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-   -   Even the Chinese won't buy their own junk... (http://www.sowpub.com/forum/showthread.php?t=9274)

GordonJ August 14, 2015 04:55 PM

Even the Chinese won't buy their own junk...
 
Here's a look at 3 local businesses, all selling their "manufactured here" goods to the Chinese and beyond.

#1. Cash cow small biz, 40 employees, makes tire making machines. Sells 5 to 10 a year, 2 to 5 million per unit. The machine can (and has been) reversed engineered BUT, many companies prefer to buy from USA because of the support. The machine mostly malfunctions when the rubber compound isn't right. The expertise is HERE, in Akron, OH. So, rather than miss days and weeks of production, one of the reps in Asia can be on site in a day.

#2. X-ray equipment. Refurbished in Kent, OH. Used machines sold throughout the world, for a fifth of the price of a new machine. 5-7 employees, doing a few million a year, with a profit on the machine, and a back end of SUPPORT. Two reps in the field, most a day or two away, and this saves down time...so the support is well worth the cost. Customers in over 14 countries.

3#. "Lines". Specialty manufacturer of a processing line. Say you want to compete with Heinz in the Ketchup market, you need a way to make and bottle your product, these guys can help. About 100 employees, a lot of engineers and they sub contract a lot of fabrication to local businesses.
They ship custom made manufacturing lines all over the world.

All three started by an Entrepreneur, today owned by Absentee corporations, all cash cows.

Sure, there has been a ton of jobs shipped off shore, but there is still a lot of know how and expertise which may be needed to support manufacturing and many cases where even with a Chinese competitor, some of their biggest corporations won't touch their own junk, they go with the quality and expertise of the USA.

Still the home of Entrepreneurship, innovation and quality.

Opportunities abound.

Gordonj

Dien Rice August 15, 2015 11:44 AM

Re: Even the Chinese won't buy their own junk...
 
Quote:

Originally Posted by GordonJ (Post 35736)
Sure, there has been a ton of jobs shipped off shore, but there is still a lot of know how and expertise which may be needed to support manufacturing and many cases where even with a Chinese competitor, some of their biggest corporations won't touch their own junk, they go with the quality and expertise of the USA.

Still the home of Entrepreneurship, innovation and quality.

Opportunities abound.

Hi Gordon,

You're absolutely right... There's still demand for American stuff overseas... (Also British, Australian, etc.)

It's not always about price, as it's also about quality...

I'm dipping my toe in the water of international trade, and it's an eye-opener!

Plus, there's a lot of money to be made as well. Instead of selling a $10 product to a buyer, you could be selling $5,000 or $10,000 worth of products to a single buyer instead. A single container-load could mean tens of thousands of bucks in profit in one hit.

I'm sure I'll have more to report in the months ahead...

With exporting, there are at least 2 ways to do it...

1. Selling it FOB (free on board or freight on board), which means your job is to get it on the ship, and from there it's the customer's responsibility. This is common if you're selling via AliBaba, for instance.

2. Shipping it to a foreign port, and selling it overseas. With this, you have to deal with customs, which is an extra expense and can be a headache (and in some countries, it could require bribes to get your products through - otherwise your products could get stuck indefinitely, it's just how it works some of the more corrupt countries). You also need contacts overseas to sell to with this method, since you have to know how to find the buyers...

I'm still learning, but there's potentially good money to be made here...

Best wishes!

Dien


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