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Path: Sourcing News & Advice
>> Smart
Sourcing >> Buying in Asia and selling on
eBay & Amazon: By Mike Michelini

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Buying in Asia and selling on eBay & Amazon: By Mike
Michelini

Posted: October 14, 2016

By Fredrik Grönkvist

Mike
Michelini is a serial entrepreneur from New York. After a few years on Wall
Street, he moved to Shenzhen – a place he has called home for close to a decade
already.

Mike
is a veteran (LinkedIn), and that’s why you don’t want to miss this piece.
Keep reading, and learn how Mike built his five figure bar accessory online
businesses on Amazon and eBay – from the ground
up.

Michael,
tell us a bit about yourself and how you first started your
business

I
always wanted to do my own business, but first took a job on Wall Street after
college. Immediately I was finding ways to make money online and started to sell
anything I could find on eBay and my own websites.

Fascinated
that I could wake up to sales in my account, I studied internet marketing via
forums.

Found
a niche in the bar products industry, and moved up the warehousing from a
Manhattan walk up apartment to a full service fulfillment company (fraternities,
friend’s basements, and UPS stores in between).

Building
up sales enough to quit the day job in 2007, I was happy to do this full time.
As I was buying products from China, I took my first trip at the end of 2007 to
see trade shows and factories.

After
an intense jaw dropping experience, I decided to spend more time in China and am
still here to this day.

How
come you decided to start importing bar products?

Wish
I could say I had a better formula, but really was selling anything I could
find. Picked various product lines I personally liked and saw which one did
well.

There
wasn’t much competition on eBay and was able to really get into the rankings.
Made a full site for the bar products line and grew out the supply
chain.

How
did you go about to find suppliers for the products?

Started
with US wholesalers, via Google searches and manually contacting them. Getting
pricing lists and samples. Some would drop ship, others forced us to take
inventory.

As
we grew, we went full inventory and started searching on Global Sources and
other B2B sites.

Was
like a shot in the dark, up late in NYC, chatting on Skype with factory sales
reps, sending photos back and forth, getting samples.

Starting
with small quantities – some products we still would buy from American wholesalers and others
direct from China, India, and Thailand.

It
was a school of hard knocks for sure – just getting in there, testing the waters
with small orders, getting good ones, throwing out the bad, and growing with
it.

Do
you recommend visiting a Trade Fair in Hong Kong or Mainland China – or can
everything be managed from overseas?

Well,
I had been buying from China without ever going – so sure, I was using the
online directories.

But
coming to the trade shows was like night and day. It was basically as if the
online directories had people inside of them!

You
could still search through the catalogs and websites- but leading up to the
trade show, I would ask the factories if they were going to the shows. I would
note down where their booth would be and meet them in person.

Even
with all this amazing online technology, it is nothing like meeting someone face
to face.

Maybe that will change once VR is further developed – and can
go into a virtual conference – but for now – nothing beats meeting people in
real life.

It
makes the transactions seem real.

Did
you buy from a large network of suppliers, or just a few?

The
tricky part about bar products is there are so many different styles of products
and materials. There are plastics, and then there are metals.

I
was trying to find the source, and I quickly learned that most factories were
actually trading companies.

The
factories were dispersed in Zhejiang province and I went to them.

What
I learned is it was down to who had the mold. Factories would buy from each
other to complete their product line – but to really get the right product from
the right factory you had to buy from a network of factories.

To
add to the complexity – the metal bar products (tins, strainers, ice buckets)
came from India. China is actually stronger in injection mold, plastic – not in
things like metal and wood.

Also
found a couple factories in Thailand that had quite a bit of
products.

And…
how much time did it take to build up?

Started
the site at the end of 2004 – within a few months we were making 10,000 USD a
month, and took about a year to get about 20,000 – 30,000 USD a month (depending
on season).

What
kind of sales channels did you use?

We
were using a multitude of channels – first getting cash flow from eBay sales,
then using Google Adwords to our website to get website sales.

Organic
search was awesome but really think it was about a year (I was leaning it on my
own) before we got organic traffic.

The
best memory I have is my first Adwords campaign I set up, the 2nd click brought
in a 75 US dollar sale! Was almost all nickel bids too.

Amazon
we started later in the game, maybe in 2006 we started listing there, but the
majority of our sales came from eBay, our website via Adwords and Organic
traffic.

Did
you exclusively sell on Amazon and eBay, or did you have other sales channels
too?

Mostly
Amazon and eBay. We did get some retail mom and pop shops who found us online.
We also used some manufacturer sales reps in a campaign we did in 2006 to grow
offline sales.

I
hinted earlier, we had trouble finding a dropship source for bar products – so
we became the dropship source.

We
launched a drop ship program also in 2006 and built up a network of over 50 drop
shippers and using a white label system in our back
end.

Did
you ever have to deal with scams or quality issues?

Shipped
about 300 US dollars of shirts to Africa. We went a bit too crazy on automating
the systems and didn’t have proper checks in
place.

Also
a close call we had an order for a couple thousand dollars shipping
to the Caribbean with a US credit card.

Well,
it shipped, but it was a real order.

He
had to fax us his credit card statement for the bank to give us the funds, so
things went along happily ever after.

One
of the scariest situations was a lemon squeezer order.

One
piece to a woman in the Midwest, she said when she used it the spring broke and
gauged her palm open.

She
was threatening us. I asked our other team members what we should do – and
decided to immediately issue her a full refund (8 USD).

Wondering
what would happen next, she thanked us so much for the free product, gave us 5
stars on eBay and the problem was solved.

That
one had me researching product liability on google for a couple hours.
Phew!

Luckily,
those are, the bigger issues we had – of course a bunch of savvy online buyers
asking for the free product saying some quality issues.

You’ve
been based in Shenzhen for close to a decade. Do you think it’s become easier to
deal with Chinese suppliers since you first arrived?

Being
here definitely helps, but doesn’t make the issues completely go
away.

Took
me a few years of knowing what to look for. I also have a firm grasp on where
the factories are, and I now even can find people who live in the area and can
stop by for me.

When
the factory knows you are in the area, they seem to pay a lot more attention to
your orders. That saying – out of sight, out of mind – comes to play.

But
then again, factories in China have advanced quite a bit in the 10 years I have
been here and know what Western buyers want – so that is also a
factor.

Are
they harder to deal with? Or the opposite?

Much
easier to deal with. You can get to know them, chat with them while they are
awake (no time zone issues) talking to them about their family, their personal
life and experiences.

They
don’t get to know most of their buyers this closely so it definitely sets you
apart.

Thanks
Michael. Please tell us more about your current ventures.

I
started blogging when I quit Wall Street in 2007 – for some reason I was afraid
to blog while working in corporate – thinking something with compliance would
come to bite me and get me fired.

So
the blog started for my friends and family to be able to follow my travels and
business updates – mikesblog.com
now – still going strong!

What
I realized, I am passionate about the online marketing, about connecting people,
and international business – so in 2013 I started GlobalFromAsia.com as a blog and podcast to
help business owners set up their international businesses via Asia.

And
just recently I became partner at EnterChina.co – an online community of entrepreneurs who are
working to take their product ideas and launch them to the market.

Are
there any conferences or events coming up this year where people can find
you?

Sure,
had a great crossbordersummit.com
this past April and will do that yearly in Shenzhen. Working on day trips in China from
Hong Kong and continuing to bridge the divide of business between China and the
world.

Want
to learn more sourcing best practices?

Join the Global
Sources Summit that combines conferences and networking, co-located with our
Hong Kong trade shows. The event will be held October 17-19, 2016, and is geared
toward online and Amazon sellers.

Fredrik
Grönkvist is the co-founder of ScandinAsian Enterprise in Shanghai. Since 2010,
he and his team have helped hundreds of companies worldwide, primarily in the EU
and US, to develop and manufacture products in China. He is also the main
contributor on http://www.chinaimportal.com/blog,
a leading knowledge base for small- to medium-sized enterprises importing from
Asia. For further questions, you can contact him on www.chinaimportal.com/contact-us/.

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