It’s all in the name of F.I.
Thursday was a day full of pivots, reality checks and tough pills to swallow. It was the most productive day of them all in no small part because of Sharon. I had met her on my first trip to Shanghai when she worked as a tour guide. She was charming, charismatic and an effective communicator. Once I discovered the existence of this market, I contacted her and informed her of my plans to take on this venture. She was just as excited about it as I was and that’s how I knew I found a person I can work with. From the first time I pitched the idea to her, she took it seriously and was willing to make concrete plans with me. We met on Thursday morning and headed back to the market. The night before, I had to rethink everything including the quantity of things I planned to bring back. The reality was that I would be lucky if I could get 50% of the items I planned to buy back to the United States with me. I’m not lucky. By the time we made the bulk of our purchases, the weight of the items we bought was about 10 kilos or 22 lbs. I had to scale back and reduce the amount I’ll be able to bring back once more. I started out thinking that I’ll be able to bring 500 scarves, and 100 accessories, was forced to lower this number to 1/2 by Wednesday, and then down to 100 scarves, 40 robes and 60 small accessories. I was not doing well on this front. I did however finally improve my bartering skills significantly.
It’s all a matter of who has the most leverage. So I had a few things going for me. The first one was the day and time. Thursday morning is not really the busiest time for shopping. Most people come to this market on the weekends. That meant that customers are in short supply and vendors are willing to negotiate. The second one was the fact that I was there to buy in large quantities. Buying in bulk meant I can negotiate some sort of bulk discount. It also meant that the vendors did not want to lose me. They could more than make up for the “loss” of giving me a discount by marking up their price for the tourists that come along. Third and probably the most important was that I went there with a local. I’d negotiate the price down to 20-25% of it’s original price and Sharon would come in and insist that I pay even less. It was such a boost to my confidence. The vendors would protest and we would start to slowly walk out of their store until they begrudgingly call after us.
We were done right at the beginning of rush hour traffic and raced to the subway to avoid the crowd. The train wasn’t jam packed like it was on Monday but had a good amount of people. We boarded and took our bags back to the hotel. There was no way I could reduce the weight to be less than the allowable amount. I had already purchased a carry on and packed it full with some of the things I purchased. And I literally only packed 3 days worth of clothes. But the weight limit was still high and by the time I was done packing it, it felt like I had packed a corpse. When I left on Friday, I realized that I should have just purchased a second luggage I can check in and filled it with the remainder of the stuff. Prior to me having to pay the overweight fee, my total cost for this venture was about $3,000 including:
- $1,500 for flight, hotel and stay
- $1,300 for purchasing merchandise to sell
- $200 for other costs including a small payment I made to Sharon for her time and labor
Unfortunately, the overweight baggage cost me an additional $200 bringing my grand total to $3,200. This is not sustainable.
The whole idea of this trip is to start a side business that will create another stream of income for me. Yes, I’m buying at a relatively low cost and plan to sell the things I bought for profit. But I’m losing the money I saved on buying my merchandise on transporting it here. So I’ve decided to make a few changes to reduce my cost of doing business.
- I’m hiring Sharon to manage the purchase and shipping. I will pay for the cost of merchandise, shipping and compensate her for her time and labor. Since she’s gone to the stores with me, she’ll know what my preferences are. I will also be sending her a list of the things I want to purchase. Doing it this way will certainly be lower than the cost to travel over there and bring it myself while making sure these items are still curated by me.
- I’m doing my research and buying in bulk ahead of the season. Prices are lower when the items are purchased in larger quantities. So I plan on purchasing at least 100 of each item I plan to have available at once to take advantage of that.
- While pop-up shops have been the least costly way of making in person sales, I’m going to have to consider other ways of distributing the merchandise including providing it to boutiques wholesale and creating a website to make my items available for sale 24/7. The latter is already underway.
This was an educational trip. Even if the idea fails as a business, I would have learned so much from this whole experience that I would not have learned in class. If this works out, I would have combined two things I love, travelling and finding new ways to make money.