Trump Tariffs Are Here -The Rise of U.S. Manufacturing...

Trump Tariffs Are Here -The Rise of U.S. Manufacturing... 00:00:00 The one big thing, and you brought up that China built the world's factory. This isn't a new thing. The best way to become a world power is to be the number one manufacturing country in the world. And if you look through history, as that's happened, world powers are created on the back of making products. I think people are starting to realize that a little bit. And they're like, ooh, for political reasons, we need to have a strong manufacturing sector. You're watching Marketing Misfits with Norm Farrar and Kevin King. Mr. Farrar, another day, another dollar. How are you doing? Another dollar. No, no, no. Hold it. There's inflation in there. And Canadian. Canadian dollar. Knock off. That's right. So it's about 10 cents. About 10 cents. That's right. 00:00:59 yeah i know every time you come down to visit the states it's like i get all of a sudden it's like i know norm's coming when i started getting shipments of random cigars and i'm like and i'm like where did i order this oh okay i i think i ordered this stick in my humidor and then norm shows up it's like where this does the cigars come then i that i ordered like no nothing's come um and then you're like you sure that this one and this one i'll check the tracking And this one? They were delivered a month ago, Kevin. I'm like, oh, yeah, some random stuff did show up. I couldn't remember. Oh, it's this box right here. Yeah. You're like, that's mine. But then you were so kind, though. 00:01:42 You gave me like, this one's for you, Kevin, and this one's for me. I really appreciate that. That was very, very kind of you. No problem, sir. No problem. I don't want to put Norm Farrar because in your building, who the hell knows Norm Farrar? But they've probably seen me. They probably think that we live together or something. I just got a bill yesterday from UPS. It reminded me of you. It was a bill on an old UPS account, and it was like for $88. And someone shipped something from Germany to Toronto. So someone's using my old account number or something. This is from five years ago. And used it to ship something and said 'bill' to the account. And then Amazon, I mean, not sorry, Amazon, UPS is like sending me a bill. 00:02:27 I ain't paying this. Yeah. But that was an unpleasant surprise. But sometimes you actually get pleasant surprises like cigars showing up in your place or you do an event called Market Masters. And you have all these people come to this think tank and last minute. Vanessa, a good friend of ours, Vanessa Hung says, 'Hey, I know this lady that would be really good, really good fit for your event.' I just met her at an internet marketing party. So I get on the phone with her and we talk and I go, 'Yeah, come on out. You can sit in, I don't know you, I don't know you at all, but you can come on out and see how it goes.' And she ended up sitting on a couple of the hot seat panels and she brought her husband along with her. 00:03:13 She's like, 'You know, my husband's a pretty smart guy, too.' Anything you want to know about sourcing or products or this or that, you know, he can help out. So over the course of the weekend, he ended up sitting on a couple of panels. And I'll never forget, there was this $130 million seller. Remember? Oh, yeah. $130 million on Amazon alone, the husband and wife team. And they come in and they have all the stuff they want to get help on, on this as a panel on, on there as an expert on the panel, and we start taking the whole panel starts taking the the talk a whole different direction, and by the end of it he's just just like laying out like all kinds of like brilliant stuff, like super smart stuff, and like talking about all this stuff. 00:03:57 Like, 'Damn, this dude, this dude's good'! And not only is he good, his wife is amazing too. So she's speaking at my event at Elevate 360 in Iceland. She came out to the last one, and they're just like a power couple. So I'm really looking forward to this talk today because it's going to be, I think, pretty cool, pretty enlightening for a lot of people. Yeah, I can't wait. And sup, Mary. Sup. I just had to. She'll know what that means. Not just the impact that they had. Luba, you remember Luba? She was at the event. She came to the second one and we just had, you were at a few weeks ago. And she actually, the first night she went, Mary came out and she went and cornered Mary and she talked to her for like 20 minutes. 00:04:41 And afterwards, Luba came up and said to me, she said, you know what? They changed my life, her and her husband. The last time when I was here, I met them. Some of the stuff they said to me completely changed my life and I owe a lot to them. So, I mean, that's the power of surrounding yourself with really smart people. And, you know, you just never know when someone shows up. We had this happen. We talked about another podcast. Someone showed up at a dinner that ended up, we're like, who the heck is this guy? Why is he here? And it turned out that he's a powerful player. And the same thing with our guest today. So this is cool. 00:05:14 Yeah, but before we get to it, I don't know what's happening, but it sounds like either your ass is whistling or there's a wind or something that's happening. I got bad gas, sorry, that's what I thought so anytime you're listening now from now on push it on the on the chair to try to muffle the sound but it's just not working because when you have a fat ass, so whatever you're listening, any listeners, you know, just think of Kevin anytime you hear that well it's actually um it's um my balcony, you've been to my place and I'm right next to another high-rise. I'm in a high-rise, and right next to me is a little alleyway, basically, 20 feet between them. And the wind is just howling through there, and it's blowing things like chairs around on my balcony. 00:06:07 Literally upside down. I can look out the window over here. They're upside down. Excuses, excuses. All right. Let's bring on Jason. There it is. That's better. Hey, guys. Hey. How's it going, Jason? Doing great. How about you guys? Oh, I'm crying a little. So Jason's on the podcast today. Jason Acevedo, just in case you want to use the Googles to see who this guy is. Are you on the Googles? Dungeons and Dragons master with the same name that he takes over the bulk of the listings. 00:06:52 So, Jason, what's your story? I mean, for the audience, most people here are probably like, who is this dude? Tell us a little bit of background about where you come from, what you do, and that kind of thing, just to enlighten everybody. So kind of the simple version is I started my first manufacturing company when I was 15 years old. We built it from $600 in a garage and just kind of got into making just about everything. Our early career was heavily kind of in the marketing and product launch space. So we took to market in Walmart and a bunch of the other major retailers. Roku was one of the bigger products that we helped originally launch, and then through that, we started manufacturing the packaging, the retail displays. 00:07:37 Nowadays, we make 10 parts inside of every General Motors transmission. We make every dishwasher inlet hose for General Electric. I mean, it's just kind of a broad swath of American-based manufacturing companies that are we've got plants throughout the US and kind of specialize in all these different things. A lot of them are things that you interact with every day of your life, but you don't realize that they're actually being made in the United States. Are you seeing more manufacturing coming back to the States? We are seeing more coming into the States. One of the big changes is going on is for a long time, it's been cheaper to produce in the US. And Tim Cook from Apple's actually talked about this for years. But nobody was willing to. 00:08:27 It was it was scary for a supply chain manager to start moving things into the US. COVID kind of acted like an accelerator when we when people couldn't get things out of China. And all of a sudden they were forced to look into U. S. companies again. And that's really what kicked off just the hockey stick that's going on in American manufacturing right now is once they learned that there were suppliers there, that they were price competitive with overseas. And I mean, the story of today has been what tariffs are going on, what's going on here. So we're seeing a mass increase. And it's a good time to be a manufacturer. I remember going back to back in the 90s. I was I wasn't 15. I was 18. 00:09:16 I was trying to manufacture some stuff. And I have to go to this before they don't have to go to the library and go to the Thomas directories. Yes. You remember this like a whole like encyclopedia of like manufacturers and look in there and find the page for dishwasher hose makers or whatever. And be all this listing of people. And that's how that's how I found people. And then, then you start doing this Amazon thing, and everybody's sourcing from primarily China, some Vietnam, and a few other places, but primarily China. And then Trump, in 2017 was it or 18, implements the 25% tariff, and now he's just added the additional duties on top of it, so in some cases, it's adding 50 to the cost. Like you said, sometimes it's cheaper to manufacture in the U. 00:09:57 S., or even in cases in the past where it was more expensive to manufacture in the U. S., by the time you add in the cost of money for waiting for it on a boat and the cost of duties and stuff, you're better off to pay the more expensive price in the U. S. than you are to bring it in. And then there's a lot to say about 'Made in the U. S.' banners and all that. But the problem I think a lot of people have always found is most U. S. manufacturers tell you to F off. Yes. Unless you're going to – I mean, you go to China and he's like, I need to do 500 of this or 1,000 of this. 00:10:26 2,500 that bend over backwards and take care of you. You do that in the US, they completely ignore you. Don't return your calls. Don't answer anything. They're like, nah, I'm not going to play with you. That sounds like my girlfriend's back in high school. That's true. But so has that changed? I mean, are they now more receptive to small orders? Are they just not set up for that? They really need the big production runs to make this efficient. So one of the big problems in manufacturing and the short answer is no, it hasn't changed for most firms. We take in a lot of smaller clients. We've got our mass blue chip clients, but because we started so small, we truly do believe in getting with a brand when they're just kicking off. 00:11:13 We do take them in, but there's a couple of holes in that. American manufacturing had to get super, super lean. For a while, there because they were they just weren't competitive so one of the ways they leaned out was they got rid of all their customer service, so you're the person taking your phone call is more than likely an engineer that really doesn't want to deal with it and they just don't have that 'hey, let's actually work through getting this into production' um. And the other part of it is a lot of American manufacturing right now is being ran by people that are right about to retire or post-retirement. So new, scary take on projects that you're going to grow a client over the next five, six years, they're just not interested in it. 00:12:04 And there's really not a youth coming into the industry. I mean, every event I go to, I am the youngest person in the building by 20 years. So there's still a lot of grit there. Amazingly enough, like the Thomas Guides, it hasn't gotten easier to find manufacturers they that none of them have gotten better or not none of them but the greater majority haven't gotten better at marketing um I I acquire most of my uh companies nowadays and you'll get a website that was put together in uh 1999 and they haven't touched it since it was a it was a glamour purchase they put it up it at least shows the phone number to call, but it is still an industry that in the U. S. that it is harder to find the right manufacturer. 00:12:59 What's up everybody. Your good old buddies, Norm and Kevin here. And I've got an Amazon creative team that I want to introduce you to. That's right, Kevin. It's called the House of AMZ and it's the leading provider in combining marketing and branding with laser focus on Amazon. They do a lot of really cool stuff if you haven't seen what they do, like full listing graphics, premium A-plus content, storefront design, branding, photography, renderings, packaging design, and a whole lot of other stuff that Amazon sellers need. Yeah, and guess what? They have nine years active in this space. So you can skip the guesswork, trust the experts, there's no fees, there's no retainers, you pay per project. So if you want to take your product to the next level, check out house of amz that's house of amz . 00:13:50 com house of amz i wonder why somebody hasn't just taken it under their wing and developed a really good directory and it you're right it's really tough to find a great manufacturer here because you can't find them trade shows are probably that going to trade shows or something is yeah The only real way are Google, who makes this in the USA, and hope and pray that 1999 site shows up and they're still in business. Yeah. Well, and trade shows are great for it. I mean, there's a billion-dollar idea in somebody creating Alibaba of the U .S. Because that's how so many people are finding their manufacturers for China. But it just doesn't exist in the U. S. It's an antiquated industry on its marketing side. 00:14:47 Yeah, you ask most people about manufacturing in the U. S., they say it's dead or it just smells funny. But it's still there. You just have to look in certain categories. Some it's just nonexistent. Yeah, so the U. S. can beat pretty much any country nowadays unless the product has a couple issues. Extraordinarily high labor costs that cannot be done by a machine, which machines are getting better and better by the day. I mean, we're implementing vision systems that are accurate to 0. 003 of a millimeter, but takes like painting little metal soldiers. You can't do that in the US yet. It's too labor intensive. Things that have massive environmental impacts, the US actually protects its land. 00:15:37 A lot of the countries that we're competing with, they will throw acid in the ground and there's really no place for a lot of those highly, highly contaminating businesses in the U. S. yet. And then the last one is things that just don't have the infrastructure in place. The U. S. is extraordinarily large and our manufacturers are everywhere. So to get a highly complex item, you've got to go to five or six different manufacturing companies, get somebody to do the final assembly, all that. We kind of counteract counteracted that because we own all the factors of production. We'll put a client through one company, but they're actually touching all of our plants so that you when products left the US, they were entirely made of sheet metal. Or entirely made of plastic. 00:16:34 If you go to a store nowadays and try to find a product that is made out of one process, it's almost zero. So that's a redevelopment that's going on right now is being able to get American manufacturing to match where products have moved in the last 20 years. Because, like, in China, you have these hubs of like, if you're making a certain type of thing, there's a city that specializes in that type of thing. And so all this stuff, like you just said, five or six different things, they're all kind of geographically close to each other but here you're it's all spread out all over the place-you might have a guy in North Carolina and you need the guy in California, need something from Michigan or something. 00:17:13 And yeah, so this is an example that happened where you just have to think a little bit differently; there's just materials so we had a project that we were working on where they were bringing in some wood products with sort of a rough sandpaper adhesive on the top of it, but they were all doing it by hand. And we brought it back to the States and we did complete automation. So it was able to be built automatically and much more precise. And we saved 30%. Then my partner, he took it and he had it done with resin. And it did another I think it was another 30% on top of that but just by being innovative; yeah, there are ways that you can work with others. 00:18:05 Manufacturers that can outcompete any Chinese product, yeah, and with like us because because we have that breadth of manufacturing, one of the issues if you go to somebody who's got a hammer, everything has to be a nail. Being able to innovate on, hey, just tell me what the goal of this product is to pull off. Can we swap resins? Can we do this? Can we do that? How can we redevelop? And in the last 10, 15 years, just like everything else in the world, computers and automation and AI and all of that has come such a long way that you can really get a lot more done in, in kind of those focused redevelopments 00:18:54 of products to get them to work the best in the US what about natural what about resources I mean China has some of the almost all the natural resources that you need in manufacturing, we have quite a bit too but still there's a lot of stuff that has to come from other places um is that the case uh or or are we strong on like certain areas like steel and weak in other areas like uh I don't know some sort of ingredient. So the U. S. is the number one petroleum country in the world. So plastics, we can win on. Steel, we have ridiculously strong infrastructure. And because most steel is steel, aluminum, all that, the bulk of what's being consumed nowadays is actually recycled. 00:19:42 So the bulk of our steel is old washing machines that are re-refined in the U. S. and things like that. So, really, you don't only when you're getting into specialty, like if you need cobalt, the U. S. doesn't; they think they just found a section, but they, if you're doing like battery tech and all that kind of stuff, and those kinds of rare earth style things that gets harder. But for the basics, the U. S.'s infrastructure for material sourcing is a, it's incredibly strong. So Kevin and I sell a lot on Amazon, and There's this focus on made in America. Do you find that to come at a premium cost? Can you charge more for having made in America? No. There is a subset of consumers that they will pay a premium for it. 00:20:39 But what it does is it will make the difference in the purchase. So if you're a dollar and they're a dollar, you will win that battle almost every time if you're made in America. Perceived value. Yeah. And patriotism. And patriotism. And there is a huge feeling that goes along with it. But the reality is you're not going to be able to get 30% more with the average consumer because times are tight for consumers. So they are going to be looking for the best perceived deal. I just know, Norm, if it says Maine, Canada, I want a 30% discount. Don't get me started. What about nearshoring? I mean, you have all these Mexican – I'm sorry, Chinese factories coming in along the borders, putting in – factories and stuff that are Chinese manufactured and Chinese run. 00:21:46 In some cases, Koreans are coming into the U. S. and setting up chip manufacturing stuff. What are your thoughts and what's going on in regards to that and how does that affect things? That's been going on for a long time. It does affect things. The reality is those facilities are usually incredibly inefficient. We have some stuff that gets made down in Juarez, Mexico. I've got a plant in El Paso and we trade it up for some heavy hand work style stuff. It's one of those things that it keeps on going back and forth. Take a company like General Motors. They'll say that they're pushing a bunch of Mexico. They go down to Mexico. Well, it's cheaper labor, and it's functionally on paper looks like it's going to be good. 00:22:38 Then they come back, and go, 'Wait, but the American plant is still producing way more profit for us.' So you see it trade back and forth. It's something that we keep an eye on. But with the onset of automation getting so cheap and so incredibly powerful, things like that are-why pay the extra freight? Why have it be that extra headache? So it really is just a balancing back and forth of what is the trend this week. And now a 25% duty. What do you think is, forget your political association, whether you like one party or another, but what do you think is the ultimate, what's going to ultimately happen as a result of what Trump has done with imposing the 25% on China, I'm sorry, on Canada and Mexico, and then adding additional? 00:23:34 20% to the 25% that's already on most products coming out of China. Do you just see that as just a bunch of political negotiation stuff? Or is that really dramatically going to affect the manufacturing of stuff in the US to receive even more coming here? Or what are your thoughts on the end result of what's going on here? So, and I've been talking with my teams and my customers about this a lot. There's two different time windows you have to look at. In the 12-month span, this is going to be the wild, wild west. Nobody knows where it's going. Everyone's trying to predict it. Do I think the Mexico-Canada tariffs are going to stick long-term? No. 00:24:18 The Chinese tariff, because of geopolitical issues and, frankly, wanting to get money not going to that country, I think they are going to hold those, and I don't think they're going to pull back. China's starting to consume enough products internally that I think the Chinese don't have to fight it as hard as they would have, say, 10 years ago. If you go out to 18 months, 19 months, what I think you're going to start seeing, especially on big blue chip companies, is they need a reason to make a decision where the next plants were going. When we start working on a part number, for big multi-million unit 10-year contracts and stuff, that part number is in development for five or six years. 00:25:08 So if you've got a tariff threat sitting there, even if it's only for 12 months, that is enough to push a blue chip plant to go, you know what, we're going to go into Indiana. It was half a dozen here, six of the other, and we're actively watching them do it. Where it's you know what, let's not play Risk here, um we've got four years of this, uh, of this administration that plant's gonna open right about this time, it's too risky for us to do it, so I think you're gonna see a large set of part numbers that are part numbers and plants that are gonna open in the US in the next four or five years, um, and then you go a longer time period. This same calculus is going to happen then again. 00:26:02 And what a lot of people don't realize is a lot of big blue chips, their manufacturing plants are frankly disposable. They build these plants up to run this engine or this transmission, and then they'll shut that plant down and build the next one next to it or a couple hours away where they're seeing it. One of the big ones that will change this is a lot of companies are doing a lot more regional manufacturing. So if you know, you sell a lot of trucks in the south, the truck plant is the truck plant is now in four locations in the south, where you're okay, I've got my I've got this product set makes a lot of sense on the east coast in the US. 00:26:48 And as those go, they're a lot harder to move because they're now cutting that delivery time and the freight so low, they can't rebound from that. It'll hurt the balance sheets too much. Hey, what's up, everybody? Kevin and Norm here with a quick word from one of our sponsors, 8Fig. Let me tell you about a platform that's changing the game for Amazon sellers. That's right. It's called 8Fig. On average, sellers working with 8Fig grow up to 400% in less than a year. 8Fig offers both funding and free tools for e-commerce growth and cash flow management. And here's how it works. 8Fig provides flexible, data-driven funding tailored to your exact needs. You know, they could fund anywhere from up to $50,000 all the way up to $10 million. 00:27:39 8Fig gives you free tools to forecast demand, manage inventory, and analyze cash flow. Visit 8Fig. co, that's 8fig. Co, to learn more or check the link in the show notes below. Just mention marketing misfits and get 25% off your cost. That's $8fig. co, $8fig. co. See you on the other side. It'll be interesting to see what happens with the auto industry. I'm in Canada and just 18 kilometers away from me is a big Honda plant. They just announced Honda heading down to the States. I don't know if it'll affect the plant or not. You know, Canadians, US is our biggest market. But what I'm afraid of is the inflation side. Like when you start bringing in 25% tariffs or, you know, additional tariffs on China, I wonder what that's going to do. 00:28:45 And I guess nobody's going to know. Like, if you listen to the people marketing this... uh, it is a marketing question you know where does this where does this go uh down you know uh down the line somebody's got to pay for it? I see some companies saying that they're just going to absorb it and then other companies are going to have to raise pricing, depends on i think uh the case-by-case basis yeah, I mean for every big win there's going to be a big loss, and that's where the the next 12 months is just gonna be a roller coaster. You're not going to see it in any instant period. Most products, big blue-chip products, the vendors like us, we've already agreed to pricing. 00:29:35 So if we get an increase, I'm going to have to battle 18 months to the final consumer to get my price increase. So it's not going to be an instant thing. On things like Amazon where that lead time is shorter, I think you're going to see it more because people are importing the products every single day. But on a lot of the items you see at a store, that pricing has been locked and it's going to be locked for a long time. So it'll come down to whether or not the retailers or the dealers start trying to take advantage of the situation. But the cost to produce isn't changing to the OEMs. It seems like there's a shift now from – in the 60s and 70s and 80s, we went to globalization. 00:30:25 And that's when China really – China wasn't the world's factory until the late 80s, early 90s is when that really started. It was Taiwan before that and a few other places. But they really – they made a concerted effort to actually do it. And we have this whole globalization where they basically became the world's factories. And a lot of people – or a lot of countries are backing off on that and they're going more nationalistic now, and you look at the US with semiconductors; they're freaking out because all the top stuff is in Taiwan primarily, and they're like, 'Well, shoot! What if China takes over Taiwan? Then we're screwed on all these NVIDIA chips and all this stuff!' So we better go build uh factories in the US, and Biden put in some incentives, and like here in Austin, there's a 30 billion dollar Samsung plant being built in Hutto, just north of Austin right now. 00:31:12 And there's several others around the US. Are you seeing that in other industries too, where people are like, 'We got to CYA and get some of this stuff so that we're not 90% dependent on the world; we're 50-50 or 70-30 or something like that? Yeah.' Every single group that we talk to, I mean, I'll tell you on election night, I had Chinese companies calling me asking to take part numbers. As as it became clear what direction it was going, my phone starts ringing because even other countries are like, 'Shoot, we need to have some of our parts being made there, too.' So we stabilized it. The one big thing you brought up that China built the world's factory. This isn't a new thing. 00:31:57 The best way to become a world power is to be the number one manufacturing company country in the world. If you look what we really did to Britain and Europe as the U. S., when we launched our industrial revolution and we started making everything they were buying, all of a sudden we were in charge. And if you look through history, as that's happened, world powers were created on the back of making products. And I think people are starting to realize that a little bit. for political reasons we need to have a strong uh a strong manufacturing sector yeah that's a that's a really good point i actually if you look back at now i think about that um that even the british empire was built on ship making uh and the ability to actually do that and you look at some of these others uh you look at the roman empire was built on on it wasn't necessarily the same 00:32:55 type of products that we have today but it's built on technology and information and education and all all that kind of stuff and the us is the leader in that and even look at like apple it says uh what's it say designed in cupertino uh manufactured in china or something like that so they're still emphasizing that that aspect but um what about like the labor cost here i mean that you have to balance this as another political thing with immigration a lot of the immigrants that come to this country are willing to work for the lower rates because that's still better than what they got back in the us and a lot of times that's who's working whether It's the fields in California or it's the some of these manufacturing plants, and there's going to be a change in that are. 00:33:35 Are the regular American people willing to go into a factory and do this, or is it going to become all, uh, figure robots and not robotics that's going to be doing all this stuff? Uh, where do you see that going? I mean, automation is going to, not is going to, it has changed the game. When people think about American manufacturing, unless they live it, their mind always goes to like a greasy place with downtrodden workers and it's just a horrible environment. I don't know if you've ever seen the drone footage Tesla did of their new plant. Crystal white floors. There's machinery everywhere. There's robotics everywhere. So, the people running those machines, they're paid more. They really are. But they're getting an effective return on investment for that labor drastically higher than anywhere else in the world. 00:34:37 And because a lot of stuff is moving to the U. S., a lot of people fear automation. Oh, that's going to take away jobs. No, it's actually increasing jobs because what it's done is it's lowered our cost to manufacture enough to be able to take part numbers back from other countries. So no matter how great your automation is, and Elon ran into this with Tesla, he automated, their goal was everything. And they ended up actually taking offline, I think it was like 60% of the robotics because you can't automate everything. Humans are incredibly important. care what anybody's doing with AI at this point. There's something about getting a couple people in a room that is a completely different way of solving issues and getting things through. 00:35:25 It's a falsity to believe that because cheaper labor is coming in anywhere. You brought up in the fields. I live on a ranch and that's kind of a world that I'm very near and dear to. Do you know who the number one autonomous vehicle company is in the world? John Deere. Yeah, John Deere, the tractors. Yeah. Yep. They're leaps and bounds ahead of everybody else. But the difference is they're selling a million-dollar piece of equipment so they can put much better sensors and algorithms in that than you could into a consumer car. But all of that is being automated every single time. And frankly, you, it's just changing. The factory work has changed drastically. Well, you hear that in the news, like the Tesla giga plant in Austin, when that was granted the land and some of the tax abatements and stuff, he was going to, I forget the exact number, he's going to bring 10,000 jobs or 12,000 jobs or whatever. 00:36:25 And they've gone through a series of layoffs. So now it's like, I don't know what the number is, but 3,000 people working out there. There were no plans to get to those numbers that were promised because of the automation. And so, the argument on the from the other side is like uh, he's a liar and a fraud and a thief, and this and that and the other well, and he's just doing good business, well, and not even that I don't think anybody predicted how fast automation would be changing, um, and how well it would be implemented. I i we're looking at um some robotic uh systems right now that the robots actually have full vision cameras on them. 00:37:01 And they're going in and grabbing, it's a 150-pound part, and putting it into a machine for us, which is currently being done by a human, which is incredibly taxing on their body. And what that has ended up creating is now I can actually put vision on the robot. So the parts don't even have to be in the right spot. It's accurate down to three microns and it's finding the stuff. If you would have asked for a system like that five years ago, you're talking, a quarter million to a million dollars. I found a [I] found one of those cameras on eBay for $8, 500 yesterday. So, have you seen the Figure demo? It's on YouTube, just came out; I think last week. They got two robots next to a refrigerator. 00:37:47 So, there's a refrigerator to the left of one robot and another robot and to the right of the other robot is a drawer, like a cabin, like a pantry drawer kind of thing. And they put two baskets in front of each robot with apples and eggs and milk and different things. The robots actually, each one of them took turns, and they picked something out of the basket or even out of the other one's basket, like an apple. Oh, the apple turned around, looked at it; I say, with his vision, oh, the apple. Goose over here in the pantry drawer, another one picks up the milk looks at it, oh this one goes up into the into the refrigerator, it opens the refrigerator door and actually knows it goes on the top shelf because that's where it fits, it won't fit in the other two shelves down below. 00:38:25 It was amazing where this is going, and you just imagine taking that basic concept and applying it to manufacturing what you can do, it's mind-boggling. Yeah, it's It's the car battle today. You know, if you take a look at the robots, well, what you had with Dodge Chrysler and all those car manufacturers, you're going to find with the robots. I don't know who's going to win it. I haven't seen it. They're not sophisticated enough, but every house is going to have it one, two, three, and it'll come down to the old Sony beta or VHS Beta Max. Yeah, exactly. VHS beta max. Yeah. Yeah. It's, and the other part of that is what it's creating is a lot more high-paid jobs. 00:39:11 So this is the part that a lot of people aren't discussing because people like the inflammatory side of it is, 'Oh, look at all these low-wage jobs.' Apple has been begging for this for years. The U. S. does not have enough industrial manufacturing engineers. They simply do not. Those are very, very good-paying jobs. When Apple was going to build their iPhone plant or their display plant in Wisconsin, it was going to add a ton of jobs. Apple had mapped it out. It was cheaper for them to produce it in the U. S. than it was in China. Foxconn was in on it. The government granted all sorts of concessions for it. It was great. They hit a snag that they needed people to be in that plant and run it, and there simply were not enough American citizens who had gone into that industry. 00:40:09 And Foxconn's like, the only thing we can do is bring our Chinese employees and have them run the industrial engineering side of it. And then, of course, because of all the subsidies, everyone's like, 'wait, wait, all the good jobs are going to somebody else?' No, no, no. So there's a huge opportunity in it right now. And we're seeing it where our Illinois plant, they work with the local high schools and we were just talking about last week, throwing, throwing robotics into the high school to just start having these kids learn how the industrial side of it works, because these are really, really solid jobs and the market's moving incredibly fast in the robotics. And the cost of it is just, it's just going through the floor and getting intelligent people that understand the manufacturing process, but also the new tech that's available that ends in it. 00:41:02 If I were to have kids right now, I'd be like, 'Hey, this is a really, really good place for you to be.' Or be a plumber. Now, a quick word from our sponsor, LaVonta. Hey, Kevin, tell us a little bit about it. That's right, Amazon sellers. Do you want to skyrocket your sales and boost your organic rankings? Meet LaVonta. Normanized secret weapon for driving high-quality external traffic straight to our Amazon storefronts using affiliate marketing that's right it's achieved through direct partnerships with leading media outlets like CNN, Wirecutter, and Buzzfeed just to name a few as well as top affiliates, influencers, bloggers, and media buyers all in Levanta's marketplace which is home to over 5, 000 different creators that you get to choose from so are you ready to elevate your business? 00:41:58 Visit get. lavanta. io/ slash misfits. That's get. lavanta. io slash misfits and book a call and you'll get up to 20% off Levanta's gold plan today. That's get. lavanta. io slash misfits. Yeah, it's the dirty jobs. It's the piano movers, the plumbers. That's where a lot of these people are going to lose jobs. Those are going to become more valuable because, like you said, when you're the youngest guy in the room at a lot of these conventions, the same thing is happening now where it's the guys who are repairing telephone lines, they're aging out. They're retiring and stuff. And you see stuff where now they're using Ray-Ban meta-glasses. Whippersnappers in the field and he 00:42:53 puts on the glasses and he's trying to figure out the wires and he doesn't know the old man that's retired and making a little side side money sitting on his lazy chair sees him, tells him, 'No, you need to change the red one with the green one, and uh look behind over here, that's what you got to do.' And you're seeing that kind of stuff happening too now. Yeah, it's I mean, the the speed that tech is infiltrating manufacturing is unbelievable um, and and all, all dirty jobs to begin with, and the other part of it is, it's making it safe so it that a lot of those jobs the reason why you you didn't want to do them uh was because they're hard on your body. 00:43:32 I i mean, I brought up that 150-pound part yeah, loading that thing all day long – I mean first off, you you dropped that part and now you're gonna get yourself hurt. But now if you've got something that's assisting you, so all you're using is your human intelligence to get it to get the thing done. I mean, it's a whole different world than it was even 10 years ago. I like the leverage with the safety. So I come from a manufacturing background. father owned many manufacturing facilities and the accidents that you'd hear about either in the industry or in, in just in the, the different plants, like it would be nothing because they were molding shoe components for people that were there. Inevitably you'd cut your tips of your thumbs off. 00:44:25 My dad did beam presses where my friend cut both of his thumbs off. Just because he wasn't paying attention. So that's not going to happen anymore. So these machines that I see happening, not only is automation is going to happen, the safety is going to be happening, but also over time, we touched on it before, you spend a lot more money, but the ROI that you get over time is going to be a lot better than what you have right now. Like we think about cheap labor, that's going to outperform. Those machines are going to outperform what you have to pay now. Yeah. And I mean, the reality is, is those machines are getting so much cheaper so quickly. Yeah. 00:45:08 And it's, I mean, just like everything else, when the product comes out originally, it's like, oh, nobody will be able to use it. It's too expensive. And you get teams and teams of people figuring out how do we make it more efficient? How do we get the tech to work smoother? And we're watching it in real-time. And the safety is a huge component of it. We've got a lot of machines nowadays that have scanners scanning at every millisecond, laser scanning the whole area. And it's changing the speed that the machines are running at, depending how close humans are getting to dangerous points. You said earlier with your ranch, with John Deere, I think I read something recently where John Deere, whatever their sales, it's in way into the billions. 00:45:54 Um, they're becoming they're more of an AI company. A company, now than they are a tractor manufacturing company, yeah I mean there, there's a reason why their largest shareholder is Bill Gates um it's the, they are they are known for putting out an absolutely wonderful product and they are known now for we're going to be on the cutting edge and Deer's been there their whole time, I mean they invented the steel plow so that that's what put their name on the market, they've always been a very, a very progressive group at looking at innovation, innovation, and it just so happens you can only make a tractor so much better nowadays, I mean we, they kind of got it down now it's, can. 00:46:47 We make them do the job and take people take people out of the fields, um, take pesticides away; they're using uh scanning to individually laser burn weeds instead of putting pesticides on the ground like it's they they're that's the cutting edge of it now that's safety again. I live in a farm town and a friend of mine his brother caught in a combine cut his arm off, another one, 19-year-old kid killed this summer Because he got caught in the combine. And so, I mean, these farm accidents, the safer we go, the more advanced we get with these machines. These sensors are going to help with safety, especially in farming. Yeah, it's a huge push. And kind of circling back on that cheap labor, the trend is moving away where you don't want cheap labor running a million-dollar machine. 00:47:47 You, you, you're going to want somebody that I mean, we're starting to see a lot more apprenticeship programs in manufacturing because the schooling system has told a bunch of kids for 30 years, only the degenerates go into manufacturing. And all of a sudden it's like, no, we we're looking for very bright people because that that. space is completely different than it was 10 years ago or 15 years ago 30 years ago yeah you look at the i mean a lot of people think think about ai or quantum computing that's coming and they think about oh this is pretty cool i can rewrite my emails or redo this and do that but the biggest impact these new technology is going to have are i think on medicine and a lot of people will say on supply chain and manufacturing And a lot of people don't realize they can't get their head around, well, how is AI going to affect anything on manufacturing or supply chain? 00:48:45 And that's where a lot of the big things are. You're going to have agents, especially this is the year of agents, and you're going to start seeing more and more agents coming online in the next several years and getting more and more sophisticated, where you're going to be back to this Amazon seller where I'm sourcing something. Instead of sourcing it from China, I'm going to say you're going to have an agent that goes out and sees what the opportunity is in the market. But based on a whole number of criteria. You have another agent that goes, see, what can we make this for? And it's going to go talk to, you know, the Thomas directory of AI or whatever and say, oh, this factory in Dallas, Texas can make it or this one in China can make it. 00:49:21 If we put this twist on it, here's how we do it. Here's the 3D rendering. So there's everything already done. You don't have to have a person involved. Just have someone sign off for it, and then go see what the cost of manufacturing is. Come back and A human at the top approves it and you're gonna have this whole system where you're gonna be able to go to market on products way faster uh than than you did, and print on demand has been around for a long time. And you know, it's still uh yeah, a lot of people just think of it as a problem, a little printer in your house making your iPhone case. But there's people here in Austin, there's companies making entire houses print on demand, and there's big machinery that a lot of people don't realize exist. 00:49:58 And you're going to be able to go to market faster and more efficiently, and optimize supply chain dramatically because the AI can analyze all the stuff uh what are you seeing on uh what do you think is coming on on that side of things? So I will wholeheartedly say, I was one of those people uh if you would have asked me nine months ago. I was looking at AI and I'm like, yeah, I don't know where we could ever use this in our plants, it doesn't make any sense in manufacturing yet. It's not there yet. I had one of my executives call me the other day. He goes, 'You need to see something.' And I'm like, okay. So I take the call and he gets on and we're meeting with this team. 00:50:40 They're AI specialists and we use ERP manufacturing systems. But the problem is a lot of what we do is very, very strict, especially in the automotive space. As we're sitting there, we're like, 'hey, we need an ERP that is designed to fit this exact process that we do.' And, you know, we're just going to be coded. He puts it into one of the AI processors. He codes it in three minutes. And we had a launch product the next day. And in that plant, if we increase our cycle time by half a second, we could actually start losing money on that part. So now they're having AI go through and figure out, OK, we now have the predictive analysis of when that tooling is going to go. 00:51:30 Can we now take that tooling and stop at one cycle before, put the next one in? And it's learning all of this based on seconds. And we're fully embracing now because. We didn't realize how pervasive that was going to be and how quickly it was until somebody smarter than us was like, no, let me show you what I can do with this. And another one of our groups, the amount of resin used in something. We were developing out products, kitchen utensils, and we were able to tell an AI to design the kitchen utensils. And we had teams of regular 3D designers working on it. And we started screwing around. We're like, hey, design me five kitchenware lines and it needs to be this much plastic or less. And then all of a sudden it's spitting out design after design. And we're like, oh, this is going to be dangerous. You just did what teams were doing for months. Yeah, it's amazing where this is going. So you're a believer now. You're a convert. I am a whole believer. I was never so happy to be proven wrong. 00:52:58 Are you looking to quickly boost new Amazon product launches or scale up existing listings to reach first page positioning? The influencer platform Stack Influence can help. That's right. Stack Influence pushes high-volume external traffic, sales straight to Amazon listings using micro-influencers that you only have to pay with your products. They've helped up-and-coming brands like Magic Spoon compete with Cheerios for top category positioning while also helping Fortune 500 brands like Unilever launch their new products. Right now is one of the best times to get started with Stack Influence. You can sign up at stackinfluence.com. Com or click the link in this video down in the description or notes below and mention Misfits, that's M-I-S-F-I-T-S, to get 10% off your first campaign. Stackinfluence. com You talked about vertical integration with what you're doing. 00:54:02 You said you own a lot of the factories or you buy a lot of the factories. How important is that to control that whole supply chain up and down? Because a lot of people don't do that. They're waiting on somebody else or they can't integrate them fully. How important is that? And what do you find in the efficiencies there? We felt it was incredibly important. And part of it kind of goes back to your earlier comment that a lot of American manufacturers tell you where to stick it when you try to send them to work. Um, we got sick of that game and I like so a product is probably going to have three to five processes in it now. And if any one of the companies that's involved decides to be a jerk, he ruins it for you. 00:54:50 Um, so we feel it's been incredibly important for us to really be integrated. And even with our clients be heavily integrated. Because it just takes the finger pointing away. Like we play in a world of tight tolerances all the time. Well, if my part is at the upper end of the tolerance and the other person's part is at the lower end of the tolerance and the others is at the lower, all of a sudden, even though everybody made the right part, they still don't fit together correctly. What ends up happening is everybody's finger pointing going, well, I'm right, you're wrong. Well, that doesn't do anything for the end client. The end client is the part to work correctly. So when we're just arguing with ourselves, it gets a lot further because there's one singular vision. 00:55:39 And we've gone even as far as we make a brand of hangers that's exploding. Really, really cool product. We teamed up with the founder of it. He was pushing into all that stuff. Well, our injection molding plant is injection molding his hanger. We're processing his Amazon shipments. We're processing all of his Walmart and Target and all their retail stuff because I have a full retail team because we've worked with Walmart for 30 years at that plant. So we actually just came to him with a, you sell it, we will take care of everything else. He called me about a month ago. He goes, 'That was a godsend.' He goes, 'I'm not having to route package it like and we're like yeah, it's just easier that way. 00:56:26 Let us take our internal knowledge bases and just get you as close to market as possible um instead of trying to figure out three plus trying to figure out this, it's just, it's just too messy. So, you may only manufacture something when someone comes to you with an idea, then you guys figure it out or you actually have a team on your side That's like, you know, some of these Chinese factories where they just come up with ideas and then go try to find someone to white label or private label it. Or what's your which way do you work on that? Both. A lot of the private label stuff or we've got significant amount of SKUs of our private label stuff in Walmart. So, we're making it. It is Walmart branded. 00:57:13 Our team designed it. Our team pushed it forward, of course. Within the end consumer giving feedback um and then we've got some stuff people just hand it to us and say make this um and about 30 times someone will just hand us apart and say make this and we'll turn back to them and go I can make this or I can make these three adjustments and you'll get more of what you were trying to get out of it um and we're doing that even with in the automotive space um big blue chip automotive manufacturer comes in and goes, we designed this part. We're like, great, but we have a way to make it better for manufacturing. Will you look at our, our ideas? 00:57:56 And sometimes our ideas they like, and sometimes they go, no, we've designed it this way, leave it that way. So it's, we operate on both sides of that. We've got certain companies of ours that are very, very OEM focused where they just make what they're told. And then we've got another group that if you need more of that, hey, let's take you through all this or you need or we're developing white label products, that group focuses on it and then sends it out to the other plants. So I want to talk about what we discussed at Marketing Masters. That was a couple of weeks ago. And I find it amazing how you grow, how you expand your M&A, you know, you're just, you're constantly looking and finding new companies, executing and getting it out there. 00:58:44 You have a three-person team, you, your brother, and I forget the other person. You actually, you have a four-person team. You've got me and my brother. One of our partners is our general counsel and another partner heads up branding and, and, and imaging. Stuff um, our companies are ran with those four people so that's the the question so we'll have e-commerce people listening and they're focusing on just one thing which isn't a bad thing. How are you going out there and expanding to all these different manufacturing facilities and acquiring them? So we, we divvy up the work-my brother bird dogs all of our deals um, we've got very strict criteria um, he'll at when 00:59:34 the market has a lot available which right now it does not um, he will be looking at 100-150 companies a month um, of those he'll put four or five on my desk we will go through them and go okay this makes sense-we acquire about four or five a year or we did four or five last year um, and We're looking for very strong teams inside the company that understand their product very, very well, because that takes your management time from the holding company level drastically down. We're looking for a lot of it's about the passion of the people. We operate in a lot of small towns because, frankly, what we've learned is. A lot of people in small towns, that company is drastically more important to them. 01:00:31 It becomes part of their soul because there's not a ton of options in the area. So their passion for making it successful is drastically higher. And if you get passionate people that actually care about what they're doing, the organization and management of them is so much smoother than trying to jam work down people's throats. And the other key point that you told me, and I don't know if this is for everyone, but most of the acquisitions, you're really not paying anything up front. Is that correct? No, yeah. We will put equity in the deal sometimes. But realistically, our structure is that we do it as leveraged buyouts. So manufacturing companies have a lot of assets. We will go leverage those assets to purchase the company um and we do it all on short notes uh usually three to five years is our longest note and pay off the company in three to five years and then it's healthy um so you use their own money to finance the deal yes um 01:01:48 It works. It works. When we are small towns, Norm, these are small towns. Yeah. But yeah, it works. It takes finding the right deal. I mean, there's, there are, there've been companies we really wanted, but it didn't make sense for us to do it. Or there've been, we also, we avoid certain industries. Like we, we avoid the defense industry because defense industry makes a fortune. three out of five years. And they lose a fortune two out of five years. And it's too risky. And we don't like those peaks and valleys because you always feel like a genius when you catch them on the up. But when you catch them at the top of the peak and you learn on the backside, you don't feel as smart. So we try to focus. 01:02:45 We had a group. give us a chip plant. It was an organ. It was a profitable plant. We've made a promise that we're ESOPing 100% of our company to the employees. So they wanted to be part of the team. And my brother and I actually said no to it because the chip industry was so volatile. It was so fast-moving. It didn't feel like the right move for us. So we just didn't make the move. Hey, Kevin King and Norm Farrar here. If you've been enjoying this episode of Marketing Misfits, thank you for listening this far. Continue listening. We've got some more valuable stuff coming up. Be sure to hit that subscribe button if you're listening to this on your favorite podcast player. 01:03:28 Or, if you're watching this on YouTube or Spotify, make sure you subscribe to our channel because you don’t want to miss a single episode of The Marketing Misfits. Have you subscribed yet, Norm? Well, this is an old guy alert. Should I subscribe to my own podcast? Yeah, but what if you forget to show up one time? It's just me on here. You're not going to know what I say. I'll buy you a beard and you can sit in my chair too. You can go back and forth with one another. Yikes! But that being said, don't forget to subscribe, share it. Oh, and if you really like this content, somewhere up there, there's a banner. Click on it and you'll go to another episode of The Marketing Misfits. Make sure you don’t miss a single episode because you don’t want to be like Norm. 01:04:22 You're going to have a good time. You're coming with your wife to Iceland. Yes. You're very much looking forward to it. Yeah. She's speaking at Elevate 360, but she told me the other day, y'all are coming out a couple of days early. It'd be a blast for the last couple of days before that. And you're going to, I got to make sure I introduce you to Pattern is going to be there. The number one seller in the world on Amazon, $1 billion in sales. I had them on my other podcast. It hasn't come out yet, but they're masters. I mean, extreme masters of supply chain management and optimization. And they're doing a lot of cool stuff. And I think the two of us put you two together. The COO is coming. 01:05:07 I think there could be some magic happen between the two of us guys. And that Iceland trip might turn into a lot of zeros after for us. So I just can see it right now. Yeah, we're super stoked. And the events look awesome. When Mary and I were talking, we were like, you know what? It's just always a great group of people to be around. Why don't we get there a couple days early? Rub off on on just just just surrounding yourself with just people doing cool things, yeah it's gonna be cool, be a different experience in market masters uh but it's a whole different type of event and a whole different style but uh you'll get to see another side of what we do but it's just as cool but in a different way so don't forget your assless chaps. 01:05:59 It has been explained to me many times. If they're not assless, they're just leather pants. Exactly. That's right. All right, Jason. We're coming to the end of the podcast. And at the end of every podcast, we ask our misfit if they know a misfit. Yeah. A really good friend of mine, he's the world expert on sleep. And his name is Michael Bruce. And I think you guys absolutely love him. Fantastic. Yeah, that'll be that'll be a good one. You were telling me a little bit about him at Market Master or Marketing Masters. Market Masters. That's it. You know, BDSS, BDSM. So if people want to reach out or learn more about you or maybe they go to manufacture something, how would they go about doing that, Jason? 01:06:48 The best way is my LinkedIn next year link or our website is MRCA.net. And you can get to all of our different groups from there; um, reach out to us-we're and we we run on pure transparency so even if somebody listening is a manufacturer and just wants to want to pick our brain, we share pretty much everything with everybody. Uh, we figured out that that just builds kind of a better community around us, and so any any place. All right. So I'm going to remove you; we'll get right back to you. But thanks so much for being on. This was great. Love talking manufacturing. Thanks, Jason. All right. Those guys are crushing it-four of them doing all that kind of stuff. That's very smart business. Very smart business. Exactly. Exactly. 01:07:40 Just imagine if Papa Farra had access to what? the technology and the systems and stuff back when he was going; you wouldn't be doing this podcast; you'd be living on, on, on for our Island somewhere in the Caribbean. Yeah. I could just imagine. I mean, every night and drinking Coke zeros. And I do that now. Oh man. So this, this was a really interesting, you know, not so much about marketing, but yeah, marketing manufacturing, you know, all placed together. Absolutely. All right, Mr. King, why don't you close this out? Yeah, we do this, y'all listening, we do this every Tuesday. So if you just found this podcast, you got to go back. We've got 50 some odd episodes of just amazing stuff from email marketing to domains to funnels to just all kinds of crazy cool stuff. 01:08:35 So, check whether you're on YouTube right now, go and look in the library of videos and see what might interest you if you're listening to this on Spotify or Apple. There's a lot of episodes. Go in there and flag a few. Download them for your next plane ride. And be sure to share. If you found this episode interesting, just hit that share button and share it with some people that are manufacturers. Maybe you know someone that's looking for a factory and say, 'Hey, I heard this guy Jason. You might want to check it out.' Go ahead and hit that share button. And remember, every Tuesday is a brand new episode comes out. So if you want to follow us, you can always find out the latest at marketingmisfits. com. I've got this right now because it's Colombian.co. Marketing Misfits . co, Not . com, Norm. Every time I type . com, I see some swanky stuff. Some other guy with a beard or something. I'm like, what the heck is this? MarketingMisfits . co, That's where you go. All right, sir. Well, we will see everybody next Tuesday. That's right. See you later, Mr. King. Ciao. Peace.