#371 – Indian E-Commerce Sourcing Opportunities with Lokesh Parashar

#371 - Indian E-Commerce Sourcing Opportunities with Lokesh Parashar Speaker 1: Welcome to episode 371 of the AM-PM Podcast. My guest this week is Lokesh Parashar. Lokesh is based in India where he's been doing sourcing for over 30 years. He's worked with some of the top retailers and brands in the United States and Europe. As well as Canada, including Walmart and Pier One and you name it, a laundry list of top tier brands. He's done a lot of sourcing for them. He also helps e-commerce sellers source in India. He's a total expert when it comes to India. We're going to be talking about the opportunities and why you might want to consider moving some of your manufacturing over to India. Plus, Lokesh has an incredible offer. He set up this program That brings sellers over to India at just a ridiculously low price to actually check out the factories, to check out the infrastructure and to have a little fun while you're there. Enjoy this episode. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Speaker 1: Lokesh Parashar. It's awesome to have you here on the AM PM podcast, man. How you doing? Speaker 2: Great Kevin and it's been wonderful. I've been listening to your AM-PM Podcast around a year now since I got to know about it and really wonderful to have myself here in the podcast. Speaker 1: I'm glad to have you here. You know, we met, I think at, what did we meet at Prosper? Yes, I mean, you're based in India, in Delhi, right? Speaker 2: I'm based in Delhi. So when I was a new online seller with Carlos as a speaker, I heard a lot about Prosper. Are you not coming to Prosper? And I said, why do I have to come back again? I was just like in January, I was in February, I was there. And they said, next month, there's a Prosper, you must come. And I must admit, Kevin, I met All the right connections when I came to Prosper. Online Seller Cruise is something different. It's like a week-long engagement with like-minded people. But at Prosper, I think I connected all the dots. It was a worthwhile trip to come back almost a month back, back to back from Online Seller Cruise. Speaker 1: And then you came again back in early August as well, right? To another event. I mean, this is a, that's a trip. I mean, coming over from India, just from India, if you flew direct, I know you took a route through the UK when you came in August, but even in direct flights, what about 14, 15 hours from Delhi to Chicago, right? Speaker 2: I have always believed, Kevin, in relationships. And that's, I think, 30 years of my experience. And I've been teaching all this to all my factories and exporters and buyers and anybody. I'm running a federation of buying agents. So we are talking about a lot of sourcing agents. Invest in your relationships. Don't look at short-term benefits. You might not get short-term. You might get short-term. But don't be focused on short-term. So when I invest, when I started this e-commerce journey, I looked at it right from 2018. And I could figure out that this is the next generation of customers and probably the future of e-commerce and retail together. And that is why I started investing and I figured out that if I have to be in the community of those e-commerce, They only meet in conferences. They only meet in summits. There could be pockets of meetups. There could be pockets around small things. Like when I was following my wholesale clients, I figured out that all the wholesale clients can meet up in an international trade show, like High Point Furniture Market or Las Vegas Gift Market or Atlanta Gift Market. So I was not going individually to their offices. I was meeting almost 100, 200 people at one time in a market. And in the experience of 30 years, I found out that markets basically are the growth generator of your business. Instead of doing hunting, you should be actually placing your net as a fishing net. A lot of fishes are there, you might catch one or two. And that's how I made my business strategy that if I have to be in the e-commerce business and I have to capture the business for myself, Primarily it was only for sourcing, then I found a lot of other opportunities as well. I said okay, then these people are meeting in e-commerce summits, they are meeting in conferences, they are meeting in online seller crews, I will invest my time there. I have a lot of friends which I made around online seller crews and I would say they prosper and my aim is mostly to build relationships. I don't look at a business I primarily focus on will the people like my company? Can I add value in the place or a situation I am standing or even we might have some dinner together? Am I able to add value in the entire ecosystem? It's not about what business I'm going to get from here. I have never had that in my mind and that's how I think Brexter also saw that, that I have a huge potential and a lot of people from The speakers of the August recommended him that, yeah, you should bring Lokesh as a speaker in your October. And I think that's how it reached me. Although it's a huge cost to me, but I'm sure I don't take it as a cost. I take it as an investment. So I said yes to him. Speaker 1: Yeah, that's so a lot of people. I mean, I've harped on this a lot is going to events is one of the best things you can do because you and like you said, it's a long term, it's not necessarily A short-term thing, it can be a long-term where you go and you might meet someone, you met me in March. And then we've talked, but we haven't done any kind of business or anything really together. But then six months, seven months later, I'm inviting you to come on the podcast because we met again. And so if you view it as a long-term, sometimes you'll make an instant value add right on the spot. But a lot of times, there's people like you speak of Norm. I've known Norm since 2017, I think I met him. And he and I, we've been talking about different things, but we didn't become partners on anything until just recently. Unknown Speaker: It took that long. Speaker 1: And that wasn't because it was an opportunity. It's just, was it the right opportunity? Did it make sense where we could put each of our skill sets to use for the greater good on the right opportunity. So that's value. But you're known though, people are like, who's this Lokesh guy? Your background is sourcing, right? I mean, your main focus is on sourcing. You've helped some of the biggest brands, Pure One and some of the top, all these big brands actually in sourcing actually in India, correct? Speaker 2: Yeah, so my journey started when I did my engineering in 1993. Within a year, I could find out that engineering and jobs is not a very good promising career for me. I didn't even actually like myself to be on the ground with the dust and everything else and making the billings and estimates and construction thing. And I ventured into The one thing I liked about exports at the time was that it can make you travel and create new products. That was the only hook I got when I was at an exporter's friend's office. So this career looks interesting if I have to change myself. So I did my export. Marketing Diploma for a year and I became a local supplier to exporters right at the end of my export diploma. They put me into an exhibition which was an international exhibition which happens now where we are also part of their hosted by programs. And I got my first order and that's how I got kicked up right on the beginning. And I supplied to exporters, then I transitioned into myself becoming an exporter. Then I started my own manufacturing and all the way went up till Walmart as a supplier from India when Walmart started to source directly from India instead of coming to Hong Kong and Shenzhen. And that's how and again in that story itself I can tell you my relationship with one person who was into buying agencies and sourcing agent and then he was in Walmart as a sourcing head helped me tag along and grow. And by the time when I was in 2001, which pretty much made me bankrupt in that sense because my whole exposure was in the US with Tuesday Morning and Oriental Trading Company, Gardner Supply, PA1, so all of them were retailers and wholesalers of the US. And my exposure to business was totally like, I got bankrupt because banks stopped supporting us. Speaker 1: And 9-11? When 9-11 happened in 2001? Yes. Speaker 2: I came to Canada. Again, from a relationship which I had grown with an exporter, he said, you are a master of sales. I know how you sell and you have been talking to and you have been doing business with Walmart and I have a Walmart Canada opportunity that I would like to bring someone and why don't you migrate to Canada and help my business? I said, yeah, I have nothing to do. I have a 2 million rupee debt to pay to my suppliers. That sounds interesting. If you give me a good pay, I can go to Canada. So next two years, I built that business with him. I was working for him as a marketing manager and I really got to know how the buyers work from the other side. So, all those years from 1994 till 2001, I had been a supplier, an exporter, working with sourcing agents, a buying house. Speaker 1: When you say supplier, it's like, did you own the factory or you're like a trading company? Speaker 2: At that time, I was a manufacturer and the exporters used to buy from me. So, they're like back shipping. Speaker 1: So, you actually had a factory, you had a lot of workers in villages actually making the stuff for you or how did that work? Speaker 2: I had factory. Earlier, I had People working for me in different places. Then I opened my own manufacturing unit when I was supplying to Walmart because Walmart has protocols and compliances. You need to have a factory of yourself. You just can't be buying from different cottage villages or people and becoming an exporter. If you are a registered supplier with Walmart as an exporter, you need to have your own manufacturing. Speaker 1: What kind of products were they buying? What's Walmart buying? Speaker 2: I was a garden accessories specialist from India, especially with the product development side. I had a huge strength. You can give me an idea and I can create an idea into a range of products for yourself. If you talk about garden, I can create a garden product. If you talk about barware, I can create a huge range of barware products, which is India's Strength would be that I need to also make sure that the buyer is looking at my product when he's competing with China and other countries. So getting an exposure like 23 years back, selling to Walmart has now proved so worthy for me. Even today, when I'm looking at a product, my always the mind goes towards the buyer and say, okay, as a buyer, will I buy this from India? Or should I try China or some other country? And that's how I figure out which product to sell to my clients. Speaker 1: So was your factory this mostly handmade, hand assembly stuff or are you doing molding and plastics and metals and stuff or what kind of gardening stuff? Speaker 2: At that time I did not have any molding so all the tools and dies were like outsourced. I used to have mostly the welding side, the finishing part, the construction of furniture. So I was a garden furniture and garden accessory buyer. I was selling garden furniture to a lot of retailers. So all those things are like raw material you purchase and then if there is a tool and die or if there is something to do with molds then you outsource that part but pretty much the rest of the manufacturing happens within in-house in your factory. Speaker 1: So then you came to Canada when things went south, when 9-11 happened in the US, spent a couple years in Canada, learned a whole different side of things and then what happened after that? Speaker 2: So my wife got a hearing disorder. She was genetically having a disease which we discovered much later and we were pushed back in India because Her genetic disorder stopped and I asked all the doctors in US, Canada, Australia, Austria to figure that out. They said, no, because of a genetic disorder, you can't have a cochlear implant. It will be too risky. And only the doctor in India said, I can take that risk because I have an invention. And he actually got awarded by the international doctors community for that invention, where the implant can be also put in and she was the first patient to be actually tried for that method. So that pushed us back to India for almost like two and a half years when my wife was not very comfortable going back. Then that is the time when I switched from my product selling and a service to offering a sourcing agency service because now I figured out where is the gap. What the customer in the North American market actually wants from these factories. So that communication gap, those challenges of quality getting 100%, inconsistency in price. So all those big misses which a factory can miss when they're supplying to exporters or to buyers. So I basically converted that into a service business and I said, okay, now I should be able to earn something as a sourcing agent, as a buying house. Speaker 1: And so that's what you've been doing the last 15, 20 years. 20 years. 20 years now is sourcing. So you're sourcing for big companies and small companies, right? Everything from e-commerce people to still sourcing stuff for some of the largest well-known brands in the world, right? Speaker 2: In 2003, when I started the sourcing to till 2013, I was primarily focusing on big retailers, big wholesalers. And 2008, again, we were pushed by recession like the Lehman Brothers happened. So that was my first visit to Europe. Looking at business, I went to Canton, I went to Hong Kong fair to look for clients. And I also saw that there is a wholesale market in Europe as well. Speaker 1: Do you go to those fairs or do you exhibit at those fairs? Speaker 2: No, I just visit the fairs because I am not a product guy, so I can't be displaying a product, so I always been visiting and during those visits, I could figure out where to get business, how to get business, how to get the attention of the customer because they are there to sell or they are there to actually buy from factories and how do you make sure that they are paying attention to you. In 2013, I opened my US company primarily to focus on small business as well. Because small business when they're doing private label, in that time, there was no private label sort of a definition, there was like sourcing from China or sourcing from India. I figured out that they have real trouble in getting me paid in India or getting paid a factory like $1,000, $2,000, $5,000. I said, okay, I will open a company in the US, you can pay me in credit card, you can pay me by anything in the US and I'll manage all your finances from the US bank. Because when you pay me in India, I can't pay dollars to a factory in India from my bank. I have to pay them in Indian rupees. That was the aim of opening my US company in 2013, but I never knew that destiny would be that it will become one of the largest consulting firms from India, which actually brings Indian factories to US. I have made connections and as I told you, relationships always help. I got introduced to two consultants in US. They have 30 plus years in business. They have been bringing Chinese business to US, setting up their sales and distribution, getting the whole sales rep The team set up like 200 plus people on the road selling their brand of the US company. They partnered with me for Indian factories. So from 2018, we started to talk about this that, okay, how do I bring Indian factories to the US as a brand and as an entity in the US? And that is where my US business and the US entity really got a lot of attention. Speaker 1: So for people that are familiar with sourcing in China or going to Alibaba and finding Chinese manufacturers or going over to like the fair like Canton or Yiwu or some of the other fairs, what's the big difference between sourcing in China and India or is there really a difference? What are some of the key differences people need to understand if they're kind of new to actually venturing out from China? Speaker 2: When you're looking at China and you're looking at India, first thing which you need to always get in your mind is do not compare unless you have an apple to apple factors. So you have to compare apple to apple in that sense that this product which I am looking at China, is it possible to be done in India? And then all your factors of quantity, quality, factory parameters, your own business ethics, your credit with the factory which you can get from India or from the China part. And what kind of future business you want to get into with the factories. So there are numerous factors when you are doing a private label sourcing. It's not only about one time buying. And private label sourcing, I can tell you as a hack of sourcing, it's all about relationships. It's not about going to Canton. It's not about buying one time from factory. Unless you are staying with a factory for a couple of years, I can tell you will never make money. The biggest money and profit you will make is when you have good relationship with the factories. You will face problems, but the factory will back you up. You will find a lot of inflationary recessions kind of a situation, but unless you have a good relationship with the factory, these things will actually bother you and maybe make you get out of business because your prices will be zooming so high that you can't even sell in the market. So, when you're looking at China and India, first is Apple to Apple comparison on prices, on suitability. Is it possible to do it in India or is it something which is actually can be only happening in China? That's the first step I will say. Now, when you say that okay, I have compared myself and I see that this is the possibility. For example, Home textiles in India can really compete very comfortably with any Chinese home textile. If you are buying or if you are focusing on product which is in the home textile category, for example, cushion covers, table covers, kitchen linen, wall decorations made of textiles, Then you should not only focus on China because the most competitive market which can offer you a price is India. The kind of variety, the kind of quality, the kind of quantity, the kind of business support which you can get from Indian factories in terms of home textiles, Chinese factories can never compete with India in that sense. So that is where you should be thinking, okay, if I'm into home textile domain, I should not focus on only China. Let me also explore India. So these are certain things which I would say could primarily answer your question that when we are thinking of going to China, how do we basically assess that is India also a good sourcing market for me? Speaker 1: What about the infrastructure? China is seen as the world's factory and everything is just set up, all the wheels are greased, everything just moves pretty smoothly versus India is still playing a little bit of catch up there. Getting stuff from Delhi down to a port, most of the stuff in China is along the coast. Most of the factories are along the coast, either in the north, central or south. India is a big country and a lot of stuff is spread out throughout the country. So there's extra logistics and extra things you got to think about. So how has India these days, I'm sure it's changed dramatically in the 30 years you've been doing it, but how is the logistical network? The streets are crowded. I've been to India a couple of times. I know there's some new roads now that help. It's 30 miles an hour, 40 miles an hour with people and cows and everything in the road, everywhere. So it can take forever just to go a short distance. So how is the logistics side of things coming when it comes to India as far as moving goods? Speaker 2: As I said when you are comparing China and other countries in India, logistics and your timing is also a factor you should take care and that is the most important component when you are actually doing a private level source in that how much time does it takes For a goods to come from China or how much time does it take to goods to come from India? What are the freight cost of the product? What are the times between the factory and the shipping cost? So, these are certain factors which are very subjective depending upon the quantity. Is it a 20 feet container? Is it a 40 feet container? Or is it just an LCL? In the last 30 years, I would say India has dramatically changed. Challenges are still there. We are going towards positive things. Not yet there as I would say China, just to frankly admit it. In the last 10 years, we have made a lot of inroads. The focus now has shifted to fast production as well as fast logistics. Infrastructure is improving. But as I said, we are still not competing with China on our logistics, especially when in terms of import duties or a preference from China to US in terms of the duties. So, when you're talking to Indian factory, you should not only speak about FOB price, you should talk about CIF price. What would be the landed cost at my door if I have to compare it from China and India? And what will be my time frame from getting it from China and getting from India? What are the minimum order quantities an Indian factory can accept against a Chinese factory as a minimum order quantity? So all those factors which can built in. In the business of a private label, you should have all those checkpoints just like a visa form. You should have all those checklists done and then you should compare your pains and pleasure of buying from China and pains and pleasure of buying from India. But definitely in terms of product selection, that is the core business I would say that will define that is India competing with China and are they comfortable in terms of all the other factors involved. Speaker 1: And you said that India is really good and I agree with you on the textile side of stuff, but it's also like a lot of handmade stuff, a lot of things made out of woods and even some metals and stuff they're actually good at. But when it comes to maybe electronics, maybe that's an area that you might want to consider. Maybe India is not as strong or am I wrong on that? What are some other areas besides the textiles that India is really strong and where some areas that maybe it's a little bit weak at? Speaker 2: That's again a great question and I've been asking my customers who I've been serving Oriental Trading Company for almost 17 years now. They're a catalog company. Then I am serving almost seven years as a wholesaler, which is very niche, high-end furniture. And during our conversation when they're in India, I said, why do you come to India? You're buying so much from China, you're buying so much from Vietnam and other countries. But what brings you to India? I know it's only maybe 10% or 15% or 20% of a business, but why also that business? And they always say that the kind of innovation, the kind of mixed material, the kind of challenges which Indian product can actually put us in front, that makes us very interesting. For example, I have a lighting buyer and India is No way competing with China when you're talking about very commercial lighting or LED lighting. But if you're doing a home decor table lamp or if you're doing a Christmas ornament with lighting or LED, Indian factories can import all the LEDs which are very cheap to import from China to India, get them incorporated in your lighting and then you have a plethora of products. A variety of product with the wood and metal, with wooden textile, with wooden and metal or something mixed together with latest technology. So that is where India stands out. As I said in the beginning, don't just compare apple to apple. You need to also figure out where is the strength for Indian material, which material I'm going to use to make it a final product. And if it is easily available in China, for example, socks. The socks which is like worn by almost every human being. India can never compete in socks from India. With China having a huge big town which creates thousands and thousands of SKUs of different kind of socks. We have pretty much a very small segment of people. Now, when I was at a trade fair and I saw an Indian, South Indian company displaying socks and it was primarily all the designs which I can say is going on North America, I had to stop. And I said, I need five minutes from you because you're displaying so many socks items, which are primarily North American designs and you're from South India. So my first question and the last question is, are you able to compete with China? And they said, yes, if you give me a quantity of 500 plus pairs, I can guarantee you, I'll beat China in your prices. I was really surprised. So, these are the certain things which you can only get when you're at the trade fairs. When you are at the ground visiting international trade shows, you'll see a nice factory. We don't have a socks industry. So, I'm not sure if you're really a socks guy as a brand and you sell a lot of good quality socks, Again, India would be maybe 10% of your business, 90% still will be your China. But add a variety and to get what India can bring, then only it makes sense to come to India. Speaker 1: So you're saying that's good for maybe adding a different kind of variation using a little bit different materials or different style. India can be a good choice to supplement what you may be getting elsewhere. So are you seeing with the labor in China has skyrocketed, the middle class has skyrocketed, the labor cost has skyrocketed. So a lot of Chinese factories are diversifying out of China. They're building factories in Vietnam. They're building factories in Mexico. And what about in India? There's Chinese factories in Italy making quote-unquote made in Italy things. So it's all made by Chinese factories and Chinese workers in Italy. Are they doing that in India as well or no? Speaker 2: In the last 10 years, if I calculate my profession of 30 years, the first 20 years, we were around 20 to 25% more expensive than China. Right now, with the labor costs still not expensive in India, while China's labor costs have risen a lot. I would say we are just about 5 or 10% expensive or maybe at par with Chinese prices just because of the labor cost. Indian labor cost has not risen that much. It might have gone from $120 to maybe $150 or maybe from $150 to max $200 a month. Speaker 1: So the average worker in a factory is making $150 to $200 per month in India. Speaker 2: An average laborer who starts work at 8 hours, they come to the factory, they sit on the tables and then do some work is around $200. 5 days or 6 days a week? 6 days a week. Speaker 1: So, okay, so it's like the old Chinese 9-9, 9-9-6, 9 AM to 9 PM, six days a week. It's similar. Speaker 2: It's eight hours. So when they do four hours, you can count $300. Okay. Speaker 1: Okay. Speaker 2: You get 50% extra for four hours. Okay. Speaker 1: And what about like in China, it's huge to like you said, talking about relationships, going to shows and finding out things. But in China, one of the biggest things you can do is go visit your factory, visit and have dinner. You know, it's that face time, that face to face and have sit down and have dinner with the owner of the factory. And a lot of times that can lead to priority treatment. It can lead to increased terms or credits or whatever is the same. The case in India is if you're doing business in India, is it wise to get your butt on a plane, get over there and actually Meet the people on the ground to give you a competitive advantage. Speaker 2: I would definitely say yes to it. Just like I told you, I am now targeting or focusing on e-commerce players. I can't be doing business when I'm sitting in India and just talking to Kevin or Norm or Carlos or Amy online. I have to be with them. I have to meet them in Summits or anywhere at any platform or maybe the Rob as Gatita, Rob Stanley, I have great conversation with him. I have a great relationship with him and his wife. That can only happen when you are actually on the ground, when you guys are actually sitting in a coffee shop or you are on an online selling course together for seven days. Similarly, when you are coming to source, I would say you should never think of this as a cost. Your trip to India or China is actually invested, you have to make it. If you want to build a big business, which can run for 15, 20 or maybe 30 years with factories. So this investment of traveling to the fairs and meeting the factories, maybe pinpointing or shortlisting people from the trade fair. And then from tomorrow, next year onward, you can shortlist which are the factories I need to really visit. That is a must for your private level business. Speaker 1: The problem with a lot of Westerners and a lot of sellers in Europe and the US is they're scared. They're scared to go to China. They're scared to go to India. They're like, what if I don't like the food? Is it safe? Is it dirty or it's this or that? And what they don't realize is that places like China, China is more modern than the United States in a lot of ways. I mean, China has its backwards areas, but in a lot of ways, China is far ahead of the United States and Europe when it comes to modernization. And India is on its way. India is behind, but it's on its way. And Just by going, you understand those cultures too. You understand the people, you understand their food, the way they're living and it gives you empathy and it's not just about meeting the factories and making those connections, but it's also, it's just, it's good for you as a human being to actually get out and see. I mean, India, I wrote about this a few months ago in my newsletter. I featured India and India is colorful. It's an amazing place. For a lot of Westerners, it's love it or hate it. It's extreme wealth next to extreme poverty. You know, one minute you're stepping over poop in the road and the next minute you're walking on some of the best marble you've ever seen. And the history there and the people, the colors, the smells, the sounds, it's just, it's an amazing, cool place and the diversity of India from Delhi, you know, the big cosmopolitan city, To going down to the Kerala backwaters, to Goa, to, you know, you go all around India, it's an amazing place and that's something I think everybody, if you're going to be sourcing there, you need to, like you just said, it's an investment that you need to make because it might not pay off immediately right that day, but it's going to pay off down the road. And I know a lot of people are like, well, I don't have five grand or 10 grand or whatever to, you know, get on an airplane, pay the hotel and who's going to hold my, I don't know if I speak the language. Yeah, they speak some English in China and India, a lot of people speak English, but they're hard to understand. What if I get lost? So I know you have a trip that you put together and you have, you know, there's a couple of different trips out there and they're all great, but yours is a little bit unique in the sense that You've figured out like, hey, let's take down all the barriers to people wanting to come to India. And for basically $1,000, you've got factories in the government to actually supplement you coming to India because India is trying to boost their trade. So you've worked out through your connections over the last 30 years and you know everybody next to God in India. So you're able to make all these connections and say, hey, look, let's bring some e-comm sellers over. Let's take down all the barriers where they can say, I don't have the money or I'm not going to be taken care of or how do I know it's safe and you bring them over for a week. And it's cost $1,000. For $1,000, that includes your airfare on Air India, I think, from the US, that includes your hotels and nice, you know, good quality hotels, you include someone taking you around a little bit of tourist stuff, and you meet factories, and you meet everybody and you're not under any obligation to make a deal. I mean, it's not, you know, it's, it's not under, you don't have to leave there and make a deal. I mean, if you don't find the stuff you're looking for, enjoy your time and you learn something. How were you able to put that together? Can you talk about that trip that you do a little bit there that I know you do a couple times a year. You probably have another one coming up here in 2024, but tell me a little bit more about that. Speaker 2: Sure. When I was in the business and I'm in a community guy, Kevin, we must have known each other almost now a year when we met again. I have always thought that how do we help the community. I am involved with a lot of my social community work in my government of Delhi and government of India. So when I was Pretty much established in my business, I thought we never had a federation or an association of sourcing agents. Why? Like every exporters from a different town, they have city export associations, they have national associations, they have every retailers have their association, everybody has their association. But why not sourcing if you never had an association? And that thought was somewhere there down the line with me ever since I started my business. I've seen how America works. I've seen how India works. And lobbying is always there. You have a lot of common problems which you need to take care. And unless you are a community, nobody can listen to you. Even politicians will not listen to you if you're only one guy. So if you are 100 people, then maybe somebody will take attention to your issues. So we started the Federation of Buying Guardians in 2014 as an idea. By 2016, we had 76 sourcing agents joined in the WhatsApp group, where we were only helping find good factories, saying hello to everyone, with close connections and getting some four or five people getting together. But by 2016, there was a strong demand from all those people that let's collaborate and build a society. A formal society where sourcing agents can come in and solve the problems. So in 2018, like it took us two years to evolve that, we started the non-for-profit society called Federation of Buying Agents, which is a pan-India sourcing agent network of close to 789 members now across India, freelancers, buying agencies, big buying houses, liaison offices, they're all our members. And we formalized this as an association of three G's like G as a growth of your business, G as your grievances to manage and G as generation of opportunities for your business. So that was the idea as a thought leader I had and it was my present message actually when I was elected as a founder president of the organization. But where are the areas we should be focusing on? The first area is to grow more buying agents or grow your business in terms of structure. A lot of problem happens. It's a trust-based business. If Kevin has to source something from India and he's taking a service of a sourcing agent, It's basically putting your dollars in somebody's hand. In my mind, in my capabilities, okay, Kevin, buy this product, you will be easy to sell. And this factory will be the one right factory for you. I'll manage the factory for you while you focus on sales. So it's more of The capabilities, so we work in the growth area where buying agents are primarily hand-holding with a lot of issues, vendor management, contracts, how do you deal with customers, how do you deal with employees, how do you scale your business, so all those things are taken care, we are mentoring process for our new members, that area. The generation of opportunities is where this Hosted Buy Program, which you just mentioned, came in being. Once the e-commerce sellers or retailers, the wholesalers are visiting India, all these trade fair organizations, export councils, they're primarily promoting and paying incentives to government, paying incentives to the buyers to bring business to exporters of product, but they're not placing Sourcing community or sourcing consultant community as a person to meet the buyers. They treat us as an arm of a buyer, a representative of the buying community and they host us in their trade shows in India as a buyer. But my member will never get an access to any buyer which is visiting a trade show. That is where we said, okay, we will host our own trade show. And we will pay what the government is paying to, because of the export promotion fund they have, we'll pay it from our own pocket. So, and if we get help from government, that's fine. If we don't get help, let us build a community of exporters, service providers, like freight forwarders, logistics, vaccine company, testing companies, accounting companies, and a lot of service providers are involved, where the market for them is exporters and buyers and buying agents, and create an ecosystem where we can incentivize the buyer. that you should explore India and that thought actually came and I'm thankful to Carlos for that when I was an online seller cruise. I was never hosting it at $999. Earlier we were doing from 2018 that if a buyer is coming to India and he wants us to host them, we'll give them a hotel. We'll give them support on ground and we'll offer them a meeting with sourcing agent. They can choose a sourcing agent. If they don't choose, Federation will just hire a cab and one person from the Federation will volunteer and figure out where they want to go. But on the online seller cruise last year, like this year itself, I said, OK, if I have to tap e-commerce industry, they are not the people who will invest $6,000, which is happening in the market, that there are people who are charging $6,000 that bring e-commerce sellers to India. I said, I don't think so. I should be one guy who should be spending $6,000 to bring Bring me to India and look at a product which I might not even be interested in. Because most likely India would still be 10 or 20% of our business if I'm doing private label sourcing, I would be more inclined to China. So how do I make it attractive? And also take care of the interest of my sourcing agent members. That's how we figured out a way, okay, I will bring this business to sellers that you only pay $9.99. While the entire $5,000 of the incentive which we are offering including flight ticket will be equally amortized and contributed by exporters and buying agents. So only one condition which we put on the e-commerce seller is that the first day when you arrive like overnight Amy Weiss came just for the experience and I'm sure she was happy. You arrive at any of the time during the afternoon, night or whatever you stay, you just relax. Next morning is the first day when you do a hosted bar program, B2B exhibition, where you are required to meet five to seven sourcing agents. No commitment to sell or to appoint any sourcing agent, but just meet them. They should be able to sell their business and services to you. You should be asking them questions and you should figure out whether I require a sourcing agent in India or not. Maybe in the future I might require, you just take the contacts and then you have 25 to 50 exporters displaying products depending on your You have filled a form of the registration on our website. You have given us the priority of your product to source. You can also say, I don't know what to bring from India. So we can figure that out for yourself. And we bring 25 to 50 exporters in a B2B display of product. And you'll be spending the whole day talking to the exporters, figuring out what you want to buy. The Federation support staff will be with you for all the time. Right from the day or the time when you arrive at Delhi airport, there is somebody with you at every time. The only time you need to take your credit card out is only when you are trying to shop or doing something which is not in business, which is your personal choice. You want to go to disco, you want to go to a party. That's the only way you pay for yourself. Otherwise, all your food, all your hotel, all your B2B exhibition, all your trip is all accounted for in that $999. So first day is the one which is actually paid for. Second and third day, if you figure out you want to go to a trade fair, or you want to meet any of these factories, or if you have appointed a buying agent, you can ask him or ask her, okay, please come tomorrow and let's go to a factory which you would think is good for me, or maybe factory which we met today, you want me to So, you can also work with a sourcing agent if you don't want it. Federation will also give you support to figure out how to go to the trade fair. The next two days is all business. We are not giving you any leverage in that sense. So, three days is all business. Now, the next three days which It's primarily to look at India. And what you discussed right now, India is a different country. It's not China. You might have gone to China, but India is completely different than any other country. Just like US was new for me, Canada was new for me when I arrived first time. India, when you're arriving first time, is a new country for you. So, next three days, we want you to explore India. Please don't do any business, go to Kerala backwaters, go to Goa, we'll have packages for you which is pretty much in our budget, where you can go to Taj Mahal, if you've never been to Taj Mahal, you can go to Jaipur fort or you can, we'll also inbuilt as per the MEB's suggestion, A trip to a manufacturing town as your trip in the next three days. There should be something to do with manufacturing across one particular category. So these are couple of tool packages will be given to you. You're not paying anything, you just have to choose. Okay, this is what I want for myself. And all arrangements for your hotel, for your flights, for your train, for your car will be arranged by the Federation. So, six nights are all paid for, you arrive on the first day, you leave on the 7th, but 7th night or 8th morning you should be back home. So, this is what Federation wants, that the sellers should get a value of the money, Our members are getting an opportunity to meet e-commerce sellers and they can figure out that this is the new, and that's my personal thought as well, that this is the new community you should focus on when you're looking at business. If the business has to come from overseas clients, it's not about wholesalers or retailers. It's more about e-commerce sellers, because now we have e-commerce sellers who are even eight-figure and nine-figure sellers, and they are huge in terms of buying as well. You should be focusing on that as a sourcing agent. That's the whole mathematics we have done. And I made MEVs actually at the last day, I showed her all the calculations. And she was happy that yeah, in spite of all that we did, we could still have some profits in our pocket in the sense that okay, we could figure out all the expenses. And The key point here is there is no minimum. So we're not saying that you should be having a batch of 10 people or 25 people coming together, then only we can host it. We can figure out this with even three people or five people. That was a learning of the 17th August or August trip of MEVs that we can also do it for smaller groups. This is how the whole Hosted by program is offered to e-commerce sellers. Speaker 1: So it's not a set dates necessarily. These are the two dates of the year you can do the trip. If you get three, five, ten people together, maybe your friends or you're in a mastermind or something, you can organize a trip specifically for those people, right? Speaker 2: So we have two months gap between each event. So we had one in August, we had one in October, we are doing it one in December, and one again in February, then again, March, April of 2024. So every two months, you should be able to figure out, you should sign up now, at least you should be knowing that, okay, which is your preference. If we get three or five people together, and it's a two month gap, we'll just let you know that which month we can fit you in. Speaker 1: And so just to be clear, it's basically $1,000, that includes the airfare from like Chicago or LA or somewhere, right? Speaker 2: It's anywhere in the US or anywhere in Europe, wherever you're coming from, you only pay $9.99. So there is a seller which has just signed up, he's coming from UK, but we have asked him only for $9.99. We are not saying that if you're coming from UK, you only pay maybe 700 or something. We're not saying that because somewhere it's all mathematics. $100 and $200 will not make sense or doesn't make anybody richer or poorer. So, we've just kept it a standard for anywhere in the world you're coming from, maybe Australia, New Zealand, UK, Europe, or North America, anywhere in the world, you only pay $999. Speaker 1: Okay, so it's $9.99. That includes my airfare, includes six or seven nights of hotel. Speaker 2: Six nights. Speaker 1: Six nights of hotel includes your team helping organize with the... The logistics of if you want to meet a factory or if you want to meet the suppliers or if you want to go to the Taj Mahal or do something, but is that extra? I mean, like you said, Amy, when Amy visited you, Amy, we visited you, she went down to, well, she went to a factory, but you said you could go to Kerala. Kerala is a ways away from Delhi. Is that extra cost or is that included? Speaker 2: So in the, what we did in August and we learned a lesson that In this course, we have to give them a tool package. So what we did in October and what we did in December would be that we'll be giving you options of the places where you can go. Because when we have a group, then we cannot have one person going one place and the second person saying, East, third person said West, and the South, that becomes a lot of logistic challenge for us. So we'll give you a tour. Speaker 1: So a fun trip is included, whether if you want to make that a business trip and go to the factory, like Amy did, you can, but you recommend, enjoy India, pick some place you want to go, the Taj Mahal, the Pink City, the Varanasi, or Kerala, or Goa, or wherever, there's tons of options, but you've got little options, and so the group As a group basically does that option. Speaker 2: The idea is that as a group you're going and you're learning how India actually works so that when you go back and if you're working with a sourcing agent or you're working with a factory, you should have that in your back in your mind that yes, these challenges might happen in India. Speaker 1: Now, some people out there maybe listen to this and go, this just sounds, what's the catch here? This sounds too good to be true. A thousand bucks, I can't even buy an airplane ticket for a thousand dollars to come to India. And you're saying I don't have to make any commitment to buy anything. Y'all are hoping that you do. You're hoping that they find a connection. And that's where the payoff is down the road. But there's no catch to this at all. Speaker 2: So there's a commercial catch and the catch is simple mathematics is nothing like a hack. The exporters of product, they are looking for business. If I am a sourcing agent, and since I am in the business for last 30 years, I'm managing 18 companies, clients, like 18 companies are basically managed by me as clients. So when an exporter is displaying a product, and if my team is walking in the fair, they're looking at 18 buyers from one eye. So they might have an opportunity of getting some business from any of my merchants. So, when we are hosting this one-day event where we have 50 exporters and we have 3 or 5 buyers, but we also have 7 to 10 sourcing agents walking in the display. And that is where the factory says, okay, you are asking me to pay something extra, which is in fact is a cost to me. If I'm exhibiting in a big fair, it's actually 4 or 5 times of what you're asking. I'm getting a guaranteed time with a buying agent or a sourcing agent and an overseas buyer as well. I will be happily paying this cost. So that is where the cost is coming from exporters. Speaker 1: Okay, they're supplementing the cost to get access to the agents you bring and to the. Speaker 2: For them, the big business is going to happen from the sourcing agent, because sourcing agents will be in India forever. So they will meet up there, they will fix up an appointment to go to their office, and that's how the business happens. Speaker 1: That's smart. So you're taking care of everybody at the same time and making a good deal. That's actually really smart. All right, I see that now. And again, it's also a lot of them are looking at it just like we said at the beginning of going to events. It's a long term investment. In some cases, it's you may not have a deal may not come out of that trip. But it may come down the road from that buyer or maybe it's not even from that buyer. Maybe it's from that buyer's buddy. But he comes back and he's in a mastermind or he's in an event and someone's like, yeah, I'm looking to source in India. I looked on Alibaba. I couldn't find anything. Do you know anybody? He's like, oh, yeah, Lakish. You know, he's got here's a whole list of people. So it pays down the road sometimes. So that's the investment that they're making where they can gamble on supplementing this to for you and take a lot of the risk and the burden off you as a seller. So this is almost like it's a win-win. It's like a no-lose thing for you as an e-commerce seller to do this unless you just for some reason don't have the time. Like you said, if you're serious about your business, you know, I had this in my newsletter, I talked about back in September, I talked about sourcing in China, I wrote about sourcing in China and I told a little story. About going to dinner with some guys and getting better terms and stuff by eating this crazy food. And then I segued that into, I promoted, not promoted, but I mentioned here's three different trips of people that lead people to China. And then I did the same, a similar thing for India. And I had a couple people, you know, that I send them the newsletter out to a couple people. To proofread it before it goes out and just to make sure, you know, all the links are working and everything. And one of the guys said to me, like, I didn't like this issue as much because the action, the big action thing here, as you're saying, is you need to go on a plane and go to China and visit your factories. And who's going to do that? Nobody does that. And I was like, that's the problem right now is that attitude. It is costing you huge opportunity cost a huge amount of money. Just in my case, I went and I had dinner. I was in Shenzhen. The factory owner, if you didn't see the newsletter, the factory owner took me out to dinner, serving all this nice stuff, Peking duck and all this stuff. It's this nice restaurant. And the next thing that comes on the plate was this, looked like a freaking slug, like a caterpillar or something. It was moving. And I was like, what the heck is this? It's sea cucumber, which is a delicacy in China. And I was like looking and thinking, there's no way in hell I'm going to eat this damn thing. It's freaking moving. It's kind of half raw. But I knew like, look, if I eat this thing in front of him, this is going to bond us together as brothers. And it's going to pay off dividends in my business. So I took a fork and put it in my mouth and ate it. Well, as a result of that, I never want to do it again. I'll tell you next time, bring something different. But as a result of that, I went from 30% down, 70% when it's ready to ship, to 10% down, 90% 30 days after it arrives to the United States. I went from a four to six week usually turnaround time when I placed a new order to about two weeks. Those terms alone with this particular product saved me, I have to go back and do the math, I don't remember the exact math, but probably saved me from having to get a half a million dollar loan to finance inventory and to pay interest on that and everything. So the value of going to, whether it's China, whether it's India, whether it's Vietnam, Mexico, Turkey, wherever the heck you're sourcing, is you need to get your butt on a plane and go visit your factories. I mean, I used to do this back in 30 years ago, I was printing magazines and calendars and stuff. I still do some of the stuff. And I would actually do, it's called a press check. So you would actually, I had a factory, I live in Austin, I had a printer in Chicago. So when they were making my magazine, I would go up there and do a press check. And they actually had like a little room in the printing facility. It's like a little, like an Airbnb. One of the offices was turned into like a hotel room with a bed and TV. And you go and you hang out there and you go to dinner with the sales rep or the owner of the company. And then you go and you watch your stuff coming off the press and you kind of sign up on it and say, yes, it all looks good. Or no, you need to change the color a little bit. And people used to do that all the time and now with the internet and Zoom and like, ah, we don't need to do all that stuff anymore. Yes, you do. It's still, this is a human business. It's human relationships and you need to go and what you're doing here is a service. It's a business, but it's also, it's a service to people to make it easy and pain-free to go over and look at these opportunities that could revolutionize and could completely change the trajectory of what you're doing. And just by switching to India alone, like you said earlier, it's not all products are appropriate for India, but the ones that are. If you can do that, immediately you just got a 25% advantage because you don't have to pay that Trump tariff that you have to bring to the US. You probably got a quality advantage because a lot of times the handcraft and the craftsmanship coming out of India is not always, but typically it's a little bit better. And most of them speak English as a first, not as a first language, but they speak English more fluently or at least understand it. The accents might be tough sometimes, but they at least understand it. There's just so many advantages to doing it and then you get a trip to go and experience the culture and expand your mind and expand. This is like, this is really good what you're doing here. And so if people want to actually find out about that or like get in touch with you, they got questions or see how this works, what's the best way for them to do that? Speaker 2: So we have a website of the Federation called FBA.ORG.IN and you will see FBA is a known name for e-commerce like FBA, Federation of Buying Agents, FBA.ORG.IN. Speaker 1: Okay, fba.org.in. If you go to fba.org.in, that'll direct them to more about your software. Speaker 2: You'll see a tab where it's called hosted by program. It's a global logo of a globe and you can figure out and you will fill a form as a registration. It's a one-time incentive for you. So, if you are coming first time with us, you might have come to India, we don't care. It is first time with us, you will get an incentive. So, if you are coming back again and you would like to... To be on our platform, then we don't offer this to you. But yes, all the first timers who are coming on the Federation website and they would like to explore India, that is all, all are welcome. And just to add to your conversation, when Amy Weiss was here, we had a toy fair. I primarily had this notion as a sourcing agent that we are not good in toys as competitive as China and which is somewhere right. But Amy proved me wrong in almost five of the exhibitors that Lokesh, if this guy is selling at this price and this product is export quality right now, She made me saw on her phone the kind of prices people are selling on Amazon, like 9 to 10 times of the margin people can make. Or there were a couple of dropshipping options which she proved on the floor with me. Lokesh, if you want to do this business right now, I can tell you can make a million in only dropshipping this product. So in that sense, I was also educated of how the right factory can be actually found out in India as well. Since you are an e-commerce seller, you know your maths. Speaker 1: Lokesh, I really appreciate you coming on today and sharing all this stuff about India and opening some people's eyes to what some of the opportunities and stuff are. It's been great chatting with you. Appreciate your time. Speaker 2: Thank you so much, Kevin, for hosting me today and yes, I am up for all the cigars with you and Norm. Speaker 1: All right, let's do it. On that ship, it's going to be every night. Cigar, cigar, cigar, cigar. Sometimes it might be a three cigar night. You got it. That's a deal. Speaker 2: Thank you, Kevin. Thank you so much. Speaker 1: Great stuff from Lokesh there about sourcing in India. I think it's a great opportunity. In fact, I've just moved some of my sourcing over to India. I had the guys over at Xignify. You might remember Sebastian from an earlier episode of the AM-PM Podcast back in August. I had him on and they did a bunch of sourcing for me and some of that was in China, some of that was in Vietnam and some of that was in India. And India was the best quality and the best price by almost half. And so I'm actually manufacturing some stuff in India now. So take a look at India and consider Lokesh's trip. It could be a pretty awesome opportunity for you. We'll be back again next week with another great episode. Also sign up for the Billion Dollar Sellers newsletter, BillionDollarSellers.com. Today's words of wisdom before I let you go, if you feel behind, it's only because you're comparing yourself to where others are. If you feel behind, it's only because you're comparing yourself to where others are. See you next week.