Episode 42: Office Products and Niche Focusing with Adam Smith and Jonathan Domsky

Rolling rawhide with the homie.

You're listening to the Profit first podcast, episode 42. That was like delayed grunting this time.

Well, here was funny. As I'm doing my grunts, I have a guitar that hangs right next to where Christina sits on the wall. And it started reverberating. I was hitting the right tone. The strings started shaking. I could hear him w. That's how.

Into it I am, man, you're vibing so hard right there. Okay, moving on from that statement. Welcome everyone, to the Profit first podcast. I'm Chris Curran. I'm the founder of Fractal Recording.

And I'm Mike Michalowicz, the author of Profit first and the co founder of Profit First Professionals. And glad to be accompanied again by Christina Bulduk from the office.

The brains of the operation.

The brains and the intelligence. The muscle. She's the muscle too, literally. When we have orders come in for.

Books, that's where I got my workout.

Yeah, we had like 500 books. Yeah. Go out. Christine's up and down. And our office is down as a flight of steps. She's up the flight. 40 pound boxes, bringing 40 pound boxes. She's jacked, dude. She's bench pressing them, throwing them around.

Sure, sure.

Mike's there yelling at her like a drill sergeant.

Faster, faster. For God's sake.

Oh, God. Did your mother have any children that lived?

Oh, my God, the weaklings.

Anyway, okay, so this show is all about profit. It's just about business and revenue or anything like that. It's about profit.

Yeah. And I like how you said revenue like it's disappointing because, you know, there's a little bit of truth for that. So many businesses just look at the top line. How much money am I making? But this shows. How much money are you taking? That's right. So wise. So wise. And we talk about from every angle. Today we're going to talk about office supplies. What?

Yes, right.

You do your what? You're what? No, the what you do. Yeah, we're talking about office supplies. What? And we're going to talk about international business. What? Yeah, exactly. So all different perspectives. Everyone's got to be doing international business today. I don't care if you're a pizza shop in Hoboken, New Jersey.

Gotta do it.

You gotta do it because there is tourists coming from Japan who want good pizza. You gotta be selling to them. That's international business. So we'll be talking about that angle too.

Yeah.

And you can find us on. You can find our podcast show on itunes and stitcher and tune in Radio. Radio and Profit First Podcast dot com. That's the website. That's the home on the web. You need to go there, you need to stare at that screen and, and, and you know what? Mike's website, it might even track your eyes where they're looking at this point.

Yeah, you hear that? A couple episodes ago we're talking about eye tracking. We, we did Chewbacca imitations. We have tons and tons of competitors now emailing in with their Chewbacca voice. It's not too late. Send in your own Chewbacca imitation and you could win a copy of the Profit first book.

So what do you out there?

What have you been up to, Mike?

Not too much. Why did you ask me? Why did you ask me twice?

So, Mike, what are you up to? What have you been up to?

All right, so what I've been up to is I got all new furniture for the deck out back and I went to Walmart. Like, I'm not a big. I don't believe Walmart carries good furniture. But I was walking through and they had these chairs that you basically push a button and it converts all the way to like a laying chair. And you push. I love that.

Yeah, those are cool.

They're really cool. So I now I do this in my back deck and I'll have my little margaritas. Like I'll do it tonight. I'll have a margarita out and I'll slowly, as the sun starts setting, start turning the chair back so I can look up higher and higher in the sky. And by the time all the stars are out, I'm laying flat watching the stars go by, snoring. That's what I'm up to, bro. What are you up. What have you been up to?

That's cool. Yeah. You know what? I started taking this, this course from Santa Sant, the Santa Fe Institute. It's.

Oh, the train company. Or is it Monopoly?

No, it's a real course, man. I'm taking a college level course. It's called Intro to Complexity. It's so cool. I'm learning about nonlinear systems and fractal geometry and populations. Are you, are you bored yet?

Yeah, I'm looking for my. I'm looking for a cricket button. I just wish I don't have.

No, but it's an awesome. It's my first online course. So it's kind of cool to like watch the videos and see the materials and actually take a look, take a little quizzes. It's pretty cool.

Have you ever done it for credit? No, for Credit?

No, no.

Just cuz you're interested in complexity.

Yeah.

No, that's awesome. And are you actually going week by week? Are you kind of waiting till the course is over and doing a cram session?

Well, I've. I'm about a week behind, but I'm doing it every week. Yeah, I mean, I'm working on it. Yeah. I'm not gonna wait till it's over. And none of it's graded or anything, but. And there is homework, but it's not mandatory because it's not. It doesn't matter. But I'm really trying to do it, so it's pretty cool.

The whole description was very complex. I think you just got an A in the class for your own complexity.

I wish I could talk more about it, but yes.

Now we don't have time because we got to talk about our sponsors, T Sheets, Fundera and nextiva. We'll mention them a little bit later on. But thank you for sponsoring us. And we got some. We got some guests we gotta bring on our show.

Right? I'm ready, dude, you're ready.

Everyone's ready. Seat belts on.

I'm so ready. I can't even tell you.

I need that. I need that sound effect. Here's a couple you guys sent me. That's one of them.

Okay.

All the other, Barry, sound effects too. Our guest, or Grest. Prefers to go by Grest. It's. Well, he's just into that type of thing, so. Our Grest is the director of marketing at Acco Brands. That's Acco. Now, you may not know what Acco brands are, but you probably do know the products they sell. This company is one of the biggest players, if not the biggest player in office supplies. You know that closet you have with all the paper clips and manila envelopes and that dead body, you know that closet?

Those pesky pens.

Those pesky pens that don't work, that you don't work. And you're like throwing them out and then employees are stealing stuff and it's just a disaster. Adam's here to help us out with this. So with no further ado, Mr. Adam Smith, welcome to our show.

Thanks for having me. Appreciate it.

Yeah, it's a pleasure. Pleasure. Where are you calling in from today?

I am calling from outside Chicago, Illinois, in Lake Zurich, Illinois.

Now, is there an actual lake? There is. It was one of the Finger Lakes off the.

We have a lake here? Yeah, it's. You know, when we moved our office here, I thought we're moving to Switzerland, but there is a lake Zurich in Illinois.

It does sound that way. It does sound that way.

Yeah. Sounds very fancy.

Yeah. So tell us a little bit about Acco. What exactly does Acco do?

Yeah, so Akko is the largest office products company in the world. We have about $2 billion in sales. The name of the company stands for the American Clip Company. We still manufacture paperclips. We actually make them here in the US in Wisconsin. But you've probably heard more about our brands that we sell like Swingline, Mead, five star at a glance gbc. So a lot of different categories within office products. So whether you're a. A professional print shop using a $70,000 laminator or a student who's buying a five star notebook at Walmart, we've got a wide breadth of product.

Okay, so what is like the most common products? Just so you get a sense for the people listening in right now, small businesses, maybe five or six employees, maybe a solo practitioner. What are the most commonly purchased office products?

Yeah, you know, I'd say for the, for the B2B market, certainly a lot of our consumable products like file folders, notepads, paper clips, clamps, but also business machines as well. A lot of offices are using laminators. You know, whether it's a small business that has different legal signage they have to hang up or different things throughout the building that they don't want to have destroyed. Also, we have a full line of shredders. So data protection is a huge focus that we have. And one would assume in the digital world that paper consumption has declined significantly. But almost 90% of people still have sensitive information on paper. So that's a huge focus for us at a growth area.

Really? Wow. I had no idea that that many much was being printed out. And as I look around our offices recording this, I'm like, oh my God.

Like everything, There's a lot of paper.

Yeah, it's printed out. You know, our focus is all about profitability. And one major leak of profitability is if someone catches your confidential information. For example, we get a lot of credit card information that comes through our company. You're in trouble. When we were off air, besides me asking you where you're located a thousand times off air and then one more time when we were on air. Tell us about these shredders. Like, what's the application of this and how can you use them in a way to ensure that you're not leaking sensitive information?

Absolutely. Yeah. So it's, you know, a lot of small business owners, you know, don't spend A lot of time thinking about it. But we completed a study late last year that almost a quarter of employees admitted that they threw out sensitive business information in the trash can at work. So, you know, a specific product that we have. I mean, we all recognize that if you're shredding, it's kind of a hassle. You know, often it's jam, the bin is full. And if you got a. If you have a lot of papers to shred, you've got to stand there and feed it.

So.

So two years ago, we introduced a product called Stack and Shred. And if you have 60 sheets of paper, we make them all the way up to 750 sheets of paper. You literally walk up to the shredder, you open a drawer, you put your paper in, you close the lid, and you walk away, and it shreds by itself. So it's a huge cost advantage because you're not paying an employee to stand there to physically shred paper. But it also drives compliance. So there's not the frustration associated with. With jam shredders or with wasted time standing in front of the shredder. So we find that when small businesses are using this product, that they've got better compliance from their employees and better data security.

So, you know, you're not joking as you're talking. I leaned over. Christina's, like, laughing. I just looked at my garbage can. I'm like, no, I don't do that. The first thing I pull out is my itinerary for a speaking engagement I did back in Kansas City. And here I'm looking at it. It's listed my full name spelled out properly. Right. It has all my contacts, their information. It has my fly ID number, has all my confirmation numbers, has all my security codes to. Or not security codes, but the holiday in confirmation code, I use the budget car rental reward code. That's what. It's all these different things, like all this confidential information into sitting on my garbage can. The only mechanism of protection I had, Adam, is a stain from an apple laying on top of it.

Yeah, it's scary, you know, and when we talk with small businesses, that's what we asked them. We said, you know, when you're closed for the day, go around and walk and see what's in trash cans, and you will find a lot of sensitive information. I think what's scary for a lot of those small business owners is it's client information. And if you have a data breach with client information, you're likely going to lose that client or you're going to have a tough conversation with them. So, you know, we all know the most profitable customer you have is the one that you're able to keep and grow. So when there's a physical data breach at an accounting firm, at a law firm, at a doctor's office, it's a pretty big deal and it's detrimental to their small business.

Doesn't it give you also a competitive advantage? If you're calling me saying, hey, I'm looking for a new accounting firm, and I say, you know what, you're going to talk with 100 accountants, Adam. But let me tell you what makes us different. We have this confidentiality standard we adhere to, and we use a self shredding mechanism so any of our print material is assured that will be destroyed. Doesn't that give you a competitive advantage using technology like that?

Absolutely. And really, the only way to ensure that you have proper data protection is to shred your documents on site. I know a lot of small businesses also use shredding services. So shredding services is a big bin that your employees drop paper in. There have been a number of reports out there that some of those documents either don't get shredded. I think there was a ticker tape parade in New York a couple years ago where there was literally like the police department's confidential information was used during that ticker tape parade, or employees of those shredding services selling that customer information, you know, for illegal purposes. So, you know, it is, you know, really the only way to ensure that that is being protected is to have your employees do it and be compliant with the policy.

Yeah, that ticker tape parade was covered with my itineraries. Everyone's like, who's this guy McAllows? He travels a lot. So now tell us about the office supplies themselves, because this is another category, office supplies, even for a small little business. Listen, we got five employees here at our shop. We tear through stuff. What are ways to reduce our costs? To use only the stuff that we need to use and make sure we're not spending money frivolously or on office supplies.

That's a good question. I'd say when you look at your larger expenses, like when you look at your printers, your business machines, you always want to ensure that you're getting something that has a really good warranty, that's durable, that you could get a lot of use out of from just a consumable supply perspective. Again, shop around and find the best price. Just because you have a contract with a specific office supplier doesn't mean you shouldn't shop around. So there's a lot of deals to be had out there. And then just keep tight controls of your office supplies. I mean, the thing we're probably most famous for is the red stapler in office space. So you remember Milton with his red stapler. You know, there's people love to walk out of the door, you know, walk out of the office with their office supplies or they get very attached to it. So, you know, we always recommend that you keep pretty good inventory of what you got on hand and you know, make sure that employees aren't using those for personal use.

Yeah, you know, as a simple idea is lock the office supply closet. My last company, I had 30 employees before we sold it. And as we're positioning for sale, all of a sudden that supply cabinet went empty. And you know, we don't know what the cause was. Could have been some outsider taking it as they were going through the acquisition process. Could have been an employee that was maybe disgruntled because we're being acquired and wanted to teach us a lesson. Could have been someone just taking advantage of the situation. Someone said just put a simple lock on it and then have one person accountable, the office administrator. Something that you go to them and say, hey, I need some supplies. Another little trick I had too is let a supply deplete all the way and see if there's demand for it. Sometimes people just use stuff because it's just there. So that's another way to control your costs. How do you evaluate these different machines and stuff that you're considering? Shredders, I know you have different equipment. How do you evaluate the right sized equipment for you to make sure you're not over buying something?

In a decision like a shredder, we actually find that people tend to under buy what they need. So they assume that they need a 12 sheet shredder, but they have it for a year and they find out they actually need a 17 sheet shredder. So what we do is on our website we have a buying guide and it's pretty simple. What kind of environment are you in? Is it a personal office? Is it a shared office? Is it a large office? And how many users are going to be using that shredder? And then the bin capacity, which is, you know, how big the receptacle is that holds all the shreds. You know, you have to decide how much shredding you do at a time and how often you want to empty that bin. So it's all based on really the number of employees and how Often they're going to use that specific machine. One of the great things that we offer with a Swingline stack and Shred is certainly on our hire machines is we also have a two year kind of bumper to bumper worry free warranty that if there's any issue with your shredder, you call us. We'll actually send a tech out to your site. We've got a national network of our own techs and they'll come and service your shredder. So it's a worry free purchase.

And the fact that your shredders have bumpers on them alone. Adam, if people. Oh, I got one more question for you. But before that, if people want to find out more about the Akko product line and your office supplies, where do they go and find your stuff?

Yeah, they can go to accobrands.com and specific for the shredders, it's swingline.com.

Okay, wonderful. And here's the last question for you. Now get ready for this. Just listen.

I'm ready.

Every guest on the last three weeks of our shows have done a Chewbacca imitation. We have a whole contest going on with this. It just kind of sprung up. The challenge to you, sir, if you do accept, is your best Chewbacca imitation.

Oh, man, it's about to get uncomfortable.

Can you actually play that again?

I'm not sure you want to. Listen, here it is. And if you want. Yeah, just. Just give it your best shot.

Okay, let me try.

Whoa.

That was actually good. Nice.

Do I get a prize for this?

Wow.

Yeah. Do I get a prize over.

Yeah, I'm excited you guys have that because we are in the process of launching some Star Trek product for back to school. So.

Okay, just so you know, that's Star Wars.

Oh, Star Wars. I'm sorry, it's not my product.

All right, be real careful. But yeah, I think you're one of the top four Chewbaccas. We should have heard. Thank you for that. You wanted to. Yours. Christine's was. I'll imitate hers. Ah, that was basically it. That was basically it.

Except higher pitch. Yeah, that was it.

Yeah. All right, Adam, it was a pleasure having you on. Thanks for joining us today and thanks for these great tips. I appreciate it.

Thanks for your time.

Thanks, Adam. Great job, man.

So. Okay, dude. Next guest. Yes, Jonathan Domsky. Here's the deal, dude. 15 years ago, maybe 17 years ago, I go to this thing called got it's gathering of Titans. The idea of this thing was to bring all these entrepreneurs together with different businesses for Us to meet each other, about 80 of us in the room. And what they did, they said, you're going to be like the next generation of big time entrepreneurs. I love telling the story. To my left is this guy who moves garbage. Like he's a garbage moving guy. To my right is some guy who does stuff with like Chapstick. I'm like, these are such nonsense businesses. What can you do moving garbage? That guy's name was Brian Scudamore, who was not moving garbage, he was moving junk. He's the founder of 1-800-GOT Junk, which is a 200 to 300 million dollar company. The other guy to my other side, his name is Rob French. I'm talking to him a little bit. I'm like, what is this Chapstick? He's like, it's a new product we're coming out with. It's called Burt's Bees. We're bringing it internationally now. He's the third partner. Burt was the first. But the third partner in Burt's Bees brought to a billion dollars. Real players. Well, there's one guy, this kind of quiet guy in the back of the room named Jonathan Domsky who's like, you know, I make stuff for children's. It's called Kidorable. I'm like, you know, I've been burned twice in saying, like, these businesses aren't gonna make it. And sure enough, Jonathan Domsky hits it out of the park and he's figured out the formula for building and manufacturing stuff internationally in China mostly, and bring it to the US and that's. We're gonna learn how to do that right now, how to do it profitably. With no further ado, Mr. Jonathan Domsky, welcome to our show.

Oh, great to be here.

Who was it? Oh, oh, it's Michalowicz.

Welcome, Jonathan.

How you doing, man?

I'm doing great. Eager to share my story.

Well, I want you to. Well, I shared how I met you, but why don't you share a little bit about what your business does, what Cadorable does?

Sure. So Cadorable takes everyday, ordinary children's accessories that everybody has. And we had something special to excite children's imagination, enrich their lives at play. We're most famous for our rainwear, especially umbrellas, boots and coats. If you've seen umbrellas, like frogs and ladybugs and stuff like that, that's us.

Wow.

Yeah. And I have seen. Oh, my God, actually, yeah, they are awesome, right? I actually bought some recently. Not that I have kids that need them, but just for Myself. Yeah. What, what do kids do with this stuff? I mean, rain time becomes fun time. Splashing time.

Yeah, exactly. You know, kids, they go to sleep wearing the rain boots. They, you know, they find a puddle and just need to jump in it. We make runtime. Exactly. So we make rain time, fun time. And also we make cold weather accessories. Knit hats, scarves and gloves. Basically we make things that kids want to use as opposed to parents having to cajole them into putting it on.

Yeah, and that's a real issue. Right. So with my kids growing up, as they were raising up, we always tell them, put on your boots for God's sake. And my son be put on sneakers, splashing of water and then my feet are wet and the whole thing.

So with our products, the problem is getting them to take them off when they get inside.

That's a good issue to have.

Instead of getting wet socks, you'll puddles on your kitchen floor.

Right, right. And someone slips and dies and that's all. But tell me about how did you get started in this business in the first place? It seems like such a random choice.

So.

I co founded Codorable with my wife when I was 24 years old. And just a year earlier, I would have never expected that I would go into business. But like all great stories, Kadora was a love story with plenty of twists and turns. The week after I graduated from college in 1994, I was on a plane with a one way ticket to China in search of adventure. Three weeks later, I was in a beautiful ancient city called Hangzhou. And I wanted to rent a bike to go around the city. But I guess my map was out of date. I couldn't find one. I asked everyone I could see on the street where I could rent a bike. No one knew. I figured I'd walk into an office building, maybe someone who worked there would, you know. And the woman who's now my wife walked up and she didn't know where I could find a bike either. But she lent me hers. And long story short, I took her out to dinner to thank her. Seven months later, we were engaged. And we were just used to spending all of our time together like 23 hours a day. And when we finally did come back to the United States, we didn't want it to end just because we needed to work. So we didn't have any money, we didn't have any experience. But I was pretty good at figuring things out. My wife, she was an artist. And after a year of just saving a little bit of money doing Odd jobs and her learning English and all that sort of stuff. We went back to China. We talked to everyone we knew, went to a couple trade shows, came back with all sorts of products that didn't have anything to do with each other. We had silk scarves, we had home decorations. We also had some fun, cute umbrellas. And we went to a couple trade shows, the Chicago Gift show. And the stuff that sold best happened to be kids stuff. So we decided we were in the kids business and within six months we had created our own niche of fun, practical, unique children's accessories. Everyday items all kids need but that excite their imagination, become part of their everyday play.

So tell me about, how do you go about manufacturing overseas? Maybe someone listening right now has a great idea. They want to make their product, but they need to do it affordably. Tell me the story.

So we have a bit of an advantage in that we actually speak Chinese and we enjoy spending time in China, but it's not at all necessary. It's very easy to find Chinese factories. And there's, there's two ways to work with the factory in China. The, the easiest way is to work with an import export company. The best way is to work directly with the factories. You're going to get a better price. You have more control over what it's done. And they're very easy to find. Just going to one website, Alibaba.com. you guys probably heard the IPO recently. Go to Alibaba.com, a L I B A B A dot com, and it's a search engine for factories. So you could just put in, you know, shredders, you know, whatever it is that you're looking for. And you could find, you could find the shredder manufacturer, find a dozen shredding manufacturers. Everyone who's on there is going to speak enough English to do business. It's very easy to find and start a relationship, but that's the best place to start. And you know, people, everything like the pricing, the importing, there's all experts who could help you with that. Find a good look in the yellow pages for a customs broker and you know, they'll be able to help you with shipping and everything else.

So I think you're suggesting that our last guest went to Alibaba guy shredders. You know what? He's, he's listening in right now. He's like, all right, that's how you want to play the game. He's going to come out with, you know, kids s' moreable or something. And have his own line.

Shredders for kids.

The second guest. Advantage.

Yeah. Oh, I like that. Shredders for kids. That's funny. Make shredding fun. So, okay, so now something confused me here. You said use an import export company and work direct with the manufacturer. So do you need both companies?

No, no, there's two different sets of companies. There's some companies that don't produce anything. They just work, you know, they're matchmakers between companies. Companies that want to buy and companies that want to produce. And then there's the factories themselves, who you work with directly. And if you ever go to. If you were to go to a big export trade show, Canton Fair, which is, you know, once, once, twice here, in twice a year in Guangzhou, China, most of the people who are there would be import export companies. There'll be some factories as well. If you go on to Alibaba, same thing, you'll find some import export companies, you'll find some direct factories, you know, factories that sell directly. And it's important just to ask to know who you're working with. They won't necessarily. They won't necessarily tell you. Just in the normal course of business.

Now, when you have a new product that you've invented or prototyped here and you want it manufactured in China or I guess anywhere else, do you just mail them the prototype? Do you tell them how to make it? Do they reverse engineer it? How did that work, or does that work?

Well, it's a cooperative process. We do all of our design work in Chicago and we'll send them spec sheets, we'll send them drawings of every aspect of the product so that there is as little guesswork as possible. We'll send them material samples so that they know exactly what to get. And we have people on the ground there who also expedite this process, you know, going to markets and finding materials and all that sort of stuff. But there's no reason why you need that. It makes it better. But the factory should be able to handle all that sort of thing themselves. But there's no design that's perfect in its initial factory. There's always problems that come up where, yes, we can do this, but it's going to add 60 cents to the product. Do you want to do this this way? That's only going to cost 15 cents. So there's some give and take. And a good factory will not just do exactly what you ask them to do, but will make suggestions on how to make it better.

How do you know you're working with a Good factory versus not a good one.

Well, in the beginning it takes some trust. But over time, you know, just like any supplier, they do what they say they're going to do, and they do it on time. And the quality is good. You know, it costs what. It costs what you expect it to. It costs what you expect it to. We have our own team of quality control people that go to the factories during production, that limit links of, limit leaks of intellectual property. But at the end of the day, you just have to trust the people you work with. And we've worked with our factories for years, so we built up that trust. We know what to expect. We've also had our share of factories where we've worked with them once or twice, and they just, they weren't reliable or they weren't trustworthy, and we moved on.

I gotcha. And that's one big fear. I have this great idea. I give it to a manufacturer in China. They take my great idea and they now can see that they can sell huge volumes of this. Why not sell it to somebody else? Are there ways you can enforce or protect your idea?

Well, so it's an excellent point. And the first thing I'd say is expect that there's going to be some intellectual property leakage, if not from the person that you're working with, then from his neighbor across the street. It's common for there to be spies in factories. It's common for workers to at least go to the competition. And there's less of a cultural respect for intellectual property in China than we're used to in the U.S. having said that, there are definitely things that you can do to protect yourself. And the first is very simply setting the expectation with the factory that this is a protected product. But it will, you know, setting the expectation. It will be the end of our relationship. If we see this, you know, popping up other places. Chinese factories, they understand what intellectual property is. And if you tell them that it's important, they're far more likely to respect it. I would say that the default assumption is that this is something that could be sold to anybody, that anyone could use. But if you make that expectation clear, more often than not, it'll be respected. The first is just to be very clear with the people you're working with. And then the second is to get legal protection where appropriate, get patents, design patents, copyright protection. Also be aware that China doesn't necessarily respect international intellectual property. So if it's something that's worth protecting, and if you're going to be selling or manufacturing In China. Find a Chinese attorney, get it protected in China as well. They're far more likely to respect a Chinese copyright application than an American one.

And what about considering if you're based out of America or somewhere in a country other than China? What about manufacturing locally? Is that sometimes a good choice?

You say manufacturing locally in the United States?

Yeah. If you're in the U.S. why not just make the stuff here? Maybe it's even cheaper. I don't know. What's your thoughts about.

When is it appropriate? It depends what it is the United States is. I don't know if we're ranked 1, 2 or 3, but we're among the greatest manufacturing powers in the world for all sorts of things, including planes and cars and all sorts of things that require advanced manufacturing techniques, advanced skills, tremendous investments in machinery. But when it comes to things that are very labor intensive, the products that we make, you know, clothing and accessories, labor costs are so much more expensive that it's just not. It's just not price competitive to manufacture locally. Labor prices in China have risen dramatically over the last 10 years. There's still much less than the United States, but, you know, no longer just a small fraction. But there's an ecosystem in China. There's all the components manufacturers. There's. It's, you know, it's cheaper to ship, you know, container from China to Chicago than it is to drive something from, you know, southern Mexico, you know, to Chicago. So China has a lot going forward, even though that their own wages are rising. But the two things that I would keep in mind is one, how labor intensive is your product? Three things. How labor intensive is your product? Number two, how time sensitive is your product? You know, for our products, we could project what our sales are going to be three months from now, four months from now, and we could order accordingly. If you need just in time and you can't predict very well what your needs are going to be in the next month, it might make sense to manufacture a lot closer to home to manufacture it locally than to spend money on air freight. Unless you're something very small, like in light, like jewelry or something like that. And then the last thing, I guess is how closely controlled you want it. But the main things would be cost, depending on how labor intensive it is, and time in transit.

And does quantity play in here too? I assume if I'm going to manufacture overseas, that larger orders, mass quantity will play into my favor substantially. And if it's a local vendor, yeah.

Most Chinese manufacturers are looking to ship containers, you know, depending on what it is, you know, you could do a, you could do a smaller. And when I say containers for your listeners who aren't, it's familiar. The, you know, when you see a semi truck going down the highway, you know, it's a tractor trailer, what's behind it? That's a container, you know, so if you could pull one of those, I know it's labor intensive and you know, then it's almost always going to make more sense to have it produced overseas. If you need smaller quantities, if you need a lot of custom work, it might make sense to do it closer to home. There's one more reason that you might want to. It's not to do it overseas, at least not do it yourself. And that's just simply to the same reason you'd outsource anything. It's complex, it's a lot of work. It requires a lot of management time to produce things as opposed to selling them or marketing them, moving them. And it's just one less thing that you have to worry about when more time to concentrate on what you're really good at.

Fascinating insights. Jonathan, I got two things for you. The second thing is going to be first thing though is if people want to get the cadurable products, where do they go?

Sure. The best thing is to go to cadorable.com www.kidorable.com. you can also check us out on Facebook. And I'd also recommend that your readers look for our upcoming blog on how to make your family life more fun, easy, meaningful and joyous. It'll be on the website Cadorical Parenting.

Oh, cool there, Cador. That's cool. So the other thing is you got two options. You can do the Chewbacca imitation and be in the competition, but since you're fluent in Chinese and this may be better, you can say my favorite character from Star wars is Chewbacca. But really my favorite thing in the world is the Profit first podcast in Chinese. What do you think? What do you think?

Sure, go for it. Profit first podcast.

Yes. Yes. Oh my God. Jonathan, you are the winner. You just win everything. Wow. Amazing. You will one of our future episodes, we will be playing that as the introduction. That was awesome.

Oh, I love that. Thank you, Jonathan.

Jonathan, thanks for joining us. We got to get going and talk about what you just shared with us. So thanks for joining us today.

Thanks guys. It was fun.

Yep.

Take care.

See you, Jonathan. Wow.

Wow.

Dude, that was just Infomania, right?

That was awesome. And I want to hear the Chinese thing again. I can't wait to rewind the tape.

Oh, my God. He probably said the biggest pain in the butt in the world is Mike McCallow. It's almost as big of a pain in the butt is Mike McCallowitz.

He's like, these idiots think they're funny. What are they trying to do?

Michael McKaunch is a jerk. Chewbacca's not. One thing you should never listen to is the Profit first podcast. That's probably what he said.

It's rubbish. I think. I think rubbish.

Yeah, I did hear rubbish. I did hear rubbish. Dude. T sheets. You know what they do?

Please do they time track?

They. Yes. Tell me what.

How many business. If a business has employees and the owner wants to keep track of everybody's time and what they're working and everything, T sheets can do that.

Yeah. Oh, unbelievable. Dude. Dude. And it does it on your cell phone, Kristen.

I do. I sms text in when I'm done. If I have to run to the post office as soon as I'm done, I just text T sheets and I'm like, hey, clock me out. And they're like, okay, have a great night.

Isn't that cool?

Yeah, dude.

So here's the deal, yo. Christina has to. She runs out of the office all the time. Post office is a big thing. We mail a lot of stuff to China and sure enough, you know, so she's got drive. It's a few minutes down the road, but then you got to do this stuff. You can spend 15 minutes there or whatever goes right in. No more paper system, which unbelievably people.

Use it or trying to like when she comes in the next day. Try to remember when. Oh, when did I. Oh, done Yesterday.

Oh, when was I done? Yeah, Fundera. Fundera. Dude.

Thank the Lord for Fundera.

Were you my church sermon last week? Because that's what I did say. Because the Lord, the Lord Jesus, we got one thing we want to thank the Lord Jesus for and it's Fundera.

You say it.

You said it. Fundera. Yeah, Fundera. You're one source for funding. And listen, if you're gonna be manufacturing in China and you need money to do it, guess who will get the money for you? Fundera. If you need a shredder, that's kid friendly fun. And have fun, Fundera will do it.

Oh, man.

And then we also have Nextiva next. I don't know if you can hear Ron belting out phone calls in the background while we're doing this. We're right down the hallway from him and there's no Door. So that's something we got fixed. But Ron's on the nextiva phone constantly. And he's one of the few guys who doesn't use a headset. He does it old school. He bends his, crunches his neck, lifts his arm, squeezes the phone in there.

Yeah, he prefers that way.

Yeah. Isn't that weird? Because you don't have to. With the next even phone system like I got, you can have a headset. You can, you can. They even have a video conferencing one. We don't have that model. I could push it. Like if we have the nextiva set up that Christina has one at home at her place, and she's got one here at the office. Ron has one at his place. And here one of the office. I got a couple. We. If Christina. Because a snowstorm comes through New Jersey all the time. If Christina's got to stay home and I got to talk to her and I got a show or something, I could just push the video conferencing capability. And it's even better than Skype. She's right there instantly. So next diva dude.

Hey, is Ron there right now?

No, he left. He like, he gave us the fingers.

Because I wanted to call him on nextiva and have him do his Chewbacca over nextiva.

Oh, my God. Let's try dials extension. Call it. Let's do right now.

All right. What, what's the number?

Let's see it picks up. 855-80-22-2994. And you'll hear the next to. You have a phone system answer and dial extension.

And all you accountants and bookkeepers out there, remember that phone number.

Yeah. Call it. Dial extension 7 005.

Profit First Professionals.

If you know your party's extension, you.

May dial it at any time.

Your call is being transferred.

Please hold.

Listen, listen to me. The party you are trying to reach is busy and cannot take your call. So you know what happened there?

Message for Ron. Okay.

I don't even message for him.

Okay.

Because that means. And that's a feature we're setting up now. He is on the line at his house. That means. So he already got home and he's on a phone call and it does that. We're changing that now to say I'm on another line. We just haven't set that up yet. All right, dude, so that's next. Eva, you heard the voicemail, right? What you learned from today's call?

Oh, Christina. Were you talking to Christina?

No. Chris. You Chris. Chris Curran.

So from Adam Smith I learned that. Right. We were talking about office supplies and shredders. Yeah, he, he basically said shop around for the best price. I mean, that's kind of obvious. But he also said keep tight control of all your supplies, which again is kind of obvious. But. But you know, a lot of things we talk about on this show are sort of obvious, but like you're not doing it always do it. Yeah, it's like obvious. You should exercise a little every day or walk or, you know, or eat some fruit. Who does it? So sweet mother of God. What is the hold up?

Do it. Do it. That's right. Christine, what'd you learn from Adam?

I like that he mentioned data protection, which you would think is a no brainer. We all don't want anything leaking out, but just your everyday motions. You don't realize how quickly you toss something away and what important information is on there. And most of the time it's your client's information that's in jeopardy.

Oh, my God.

And you don't even think twice about it.

Yeah, Yeah. I like the idea of just put a system in place. The reason people dump stuff in the garbage is because that's a routine and habit. We have set up a collection bin for the paper in their office and it gets shredded now. So it's a way of working with people's habits. So I like that. To get the results you want. Jonathan Domsky. Chris, you're up.

Yeah, well, he said when you're picking a factory, and I guess this goes with any, you know, any service you're gonna hire, you got, you got to kind of start with some trust. I mean, you can do, you know, your research and your due diligence, but then you got to sort of trust them to do the right thing and then monitor it closely to make sure they're doing the right thing. But starting with. Yeah, I mean, I guess that's kind of obvious too.

No, but you do, like all this stuff is obvious. Take your profit first.

People need reminders.

Yeah. Do it. The question is, is it obvious or not? Do it. Is the question. How about you, Christina? Do it.

Expanding on that, just, you know, communication, whether it's, you know, client to client or employee to client or employee to employee, it just, it's important to show what you expect from them. And, you know, especially like he said, mentioned, when you're dealing with a different country and your factory is over in a different country, expect that there will be some intellectual liquid leakage and, you know, see what you can do about it.

Yep. Oh, God, you stole my like plan. That's okay.

No, you were gonna say intellectual liquid as well.

Yeah, I was. No, I'm just plan for the worst. Right. So if you people go in situations, say I can't produce internationally because people are gonna steal my stuff and therefore I'm not gonna do it. And then they freeze, they take no action. Plan for the worst and what the outcomes are and how you're going to navigate around it. That's what I learned from Jonathan. So yeah, people will steal stuff. That does happen. How can you go in and protect yourself from the get go the most but not prevent yourself from starting in the first place? So that was pretty cool. And Alibaba too. Check that out. I've been to that site.

Yeah, me too.

You can get anything you want. We actually that profit pick up there on the windowsill got through Alibaba.

Yeah, it's kind of like an ebay. It's like an ebay, but internationally.

Yeah, it's. You can get anything you want there.

Well, dude, great job, man. Do you have a. An inspirational message for our listeners about profit? I'm putting you on spot.

No, no, I'm just sitting here. Yeah, I wanted to see how long it takes.

Can Bobby Knight come back and do his.

For God's sake, man. Now here's the thing about profit. The opportunity exists everywhere in your business. Everywhere there is a profit opportunity. So don't just look at something with your clients and selling for a higher price. Don't just. It could be in your shredder and you can use your shredder as a way to differentiate yourself. It could be in Alibaba. It could be everywhere. There's always a profit opportunity. It doesn't mean you have to compromise your business. The opposite. You can improve the way you're doing business and make more money there.

Thanks, Mike. I love that.

Now I'm angry. Now I'm angry. What a way to end the show.

Now I'm getting you rolling. So I'm pissed off again. I'm Chris Curran, founder of Fractal Recording. I help business authors host their own podcast shows. I had to. I paused for the music obviously. And Mike, you are just rocking Profit First Professionals. I mean, thank you.

Yeah, thank you.

Was that Christina?

Yeah, that was. She will not do it again.

Mastered it.

Yeah. Profit First Professionals. We are a membership organization, a collection in enclave of accountants and bookkeepers. But not just accountants and bookkeepers that do accounting and bookkeeping because there's a lot of excellent people out there doing that just like our members. Our members also have the technique, the method, the certification in driving profitability in your business. All this stuff we've been talking about every single episode. They are the consultant, the consigliere. Like, you ever see that where the Godfathers like, I need my consigliere. Well, that's what our members are. They are. I paused and missed the button. They are the consiglieres for profitability in your business. I will make your business very profitable. Just listen to me. That's what our members do. And sometimes they kill someone. Oh, no, they don't. That was supposed to be a gunshot. I am.

Oh, there it is.

Oh, there it is.

Thanks for listening, everybody. This has been great. Check out profit first podcast.com for all our episodes and all the links to all our guests, too. So check it out there. And thanks again.

And one more thing. My pleasure. Freaking post a review. Oh, rate the show.

Yeah. On itunes or stitcher. Yeah, you can rate it. Review it.

Oh, look at. Listen that. Listen that bridge. Oh, my God. It's like, the longest bridge ever. Oh, there. We're back. We're back. Oh, now he's back. That was the longest bridge ever.

All of our heads were like, like. Wait, no, no.

You think if they dropped, like, three notes, you think that'd be it? They kind of went down there. Near, near, near.

Dude. They kept going.

And just, like, the poor drummers had, like, throw fills in there. He just started, like, hit the guitarist. Messed that one up. All right, dude. All right, we stretched.

See you guys. See you next time.

Bye, Sam.