I don't have a bank account in Hong Kong. What I'm going to do? I think PingPong is a great way to pay in local currency. Always ask, what is the price? What is the break down? Ask for the breakdown price. One time I went to a Chinese factory in Shanghai and then we were sourcing a product. It's a security device. They told me very expensive price in US dollar and I'm like, " It makes no sense." Because I lived in China, I knew the cost of the plastic. I knew the cost of this and that. Then once they calculated in RMB, they're like, " Wait a second, I think we made a mistake. Yes, you're right, this product cannot be eight, nine dollars. It has to be like six dollars." It's also important to do research. Definitely look outside of Alibaba. You can do different research. You could use Baidu. That's a Chinese platform to source. I know it's not that easy, but you can use always translation if it's possible, maybe Yandex or different browsers to check if you do any business with China. But outside of China, it's also important to understand the cost of the material, cost of shipping. We have some customers... China is such an advanced country, Ryan, now for international business. Everything is greatly established. Everything is working like a machinery. You pick up, you find a truck in one day. You ship it, you reserve. It's not the same with other countries yet, unfortunately. Shipping from Vietnam, maybe you find a product cheaper in India, but the local charges are higher. The truck fees are higher. There is not enough cargo shipping out from those countries, so actually the destination fees are higher. We have a customer who placed an order, some, I think, coffee tables or bar stool. I can't remember the order from India. For one or two CPM, the cost was so high. I was even surprised. I'm like, " Why is it that high?" That's the reason. If you ship it from China, we have our own container. We consolidate our customer's product and then ship it by ourselves, but we cannot do that from India yet because it has not been that established. When you want to source a new product from a different country, definitely I think everybody should start looking for it. Even if you don't place a bulk order, maybe order some samples. It's a great time to plan the 2022. I mean, when you told me we already finished the two quarters, this is the third quarter, I'm like, " Wow, this year was really, really fast actually." I think it's important to place an order and then, again, PingPong is a great way to pay four or five different suppliers separately in RMB or Turkish lira or ruble. You can pay in the local currency. Otherwise, you have to pay... Some of our customers are asking for a favor. " Hey, can you help us to pay these five different chinese supplier and receive the samples and ship it to us?" They don't want to pay$ 30 international wire fee for five samples because the sample cost like$ 10.
Ryan Cramer: Exactly.
Burak Yolga: It's a great way to look for alternative markets, do a research. One of my customers actually looking for an alternative market in Vietnam, but they told me communication is not good. It's a good way to start testing. Because if you don't test and if you just decide to go and place an order one factory from Thailand, one factory from Vietnam, you can have problem. At least Chinese factories, they know the business. They know the delivery time unless you really run into some big trouble, big problem. I strongly recommend people to do inspection before place an order, especially if it's a new country. I don't want to accuse or stereotype any certain country, any certain people, nation, whatever, but I heard a lot of people, there are a lot of scammer, a lot of fraud, countries maybe sometimes like Egypt or Thailand. Because a lot of people just create a website and then place an order. They say that this is our facility or not. Even with the China or any country in the world, I strongly recommend people to, before place an order, definitely send an inspector to factory before place an order. A lot of people think that they want to send an inspector when their production order is ready to ship. But no, you need to send an inspector if you decide to place an order before, because now it's very important to see the facility, if they're capable, enough employees. See what kind of product they have in their warehouse, if they work with some good brands like, I don't know, from UK, US, Europe or some developed countries, maybe if they're working with brands or they only manufacture no brands and then no good quality. So many things flying around my head, Ryan.
Ryan Cramer: We're going to have to have you on for part three and part four. I always tell this to my guests, the hour is never long enough. But to recap for the listener out there who's listening to all this and putting a nice bow on it, obviously there's pros and cons from every country they're going to be sourcing from. China happens to be one of the most efficient and effective and most advanced countries, and you've see it firsthand, Burak, of being there in person. They've invested in shipping and supply chain and logistics of their ecosystem and economy. That's why it's cheap to source from there because labor is cheap but also because their efficiencies are higher. You get your goods quicker. Other nations haven't caught up, but you're certainly seeing a lot of people diversify their supply chain. And by that meaning if something happens and you get delays significantly from your Chinese manufacturer, a tip I would suggest for sellers would be to make sure you have your spec sheet and you can have it ready at other factories, whether it be in different nations or even other factories around the country. If something happens to delay your goods, you can maybe negotiate or build relationships with that second or third supplier. Make sure that you have good relationships and if something shuts down or if a pandemic hits or anything like that, it makes it impossible for them to fulfill your order, you have that backup plan so that it's ready to be produced in different countries. Your second tip would be to... Obviously, we have partners with Movley for inspections. I know you have lots of great resources too that I'm sure you talk about with great inspector companies to make sure that your goods and you're working with a reputable resource and making sure you're investing in a great quality company or resource either in checking with Alibaba to make sure, hey, been around longer than a year, maybe five years or so, looking at the seniority, looking at reviews and ratings and just double checking, making sure that they're reputable manufacturing facilities.
Burak Yolga: There's something I would like to add. I'm sorry it's interrupting.
Ryan Cramer: Sure. No, go ahead.
Burak Yolga: Let's say you work with a factory over the years. Sometimes things can get lazy or too comfortable. If you find an alternative factory, if you believe that the sample is good, you could do a trial order. You could try to send to your other factory, without the name, you could send how much you're paying. You can maybe send the bank slip. Chinese people like to see that you actually do real business with other companies. You could place an order. Let's say if your regular order is 3, 000 units, you could order 500 piece from a new factory so this way you don't risk too much. And you could order 2, 500 piece from your existing factory so this way you can see how good is the service from the new factory, if they are respecting the delivery time that they promised, if the quality's good. You're not going to lose too much with 500 piece even if you pay a little bit more, but you have the plan B always. Also, it's very, very important to make your existing factory to feel that you're looking for an alternative. Maybe that's a bad thing to say. I can see that you're a little bit smiling, Ryan, but it's a good way to wake up your supplier also like, " Hey, guys. I'm still looking for alternatives." This way you could always keep them active. You can always keep them doing a good job for you. You never know what can change. A lot of companies, they go bankrupt in China because sometimes the factories are saying that they have to pay cash to raw material, which is actually really correct. I have a lot of close friends in China that they used to have one month or two months payment term with their supplier raw material. Let's say you're buying a microphone again. You have the cable supplier. You have the bracket supplier. You have the chip supplier. Maybe microphone has 10 different components and they have 10 suppliers, vendors to produce this product. Then half of them now are asking for cash. It's important to support your factory, to keep the good relationship. Of course, cash is always important for business owners, especially this year. Increasing quantity, asking for a lower deposit I think could be a good way to start negotiation for your larger orders for the last quarter, fourth quarter.
Ryan Cramer: Absolutely. I'm smiling because those are all right. You want to make sure you're making effective decisions for your business. At the end of the day, you are the customer, but you want to have a good working relationship. For them not knowing, like you said, effectively making sure that they don't become lazy or they're constantly putting out great quality product is always important for businesses as well. Burak, before I let you go, I know you wanted to mention a couple of quick things. For anyone with Forceget or any customer of PingPong's or listener to PingPong's, we want to make sure that we give you a different kind of platform to make sure that if they want to work with you or if they like what they hear or if they are looking for a different freight forwarder or freight forwarder for the first time, what would be the best way to connect with you? And then obviously, anything you have going on there.
Burak Yolga: Yeah. I mean, I think working with us could make your life easy. We have the digital platform. You can sign up. You can explore it. You can request an offer. Our website is Forceget. com. Probably, we'll drop the link later for the video. If you guys can send us a message, PingPong 150, we are offering$ 150 international shipping credit for the first time users as a special offer for PingPong listeners and then Ryan's fans, I would say.
Ryan Cramer: All my fans out there, the listeners, my people.
Burak Yolga: I mean there are a lot of people, they listen to your podcast. I know that and then we have other partners that we work with who has been a guest to your podcast. They were telling me, " Oh, that was really fun to be on Ryan's podcast." I really appreciate it.
Ryan Cramer: Damn right. Damn right it is. On a Friday, especially, that's a good thing to hear going into the weekend.
Burak Yolga: So PingPong 150 for$ 150 first international shipping bonus. People can use it as a discount from their first invoice and feel free to reach me from the website, or you can send an email, sales @ forceget. com. You can also go to our website and see our contact information, like WhatsApp, WeChat, Skype. We use all sort of communication. We have FBA- dedicated logistic team in different parts of the world, so it's very easy for people to use our service in Europe. They have the account reps in the real time they can speak with or US and Asia. There's no more, I think, time zone. There's no such thing in the world. The world is moving so fast, so we have to move forward with that.
Ryan Cramer: Excellent. Of course, yeah. We put that in the comment section for people that are watching and listening. Again, it's going to be at the comments and show notes section. No matter where you're picking up this podcast from, Burak and his team are standing by obviously at sales @ forceget. com, or you can just go to forceget. com in general to check out what they do, what they can help with. As always, I wanted to make sure I showed this too as well. A friend of the show, Robby Stanley, see you at Prosper in a few days. Great show, Ryan. That's obviously to boost both of our egos, so great show, both of us. So good job, Burak, as always. The fountain of knowledge that you're sharing with us today, there's so much that we didn't dive into, but I think that's a testament of how experienced and how exciting that it is to be in this industry. It's a big puzzle, like we've alluded to in multiple different ways over the course of the past few weeks, months, it feels like years now. But this is part of the solution that you need to take your business to the next level to effectively grow international but also build your margins in your business a little bit more than what you could've by yourself. It's always important to rely on partners and growth partners like a PingPong or like a Forceget, so thanks for helping on Crossover Commerce today. And we'll make sure we catch you again here shortly. Safe travels out to Prosper.
Burak Yolga: Thank you.
Ryan Cramer: And we'll catch you next time.
Burak Yolga: Whoever is coming to Prosper, feel free to reach... I'll be very happy to meet in person as well. There's still a lot to talk, as you mentioned, Ryan.
Ryan Cramer: Yeah. And a quick little shout out for Prosper Show for PingPong, go ahead and stop by booth 137 at Prosper Show. Again, it's July 13th and 15th at Las Vegas. Don't want to miss it. We're actually going to be by the Jungle Scout and the GETIDA booth. If you know where that is or look for both of those and PingPong will be in between there. I will not personally be there, unfortunately, but I know a lot of my great colleagues will be there to answer any of your questions for PingPong. And of course, stop by Burak's booth as well and his team will be there. Definitely, stop by and say hi and let them know you listen to Crossover Commerce. That being said, thank you so much, sir, for hopping on and we'll catch you next time.
Burak Yolga: Thank you. Thank you.
Ryan Cramer: Awesome. And thank you, everyone, for tuning into Crossover Commerce. This is my show. Again, this is my corner of the internet where I bring the best and brightest in the Amazon eCommerce space. That being said, I want to thank all of our guests this week, including today, Burak over at Forceget. It and his digital freight forwarding team are going to be a great help to you with building out your relationships with suppliers and manufacturers, so go ahead and check them out. Again, make sure you use PingPong 150 for some savings there as well and let him know that you listen to Crossover Commerce. What are your thoughts, audience? If you are still listening to this, what are your thoughts on what we covered today? What are your pros and cons with working with freight forwarders? Maybe let us know if you have any thoughts or if you didn't agree with us, or if you thought there was a great tip or nugget that was hidden in there, let us know. Go ahead and tag us and let us know in the comments section. And make sure that you always like and share this episode as well as Crossover Commerce on all your favorite platforms where you listen to podcasts. I'm Ryan Cramer, the host of Crossover Commerce. Take care, everyone. We'll catch you next time on Crossover Commerce.
Ryan Cramer of Crossover Commerce talks with Burak Yolga of Forceget about working with a freight forwarder.
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