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Introduction and Guest Introduction

Claus Lauter: Hello, and welcome to another episode of the e commerce coffee break podcast. Today, we want to talk about product sourcing, about importing of products. And obviously that's something on the list of every merchant out there, specifically the ones who are just starting or have not even started yet. 

They have the big problem to find the right products and obviously to source the products.

With me on the show today, I have Brendan Elias. He's the founder and CEO at A2Zformula. com. Brendan has been importing products from China since 2001. He has built a seven figure business around this, selling imported products and selling them on eBay, Amazon, working as little as 10 hours per week.

Despite his legal and economic education, Brendan's entrepreneurial blood. Proof to too strong to ignore. He leverages wealth of experience and build several successful business that made billions of dollars by importing high quality merchandise from China and selling at a profit. Brandon now teaches people from all walks of life to realize their dreams of leaving their nine to five rat race to become successful importers and merchants, obviously in their own rights.

So let's welcome Brandon to the show. Hi, Brandon. How are you today? 

Brendan Elias: Hi, Klaus. Doing great. Lovely to meet you. And thank you for the awesome introduction. I couldn't have said it better myself. 

Claus Lauter: Great to have you on the show, Brandon. Let's dive right into it. 

Understanding Product Sourcing

Claus Lauter: Product sourcing seems easy, but it's not. And obviously it's the core of every business.

If you don't have a product, you don't have a business. And a lot of merchants struggle to come up with a plan. To find the right products and then once they have them to source them, to import them and everything that comes with it, give you a bit of idea from your experience. Where do people struggle the most with in the beginning?

Choosing the Right Product for Your Business

Brendan Elias: the biggest problem most people have, especially beginners is what product to actually sell. Anyone who's medium enterprise or large enterprise, well, they're already going concern, right? So their problem more is what to source or how to source it, where to get it from, how to get good quality.

So depending on where you're at so let's say for the beginners, the first thing you've got to determine, is who your market is, and that will answer the question about where to source it from and what to source, if a lot of people are just doing things on say, Amazon.

Then, you've got to run that through either Zonguru or your Helium 10s and see how much competition there is. Basically we have five kind of principles. The first thing that we will, in terms of sourcing, or not choosing, forget sourcing, choosing a product, is it simple?

And not complicated. So what I mean by that is really what I don't mean by that. Don't do anything that you would ingest initially, right? Or anything that would go on the skin or anything that could have any danger like that. Those are good products, but not for beginners. because of the regulations and whatnot, what you gotta watch out for.

Is it small and light? So Amazon have standard, we've all seen what an Amazon box looks like. There's usually a small standard size and a larger standard size that can fit in that box. Is it, light which is under 20 pounds or 10 kilos if we're using the metric versus appeal system.

Once you've got those, then you've just got to take care of the, profitability side and the competition side. If we're talking Amazon in terms of profitability, it's gotta be, don't want to sell anything less than 25 us dollars. Because you want to make some profit.

 And you want to be able to sell it. I used to say four times, but now I say five times than what you bought it for. So it means that if you buy something for 25, it's got to cost less than 5. So that's would be the thing. Get it for three or four. Fantastic. If you're selling for 50, then you can, buy it for 10.

 So that's in terms of it. So five times what you buy it for is what you sell it for. And also. It's got to be above 25. So that's it. So then you've got the probability side and then there's just demanded competition. So that's just a recap. Is it simple? Is it small and light? Is it profitable?

Is it good enough? Demand is there and not too much competition. 

Determining Product Demand and Competition

Brendan Elias: So let's talk about some man. So this one, everyone has a different formula here and I would say there's no right formula, right? But what we do in terms of demand is we look at would run it through Zonguru or through helium 10 or whatever.

And we just want to check that, when we add up. Sellers and the total number of sales that, when you add up the average, then there's more than 3000 units being sold a month, right? If it's 282900, it's okay. But if there's only 100 units being sold, there's not , much demand for it. So that's what we say in terms of demand.

 Obviously the higher the price point. So if a product's instead of selling for 25, it's like for 200, then, instead of having 3000 a month, you could get away with 1000, 2000 units a month, because it's still not a demand there. And the last thing is competition. So in terms of competition, what I like to do is firstly, I type in the keywords.

And I want to see how many results there are. For me, if there's more than a thousand results, then it's too saturated. The sweet spot would be less than that, if your product has maybe 2000 results, but all the other metrics check out, there's a bit of wiggle room there.

So it's not gospel. It's not black and white. So that's it in terms of the number of search results. The three things we look at a demand. We look at search results. We look at the amount of, whether there's any other key competitors and we look at reviews. So in terms of reviews, what we like to do is just check out the, total number of five star reviews, right?

Of the top 10 sellers. And we want to see that there's a gap there. So if you have 10 sellers and all 10 have 10, 000 reviews. Then it's going to take too long to get traction. There are people are not going to buy for you. So we want to sell, find at least four people in there out of the 10. They have less than 50 reviews, 

if it's less than that, that's good. The less, of course, the better. And in terms of brands, you don't want to go into an industry where, there's a key competitor, who's a brand name. So I would go into mobile phones and go up against Samsung For example, I will go into, running shoes and try and compete with Nike.

Our play is private label, right? There's many ways to skin the cat. You can do arbitrage where you buy low, sell high. But for us, we'd stay away from that. So just to recap. On the choosing, simple, small, light, enough demand, not too much competition. And I'm missing one. If we're going to Shopify, cause you're a lot of Shopify people, then, you're not going to be using Amazon's traffic. So then Amazon analysis isn't going to be as relevant. So then you're going to decide if you're going to sell it through Google ads or Facebook ads.

Then, you want to really be seeing what the cost is per click of that product and, whether you have a cool, offer and page and whatnot. And remember you're doing a lot of order bumps and all that sort of thing. So that would be my five minute version on choosing for the beginners.

Claus Lauter: I think that was already a masterclass and a sort of very long list of homework for somebody who really wants to get started if you don't need any of these criteria then move on and try to find another product. I'm a hundred percent agree to everything that you said from my experience your spot on your point on there.

Now, once you have find one or more products that might be suitable to sell them either on Shopify or any other Amazon, any other marketplace. 

Sourcing and Importing Products

Claus Lauter: Sourcing, importing is the next point. It can be very complicated. How do you go around that? Or how do you get started with that? Okay, 

Brendan Elias: cool. so just on the first point, if you go through that checklist and it doesn't check out with all five, then you just don't do it.

You don't go off or check out, it's a hundred kilograms. Then you just get bails, right? With sourcing, the main thing I do, look, you can source from any country in the world, right? You don't necessarily have to go to China. You can source from Mexico. A lot of my students will be doing that as well lately.

 You can even source from the USA. But what you're looking for is usually a product that you can private label. So that's, you can mass manufacture. So I'll go to China. Alibaba is the well known one, right? You've got HKTDC, you've got Global sources, people say, which one's the best one? There's not really a straight answer for that.

There are good people on there you can source from and scammers, but you get away with just doing Alibaba. So you go there, you type in the keyword, understand that some keywords, some products might be called different things in different countries. So for example, if I look at the product, the most money I ever made off any product was when I was 21, right?

And I was importing motorcycles out of China, they were pocket bikes, they were 49cc engines, they were like this big. Well, this big, an adult would ride on them, they would go at 20, 30 kilometers an hour, whatever, enough to be dangerous. I used to sell them for 400 and buy them for 80 for a motorcycle.

We used to do a container with 330 in them, and that was very, very, very profitable, right? So that was a really cool product, but I couldn't find them initially until I looked at the other names. It was called a monkey bike. So when I looked at monkey bikes instead of pocket bikes, then I found like way more people offering it.

So just be aware. But you might have another word like just a funny example I talk about is that, when one of my suppliers came to Australia from America because I was selling for America. I said, let's go to the beach. And he's like, cool. I said, Hey, I've got a collection of thongs in my place.

You can pick whichever of my thongs you like, and we can wear them to the beach. He looked at me like I had two heads, of course, in America. They wear flip flops at the beach and a thong is a g string. Whereas in Australia, they're called thongs. In New Zealand, they're called jandals.

Don't ask me why. So they're important to know those cultural differences, especially around words. I don't know what you call them in Germany, what the words are. Maybe it's just sandals. 

Claus Lauter: It's sandals, flip flops. Yeah. Something like that. Yeah. So 

Brendan Elias: then we type it in and then, we have, A template, which is how to actually, approach the factory where we ask about 20 questions, which are designed to make sure that you weed out the scammers.

Because I understand. That there are a lot of people, especially sitting in Nigeria and Lagos who are pretending to be factory. So we send those out. They're designed to make sure that, no one, is cheating you, but also to make it position you as an expert and what that does, it helps the factory to give you a good quality price.

So a good quality product and a good price. So we'll send that out to 20 factories. Let's say half a reply. And then out of those 10, let's say we're selling a product. Let's just say, for example, I'm drinking my coffee from a ceramic cup, right? Let's say that, hypothetically, you would sell this ceramic cup for Whatever it is.

I know we said 25, but for this example, let's say 10. Then you'd want to buy it for 2 because it's a 5x thing. So you have 10 factories, one's at 10 cents, one's at 20 cents, one's at 30. Now there's a 1. 20, the other's 1. 80, 1. 90 and 2. So how do you pick? Well, we take the top 20%, so we average, add them all together, average it, we find the average.

We want to take out the top 20%, the one that's 1. 80, 1. 90, cut those out because we want to make profit, but also the ones that are less than 50 cents we also cut them out and people like, hang on, we want to make profit. The thing is, if it's too good to be true, that there's usually a reason for it. And that's where the scammers lie, right?

Also, sometimes that can be stock that is, you can buy in a job lot, but they discontinued. So if you have a going concern where you have customers who are going to buy more and more and come back and buy more, then you can't get that same stock again. So why do you want to do that? Because you're trying to build a business here, not just make a.

One off payment, one off cash flow injection. So that's it. So we take the top 20%. But then what I like to do is out of those I pick the three that communicate to the best. When I say the best, it's usually the fastest, that come back faster. You want to avoid trading companies if you can, and deal directly with the factory so there's no extra margin.

And then out of the ones, I'll pick the three that's, that are the best communicators, and I'll get a sample from them. The sample might be, $2, but the shipping might be 50, so I'll pay $52. The factory, and this is where people come unglued, beginners especially because they're like, oh, I don't want to pay money unless I know what's gonna work.

Well. You have to have a little bit of risk money. So I'll pay $52 times three to three factories, $154. I'll ship them and I'll put them side by side and whichever one I feel the most comfortable with. That's the one I'm going to order, right? So then, I place the order with the factory. Now, the goal here is not to get the best price.

The goal is to get the lowest MOQ, which is minimum order quantity. So if I want factory charging me, let's say a dollar, but I have to order 50, 000 cups, ceramic cups, or I have another factory charging me a dollar 20. But they let me order 500, then I will get the one that lets me do 500 because then I'll pay 600 versus 10, 000 or whatever, so that I can keep my cash flow.

Your goal is not cash, is not profitability, it's just to prove the concept. So whatever you can do to conserve your cash. Sometimes the factory will say, no, we need to do this order of this amount. In that case, I say, look, you're charging me 1, what if I pay you 1. 20 for less, will you let me do it? And often they'll say yes.

, Also, one thing I forgot, you can get the samples for free. People get hung up on that. If you say, when I place my order, can I get my 52 back against the order? And I've never seen a note of that question. So you get a free sample, but it depends on your pricing order. Now, the next step is you pay 30%. So let's just take the example of 1.

20. Times, 500 cups. That's like, let's do a bit more. Let's say it's a thousand cups at 1. 20, right? Then we'll say to them, what most people do is the fact, we'll say, here's an invoice for, 1, 200, please pay it. And then you pay it. And then the goods never come. The reason why is that you lose your leverage.

So you need to pay 30 percent upfront. So it'd be 30 percent of 1, 200, 360. That gets the job started and then 30 days later the goods are ready and then you pay the balance once the goods are ready. Don't pay it all up front I like to give a story about the clever bank robber and the stupid bank robber.

So the clever, the stupid bank robber goes in, robs the bank, gets all the money, million dollars in cash and then the police, and he's got 10 hostages and the police say, what are your demands? And he says, well, I want a limousine to the airport and then I want to fly to Argentina to Buenos Aires, right?

So I can hang out with Klaus. Not that you would associate with these kinds of people, right? But just hype. So then, okay, what happens next? So the police say, okay, cool. You 10 out, send out the 10 hostages, right? You've got your million dollars. Now you tell me if you were the police and the robber released the 10 hostages, what would you do next?

Claus Lauter: Go for them directly. It's like police, 

Brendan Elias: right? You'd come and you'd arrest, shoot them and that's it. Right. But if, but so that's why you only released three hostages. The two women and the child, and then you've got seven men in there. Then you get the limousine, you drive to the exit.

So the clever robber, who released three hostages, goes to the airport in a limousine. Get to the airport, and then as the plane's taking off, you'll gently push them down the escape slide and fly to Buenos Aires to have some Argentinian beefsteak with you and some Malbec. Alright? So that's how they do it.

Now, why the hell am I talking about bank robbery when we're talking about sourcing? Well, The same thing three hostages is 30 percent 700 70%. Right. So you wait till the goods are ready, and you pay the 70%. But what I like to do is to just do an inspection, which costs two 300 bucks to make sure the goods actually existing, and that they're good quality, then it's safe to pay.

So that's essentially so step one. Use my proven template, I'm not sure how it works, but if you want, I'm happy in your show notes to give a link to the template people can download for free. I usually charge my students for that. If that's something you want me to do, have to do that you guys can just copy and paste that, just put your own details in.

 And then once they do that, then, you place your order, you do your inspection, you pay your balance. And that's essentially, that's a summary of it. Yeah, 

Claus Lauter: I think you giving the farmer where you giving so much experience out there and I think that's where it comes from. You're doing this for a very long time.

And I have been partly on the same experience past what you did. So I can vouch for what you're saying is 100 percent right. Now, with your experience, it shows already is if you're coming as a beginner, as a newbie to this game, there's so many potential issues that you can run into and lose money and lose your motivation.

What I liked a lot that you said, proof of concept, I think that that's always very, very important, but also having people on your side who have been through this and can help you with the experience that you don't. Pay money for mistakes that you don't necessarily need to make. Now with A to Z formula, you're helping with this.

The Role of A2Zformula in E-commerce

Claus Lauter: Give me a bit of an idea where you help people with and what you offer. 

Brendan Elias: here's essentially how I got into it, right? So my dad was born in 1935 in Singapore. When he was seven years old, 1942, World War Two broke out he was in Singapore and he was taken and put in a Changi internment camp, Changi prison, which is now the airport and he had to learn how to survive.

So he had a beautiful singing voice he sang to the soldiers, the samurais, and he would get a cigarette, he would swap that for oranges and he'd swap that for sardines, he'd be the king of the camp for a day, the next day to do it, do it again. So he learned four or five different Chinese languages.

 And when he came to Australia, my home country, which you can probably tell from my accent he was able to speak Chinese. So he had the first fax machine in Australia. He would send a fax to China. I remember as an eight year old boy, I used to go to dad's office and I got to send the fax and press the button and then it would go, you know,

And like 20 minutes later, a single page of information went through amazing technology. So for the time, so dad would send it that, and then the goods would come in back. Then it was a captive market because there's no internet, right? So dad would make a lot of money. and my mom and dad actually brought donkey Kong to Australia in the eighties.

So that was them. So I grew up in this environment. They want to be able to need to be a lawyer. I became a lawyer. I wasn't a good lawyer. I just didn't like it. I actually had undiagnosed ADHD at the time. I only found out three years ago I had it. How I completed my degree, I don't actually know. But anyway, the fact is I started making a lot of money online.

2009 we started, teaching how to do it. So we're actually the longest running e commerce education company on the planet. No one's done it longer than I and we're around because we care about the students and we want to make sure that we get a great result. And sometimes we have to tell them stuff they don't like to hear, but that gets the result.

 So we've been doing that for what, close to a decade and a half. And the way that we help people is we have a two day event, which we run every couple of months. And if you're watching this now, there'll probably be a link to the next event. It's free to attend. , actually it's 5, 000 to attend, but if you come through a trusted partner like Klaus, then we give you one free ticket.

 So you can come to that. And the only condition is that you, you block out your weekend and you give full focus and you bring the energy up of the people, right? So we're giving you a free ticket. You have to add energy to it, not suck energy. And that just means asking questions, listening, taking notes, not disappearing and onto your Facebook or.

 Going out for to go bowling and then we just show you exactly how to do it yourself from scratch. Some people want to use that office on the ground in China for us to just source for them, or to have a coach who for every week for a whole year, we'll get on a zoom for half an hour and guide you through it like I'm doing now, but specifically to your case.

And some people want us to build their Shopify stores or to, do the inspections for them for their product or, to design their packaging and everything. So just using my. Everything I do myself, my own products, I created systems for myself. And then people found that valuable. about two or three years into like 2011, 2012, people said, please don't teach me how to do this.

Just do it for me. So we cover both people, both. And so we have a lot of time on their hands. They want to do this themselves. We say, go for it. And some are like, they don't have much time. They just want someone to do it for them. And then others have the time, but they're scared and they don't want to screw up.

That's how it works throughout two day weekend event. It's nine to five on a Saturday and Sunday, but I have eight guest speakers, friends of mine who help me in the business who come and share information. So it's pretty cool. It's a lot of fun. I love, we love that event.

 I call it infotainment because people don't just learn if you just talk at them, you got to tell stories. By the end, people are enjoying themselves. They're laughing. There's like a little bit of a get together at night called wine and cheese, where people can ask direct questions to the coaches and get them answered.

 We cover everything, all the latest stuff, AI , and all that stuff's covered. So it's a lot of fun. Everyone who is here, if you're listening to this, then, you've got a free ticket. 

Claus Lauter: No, it sounds like fun, but more importantly, I think it's important to have someone who is in the grind every day who went through the learning curve and it's on top and actually, communicates information that that is.

Real and actual a lot of things that you find on the interwebs are outdated stuff. That's worked maybe 2 or 3 years ago. And if you follow that, then you might have a problem. And also what I like is the community aspect to it. You probably with other people who have the same plans or on the same track as you.

And it always gives a lot of synergy in there. No, but before we come to the end of the coffee break today what is one final thought that you want to leave our listeners with? 

Final Thoughts and Advice

Brendan Elias: Don't be afraid. Be prepared and be accepted. Your first product may screw up totally. You might bring a product and whatever happens, your calculations are off or just a bit of bad luck and it didn't make money.

And that's okay because you got to look at this as a learning process. Yeah. My first product didn't make money. So just be sure it might be your second and third, but as long as you go through and when something happens that isn't to your liking, you analyze why and you fix that the next time around, you'll get better.

 If you do 10, you have there are 10 things to do it correctly. And you do six correctly, and four you screw up, then the next time you do it, then you'll make eight correctly and screw up two, and the next time you do it, you'll do nine correctly and screw up one

so just understand that, so be forgiving on yourself and be kind to yourself. And just pat your back, most people don't do this, most people will work nine to five, they'll work for their boss, make their boss rich. The fact that you get your balls, and you put it on the line, and you do that, is a credit to you.

, I said anyone who tries that and puts this... a little bit of risk of a few thousand dollars, that's going to start changing your brain to become an entrepreneur and not a salaried worker. And they're the type of people we like to help every day of the week and twice on Sundays.

Claus Lauter: Very well said. I 100 percent agree on that one. Where can people find 

Brendan Elias: out more about you? Sure. In the show notes there is a link to your free ticket from the top of my head. That of course is A to Z formula dot com slash product sourcing made easy. A Zformer. com slash product sourcing made easy and you'll get your link.

To the event register and we will see you there. 

Claus Lauter: Okay. I'll we'll put obviously the link in the show notes and you just one click away. Brendan, thanks so much. That was a masterclass on sourcing. So there's so much content in there. I think our listeners listen, need to listen twice to this episode, at least to get all of, out of it.

And I'd like to thank you for that. And I hope to talk to you soon again. Thanks so much. Cool. Vielen 

Brendan Elias: Dank, con gusto, con gusto.