Speaker 1: It's not only China sourcing, it's global sourcing. So we
do of course China is still a strong market for it,
but also the ones for example, if we do look
into getting out of China, I mean we do global
product sourcing. That's what we call Signify global product sourcing.
But what we usually bring to the table is that
most of the companies who have either raw material to
purchase or they're getting private label products done through third
party manufacturers, they don't usually have the time and or
the knowledge of finding about thirty potential producers, contacting them,
getting quotations, comparing the quotations, and negotiating one against the
other one.
Speaker 2: You're listening to Carrie Letz's Financial Survival Network, where you
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. Hey, you know,
for a while I've been helping businesses turn around and
well person you're about to hear from, not exactly the
same kind of business, definitely related. Name is Sebastian Hers,
and you help businesses increase their profits by cutting costs,
which is something that every business should be doing on
a monthly or a very least a quarterly basis Sebastian.
It's great to have you on the show. How'd you
get into this? Harry?
Speaker 1: Thank you so much for this? And I think you
hit like a very very good use case. Aud you
say it does an English like you hit a nail
on the head. You should look, of course, especially when
it comes to turning your business around, whether you're spending
too much or not. And we're sourcing companies, so we're
finding manufacturers negotiating prices and reducing the purchasing costs.
Speaker 3: That's the ultimate target, of course for it. And how
do we get to this?
Speaker 1: Well, I got to admit it's not me, it's my
better half. She's been doing sourcing all her life long.
I should usually not say that she's been doing sourcing
for twenty years, but only nineteen years, because she's not
don exaggerated.
Speaker 3: And we used to both.
Speaker 1: She's from Russia, from Germany, and we both used to
live in China, so we got to know each other
in China. I'm an electrical engineer and stayed with a
large Swiss company for twelve years, and she's been doing sourcing.
Then in the end of China, I started building my
first private label product business and all of a sudden,
of course sourcing was one of the topics for myself.
And she bothered me three times, or it bothered is
the wrong word, but usually when what can you not
do against women?
Speaker 3: You can't win against them?
Speaker 1: So three times she asked me in it all right,
I'll join you. And this all of a sudden is
how we then got together with Signified Global Product Sourcing
into a deeper, more and more sourcing together.
Speaker 3: Yeah. Never never argue with a woman. You can only lose, right,
I like that one.
Speaker 1: I think that's that's hitting and nail on the head again.
Speaker 3: Yeah, hice. So all right, so you were out expert
in China outsourcing and it kind of led to this,
and what do you think you bring to the table, Like,
what is your your avatar, your typical archetypal. Buy in
two needs you and maybe not doesn't know it.
Speaker 1: It's it's not only China sourcing. It's global sourcing, so
we do. Of course China is still a strong market
for it, but also the ones for example, if we
do look into getting out of China, I mean we
do global product sourcing. That's what we call signified global
product sourcing. But what we usually bring to the table
is that most of the companies who have either raw
material to purchase or they're getting private label products done
through third party manufacturers, they don't usually have the time
and or the knowledge of finding about thirty potential producers,
contacting them, getting quotations, comparing the quotations, and negotiating one
against the other one. So it is something anybody could
do on his or her own with a little bit
of course of sourcing knowledge, negotiation power.
Speaker 3: Et cetera.
Speaker 1: But it's just simply really the time that most of
the medium and large companies don't have to look into
so many potential quotations or finding so many because in
typical or in today's world is typical that purchasing staff,
whether in large companies or us on small private label businesses,
they may get three or four quotations typically to have
a comparison and think we're at the right track. This
is usually good for the beginning, but especially when you
have products that sell well or you have issues. Of course,
with finances, you can look whether your costs of a
good sold are too expensive. And it's I think not
a secret. I mean, the more quotations you get, the
better leverage negotiation you have. Right, that's the unspoken or
spoken truth of what brings success in saving money.
Speaker 3: So when you're looking though, sometimes the price could be
too cheap or too expensive, do you like usually throw
up the cheapest and the highest? How do you do that?
Speaker 1: I mean the target would be of course, if things
go well, out of those thirty potential producers may work
get five to eight quotations. Maybe if it goes well,
or even better at ten to twelve. Maybe if it
goes really well, if you're going into China and seartually there,
maybe you get fifteen, twenty or twenty five. So of course,
if you do see where the average usually lays, and
you see one that really escapes and run the way
with extremely low prices, you think is like, yeah, there
must be something wrong. And then the most expensive and
extreme ones that get out of the normal average, of
course you would kick them out as well. But then
you'll start looking at the ones which are reasonable. I mean,
it may not hurt still to have a look at that,
but like you rightly say, it may be if it's
like extremely cheap or extremely expensive, there's something there's something
that's different with that product.
Speaker 3: Gotcha, I say, so, yeah, you really you got to
do your due diligence on these potential suppliers, right.
Speaker 1: Absolutely, yes, yeah, And I mean one of the other
secrets maybe to do is also if you do this,
of course on your own, kick out any trading companies
if you can, if you're willing to take the effort
of being responsible of course for your product on your own.
If youse, say, companies they're moving big boxes, turning them
into small boxes and ship them out and then ask
for a FT twenty thirty forty fifty eighty percent margin,
which or sometimes even more so, trading companies is like
a red flag for us usually unless.
Speaker 3: A client really wants to have them.
Speaker 1: We don't need middlemen, not all the time.
Speaker 3: Well, I always learned in college and management. You can
get rid of a middleman, but you can't get rid
of this.
Speaker 1: Function, right, yes, but you can change the way how
a middleman is being charge or how he charges. Like
most of the middleman would call us as a middleman,
you know, many times they would buy the product and
resell it or get a contract for getting a percentage
of the order volume.
Speaker 3: And those are.
Speaker 1: Unnecessary costs where you say, why.
Speaker 3: Should for doing that work once?
Speaker 1: You should always earn so many percent forever? Yeah, just
finding a producer on the order volume.
Speaker 3: That used to be the case.
Speaker 1: But I think this is something where we're i would say,
revolutionizing the market. And maybe some companies don't like us
because of that.
Speaker 3: Well that's their problem. Your duty is to your client
to get them the best possible deals to help them
maximize their their profits. Right, if you ever.
Speaker 1: Look for a job, carry that was a very good summary.
I don't think I could afford you.
Speaker 3: Though, but yeah, hey, that's what I usually tell clients.
I don't want to work with you can't afford me,
and that makes them want to work with me more.
But sorry for another day. But so, so, what are
three things that any business could do right now to
cut their costs?
Speaker 1: Where let me ask, where's the audience for you? Mostly
in the US, I would assume, right.
Speaker 3: In the US, But we got Canadians and then Europe.
You know, we got three percent of the audience in UK,
Netherlands and Germany, so this.
Speaker 1: Is really the majority, of course for the US and.
Speaker 3: Cat Yeah, eighty five percent is here in North America. Yeah, so,
I mean definitely.
Speaker 1: One of the things I think that applies for anybody
is to ask yourself, all right, do I really get
the best prices? And I am very very often hear oh,
we're working for such a long time. We're working for
ten years, fifteen years with the same supplier. That's usually
a sign that you don't have the best prices, because
of course they also want to earn money, and something
has changed in the market. There are probably more producers
in there. And I mean we've saved our clients no
more than have a billion with a bee like.
Speaker 3: Bravo and long. That's a lot of money. Yeah, indeed.
Speaker 1: And the second thing, especially when it comes to the US,
I would look, I mean, China still is a great country.
We've been in there, I mean politically wise that maybe
you know, of course different reasons, but what I'm saying
in terms of production and et cetera, it's still a
great country. We're still doing about forty percent sourcing inside China,
which is the largest by far for a single country.
But I mean an economic economic war always has somewhat
been going on between the US and China, but I
mean since Trump back then in twenty eighteen implemented even
more anti dumping tariffs against products from China, and the
question really comes up as like, okay, can I get
this product from a different country but China, because I
think back then it was a two hundred and fifty
or two hundred and eighty billion lawler market. Who cares
about thirty billion?
Speaker 3: Right that.
Speaker 1: They had at least twenty five percent additional import tax.
And please do not do not do to make the
mistake and sheet and different tariff code cheat with a value.
So just to get around the anti dumping tariffs because
a country does not make any money, a country doesn't
have any money, A country has taken taxes in the top. Yeah,
and if they need money, and they'll check you out
and they find some mistakes, believe me, they go deeper.
We have a few companies, two of them are also
product businesses, and I mean US Germans. I think we
may be a little bit more afraid or more aware
of that compared to what I see a lot of
times in the US. But I've gone through customs checks
and I'm super happy that they found like minor mistakes,
but you know, the minor mistakes, and they started digging.
They wanted to see the invo as a still bank
transfers all of those things, and was like, if there
was one small mistake, paid one thousand, five hundred extra,
which wasn't really much, but the rest was correct. But
if a country wants money, they will go for it.
Speaker 3: And they got to pay you know, a few mispayments there,
and they've already paid for your fee. Right, what do
you mean a few misspayments, Yeah, a few misstaken payments,
a few you know.
Speaker 1: Right, I mean whenever we came on the right payments
or just looking at the penalties, I mean, yes, you
may very simply do it once. Right, it covers any
of the cost that you would have. So one of
the ones we said, like, you know, do you really
have the best prices. The second time is like is
China the right country or for the simple reason, a
government does not tax a product. A government taxes a
product from a specific country. So that's say I give
you one example, one of our they do beauty accessories.
Also German guys selling in the US, selling over their
own web page. I think that year back then was
like thirty million dollars. Was like, hats of guys, you
really know how to do marketing. And we found the
product actually even one dollar cheaper in Vietnam and zero
percent import tariffs. And they saved eight hundred and ten
thousand dollars alone on import terms the whole year with
the products that we optimize. They say fourteen million dollars
by finding a cheaper supplier and no import taxes from Vietnam.
Speaker 3: And the certain thing I would.
Speaker 1: Say is that you can do besides that, get more quotations,
find more suppliers and ask around and or go in
with your existing supplier and said, guys, we've been doing
business for so long together. I do understand here and
there on this and that. But you know what, we
have a lot of other orders offers as well. If
that is true, can we do something about the price?
Really the simple thing of just asking, even on the
next order, even if it's the same amount of units
that you're ordering, our own team got for our own products.
I think in that one day was like a three
three order row. I think in the average fourteen point
eight percent saved just by asking. We was like, wow,
that's additional savings.
Speaker 3: Well, we had a saying in law school, if you
don't ask, you don't get.
Speaker 1: Uh. Absolutely right, Yep, that's so true.
Speaker 3: That's absolutely true.
Speaker 1: I mean what you need to do is, you know,
business a bit is stune in between people, and if
people don't talk to one another. That's why you know,
I'm not really afraid of AI is taking over all
those negotiations. It will be people in the end still
communicating one another and deciding whether I do want to
take that business from you for the amount of money
you're offering me or not. But true, yeah, And another
good praise in general out there is you may have
heard this, I carry you for sure have heard this
that the real money is made in purchasing, not in sales,
or not only in sales.
Speaker 3: Well, you have to have the sales in order to
do the purchasing, right, what you.
Speaker 1: Can purchase before, of course everything and not sell. But yes,
some makes you get the sales. But then you know,
the cheaper you buy, the more money of course you made.
But yes, if you want to make.
Speaker 3: Again in the US, like when a contractor it's or
a construction project, after they get the award, the first
thing they do is go back and try to cut
the costs and get the get the suppliers to lower
their costs, right, to lower the bill, right. Yeah, So
it makes a lot of sense, doesn't it. Absolutely? Yeah. So,
so tell us some success stories things that you've been
able to achieve for clients. You gave us one example,
some overpayments you found and that led to them saving
not all the money in the world, but hey, every
it's a process, right, Every savings leads to more savings.
Speaker 1: So I mean another success again is one of the
beauty accessories products. It was again the first product was
like five hundred thousand units ordered a year. One dollar
sheep was half a million saved original purchase in Bible
six dollars, so it was three millions, and those twenty
percent out of three millions, eight hundred and ten thousand
just save from product number one went in the other
seven or eight products, and then it was the savings
of fourteen million just by changing from China to Vietnam
and or in general looking for a new supplier. Now
another one that was a cosmetics brand, so creams and cosmetics.
I think it was a business of around like twenty
six million dollars. Also, heads off, he's built this in
three years from scratch to twenty six million dollar in revenue.
Speaker 3: That's pretty neat. And and in the first.
Speaker 1: Eight months back then, my wife was still doing it alone.
But she's saved in the first eight months one point
four million dollars. And if he's had I think back
then two and a half million dollar in profit or
so an additional one point four million dollars, I think
we're like forty the forty six percent or something on
there like it as additional profit. That's amazing finding.
Speaker 3: I mean.
Speaker 1: Another thing is, of course, if let's go for some
big electronics companies fortune five hundred, so I can't give
an aime there about this specific product. But when they
couldn't produce anymore during the chips crisis, why or because
they are previous free suppliers, you know, they didn't have
any stock of computer chips anymore and memory modules and
why not? Well, because they also only looked into their
into their own typical pre sourcing channels. And we said, guys,
it doesn't you know, if you're looking always in the
same spot and there is nothing, then there's a very
good book like The Cheese Manager or the Device Manager.
And I think if you start looking in the same thing,
or when you lost your key and you're looking at
night under the street light and the key's not there,
you will not find it there. It may be somewhere
in the dark. And we actually went in and then
later found As weird as it sounds, but electronic chips
in textile producers literally under the pillows because they knew
something was going to happen. They knew the market is
going to crash in terms of chips, so they bought
empty the market stopped everything in and they're owned as a
textile training company. They knew what's going to happen. I
can charge ten, twenty fifty or sometimes one hundred times
the price of some of the products one hundred percent
up front payment with no invoice. And believe me, how
how what's the English word? How the big clients were
really like needing it? How they are desperate?
Speaker 3: Yeah, they didn't even you know, that's the problem. They
don't necessarily know they need it until until you do
it right. Until they find you and you show them
the way yeaeah.
Speaker 1: And I mean many of them could still not buy it,
because I mean, obviously those are not ways that could
be according to their compliance. But some other electronic companies,
of course without setting the details, but they went in
bought chips because they knew, all right, it doesn't matter,
we need to buy them, and then they could produce
in two digit millions. Again, finally, while somewhat outperforming legal
or not so legal legally their competitors. And there's tons
of finding alternative producers, finding getting your products near shoring,
get it the production closer to your home, so maybe
you're even in the same economic region. You can get
much much better payment terms. Let's say, well, for example,
like ninety days net or whatever, three percent discount on
thirty days payment. After receiving the goods, you may by
switching over your supply chain ors the tours near shoring
or the smaller batches. But more frequently you have less
bound at all, and with the late payments you may
build up a positive cash flow. On the other hand,
you don't have like seven eight nine weeks sea time, no,
because you throw it on the truck and it's going
to be there in three days, and all of those
things may of course, I mean there's there's there's tons
of stories that either share.
Speaker 3: I just say, I'm sure you got a lot of them,
like we all do, right, Yeah. So hey, So when
when you're approaching what a quiet you agree to do
business with them, what's the first thing you do with them?
Speaker 1: I mean usually, of course, when it comes to really
getting started with the sourcing, it is of understanding the product.
It's not like, you know, they come to me, it's
like where's the best market? That's usually what they say
is like, so where do I best buy products? I'm
saying that I need to understand the product because you know,
getting freshly squeezed orange juice from Alaska is maybe not
the best choice.
Speaker 3: Yeah, it's not a good idea, and.
Speaker 1: Getting bamboo out of Europe is maybe also not the
best ideas. So we would be looking at the product
of the way, how it's being made, what are the
main components, And when we, for example, say can I
give this as an example?
Speaker 3: Sure, I'm thinking right now if I should or not.
Speaker 1: Let's say, let's it's just some kind of basket out
of felt material and some bamboo holdings or frames around it.
So the question is like whether it makes sense to,
you know, get it from Europe because Europe doesn't really
have bamboo. Should it be a bamboo producer on the
other in Asia who doesn't really know about textile, or
should it be on the other hand, a textile producer
somewhere in the Asian region, depending on which country of course,
looking of course into the import tariffs or looking into
the customs duties and saying whether a textile company who
would purchase bamboo frames from somewhere else would be the
right choice to look into. So without understanding the product,
you can't really understand where the product.
Speaker 3: Should come from, gotcha.
Speaker 1: I mean, with the focus of making it the most
affordable you can. Belias this hears in Germany, but it
will be probably like ten times surprise.
Speaker 3: Hey, it makes a lot of sense. Sometimes you got
to pay the price to get the quality you want.
Other times you know, it just makes it. Well, Hey,
appreciate you coming on, Sebastian. Just tell us how do
we connect with you on the web. Where do we
find you? How do you work with the people?
Speaker 1: Jerry, thanks a lot, I mean for this real great offer.
It's it's nice to be here. I mean quite simple.
Go to signify dot net z in the beginning of
Y and the end so z I g N I
F Y dot net and there's just a booking calendar.
Just book a call, doesn't cost anything. We'll have a
chat and we'll hop on a call and see and
explore of these possibilities to find additional producers and better
prices for your products and or if it's possible, of course,
to reduce to purchasing cost. And I think that's already
very very EASi is signify dot net and just book
a call.
Speaker 3: All right, Hey, appreciate you coming on. And if you've
got a question for Sebastian or myself, shoot me an email, okay.
L At Carrie Let's dot com you'll find a link
to Sebastian's site and the show out to this interview
on Financial Survival Network dot com. While you're there, please
sign up for free newsletter. You get a lot of
great info like what Sebastian's sharing with you here and
Sebastian will definitely talk to you again. Appreciate you coming on.
Speaker 1: Thank you so much for my slight Thanks for.
Speaker 2: Listening to Carrie Letz's Financial Survival Network your solution to
today's trying times. For the latest, go to Financial Survivalnetwork
dot com. Financial Survival Network now more than ever