81. Sourcing Secrets: How to Survive Tariffs & Build a Global Supply Chain (Expert Advice)

81. Sourcing Secrets: How to Survive Tariffs & Build a Global Supply Chain (Expert Advice) Speaker 1: Okay, hello everyone who is watching and for those who are listening later on either on YouTube or on one of our platforms and through the podcast and. Usually when someone comes to my attention, and they want like they're talking about their services, I always go through those I know, in the game that are selling products, and who they worked with and who they referred. Patrick is a man who has been mentioned once or twice, but some by some people I really respect. And he's been dubbed as one of the best sourcing people you can find out there. Now, Patrick isn't like loud and out there in terms of himself, but there's people that really vouch for him. And I have recommended Patrick in the past to some people to work to help them out with sourcing. And they've come back with just glowing reviews. So Patrick is a man who knows what he's doing. And it's a pleasure to have you with us today, Patrick. Thank you for joining us. And then we also have Ben with us. Ben's not new to the e-comm space. He is my amazing advisor. He's always given me support and providing advice. And he's now joined the company part-time just to kind of give us some strategic advice on a partner level. So I've got him in here with me to just ask questions that I might miss. So Patrick, I want to kind of move this over to you. So Patrick, it would be great if you could Those listening, a bit of insight into your past, how you got to where you got to, how long you've been in this space too. Speaker 2: Sure. So first of all, can everybody hear me? Okay. I just want to make sure I'm coming through. Okay. No problems. Speaker 1: All right. Speaker 2: Perfect. So yeah, my name is Patrick Maioho. I've been sourcing for a few decades now or a couple of decades. I actually started out in sales, which is why I'm so interested in the e-commerce space too, but I was in sales, happened to make a trip overseas, came back and that started my sourcing career. Long story short, over the last couple of decades, Worked for a few large companies, let's say corporations, I guess. Did a lot of work for those companies to source. Had a couple million, sorry, couple hundred million dollar average spend per year. Even right now I have employees in China and in Vietnam. I went off Left the corporate world back in 2021, right after the COVID thing happened. And I've just been sourcing for other companies ever since. I also have my e-commerce businesses. So I got into Amazon about 2014. And I've been in that space ever since. So right now, I'm still heavily invested and heavily involved in overseas sourcing, as well as, you know, I've been hedging now too. I mean, I've been resourcing even my own products and some of my own clients outside of China, even into the United States. So it's been very busy, especially in these times. It's been very, very interesting. Speaker 3: Yeah, definitely. Thank you for taking the time to talk to us today and just with what you're saying about Working with China and Vietnam where you saw people on the ground there. You at one point were a co-owner of a trading company in China, weren't you? Speaker 2: Yeah, so I did have a principal investment in a trading company in China in the Shanghai area, Nepal area actually, so just south of Shanghai and operated that thing for four or five years. So a lot of A lot of experience with the ins and outs of importing, exporting out of China, mostly exporting out of China. Speaker 3: Yeah, I just think it's really interesting because you have both kind of perspectives, both the people coming into China to source and then the Chinese companies that are trying to export out to other places like you would have been doing through your trading company. So I think it's interesting seeing the two perspectives that you'll be able to share with us. Speaker 2: Yeah, no, definitely. Thank you. I appreciate that. Yeah, it was interesting. Learned a lot with that. So it gives me a unique perspective and having to be on both sides of the coin because when you have something like that, as far as like a trading company that you're operating and managing, you know, there are little things that you do that give you advantages, but you know, there are also a lot of lessons to be learned as well when you're dealing with, you know, foreign governments and whatnot. Yeah. Speaker 3: So before we get into the way the tariffs are impacting people in the U.S. and around the world that are selling in the U.S. and trying to import into it, I realized I didn't tell you I was going to ask you this, but I'm curious, if you were still running that trading company, what would you be doing as a company working out of China to try to accommodate or work with U.S. sellers, or is that something you'd even be able to do? Speaker 2: That's a tough question. You know, the first thing I do as a trading company is when you know, because as a trading company, obviously, you have relationships with both your buyers and your sellers, right with the vendors. So I go to suppliers. And the first thing I would do is sit down and talk with them about like, hey, these are what the tariff numbers look like, let me show you from my side, you know, so as a purchaser of your product, Let's say your product cost me $1. I buy it from you FLB Shanghai for $1. When it gets to me right now, let's say it's 150% is what your tariff obligation now. That $1 cost now come to $2.50 for me. Because it's 150% tariff, right? So I want to sit down and at least walk through the numbers with them. And what can we do right now at this moment going forward before anything else leaves port? What can we do right now to negotiate offsetting that tariff obligation? Yeah, you know. And that's the first thing I would do on there. But then I would show them like the impact of what it is in the market. Because you know, a lot of the Chinese sellers, this is back when I was both working for a corporation and as a seller at the same time in China. A lot of the misconception that many at the time Chinese had is they saw something on Amazon, they saw what it cost to take, but they didn't understand like all the Amazon fees the seller pays, you know, having the warehouse, all the logistics. So they see like this huge bubble and they're like, oh, it's so wide, like you guys are killing it. But you're not because as a business owner, just like them, you have all these different costs. So that's the first thing I would do right now is go right to my sellers or go right to my vendors and work with my customers on the US side and say, okay, where are you at? And then you start bridging those gaps and making sure that everybody understands what the level playing field is. Because the one thing that can happen is people can lose their heads when something like this comes on and it becomes an us versus them mentality. Yeah, you know, now it's me versus my supplier, or it's US versus China. It's always this versus instead of, you know, me and my supplier, or the US and China, you know, I mean, like, they put the versus instead of the and in there. And once you do that can change your perspective. And if you stay calm, you legitimately then can find creative ways that are legal to, you know, offset some of these additional costs. Speaker 3: Yeah, and is that something you'd recommend that we as sellers do now is go to the manufacturers and kind of go through these are what our costs are. This is what we're looking at. This is how this is going to impact our actual profitability. Speaker 2: Yeah, that's one of the first things I would do. I mean, honestly, the first thing I would do right now is I would look at all of your dates. So what I mean by that is anything that you've ordered, you want to know where it is. If you have stuff that's sitting in a factory right now, you want to know when those dates are like when they're planning on shipping and then see if they can hold it and if you can pay a fee to hold if you want to wait to see what happens. I would know like when stuff left the port, right? So like we were talking at one time earlier, Ben, that if your product left on April 3rd and let's say this last round of tariffs wouldn't affect April 9th, you should not be impacted. You should be under if you sailed like if you if your stuff actually sailed on that day before that tariff went into effect. You should not have the additional tariff obligation. You should be under the old obligation, right? So like midnight on April 9th. So know your dates. What's your dates? What's your dates of sailing? Whatever. Everything that's coming in because you need to track that because if there's a clerical error and that happens, you have your dates. You have everything on like ISF forms, export records, all that. Like you have that in line. The second thing I would do is I would work with my freight forwarder. So if you have a freight forwarder that you have a relationship with and you should, I've said it many times before for people, your freight forwarder should be like an integral part of your team. It should be like your best friend because a good freight forwarder has a very knowledgeable customs broker that can help guide you through not only HS codes, but all of these case liabilities and things that happen. And then you have all that information and then you start working with your supplier. You go to your supplier and you start saying, okay, what can we do to help offset some of this? Because, and you have to approach it from a partnership standpoint. Don't say like, oh, it's going to kill my business. Don't say that. I wouldn't say that. I would say this is going to impact our business together. You know, what can we do to keep this relationship thriving? Yeah, or what can we do to stabilize our relationship right now? Along enough so we can figure out how the best move forward Some of the mistakes I'm seeing right now when I see You know some of the groups that we all belong to and I'm not picking on anybody because it's a very tense situation You have people's lives and businesses and money Being affected and we all get very you can get very emotional and stuff. Absolutely. Is that I would, you know, go and start using these things together. Like, what can we do together to make this work? Speaker 3: Yeah. Yeah, it has to be a partnership between you and the supplier, you and the manufacturer that you're working with. If it's, if it's not, then the relationship is already not set up in a way that you're going to be successful long term from a sourcing perspective, because the better your relationship is with the The manufacturer you're working with, the better terms you can get later on and everything else that people have been talking about for years. This is just a continuation of that. At least it sounds that way to me, where it's a continuation of that relationship where you need to have that in order to be truly successful. Speaker 2: You do. I mean, if you have a transactional relationship with your seller or with, I'm sorry, with your vendor, your supplier, whatever you want to call them, trading company or whatever. If you have just a transactional relationship, it's going to be a lot more difficult to navigate through what's going on right now than it would be if you've had a partner that you've been working with, you know, for years that you've, you know, visited and done business with and been creative together. I mean, I know I sound dry about it and callous, but I mean, that's just the reality of the situation. I mean, those that have those kinds of relationships right now truly have the advantage over a financial transactional relationship. Speaker 3: Absolutely. And as I know, one of the things that you've said to me repeatedly is just don't panic, people need to not panic and like, watch and see how things are playing out and pay attention and like, start looking at your, your possible avenues for other We're going to talk about ways to source, other places to sell, other ways to store and manage inventory. And we're going to get into a lot of that. But the first thing I wanted to bring up is just the solutions that you're hearing regularly now are things like using DDP shipping, changing HS codes, bonded warehouses. Some people are talking about trying to legally tranship where they're sending inventory to say Vietnam to have the product then finish there or something like that, or trying to make it so that at least it's arguable that they're not violating the transshipping laws. But so there are a lot of things that people are talking about doing. Are there any in there that stand out to you or that you would recommend we focus on? Speaker 2: You know, looking at HS codes, I do that anyway. Because, you know, the harmonization tariff index, like the HTS, the US government, let's say, if you're selling it to the United States, right, you would use like the harmonized tariff schedule. You know you go to the US government website. They publish like all their stuff in full PDF format right so all those updates are made like you know you're not always you should regularly look at are things changing for your products are HS codes or categories or because it's not a static. Speaker 1: All been whatever. Speaker 2: So that's where like working with your freight forwarder and your customer. When you get into. Speaker 3: I'm sorry, I'm having trouble hearing. Is that my internet or is that yours? Speaker 1: I think it's Patrick's internet. Oh, man. Speaker 3: We can hear you again now Patrick. Speaker 2: Okay, so if we take DDP for example. DDP is a great way for terms to have stuff shipped in on a regular basis. When you change, anytime you do an abrupt change, you risk having CBP which is Customs and Border Patrol Be alerted. If you've been bringing in the same product for years, all of a sudden you go from FOB Shanghai to DDP and now your prices are significantly less, all these things, I mean, it sends a red flag. And while, depending on how you do your DDP, most of the time the seller will be, you know, they're liable for everything. So, which is fine, except if that product gets seized at the border, because of it, you may not be liable for what the supplier did, but you're not going to get your product. And now you've put your supplier at risk for doing that, right? Anytime that you're on the, and if you're a seller, and you're an importer, anytime that you are the importer of record, Then you are responsible without any statute of limitations for the obligation of importing. So whether it's the HS code is wrong, like the CBP could come back to you and say, you actually put this in the wrong category. And they can say it 15 years from now. And so they can say, you did this 15 years ago, you shouldn't have. We are going to now re we're going to bill you basically for that tariff obligation. Plus, we're going to give you a penalty and interest for that, you know, so Those types of things you need to be really careful of. I mean, especially when you're the importer of record. That's it. It's all on you. So that's a risk. Transshipments, I'm weary of anyway. You know, if you're doing a transshipment and let's say like, hey, I'm going to have all my components to make this Bluetooth speaker. And I'm going to send it to Vietnam to be assembled. Great. So, you send those components. It's a semi-finished product or whatever. You have it assembled. You know, there are rules and regulations about how much has to be completed or how much of the cost and everything go into it. to be counted as made in Vietnam to be shipped out. But if you're the importer of record, you're still responsible for that chain of events by the time it shows up to the US. So there are things that you can do, but you really got to scrutinize. Like I would be, that's what I'd be talking to my supplier. Like, Hey, if you're going to do this, how does all this stuff break down? How does this material break down? What else can we get in Vietnam? Can we get these screws in Vietnam? Like, can we like, whatever you do to add then, Yeah, to that thing that you're bringing in to make it more Vietnamese, you know, but right now my fear is one of the reasons why Vietnam and Thailand and some other areas in Southeast Asia especially are on this list is because China has basically invested so much money into putting industry manufacturing capabilities and stuff in these countries. Yeah, that They now want these countries to be obligated to crack down on just trans-shipments or crack down just on like all these Chinese goods coming in, being finished and then shipped away. So I think you'll see more guys like Vietnam come back to make negotiations, time welling. It's all going to happen that way. Speaker 1: Oh, we lost you again. Speaker 2: I apologize. My internet was fine. Speaker 3: We can hear you again now. Speaker 1: Yeah. Speaker 2: Okay. I would just be careful when it comes to trans shipments. Somebody just, they sent product. Speaker 3: I'm sorry, I think we're losing you again. Can you hear us? I think we have lost him for a second. Speaker 1: Yeah. I mean, while Patrick comes back, Ben, you were actually in China when all of this stuff was happening in terms of Trump and all these updates to what the tariffs are going to be. What's been your take on it? What have you seen? How was it on the ground? Speaker 3: Yeah, so I was there from the 2nd to 11th of April. Originally, it was actually kind of interesting they were the manufacturers that we're meeting with were relatively positive about it on the first day or two after the tariff were announced because they saw And I'm here to talk about the tariffs for other parts of Asia. And they were looking at that as a positive because they thought that that would make it and be able to compete a little bit better in certain areas where they couldn't compete previously because China was paying tariffs and the other Asian countries weren't. So they were actually excited about the possibilities initially. Then obviously the tariffs rising again after that twice and then having the 90-day delay on the other countries and having it more focused on China. Speaker 1: Great. I think we could hear back from Patrick. Speaker 2: Okay, I'm back. I apologize about that unforeseen, so. Speaker 3: Yeah, no worries at all. So, you were just finishing up talking about transhipping, I think. Speaker 2: Yeah, so I mean, my concern is that like when you transship and you do stuff like that, whenever you again, whenever you do something a little different abruptly, it does send a flag. And you know, I know of plenty of stories of people who have just done the reboxing, tried to get into the U.S. and had container seized. And not only do you container seize, but then you have fines and penalties. So, you know, everything right now is a business decision and you have to weigh on, you know, what the risk is and how much you're obligated. I have no problem with anybody offering creative solutions. I have no problem with that. You know, some are, I think, a little bit more gray than others. But as a business, you know, it's all about survival. But just realize what your obligation is when it comes to importing. You know, as sellers, whenever we import something, or I'm sorry, as buyers, when we import something to resell, like on Amazon or e-commerce platform, We are obligated for that import, the imported good. And so that ends up coming back on all of us. And again, with no statute of limitations, you have to know those risks. And as long as you know those risks and you're willing to take them, then so be it. I'm not going to shoot down anybody's ideas. I just, you know, I'm a little worried of, I don't like to use the word, but like what seem like hacks, like these quick fixes that you can do. You know, they may work temporarily, but very rarely is it a long-term solution if they end up working at all. Speaker 3: So I do at some point want to talk a little bit more about the geopolitical situation, how you see it moving, but before we get into that, you've sourced from tens of countries around the world. And I know from talking to you before, because I've known Patrick for about three years, and he's helped me with some projects, and one of the things that you told me is China is easier than anywhere else in the world to source from because if you want to have jeans made and you find a denim manufacturer, they know where the button manufacturers are, they know where the zipper manufacturers are, and they can reach out to them and they already have those connections to make a finished product for you. versus if you're going into, say, Vietnam or Mexico or South Korea or India or one of those other countries, one of the big issues is you can find somebody who makes the core material for your product, but even just getting the packaging and everything organized can be a struggle finding that manufacturer and then connecting them. So how would you go about this? Speaker 2: Yeah, you know, it's extremely more difficult. I think, you know, that's been the advantage of China, like you said, you know, and Alibaba proves that you can just, you know, you can find anything on there, right? I mean, it's just varied entries, so low. And when it comes to daisy chaining, a lot of that is, and I've had to do it, this is why I kind of have some expertise in it. I've had to go into Vietnam and when you're setting up a retail good, a finished product, you have to go out and find all those accessories. You have to find the button guy, you have to find the zipper guy, you have to find your thread manufacturer, your threaded guy, your cut and sewer, all those things. And you have to set up that daisy, that little supply chain, internal supply chain to make those little materials work. And most of the time, you know, guys are good at doing one thing and expanding that ability requires a lot of handholding. Now, I think today, It's a little bit different where these countries understand that. Like Vietnam, when I talk to my suppliers in Vietnam now, they're much more acutely aware that they have to have now other suppliers that they have to team up with to make a product. It's all going to be on how good your development team is too. If you have a team that can help you develop your product and you have your specs and all that, it makes it much easier to go to a little stamper and say, hey, I need this little metal piece stamped out. I need this money or to go to a thread. Guy and say, hey, I need, you know, this denim and I need this thread for stitching or whatever. I mean, it makes a lot easier once you do that and you have that developed, but a lot of it takes work. It takes either having people on the ground there, or you yourself going to travel to find these guys and to make those connections to make it work. And it takes more time. I mean that's and right now I mean I hate to say it and I don't be the bearer of bad news but you know everybody's up against the clock and time When people want to move this fast, it doesn't happen that way, nine times out of 10. Am I saying it's impossible? No, it's not impossible. I'm just saying it's improbable because if you're looking to go to Vietnam now, if you're looking to go to India now, if you're looking to go to Thailand now, you are going to be in a lot. There's a queue because there were people that saw this coming already that were kind of getting in there. And now there's going to be this huge influx of buyers that want products outside of China. And that's gonna and that that will add to the cost too, right? Because again, if you go on a supply and demand side, there's gonna be more demand than there is immediate supply. So potentially, that could actually drive up costs in other country. And I think some people are seeing that right now. Speaker 3: And that impact does the same kind of impact with US manufacturing, where now people might try to Make a snap adjustment to get to a U.S. manufacturer and there are already queues building up for those. The minimum order quantities are going to be typically higher than in China and some of the other countries that we're talking about. So getting into U.S. manufacturing, I know that's something that you've done a good amount with as well. I mean, obviously, there are no shortcuts, but is there still time to do that? Speaker 2: There is. It just depends how much time you have available to dedicate or can you delegate that time to do it. I'm actually working on a couple of projects right now and it takes up a lot of time to go out and find guys that have enough capacity to fit in what needs to be done. I'll give you a quick little example. I love Michigan. Michigan is sort of like the automotive hub of the United States or has been known as automotive and furniture for a long time like West Michigan's been furniture. Detroit on the east side of the state has all been automotive, right? So GM and Ford, whatnot, are headquartered in Detroit. And I heard last week from two different friends of mine who are in, like, the tooling industry that I've been trying to get some work done with. They told me that both the auto manufacturers are putting a lot of pressure on their Tier 2 and Tier 3 vendors. In the Midwest region to start getting ready for large orders coming through. So guys that would have had capacity Because Ford and GM weren't buying as much now all of a sudden are not going to have capacity because those guys are going to come in there and they're basically going to say whatever it takes to get this done now. So that's the kind of things like you're kind of competing against, right? But are there plenty of like guys that are willing to do stuff here in the United States and they have capacity? Yes, but that's not going to last for long because those queues will fill up. Yeah, a 200, like let's say a max of 245% tariff from China, our largest supplier, let's say for e-commerce. It makes the prices of US now competitive. For me, realistically, that's just what it is. Speaker 3: Yeah. And I know one of the issues I had with a product that I was selling, I sold, I think, 100 packs, and they wanted me to, I wanted to do a run of a million of it that would then be put in 100 packs. And the US manufacturers I was talking to wouldn't do below 5 million. So as far as like order, average order quantities, have you seen much flexibility or because of what's happening with There being more people trying to get things sourced, they are just taking the best kind of largest orders. Speaker 2: That's a great question. I'm trying to think of how I want to word this example. Right now, I am in the middle of a small project, a larger project actually, of moving stuff into the United States for two different companies. And when I start talking to these U.S. guys, a lot of it is they are getting so many calls right now I think that everybody now is like a voyeur, right? Like everybody's just kind of testing the waters. Everybody's making a call, like they spend more time quoting and answering people's calls. So I think that there are creative ways to get around, let's say like these minimums, you know, for serious guys, but it's like, are you willing to put up money Like pre deposit money to show that you're serious to get this project developed. I mean, when I say be creative, I mean, I mean, be really creative, like you find out what it takes. If you're really serious, like you have to move. Like you get really creative because as you go into survival mode, are you willing to put a deposit down with a vendor in order to develop your project and get it going? I mean, as a line placeholder. I mean, you're not paying them to hold your place. You're making a deposit to show that you're committed because right now there's a lot of looky-loos, right? There's people that are coming in saying, hey, I want to move, but then they get scared off because of the price or like you said, like you have 5 million. You know, I think my personal philosophy is everything's negotiable in that 5 million. And it may not be. It may take a lot of work or whatever. Like, you know, I would say, okay, 5 million. We make that 5 million over two years. If I can get 5 million over two years, I mean, like creative ways like that. That's kind of how you want to do it. If getting in front of the line is your most important priority. Speaker 3: And how would you, you said there are creative ways to do it, like you have, and you mentioned the deposit, are there other things that you'd suggest, like offering a contract for ordering a certain amount over a certain amount of time or something like that? Or like, what other avenues would you consider? Speaker 2: Yeah, I mean, if you can do a blanket PO, I mean, that's, again, like I said, if you can do, like in your example, Ben, let's say 5 million, you know, that's your minimum order. Okay. So I would say, can I buy that 5 million over two years? Like at a store, like a minimal storage fee or whatever, like you find ways to work and I'll meet your minimum order. Will you do that? Okay. Well, they're like, well, I'm not really comfortable. Then you say, well, instead of doing 5 million over two years, what if I ordered 2 million this year? At a higher price, you know. Because a lot of that time with printers and stuff, it's setup costs. Like if you know how your stuff is manufactured, and that's the other thing too, if you know your product really well, and you know how it's manufactured, it makes it easier to negotiate some of these nuances, because you understand the language or you understand like how things are done, and you can be creative. So I got a printing thing with yours, you know, I would say, well, the setup cost is this, if I pay the initial setup costs, and you only run this amount, you know, or I'll buy enough of the Inventory or I'll buy enough of like the raw materials ahead of time for you to hold to at least have my placeholder. I mean, there are different things that you can do to give yourself, you know, advantage. If time is, if time is your most, if time is your biggest priority, then you can buy. Yeah. And you're okay with flexing the money. You know, if you're going to say pay an extra five points on it, you know, and you can get terms, And you can sell your stuff fast enough, you know, it should work out. Yeah, theoretically. Speaker 3: Yeah, that absolutely makes sense. And I think I'm kind of jumping around a little bit, but going back to The manufacturing in China, we didn't really finish that conversation, I don't think. So we talked about what to do if you have things that are already on the water as far as checking the dates and making sure that you're prepared, and know what tariff burden you will potentially have on those. For inventory that's already being made in China from orders that you've maybe put down a deposit on or you have a contract for, or something like that, what kind of avenues do you have to not end up having to pay what could be a back-breaking tariff on? On some of those, I know we talked about the shipment of things. We didn't really touch on bonded warehouses yet, and I wanted to get back to that. But I know you and I have talked about how this might be a reason why people should potentially really push for getting into Amazon, UK, EU, Japan, like looking at the different marketplaces as well, where they can potentially pivot where the inventory is being shipped to. Speaker 2: Am I still live? Yeah, so the Bonded Warehouse is what you were asking, sorry. Speaker 3: Bonded Warehouse and then getting into other marketplaces, yeah. Speaker 2: Sure. So first of all, I apologize. Apparently StreamYard doesn't like me very much because it keeps like circling. So, because my internet says I have 300 megabyte download right now. So for Bonded Warehouse, that's fine. Again, it's all on, It all ends up in the United States. I don't understand the nuances of how to play a game with bonded warehouses to speak intelligently enough. But all I know is if it's going to enter the United States, whether it goes through a different country or a bonded warehouse or whatever, it's where was it made and what's the obligation. Speaker 3: I think with the bonded warehouses, people are saying to store it there until they go away. Speaker 2: Sometimes you have the bonded warehouse, you can send it to Canada and you do it in this little tariff-free zone. So bonded warehouses, that's all going to be on how long you're How long do you want to hold it? Yeah, I mean, eventually. Now, I'll tell you this, this is bonded warehouse, I think is your best advantage. If you, I think the tariff is going to stay around for a little, I don't, it's like a, you know, 60, 90 day thing out of China right now. That's just my personal opinion. I have nothing to support it. If I had a significant quantity of inventory that was going to be finished in China, my relationship means a lot to me with my Chinese supplier. I would have it in a warehouse or I would talk to my supplier about holding it a little bit longer. I would do everything I can to get myself up and running in the European market or in the Japanese market or one of the other places, Amazon or whatever, and get that shipped to a spot that has a lower tariff rate where I can sell it faster. That's one thing, a bonded warehouse would be good because a bonded warehouse is going to buy you time. It will buy you time to make decisions. So while you're staying calm, you're not panicking, you're not losing your mind, a bonded warehouse or even having your supplier hold up for a period of time for you to be able to pivot is a really, really, really smart move. Speaker 3: Yeah, no, that definitely makes sense. And I know you touched on a little bit as far as like the 60-90 days, like what do you, how do you see the next 90 days playing out before the decisions made on the tariffs on other countries or before that's kind of brought back up again? Speaker 2: So let me preface it by this. I don't know everything. I am not a tariff expert. I'm not a political expert. You know, I'm just, you know, like everybody else right now, I watch like CNBC. I'll watch Fox News. I'll watch, you know, BBC. I'm watching all the reports coming out. I'm just curious what your opinion is. Speaker 3: We're not going to hold you to this. Speaker 2: Okay, right now, when it comes to let's say where we are with China, history proves to us right now, recent history proves to us right now, that the tariffs are not temporary. You know, I think there was a big push when all the 301 and stuff came out in 2017 and 18 and whatnot. You know, it was taught that those were going to get like pulled back or overturned and they never were. So right now there's nothing that tells me that the tariffs in China will go away. Could they be lowered or could some other things happen? Yes, but right now I am operating under the assumption, which I don't like, but I'm operating as if the tariffs are going to be here for at least the rest of this year. So when I look, like right now, like everybody should be having all their Q4 stuff being produced so it ships out to get here and prep for Q4. This stuff will not go, I don't think this stuff's gonna go away before Q4. I know people are hoping that it does, like, oh, by the summer, when things ship and land, it won't be. I do believe that things will be here through Q4 of these tariffs. Now, other countries. This is what I am the most interested in is countries like Vietnam, Thailand only because of like what I have going on there. I think that and the speculation is and I agree with it. I think like for Vietnam example, the 46% tariff will go down. I think they'll probably cut that in half. When they go to enact it in less than 90 days now, if a deal is done where Vietnam really does go to zero tariff for everything, and they're the first ones to kind of like bridge that gap, other than Israel, other than the first ones of the Southeast Asian countries to bridge that gap and say that, I think you'll see a huge reduction, if not almost a free trade agreement come between those. That's just my feeling based on what I'm seeing right now. Yeah, so I think the other countries, there's more of an avenue to to negotiate and lower their tariff obligation. But a lot of it is going to be predicated, like what I had said earlier about making, you know, this this administration In my opinion, wants to make sure that these other countries aren't being used as transit stops, you know, for Chinese goods, whether through just their factories that they have there, or just with like, let's say, reboxing for lack of a better term. Speaker 3: Yeah. Speaker 1: I just wanted to go back to a little bit, Patrick, to what you said earlier, because there's going to be those who obviously most people are going to want a solution for now. How can they kind of make sure that they get the best rates? To make sure whatever they pay at the end, they still got some margin left or a substantial amount of margin. But for those that are thinking more long term, they might have just invested everything into China and are getting all their manufacturing done in China. What would be the steps you would recommend people should take as the first steps to start considering other countries? What would be other countries that would be good for their products? Who should they be speaking to? Speaker 2: That's a very, very good question and very complex, right? Because there's a lot of different ways to look at it. If, as a hypothetical, if I had an obligation in China now, what I would do if I want to explore other countries, if you have access to like, you know, the Customs and Border Patrol database, it's like through Pangeva or something like that, I'd start, I'd go back and research, I'd backtrack research Products that come from other countries, right? So if I want to look at Vietnam and let's say I'm in textile, so say I sell like apparel. If I sell apparel, I'm gonna look at Vietnam, I'll look at Cambodia, I'll look at these countries and I'll see like, I'll backtrack on Pangeva and say, you know, what are they shipping? Where are these factories at? But I wouldn't necessarily change I'm sorry. I wouldn't necessarily take everything I have out of China and try to replicate it in another country. What I would do is for similar products in my category that are being made in another country, get that up and running and get established with a supplier and then slowly transition to things that are going to be made. My personal belief is that is the fastest way to establish into another country. Don't try to have them recreate what you're already doing. Find out what they do well that fits your category, buy it, establish a relationship, and then again, slow trickle your stuff into them as time goes on. You're going to balance it out, you're going to hedge your bets, and you'll have way more chances of being successful quickly than you will trying to have them, like, I'm going to move, I'm going to move my jeans over there, you know, like, if they're already making jeans, like, get their jeans first and then have them do yours. If that makes sense, did I? Speaker 3: Yeah, so you could essentially say, you should launch a, probably what would be considered a new product for you that's familiar for them, that's easy for them to make so that you can get the relationship started. And while that's happening in the back, like kind of on the The backside of things you're working on getting or the back end you're working on getting your products moved over there, but not until you've established that they can make A, the quality of the products that they're making with the new products that you're launching essentially. Speaker 2: Right. So my philosophy is as an e-commerce seller, your most valuable asset is your ability to market and sell a product, whether it's on an e-commerce platform or Amazon or whatever, right? I mean, I think that's, that's what makes most sellers successful. So in saying that, if you can get a product that fits your category and you can get that thing up and running, the things that it does for you is that A, you diversified your manufacturing, you establish a relationship with the supplier, a buy-sell relationship with the supplier right off the bat. You're buying, you're buying, you're buying, you're building trust, and then it buys you time to take care of whatever obligation you have in China, Still keeping that relationship, but being able to slowly move whatever it is that makes you successful. And you can add it in now. Instead of replacing, you can add it into your manufacturing in Vietnam, if that's going well. Or you can leave it in China. And that just kind of like dwindles down while this other one builds up, you know, so that's launching a new product, you know, from a different country, it would be the fastest way to go. Speaker 3: Okay. And we, I guess we started talking about this and I don't think we finished it, but kind of topping, going back, piggybacking off of what George had said as well. If you're getting into these new, trying to find manufacturers, trying to find a sourcing agent, trying to find a team in these in Vietnam or India or Thailand or wherever, when you're trying to find those manufacturers and build that team, where would you start? So I would start with me. Speaker 2: I mean, I would start with me. You know, I can't do it for everybody, right? It's like, that's why I don't like say it that way. So what I would do if I if I don't know anybody in Vietnam, Yeah, you know, I would obviously network out and I would call you, Ben, and say, hey, Ben, do you have anybody in Vietnam or whatever? Like, that's the first thing you do, right? You go to your network with everything and find out, like, who's doing stuff. And somebody could say, like, hey, well, I have somebody up to me in Vietnam and, you know, they helped me do this, this, and that, and say, hey, can I hire them to do some scouting for me? You know, that's the first thing I would do. I would go to my network. If that doesn't work, then, you know, you could find somebody like me that does it, but At the end of the day, I would go and look up trading companies in Vietnam. Why? Because trading companies know everybody. If you can establish a relationship with a trading company and get something your speed, to market is that much faster. Now, if you pay a little more, all this other stuff, yes. I don't believe trading companies are bad. I mean, I had one. I still work with them because it's easier for me to have them deal with some of these, especially when I buy little things like small quantity stuff, like the trading companies are just like, it's great. I'd rather do that than have, you know, my team working on certain things that just are not at their purview. I think tools like LinkedIn, are fantastic. I mean, the first guy I hired out of Vietnam, I found him on LinkedIn back in 2011. So I think, you know, I mean, I would find somebody that you can hire. I've told this story before, and I haven't done it in a while, but Fiverr is really good. So if you go to Fiverr or Upwork or whatever hiring platform that you want to use, gig platform, okay, you go to a gig platform, And you basically say, Vietnam, I want just people in Vietnam that speak English or your native language. And you say, I need you to scout. You basically create a scouting gig. Like, I want you to scout all these suppliers for me. Okay, so you make a spreadsheet, you have all these suppliers scouted. If it's a good list, you say, okay, then you create a contract or something to have them start making first contact. I don't like to make first contact. Some people do. I prefer not to. I prefer to have somebody that I've already had an established relationship with connect. I like to have a local connection, make a local connection. When I do it as an American, I'm just another American that's, you know, just trying to, you know, push something or look at like, oh, what's under this rock? What's under that rock? You know, so if I have a local person make the established connection, there's a little bit more credibility to it. Speaker 3: Yeah. Speaker 2: I've mentioned the platform before and I'm not promoting any of them. I don't get anything out of it because they're expensive, but I know there's some free ones, but if you have access to the US Customs Border Patrol database through like Pangeva, I know there's some other ones like the Yeti one or whatever. Speaker 3: Import Yeti. Speaker 2: Import Yeti or whatever. If you have access to that, I would use that to backtrack Categorically, I mean I did that probably easiest thing to do is categorically by country who's bringing them what you know so if I was like oh I'm gonna look up I'm gonna look up frames wooden frames From picture frames from Vietnam, like that's what I would put I'd start looking up and sorting it by that country. And you could, you know, get factory names and you go through I mean, I would use AI to do that too, right? You have scouting, you know, some of these contacts or whatever, and then start reaching out. Speaker 3: that makes sense to me. Speaker 2: Seems like a long winded, twisted answer. Speaker 3: Not at all. Speaker 2: If you weren't welcome to contact. Yeah. Yeah, like everything else, it's more about just taking action, right? Like there's, there's no one, I'm not the end-all be-all. I mean, I've had a lot of success, also made a lot of mistakes. I just know, like, when stuff happens, like I try to think of two or three different ways, like, what can I do? You know, I think the Fiverr way, I mean, if I If I were somebody right now that was desperate, I would go on Fiverr right now. I would look up, do a scouting gig, research, call it a research gig. You know, create a research gig in Fiverr or Upwork, whatever. I would say I need to find cut and sewers in Vietnam right now and then go. Speaker 3: Yeah. And I know you were one of the people who I talked to, and I know Steve Simonson, who you're friends with, has been talking about this for a while as well. But a couple of years ago, you told me start looking at manufacturing outside of China, like start trying to move away from China. And you've been giving me that advice. And I've taken it to a large extent, but I still have more to work through. But What's your advice for me and everybody else for two years from now? Obviously, we have no idea what's going to happen next. We're all kind of playing guessing games. But two, three, five years from now, if you were a company, where would you want to be with your sourcing? Speaker 2: I well personal personally I would start looking at what can I would not stay in one category I would look at what can I get from where you know and what I mean by that is like I I would look at the US and say, like, I, you know, this, I bought a company last year that makes skincare products. And the reason why I did that is because, you know, and you and I talked about, I saw just some handwriting on the wall. I wanted to be able to control my own destiny. I want to be able to manufacture here in the United States. I want to be able to control, you know, everything that I could and not be subject to things like which were happening right now. I would look at, okay, what's in the Western Hemisphere right now that I can get? Like, is there stuff in Brazil that I can get? Is there stuff in South America that I can get? Or whatever. You know, start looking regionally and say, like, where's stuff coming from? And say, where can I establish? Because the biggest point of doing that is you want to be able to flex. Like, when something like this happens, you can pivot from one thing and go to the other quickly because you're already established there. So yes, start looking at other countries. I wouldn't necessarily just stay in Southeast Asia either. I mean, Vietnam and Thailand and stuff, they're all options. India is a really good option. My concern with India is because of where they are located. Like from a maritime standpoint, logistically, I think it's probably the hardest place to get to from India to the United States from a shipping lane point of view, right? You know, is there stuff in, you know, Northwestern Africa or some stuff in Europe? Like what are items that, you know, and it's going through the whole sell process that we all you know, go through when we're selling, like you're looking for your product, you go through that whole thing and say, okay, well, where can I get this? So instead of just going right to China, you start expanding and saying like, can I get this widget from somewhere else? Who else is making something like this? And start thinking three or five years ahead in order to balance out because none of this stuff is ever going to go away. Like it's all cyclical, right? Like we're always going to have these. When you have peaks and valleys, when you have a real international global sourcing outlook, everything you're doing is you're trying to balance out all those peaks and valleys. So like if one thing takes a hit, you can then ramp up the other one, get that going to balance everything out. Speaker 3: Yeah, that makes sense to me. I know we're starting to run out of time. George, do you have any questions you want to drop in? Speaker 1: No, I think this has been really, really insightful. And Patrick, you clearly do know what you're talking about. And as I've mentioned before, there have been a few people that I've recommended Patrick to and they've raved about him and there's a few people I respect who've mentioned a lot of good things about Patrick and his knowledge too. So if you do want to reach out to Patrick, and if he's got the capacity to kind of help you out, I'm sure he will. Patrick, what's the best way people could reach out to you? Speaker 2: So the best way to reach out to me is you can message me. I mean, I am on Facebook, LinkedIn, but my, you know, by email, I always answer every email. So if somebody wants to do that, they're more than welcome to. And I can, I don't know if you want me to put my email in the chat or I can write it down somewhere and send it to you, but those are the best ways. Speaker 1: OK, yeah, well, what I'll do is for those who might be watching on YouTube, we'll put a description similar to the podcast to Patrick. Is there anything that Ben and I didn't mention today that you think is really important that we should be that we should have talked about? Speaker 2: I'm looking at my notes here. Yeah, I would just, I want to emphasize again that what's happening right now, I know it's painful, but stuff like this has happened before. I mean, when we had COVID, people remember when, you know, container rates went from like $3,000 or $4,000 to $22,000 a container, right? Like we all had to make adjustments. We all had to be creative. When the first tariffs came along, we all had to make adjustments. We all had to be creative. I can't emphasize enough that staying calm and like making calculated decisions even quickly, you know, without losing your head is the best way to go. I know people are really feeling the pain right now and I am too. I mean, I was telling them earlier before this, I have a deal with a large retailer that I've been working on that is now full stop. You know, just because of what's happening. So it's, you know, it's having that mental fortitude of saying, okay, this is where we're at realistically, this is and do it like a realistic self assessment of like, what are your numbers, like, what are your dates, and then moving on from from there, you know. I get how people want to complain and I don't blame anybody for it, but really keep your head and keep moving forward. There's a lot of opportunity out there still. As bad as it may seem, there is a lot of opportunity out there right now. And it's just, are you aware enough to see those opportunities? Speaker 1: Brilliant. Amazing. Speaker 3: Well, thank you. Thank you very much. Speaker 1: And Ben. Speaker 2: Thank you guys. I really appreciate it. Speaker 1: Okay, great. And thank you everyone for listening.