- Brian Miller
- Founder of Easy China Warehouse
Notes:
- Air shipping
- 50% Shipped in passenger flights
- Over 30 day shipping times
- Direct Line
- Label with USPS label in China
- Using DHL Express shipping
- Wait and ship by sea
- Opportunities
- Smaller factories
- Lower quantities
- Improve the supply chain
- More people are buying online
Bio:
Brian Miller has been living in China for the past 10 years. He previously worked for one of the largest Chinese government owned manufacturers managing their North American Export operations. He now runs a 3rd party logistics warehouse in Shenzhen China called EasyChinaWarehouse.com. The company provides 3rd party logistics and shipping for Amazon FBA sellers and any ecommerce company creating products in China. Previous to Easy China Warehouse he founded and an E-commerce company which sells Bluetooth speakers.
Sponsors:
- Drip – Get a free demo of Drip using this coupon code!
- Spark Shipping – eCommerce Automation
Links:
Transcript :
Charles (00:00):
In this episode of The Business eCommerce I talk with Brian Miller about how COVID 19 has affected shipping and supply chain from China. This is the Business of eCommerce, episode 127.
New Speaker (00:18):
Welcome to the business of eCommerce to show that helps eCommerce retailers start, launch and grow their eCommerce business. I’m your host Charles Palleschi and I’m here today with Brian Miller. Brian is the founder of Easy China Warehouse, a third party logistics company in Shenzhen. I asked Brian on the show today to talk about how COVID 19 has affected shipping and supply chain from China. So Hey Brian, how are you doing today?
Brian (00:40):
Great. Thanks for having me.
Charles (00:41):
Yeah, awesome to have you on the show. I’m super interested in this topic. I feel like obviously kind of covert right now, everyone’s going to talk to you about it, but seeing that from the eyes of how it affects e-commerce, I think we’ve all kind of felt it, but so you’re on the ground right now in China, right? And you’ve been there for,
Brian (01:00):
Yeah. So yeah, so our company is located in Shenzhen, China, which is the S in the South of China. If people are familiar with Hong Kong, we actually bought Hong Kong. So a lot of people probably know Hong Kong over Shenzhen and that’s where we are right now.
Charles (01:14):
And Shenzhen is basically the shipping capital of the the world at this point. Right? I know that one of the big,
Brian (01:20):
Yeah. Yeah, it’s one of the shipping capitals. It’s also one of the hardware capitals of the world. So most of the hardware in the world is actually manufactured at a Schengen. And most of the big companies that we know that make hardware like Apple any of the Bluetooth speaker companies computer manufacturers are all here. So it’s an important supply base for that type of manufacturing as well.
Charles (01:44):
Okay. So this episode will come out next week, but we’re talking right here on probably good to know. May 12th 2020. Right. In case someone looks back at us. So cause, cause just topics moving quick, right? Like everything we say this week is very different than last week and last month. Right. But you’ve been on, you’ve kind of been seen this since the very beginning, since what, January, right. Chinese new year.
Brian (02:09):
Yeah. So around that time, basically in December when I was in China in, in 19 we kinda heard a little bit about a virus that was around and people didn’t know much about it and that we shouldn’t be that concerned. And at that time, no one really knew what it was about. And actually at the end of January, it was when the Chinese government made a formal announcement that there was this virus, the Krone virus that we know today. And so in January is when kind of the ramp up of everyone starting to try to protect themselves with masks and kind of stay inside started in China.
Charles (02:42):
Gotcha. And now at this point, so in may, what, what are we looking at in China? How are things going there right now?
Brian (02:50):
Yeah, so luckily, I mean, up until now you know, the first few months definitely in China were tough. But as of today, in may I’d say that like most of the production is back online. So if you do make things in China it’s easy to release what are your factory and actually factories are kind of hungry for orders right now because, because of the demands shock and the rest of the world where the virus has kind of spread to other places, now there’s a demand shock from those places and there’s less buyers releasing orders in China. So factories are having a bit of a, a hard time in China and they’re very hungry for your order now for sure.
Charles (03:28):
Is it, the demand is lower right now or it’s, the shipping is more difficult and kind of, how is the shipping right now? Like actually getting stuff out of China?
Brian (03:36):
Yeah, so I would say like, like the, the virus kind of came and it affected the supply chain in two different ways. So when we had the ramp up in China, so Chinese new year changes every year, but this year in 2020, it started at the end of January. And so that’s also kind of in line with when the virus was the most severe in China. And so we had kind of a whole lockdown and we had a lot of things that happened. Temp pitcher chats, people had to stay home. And the government kind of created kind of a strict quarantine enforcement throughout the whole country. And after Chinese new year when factories tried to get back online, basically there were a new safety requirements that all factories and warehouses like us needed to abide by in order to open.
Brian (04:24):
And we needed to have actually Chinese state government inspectors come to our facility to allow us to commence operation. And as you can imagine, if you have millions of factories in China and everyone’s applying to get back to work, well, you needed to wait in line for a safety inspector to come to your facility and approve you to go. And so that’s right after Chinese new year in February, that’s where we saw a lot of supply constraints. And by supply, I mean the manufacturing base was slow to get started. And people that were releasing orders started to see delays in February because a lot of the factories were saying that they were open, but in fact they were actually getting open and they weren’t to full capacity. So there was the safety inspections, but also the quarantine throughout the country kind of hindered the ability for factories to get labor.
Brian (05:18):
So in China, actually a lot of labor that works in factory comes from the countryside. And there are migrant workers that come to the cities, like large cities to actually work in the factories. And because of the quarantines factories were under capacity and their ability to get labor to produce. So in February we saw massive factory delays. And then in March we saw most of the factories start to open. And probably by the end of the March we saw at least 80% of the capacity come back online. So that’s kind of like the timeline that we saw in manufacturing within China. So first it was a supply constraint. And now at this point in may we have like a demand constraint, meaning like kind of you know, economies have contracted because people have to stay home. People are not spending as much money. People are not out consuming as much and so we’re seeing that you know, factories are a little bit light on orders in China at the moment.
Charles (06:10):
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Brian (07:13):
Yeah. So I’m a little bit about shipping is coming from China, at least the biggest problem that everyone’s had is basically air shipping. A lot of people don’t realize that about 50% of all air freight capacity is shipped in the bellies of passenger flights. And so since most of the flights around the world are canceled basically 50% of global air freight capacity has been wiped off the market. And in addition, because of the factory delays in February, a lot of buyers wanted to get their products to their markets as fast as possible because, you know, we had delays in production and they were running out of inventory. And so you had a massive demand of people trying to put their product on air freight aircraft. And that caused basically a squeezing in the capacity and a very high increase in demand.
Brian (08:13):
And so since February, our air freight prices have gone up almost every week until last week. They just went down a little bit, but we’ve never seen air freight prices ever so high in my whole entire time manufacturing in China. So it’s kind of unprecedented. And we as a shipping company have had trouble even getting our products onto aircraft. So a lot of our freight, our air freight is actually sitting at the airport in Hong Kong waiting in line. So it’s first come, first serve you put your product there and they load your product into the available aircraft as it’s available. So we’re seeing like even one week waiting times to get our products loaded onto aircraft. So a massive constraint in this market at the moment. So for anyone that’s shipping from China manufacturing in China or drop shipping, it’s been a huge change in their business because it’s, the costs have increased. Some of the sales of certain products have become unviable because of the high cost of air freight and also shipping times have slowed down. So for anyone drop shipping from China to the rest of the world, a lot of them are having problems with like, you know, 30 plus day delivery times, which is, you know, not normal. So there’s a lot of constraints on this market at the moment.
Charles (09:30):
Yeah. I felt like the direct drop in China shipping times are always an issue and now it’s just kind of X that like, you know, whatever problems we’re facing before and now it just exacerbated by this.
Brian (09:39):
Yeah, we’re seeing like in normal times we usually see around one to two weeks. And now we’re seeing it could be over 30 days for, we have different shipping lines, but for like the regular postal shipments, you know, some places are over 30 days and, and so a lot of these e-commerce sellers are having trouble managing that expectation with their customer, managing returns and, and all those things. So it’s, it’s become a big problem for the job. The direct from China drop shipping market at the moment.
Charles (10:10):
If you were a drop ship or any kind of tips there on dealing with us, is it just kind of managing customer expectations at this point or the, is there any way to get it there quicker or is it just what it is right now?
Brian (10:21):
Yeah, there is a bit, I mean, for, at least for our company, we and other companies offer a product called a direct line. And the basic idea of the direct line is that we label the product with a USP S label in China and then we consolidate the air freight on our own to the U S where we pass it onto USBs. And so this method, although it’s a bit more expensive than the average postal shipment, it’s a more stable in its shipment time because we’re actually setting up the air freight, right? The postal shipments that many of the drop shippers use in China, those basically get loaded on a plane last because those are the, those are the the least let’s say they pay the least for that product for that space on the plane. And so everyone that’s paying more like us or DHL or any other people are putting our products on the plane before those postal shipments. So there are a few methods people are also using express now because air freight has become so expensive that even DHL is just as competitive as a lot of the other shipping methods. So we’ve seen a lot of changes in the market in the last month or so.
Charles (11:33):
Okay. So by you basically pre-buying the postage at that point, you guys first in line, everyone else kind of just goes in the, when we have space bin and then they’re just using those as kind of filler in between more or less.
Brian (11:45):
Yeah, we have an account. Yeah, we have an account in the U S and we basically print those labels in China and then we take like you thousands of packages and consolidate them into our own air freight that we manage to the U S and then pass it onto USBs. So we make sure that like it gets on a plane and we bring it to the U S and it gets passed off. Whereas if you ship with the post office, usually you’re in the hands of whatever you know they’re able to do so you don’t know where it is, you don’t know how long it’s going to take and you can’t really track or see your package at any time during the, the shipment process.
Charles (12:23):
So you’re basically controlling the whole container from start to finish versus they’re just kind of controlling one piece, one package, one like small parcel and that gets put in someone else’s container and yeah, find its way though.
Brian (12:34):
Exactly. Yeah, yeah, yeah. So like we’re controlling the destiny of our, let’s say our customers clients. Whereas the post office is putting it all together with a group of other people. And then when there’s enough space on the plane, they put whatever they have allotted onto that plane. So say if they have like let’s say one ton available every day and they, but they have three tons of shipments that people give them every day. Well eventually you’ve get so much built up that it starts getting stuck in, in China because there’s so much backlog of product. Whereas, you know, if we have one time, we buy one ton worth of shipment. If we have like two tons, we buy two tons worth of space. So we’re like, you know, actively buying space on the aircraft to make sure that our stuff gets in essentially.
Charles (13:22):
Got it. Okay. So if you’re a small shipper out there, the only way to get in on this will be to work with a three PL like yourself, right? Like there’s no one to do syndrome.
Brian (13:32):
Yeah, you couldn’t do it on your own. I mean, we do it and obviously other people do it. So you could find three pills in China. Not many people do it, but there are various shippers that do, do this type of method. So yeah, you would have to find, basically instead of buying from Ali express, you would have to purchase your own small amount of products from the factory directly and send it to one of those three pills in China. And then they would help store it and then ship it for you when you had an order. So that’s kind of how it worked. So differing from traditional drop shipping where you could just order one or two units off Ali express and you don’t have to take as much risk, let’s say upfront and the cost. Whereas with our model, you do have to buy some product and leave at our warehouse. So there’s a bit more capital risk, but at the same time you get an advantage of better shipping times and a better customer experience for your customer. So it’s like, you know, it’s whatever balance you want to make for your business. Basically,
Charles (14:32):
And I’m guessing what the supply crunch right now, if you’re a smaller drop shipper, you might be able to approach a factory now and the minimum is going to be less, they’re going to be a lot more likely to kind of play ball with you versus if you went to them, you know, six months ago you’re gonna, you’re gonna be competing with everyone or it’s now you can probably sneak in and just get a very small initial order and just kind of almost used now as an opportunity it sounds like.
Brian (14:56):
Yeah, I completely agree. It’s a great point. Like right now it’s a great time whether you’re looking for new suppliers or whether you have old suppliers to see if you can kind of renegotiate some terms, maybe get a better price or you know, they might allow you to buy a lower quantity more often. So it’s a really good point because they are strained at the moment for orders. And so you as the buyer have a bit more leverage than they do. And I think it’s a really good idea even, but obviously it don’t be too tough. Like they aren’t a tough time as well. And if you’re too pushy, it might sour your relationship, but it doesn’t hurt to like bring it up and ask them and see if you can get a better term for yourself.
Charles (15:35):
Yeah. How is are people going more to see freight now? Cause it almost sounds like when you’re talking like 30 plus days, you could always just start going see at this point, right? Like
Brian (15:47):
Yeah it is a really good point. Like so that’s just the dropshipping but also like I’ll give you an example. Like usually THL or or ups, you can get an expression and from China in three to four days and now those same shipments are taking two weeks. So like we’re really seeing like a really long shipment time and the cost is really high. And so because of that environment, it’s made it kind of cost prohibitive for you to be, you know, make a profit on your product. So a lot of people are choosing just to wait and to ship by sea instead of even thinking and just being out of inventory for a few weeks. People are kind of accepting this as the new norm in order to keep their margins high. So yeah, we’re seeing a lot of people just move to see, even if they’re out of inventory, they just have to wait and be out for a few weeks.
Charles (16:39):
Yeah. And people I think of right now used to back orders or a thing you know, here in Boston I can usually do Amazon one day, you know, for a lot of products and it just turned into a week. It’s just normal. You just wait. It’s not a, it’s just what you’re used to now. So it is, we’re kind of living in a different time right now.
Brian (16:57):
Yeah. I think consumers are a bit more patient now and understanding than what they used to be. You know, before this all started. So yeah. So you can convince a customer to wait a week or two to get a product just because there’s so much strain on the supply chain.
Charles (17:15):
Gotcha. How do you see, we were telling us before the show. Yeah. Everyone’s looking right now in the U S is still, as of today kind of on this lockdown, certain States opening back up and we kind of keep looking over at China saying it looks like stuff’s kind of getting back to normal there. How do you see like our curve versus that curve things turning back to normal in the U S
Brian (17:36):
Yeah, so I think, I think this is a great question because since it started in China, people like to kind of make a prediction okay, what did, what happened in China and then what will happen with us. But in to that, I think we need to focus also on just the re the actions of each government and then people can make a better, more like kind of educated guess about what they think might happen. And so at least on China’s side, when the virus started in January, within the first one to two weeks, we saw about the first week we saw about half the population were masks. And within the second week of January we almost had the whole population wearing masks. Okay. So as a quick ramp up to the concern of the system of society. And then along with that we started to see temperature checks at all public places.
Brian (18:24):
So if I went into a supermarket, if I went into my own apartment building any mall would shut down all the doors except for one, and they would only allow one door in to check people’s temperature. I had roadblocks where they would stop every car and do a temperature check. And even today to my warehouse facility, there’s roadblocks on either side where every car gets checked on the way in, every person in the car is temperature. And so that kind of, you know, control and, and kind of oversight really help them kind of, or at least help China find you know, cases quickly and try to isolate those people as quickly as possible away from the rest of the population. And in addition to that, they also required people to start registering on apps that we have on our phone.
Brian (19:18):
So we have our whole health history and our travel history on our phone that people can scan a QR code when I opened my phone and they can see where I’ve been and what I’ve done and whether or not I’m high risk to a restaurant or anywhere that I want to go into. And the last thing that I think is interesting to, to to know is I left and I went to Thailand for a few weeks during the virus and when I came back I actually was required to partake in a 14 day mandatory quarantine at my house. And so I was brought to my, well, okay. Yeah, so that’s a great question. So the cell phone companies in China, they work with a lot of the so they work with the government and basically when on your phone when you go anywhere, your phone is constantly pinging a cell tower.
Brian (20:13):
And basically when I walked into my building, they have me scan a QR code and the QR code basically tells that person where I’ve been for the last 14 days. It doesn’t say the exact place, but it says, okay, I’ve been in Thailand or I’ve been in Schengen, or I’ve been in Hong Kong for X amount of days. And so basically you can’t trick anyone. You can’t say, Oh, I was out of the country. Because once they see that, they say, look, your phones told us that you’ve been out of the country and therefore you need to do a 14 day quarantine. And China makes it the building managers. So each building has like people that kind of manage the building or like oversee maintenance and things like that and they put the power in those people to oversee the quarantines. So those building managers are kind of held responsible if I do run around and have the virus and, you know, infect other people that are ultimately, you know, liable for that.
Brian (21:12):
And so it’s kind of their in their incentive to kind of make sure that I stay at home and I could order food online. Like in, in China, it’s very easy to order like groceries or stuff from the supermarket. It comes the next day. But I literally can’t leave my door and for 14 days. And I also had to provide a temperature. I had to take my temperature twice a day and report it to the building, and then they reported it to the local government every day. And on day 10 and 14 of my quarantine, actually a doctor and a hazmat suit came to my apartment door and gave me Krone virus tests. So I got one on the 10th day and the 14th day and I tested negative for both of them. And after that last day that I tested negative, I was free to leave quarantine. Wow. That is very different than hair.
Brian (22:11):
Yeah. So I think it’s important to know these differences. I don’t want to make any conclusion for the viewers themselves, but at least they can see like what is happening in the U S and then what happened in China. And that’s kind of why China was able to slow the spread and reduce the number of new cases through these very, very like stringent measures. And so if you look at the U S you’d probably argue that it’s less stringent and therefore I think that you’re going to have the virus stay around for longer and you’ll probably have like a small outbreaks and then contractions continually before we get a vaccine, right? You’re going to see, okay, every everyone tightens down and then everything’s okay. And then you let everyone run around and then you probably get another outbreak and then you kind of tighten it down again. And so I think, I think you’ll probably see this throughout the rest of the year as these kinds of contractions and expansion of the spread of the virus in the U S for sure.
Charles (23:13):
Yeah. Well we definitely don’t take that. We talk about mandatory quarantine. Everyone kind of, everyone has a different definition of mandatory, I guess. We had to drive, literally just took a family road trip, but we didn’t get out of a car. This is kind of a in front of ours. Road trip. You pack a lunch. We drove to New Hampshire last weekend. Literally just kind of look around in the car. You want some macaque turned back around drive home. And part of that is, is signs on the highway saying mandatory quarantine. If you’ve been out of the state, what I’m thinking, how do they know? Like I could, you know, it’s just a sign on highway that says that there’s nothing actually making you do it. It just, we want you to do it is basically what they’re telling you. But you’re saying, you know, they check it. It’s, they really like, you’re not just kind of sneaking through at this point. It just kind of,
Brian (23:58):
Yeah. Yeah. And I had I have a good friend in Shanghai and they actually put like a magnet on his door and the magnet actually detects motion. So on the outside of the door. So if you were to open the door, the government would know that you opened your door basically. So those type of measures and they, they, they’re, they’re, they’re extreme. And, and you can argue that they could never happen in the U S because I think the population probably wouldn’t accept it, but at the same time, like those were critical to helping them kind of slow the virus here. So it’s, it’s, it’s a huge difference when you look at the responses from, from each country for sure.
Charles (24:41):
Yeah. Well in the U S I think it depends where you are, right? Being in Boston, friends in Jersey, New York, they take it one level of seriousness. But then also I have friends in Colorado, Florida, Texas, and you talked to Velman total, just totally different element how everything’s happening right now. So I think it just depends on where you are in the country and you know, we’re getting hit a lot hotter than someone in Alaska. Right. So the U S is different. What comes to those sort of things as well. That’s amazing.
Brian (25:12):
Yeah.
Charles (25:13):
So let’s say these warehouses, right? Let’s say about large logistics logistics facility and somebody test positive [inaudible] they’re one of the employees, let’s say about a hundred employees sort of thing. What happens? Does the government step in? Do you shut down? Who tells you how long to be shut down for what goes on now?
Brian (25:31):
Yeah. Yeah. We would have to shut down actually in the beginning when the when they were starting to open up businesses in China, actually for the larger facilities, we’re alert, we’re a smaller facility, but anyone over a few hundred people, the government actually required them to rent or have an isolate, like an an isolation room that if they were to have an infection, that they would have a room to put someone. So they would have to actually rent a room in a hotel nearby, keep it empty, and have it prepared for the chance that one of their employees might be infected. And that company had to provide that space for that employee to, to isolate themselves for the period of time until they got better. And so the government actually required that from a lot of the big companies to, to kind of commence operation.
Brian (26:23):
But if we were to have an infection at our facility the government would definitely shut us down. They would require everyone to be tested immediately and most likely go into quarantine immediately. So they would require probably a 14 day quarantine from anyone that was at the facility or visited the facility in the past weeks. We saw that happen in Gwangju recently, which is a city near Shen Jen. And they had a few Starbucks employees that actually were positive infection infected. And they basically asked anyone that was at that Starbucks in the last 14 days. They were actually required by law to get tested. And if they didn’t, then that’s actually a crime that, that, that they were committing. Obviously I’m sure there was probably some people that never, never said anything and didn’t go to get tested. But they would basically quarantine those people and test those people for coven anyone that visited the store within 14 days.
Brian (27:22):
So that’s the type of response that we’re seeing from the government which is a pretty extreme response. But I think it’s relatively, you know, it’s been effective for sure in, in its ability to slow, slow down the virus. So everyone’s still a little bit nervous. Also imagine if you were at that Starbucks how even if you didn’t have the virus, you’re still, you still got to sit in your house for 14 days. So that’s also not really an enjoyable time. But I, and I did it the first time and I thought it was going to be tough and it was it was kind of a learning experience for myself, to be honest. I mean, I’ve never sat in, in one room in my apartment for so long and never laughed. So it was quite a quite an experience.
Charles (28:07):
Yeah. Well, what do they do though, what the actual facility, because let’s say you have to quarantine everyone, can you bring in another set of employees? Like is it like,
Brian (28:15):
No, they shut it down. They shut down the Starbucks. So they, they, yeah, they forced the, yeah. Yeah. The, the, the actual store got shut down for sure. I don’t know if it’s open yet, but they shut down the whole store, so they didn’t allow anyone to go in, in it. And I’m sure they have to do some type of, you know, disinfection of the facility before it’s allowed to, to, to, you know, restart. So yeah. So, so that would be a normal type reaction to any confirmed cases at a certain place in China for sure.
Charles (28:51):
Well, how about when you start talking logistics though. Let’s say you have, you know, a couple of different shifts, right? You have here, you know, three different shifts, let’s say 500,000 square foot warehouse. What, but let’s say someone that gets it, does that whole warehouse stuff to now shut down for 14 days or just one shift has stay quarantined? Like what do you, what do they actually do with that warehouse
Brian (29:12):
Was just, yeah. Yeah, it’s a good question. I, we don’t know anyone that’s, that has a warehouse that’s been shut down. Luckily even our competitors. But I assume that the government would require us to shut down. I don’t know how long. I would also assume it would be 14 days, unfortunately. And that’s kind of I guess you could say the cost of doing business in China at this moment, which it’s basically also incentivizing the people that run the facility to make sure that they’re making the proper measures to ensure that their employees are safe and, and to ensure that like, you know, people are not really spreading it to each other. And if you do that, then you can kind of keep doing business. Right. And so it’s a little bit of a self policing and I know it sounds tough, but like I think it’s also a little bit different with just cultural, and I’m in Asia, they’re definitely more about the whole community, the whole society, and they care more about that.
Brian (30:20):
And so I saw a lot of Chinese people I knew that were actually quite happy to do the 14 day quarantine kind of for the good of society and for the good of the people around them. And they felt that like after they did that and after everyone did it, that overall you just have a safer environment to be around. And I, and I’d say that I do feel that as well. I can go outside now, I can go to eat, I can walk around and I feel comfortable doing it. And I think that’s part of like everyone kind of pitching in and doing what they can to like protect each other. So I think it’s an interesting contrast in, in culture that you see as well playing a, playing a part, playing a role, you know?
Charles (31:03):
Yes. It’s interesting. So one question that kind of comes to mind and last question before I let you let you go, but where do you kind of see the opportunities, right? Where’s the positive and all of this that, you know, we mentioned it’s easier to talk to a factory. Okay. If we’re talking and 2019 sort of thing, what would all of a sudden be possible today that wasn’t possible six months ago.
Brian (31:28):
Yeah. So I think for everyone that’s doing e-commerce, this is definitely incredible for all of us, right? Because this is, this is basically forcing the trend. We all knew that was happening but forcing it much faster. And so our, our warehouse, which only does e-commerce, to give you an example, we’re up in sales 300%. And I think that’s a showing of not how good we did, but just how good the market is and how much people are buying online right now. And so for anyone that isn’t e-commerce, I think it’s a good trend and the future is going to be bright. At the moment. I think it’s a good opportunity to look at products in China specifically from factories that are smaller, that are having a tough time surviving and you could definitely get lower order quantities. You can definitely get better prices at the moment and you can get really hungry sales people that are willing to like support you and kind of serve you to sell you their things.
Brian (32:34):
So I think that’s definitely an opportunity. And I think overall like it will improve through, through the fact that more people are buying online. It will not only improve the supply chain, so improve the ability, you know, you’ll probably have more ways to ship things. You’ll probably have new different methods that come come about from it, but also you’ll probably be able to sell things that no one normally thought of to buy online. Right? So I think a good thing is like, I don’t think anyone’s able to do this personally as a small seller, but a perfect example is like groceries, right? Like normally everyone goes to buy groceries. But if you have this event where people don’t want to go and people get used to just going online and buying all their groceries online, you create that habit that probably after the virus people will continue to do. And I think there’s probably opportunities in other product categories that are similar to that, that will open up a whole new market and e-commerce. I don’t know what those are, unfortunately. I can’t give anyone the secret, but I’m sure that there are those types of opportunities that are coming about. For sure.
Charles (33:44):
Yeah, that’s a good point because I think there’s a large number of baby boomers that maybe have never ordered online and all of a sudden the past three months, this is just what they do. So it’s like we’ve introduced entire generation to e-commerce within three months and that’s like unprecedented.
Brian (34:00):
Yeah. And they have a lot of money, right? So they’re going to be spending a lot of their money online. Even my parents, like they’re buying groceries online, they’ve never done that before. So once they have that account and once they start using it, I’m sure they’ll use that account to buy other things as well.
Charles (34:15):
Yeah. And once I know it’s not difficult or scary or you know,
Charles (34:19):
Your first time, if you go back, all of us right the first time putting your credit card in on a website, it was just like experiential, like can I do this? And you know, are they just gonna like steal, like what’s going to happen? And like, you know, we’ve got used to this as our generation, but the whole older generation that might not have done the shot except for the past three months, it just happened all of a sudden and now all of a sudden they’ve kind of come out of the woodwork and I, so I think like what you’re saying, we’re entering it just a different time and from this point forward we’re going to see e-commerce, you know, before you look at the numbers and it was only ever a small percent of total retail sales, even that percent going up, you know, there’s all different numbers, right? 12% 20, whatever that number. But it’s not like, it’s not like 99 and I think just going up a few percentage points changes the game for it all of us out there and really just e-commerce in general. So I think this is a big time for that.
Brian (35:10):
Yeah, absolutely. For sure. Before I let you run any kind of,
Charles (35:14):
Anything you want to kind of tell more about the business, kind of what you guys actually do. Cause I think it’s super interesting, the whole logistics from China. That’s something
Brian (35:23):
Not a ton of people. Yeah, it’s very interesting. Yeah. So just to give people an idea of kind of what we do is we do two main types of businesses. So after you manufacture your product in China, people send their products to our, and typically we can ship it out in one of two ways. One is kind of traditional drop shipping where we ship the product from China to the end customer directly. And there’s obviously a few different methods we can do that in. And then the second thing we do is we help Amazon sellers specifically people that sell through FBA, consolidate their freight, put it in containers or in air freight and ship it to any Amazon FBA warehouse around the world. So that’s kind of our two main business models. And we, we also do a lot of the value add services that warehouses do. So that’s kind of our main business. And when we serve e-commerce only generally, we don’t really do much traditional like retail or anything like that.
Charles (36:19):
So if I’m a drop shipper, and I think we kind of touched upon this earlier, but why would I basically byproducts ship into just a different warehouse in China to have them in drop shipped to the U S you mentioned, is that kind of the big benefit of that?
Brian (36:34):
It’s, yeah, it’s a great question. So one is for branding. So if you buy an Ali express or you buy from some other people usually there’s no brand on it, there’s no packaging on it. There’s no like customization that’s done. So a lot of our sellers, like they’re bigger sellers, they care about their brand and their customer experience. And so they kinda make specialized products that have their branding, have their message, even have a no in their product, and then they send it to a us. And, and that’s something that like the traditional drop-shipper and Allie express can’t do. And the second is just like the speed of shipment and delivery. So we offer, like I said, direct line shipping and some other methods that you actually can’t get on alley express and for S, you know, sellers that are, that care about that and care about their customer experience. They like to choose that. So for our direct line, when it gets to the customer, you can’t tell that it came from China. And I think that’s one of the big benefits that customers don’t like. You know, the sellers don’t like their customer to know that it actually came from China. And so that benefit and the stability of the shipment is kind of attractive for larger dropshippers.
Charles (37:46):
Yeah. You hear all these stories, people start off Ali express and they, you know, they order something, they send it, it takes like weeks to get that and it shows it and they sell it for $40 and it shows up with a packing slip in China with like two bucks on it and yeah. Freaks out and it’s just very bad seat and you know, they want their money back and all these things. So you basically take that all away, right. They just separate all the actual invoice out of the package and then they can use their own packaging. Like you said, put a flyer on the logo, branding, anything like that. So basically gives the retail more control of the logistics events
Brian (38:23):
And the shipment actually comes from a local U S address. So we frayed it in, we actually drop it and ship it from a local address. So it looks like it’s coming local in the U S so it’s a different, let’s say, feel when customer receives it and they open up their package.
Charles (38:38):
Yeah, I can see it. I’ve done that before too. You order something and you see it and literally like, okay, it’s coming from like you see it come from China. I’m like, okay.
Brian (38:46):
Yeah. It’s very different. Yeah. It ruins, yeah, that feeling. It kind of takes a little bit out of your breath away a little bit in a bad way. Right? Yeah.
Charles (38:57):
It makes you look at the product different and yeah, if you think you’re ordering this like higher end piece of electronics and then all of a sudden you see and you’re like, and the packaging a little janky just yeah, it changes the whole experience and it probably allows you as a retailer to get repeat orders, kind of sell a little more, just kind of treat the buyer a little differently at that point cause you’re putting a little more incorrect. Yeah. Very cool.
Brian (39:18):
Yeah. And our customers usually can retain their customers better than your average dropshipper for sure.
Charles (39:27):
Awesome. People want to kind of see a little more about you, what you’re working on, what can they do that,
Brian (39:31):
Yeah, sure. They can visit our website so easy trying to warehouse.com or they can email me directly, not just about logistics, but anything about China. If you’re interested@brianbrianateasychinawarehouse.com.
Charles (39:44):
Awesome. I will look it up in the show notes. Thank you very much for coming today.
Brian (39:49):
Yeah, thanks a lot. Thanks for having me.
Speaker 3 (39:52):
Yeah.
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