China Wholesale Electronics on the Rise, Part 01

Taiwan, Korea, and Japan were always recognized for their innovation, quality, and market dominance… while China limped along behind them, making plastic parts that broke. While it’s been a steep ascent for the mainland Chinese electronics manufacturers, it’s not been a very graceful one… but those cheap Chinese electronics that everyone jokes about may become a thing of the past pretty soon, if all goes according to plan. A slow-burning global recession, coupled with some interspersed political instabilities – and even a little help from Mother Nature (most recently in the form of Morakot) — has brought Taiwan to its knees, and kept everyone else quite busy with their own problems. China, on the other hand, has been distributing and redistributing assets in a whirlwind financial stimulus plan of action that undoubtedly makes President Obama seethe with envy. The CPC does things its own way, and it often does those things with ruthless efficiency… eventually, everyone gets with the program, and things fall into place. This is the basic impetus behind the rise of China’s technology industry, and if you aren’t paying attention to the news, then you will be paying money for their goods… while scratching your head wondering why all this Made In China stuff is suddenly so expensive?

Here then, is a little sneak-peek into the early stages of development in Hangzhou, China. The somewhat self-obsessed tourist city is currently listed as the CPC’s top choice for establishing the domestic tech think tank, and it’s already been called home by the fearsome Alibaba for some time now. While hushed questions and surreptitious meetings surrounding the e-commerce giant’s loosening stranglehold on the Chinese B2B market are floating around, the government is happily pumping money into the business, and no punches are being pulled as the tech market is fed and nurtured into a juggernaut milestone in the timeline of China’s rise to power.

Scary stuff, eh? Well, it’s not as bad as it sounds, to be honest. This is still China. Things are not run with the ultra-smooth efficiency of the Japanese firms, and certainly without the creative spark of American tech companies. It will take time for China to get comfortable with its new identity, and in the meantime… this spells opportunity for you, the savvy wholesaler! Time to learn how to say 你好 (ni hao!) and make some friends in China, pronto!

In a three-part series, I’ll cover some of the basics of today’s Chinese tech market from the vantage point of the 2009 Hangzhou Electronics and Information Expo, and what this means to those who are looking for some hot new items that may be of interest to consumers at home and abroad. I’ll be presenting the news here on the pages of TopTenWholesale, and your comments are surely welcome. There are some exciting developments in the works, and all of this is made even more exciting by the fact that China is still trying to get a handle on the delicate art of innovation, which means the companies that are getting lots of generous helpings of seed money from the CPC… are dying to figure out what it takes to make their new creations fly in a world that has already been up to its eyeballs in electronics for the past 30 years. So far, it’s been a lot of ugly high-volume push-and-shove strategies that ignore the consumer’s desire for functionality… and most recently the blatantly overindulgent endorsement of Google China ex-CEO-turned-superhero Kai-Fu Lee… but if you take the time to read between the lines of marketing hype, you’ll see that today’s clumsy and awkward China is a country with a tremendous amount of unexplored human capital. This dormant period won’t last long, as the continued development of the economy and industry will undoubtedly expose and reveal some shining stars amongst a population that leads the pack by a mile.

Hmmm… you might want to make that a kilometer.

Ripples in the Wholesale Pond: AliExpress

It’s always with quite a dose of skepticism that I see huge, publicly-listed companies like Alibaba taking a shot at appealing to the individuals that make up a market that was once too small and insignificant for them to address before.

Sign of the times? You bet. Sign of things to come? You’d better believe it. This is where the rubber meets the road, as those little individual consumers suddenly represent a very powerful piece of market share that was always considered too volatile and easily influenced by uncontrollable factors in the economy. Now that so many companies in the heavy-hitting export sector – not only in China, by the way – have started to gasp for air, the need for innovation is strong, and only the strongest innovators will come out on top.

Does the move to tap the B2C market signal weakness or strength for Alibaba? A lot of people will say that it’s just a logical move to extend coverage, and pick up some slack as their original sales engine slows down… but there’s a lot of other people who are getting nervous about the sheer size of a company like this one taking steps to try to become the one-size-fits-all solution for selling on the Internet. Granted, the Chinese government will undoubtedly continue to pump money into this darling of a company, especially since it consistently ranks high on the list of “China SuperBrands”, and let’s not forget that the company also supports a vast multitude of domestic employees. Also bear in mind that we haven’t hit the 2010 mark yet, and there’s still a lot that can go wrong before the CCP proudly announces its safety-net 8% GDP year-end goal being met. There isn’t a doubt in my mind that this number will be produced, but will it be a case of art imitating reality, or reality imitating art? Numbers are easy to manipulate, and it’s been done more than a few times already.

Should other players in the market, like ebay and PayPal be wringing their hands yet? With the launch of Alibaba’s proprietary AliPay online payment system, I guess it would make sense that the other titans of online sales would be wise to watch this event carefully, but it’s all up to the consumer on this one, and I have seen the truth with my own eyes. While deals can be made with huge distributors and retailers –- all too often to manipulate the market and keep people in the dark about their buying choices — the Internet truly is the great equalizer, and there’s a reason why countries like the PRC employ strategies to censor and control the stream of information that enlightens consumers… and makes corrupt dealers writhe in pain over the education that is freely accessible to all.

Look to sources of information like the ones here at toptenwholesale.com for a chance to see some of the less popular (and perhaps even less-tolerated?) forms of opinion that could be the difference between simply following along with the program you are handed… and making a new program of your own that results in building a business that gives you the control you need to not only profit from your hard work, but maybe even empower you with the ability to deliver the solution to your customers without being part of the problem.

Wholesale Import offers Value Priced Goods

This article was written by Scott McMillin from Wholesale Import. They have been in the wholesale and import business since before my time in this industry, and I have seen consistent growth for the last 5 years. Even during these rough economic times, Michelle and Scott’s Wholesale Imports are still seeing sales growth so I asked him how he does it. Here is what he had to say:

Michelle and Scott’s Wholesale Imports have seen substantial sales increases in the past few years amid downturn economy.
Why?
Many of our items are value priced. Earrings, Necklace and Earring Sets, Bracelets, Beauty Supplies, Hair Accessories and many other items and categories have many SKUs selling for $6.50 per dozen sets or less. Customers who historically have sold more expensive items have found out that by switching to a lower price point item, they can sustain their sales and even increase the margin they are making. The end customer out there is looking to save money and get a larger bang for their buck. Michelle and Scott’s specialize in selling individual stores and providing very fast shipping service and low minimums so that the customer can reduce the amount of inventory they have to carry at one time.
Low prices, Good Value, Fast Service and Low Minimums all contribute to the remarkable success of Michelle and Scotts Wholesale Imports and the customers who use them as their fashion accessory supplier.

Wholesale Alert: ASD/AMD, Off-Price Trade Shows in August

I reckon it’s high time to touch upon a couple of the big USA-based shows coming up in August, and if you haven’t made the decision to attend the ASD Las Vegas Show, maybe it’s time for all you busy wholesale movers and shakers out there to stop what you’re doing for a few seconds… and take a look at your calendar. After all, it’s already the middle of July. Another show worth noting is the Off Price Specialist Show, which is also going to happen in August, and the first day of September. Summer just got a little bit hotter, didn’t it?

Both of these events are must-see shows for anybody who wants to get a good look at what’s hot in the industry, and what new trends will be making huge waves during the Q4 season… but it’s also going to be a lesson in what products and services have lasting power during these troubled times. Here’s what I think wholesalers on the prowl should be doing to maximize their investment:

• Be prepared… don’t walk into this thing blind, because there’s not a lot of time to cover all the space if you’re running around like a frenzied holiday shopper… and you will definitely need to prioritize your list of things to see, if you want to get the maximum benefit from being there. Even if you don’t know what the floor layout looks like until you’ve arrived, take a moment to get oriented with the map once you’re there, and come up with a tactical plan of attack!

• Decide which product category fits you best… with a list of wholesale items in product groups like Camping & Outdoor/Sporting Goods, Military/Tactical/Personal Security, Electronics & Accessories, Apparel/Hosiery/Footwear, Tools & Hardware/Lawn & Garden, Food/Candy/Snacks, House-wares & Home Appliances, General Merchandise… there is a lot to choose from.

• Look for the signs of stability in the industry… do some research in your preferred area of industry, and look for the companies that have taken the measures to combat the economic downturn… especially the ones who have succeeded. Of course you can find a wealth of information on the Internet-based wholesale news sites like TopTen Wholesale Newsroom, for starters.

• Take notes… I know it sounds really geeky and totally unwired to jot stuff down with a pen and paper(!) but you will be glad you did it after you’ve returned to your hotel room, and dumped the contents of your bags and pockets out onto the bed. Don’t you hate it when you can’t remember why you grabbed somebody’s business card? I do, so I always write some little ‘mental note’ on the back. I suggest a small notepad (or hastily-grabbed cocktail napkins from the hotel lobby) because you will need to write stuff down somewhere, since a lot of Chinese and other Asian exhibitors print their information on the front and back, in Chinese and English.

Go ahead and visit the sites, and make your plans. Hopefully, you’ll be able to use some of my little tips to keep things from getting too crazy, but in the end, it’s up to each and every individual to make this an event that will put a great finish on the overall performance of wholesale in 2009. Happy wholesaling, and don’t hesitate to write if you want to share your own tips and suggestions!

Wholesale Inventories, Prices Drop: What Crisis?

Hmmm… these are interesting times indeed. According to President Barack Obama, as he addressed the G8 summit of foreign leaders last week; lasting worldwide recovery “is still a ways off.” What he forgot to mention was the fact that wholesale sales rose 0.2% in May, and they were boosted somewhat by a 4.4% increase in auto sales, the largest gain since December 2006. (Reuters)

What? You mean people are buying cars… and stuff?

That’s right. It also means that the people who used to shop without thinking much about price and value have begun clipping coupons, while the rest of us – the truly savvy shoppers – continue to sniff out the real deals in this period of economic hardship. If you’re in the wholesale business, it could also mean that your personal economy is going to witness some profitable times ahead.

How can you turn this upward trend into something that makes your pockets jingle? Well, if it was easy… everyone would be doing it. However, I would recommend the one place you can turn your focus towards for now is: the Global Banking Community.

The banks are consolidating, even though they call it diversifying.

It looks like big banks around the world are taking a highly protectionist step, as they start putting a bigger squeeze on lending, and more consolidation efforts will make themselves known in the coming weeks. On the other hand, there is a lot of buzz in the international banking community about the ups-and-downs of the market, particularly in the wholesale sector. Hey, why not? It’s money… and banks certainly do love money. Now that it’s positive, you are sure to start hearing a lot more buzz.

Perhaps echoing the blog post Jason Prescott put up here a few days ago, it’s definitely time to start a big push to advertise yourself to the masses, and firm-up those agreements and relationships with manufacturers and distributors. I’m seeing the same thing here myself, in China. While Beijing is giddily announcing a slowdown – and hinting at a turnaround (don’t hold your breath) – of the economic downturn in the PRC, the reality is that I see a lot of people who were spending money like crazy last year… being a lot more frugal now. I’m also hearing a lot of knee-jerk commentary from the ‘luxury-brand pundits’ who feel like they have missed their chance at getting a bite of the apple. Applying blanket statistics to target marketing/branding strategies, and comparing past performance data and recession-battered KPI’s with today’s forecasts seem to be the modus operandi of the losers, while the winners will regard their chosen markets and target those ‘lower profile’ consumers as a unique animal, and treat them with some well-deserved respect.

Wholesale it is, then. Let Daimler struggle with Mercedes-Benz. You should be riding the big wave while the swells are high, so you can be one of the retailers / wholesalers that are enjoying consumer loyalty long after the tide pulls back.

Wholesale Sourcing Secrets to Keep You Cool and Dry

For me, these are the early days of Summer here in Hangzhou; the ones that torture you with seemingly random intervals of hazy, hot, humid, and suffocating air that clings to you like a sheet of oily plastic wrap. There are a few merciful sporadic moments of cloud cover and a drop in temperature… but it’s short-lived. One is faced with the fact that it will simply be a long, hot, and wet Summer this year.

Just like every year.

So, what better way to beat the unbearable humidity than to indulge in a little reading of some bone-dry material? That’s right, while I’m all about having a bit of fun and enjoying my down time as much as the next guy… it pays to invest a little of that time towards something that will give you the advantage, as you traverse the often-hazardous terrain of China’s wholesale trade industry.

My recommended reading for you this week is none other than the somewhat hard-to-swallow monthly newsletter series published by the good people at The Beijing Axis. Although it’s got a thick and slightly crusty exterior, there’s a valuable and tasty reward at the core, if you’re willing to curl up with this one and chew on it for a little while. Be sure to keep a nice tall glass of water nearby.

Of particular interest to me was the October 2008 issue, with a section titled the “China Sourcing Strategy” on page 14. Not exactly a lot of entertainment, but a very good commentary about the economic crisis, and its impact on the area of foreign trade in China. There’s a few words about the “immediate fallout” that could be attractive to the savvy wholesaler, since this spells o-p-p-o-r-t-u-n-i-t-y for anyone who wants to capitalize upon a sagging market condition, in order to gain some unprecedented leverage. In other words, it’s time to wheel and deal, as China struggles to keep up the façade of a cool, calm, and collected empire-on-the-rise… but gladly takes a seat next to you at the bargaining table, if you’ve got something of immediate value.

Don’t be fooled, China may appear to be the new bully on the block, but the truth is that she needs us as much as we need her. Global markets are far too intertwined for anybody to have the ultimate winning hand, and for anybody who wants to have a go at making it in the wholesale business, these bad times might just be the best ones to get started in. No need to work up a sweat, though.

Wholesale Business

Connecting buyers and sellers with manufacturers worldwide.

For starters, putting together a wholesale business isn’t really all that hard. I’m sure you’ve thought about it. Maybe even psyched yourself out a few times. Or, just keep justifying the preponderant reasons on why you can’t just make that tide changing decision to start looking up reputable wholesalers and manufacturers and checking out a few trade shows. What I’d like to do, is offer a few tips on how to do this strategically without taking too much risk and spending too much money. If I were to start a wholesale business, here are some of the top things i might do: Read more

Finding Wholesalers in China

Upon my last visit to China, I was informed of a “little” place called Yi Wu. Now, I’ve been to many trade shows, seen all of the wholesale districts in the USA from : Los Angeles, New York, Florida, Texas and Atlanta. If you were to take all of the wholesale districts and trade shows in the USA, add them up, stack up the wholesale merchandise, it still would not compare or come even close to the merchandise mecca offered in the wholesale China motherland of Yi Wu.

If you would like to find out more about Yi Wu and buying opportunities, I suggest you start with OnCCC.com and contact a trade manager to arrange a trip. To say that I was blown way by the amount of wholesale electronics, apparel, handbags, jewelry, general merchandise , dollar store items, watches, cell phones and much – much more would be an understatement.

Starting a profitable and growing import / export / wholesale business demands having good suppliers and valuable connections. If you haven’t been to Yi Wu, you’re missing out.

Happy Wholesaling!

Online Auctions and Product Sourcing for Right-Sized, Right-Priced Inventory: eBay Sellers, Craft Fair Vendors, Niche Market Discounters, Flea Marketers

eBay PowerSellers, Craft Fair Vendors, Niche Market Discounters and Flea Market Entrepreneurs can now source products at the right price points, and in the right minimum order quantities, from online auction and sale sites. Read more

Sellers Turnover Returned Inventory: Tips to Resell, Re-Label – Right Way, Wrong Way

The Returns, Salvage and Liquidation marketplace can be a win-win, profitable way for merchandise wholesalers and resellers to turnover excess inventory. Overstocks of brand name apparel, department and chain stores carrying excess holiday inventory, off-price buyer deals and discount-seeking retail customers all come out ahead. For buyers and sellers new to the Returns marketplace: Note re-labeling, de-labeling and selling restrictions on returned merchandise. (Tips below.) First, here is a cautionary case study of how wrongly re-labeling return inventory can ruin a carefully marketed reputation and company image.

How Not to Resell Return Merchandise

While it’s not clear who is the true “perp” in this resale story from only weeks ago, the situation hit regional television news and consumer protection groups. Everyone up and down the product supply chain took a hit to brand and reputation. The end retailer, discount clothing chain Burlington Coat Factory, is trying to make it right. Read more