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In OKC finally have a great idea for our product in I need to get it made -- -- -- where do you do it.
We asked Franklin now he's the CEO and small business consultancy Smith street solutions.
Franklin isn't a question that I have been asking all week long we've been talking about -- the show together.
How do I figure out how to manufacture.
My product in China -- didn't like call someone is there -- operator waiting on standby for Michael all in China.
Well I think the first thing it -- when it comes to -- is very important.
To understand the marketing and what's -- -- on the market I think is very important to work with people because no matter how.
Much research you do and how much understand the market and you're not going to be able to understand it better than the local so you have to do is you have to work with.
People that you trust in order to help you set up your supplier base.
Franklin like go through you it's -- solutions to find those people because again we -- Tracy.
And I -- here in New York.
We'll you know I mean I could find Beijing -- a -- but other than that I would I don't know anybody out there.
Sure I mean we're here we're based in China I think we have our feet firmly.
Planted in in both -- is we have a mix of west and its aftermath of mix of Chinese staff I think were a business consultancy that's.
Fully created in China so we're kind of a unique model where we started here and and we're deftly able to help our clients and in the US gain insight into the China market.
But if that's the way to do in the years since -- like a broker right you you connect -- -- didn't need to -- the person who makes the product.
To -- -- factories in China get a guy in the middle.
They actually will we are is where a strategic insight companies so.
Unless -- -- a lot of our focus is actually in terms of selling to the Chinese consumer so not as so I think our our strength really is.
Helping you understand we're not gonna tell you what to do in China.
But we're going to tell you.
You don't give you the right information in the right tools to make the right decision so I -- call your broker but I would say that where we're here to keep you insights that you can make better decisions.
Essentially China the Blackhawks and and were AAF flashlight for you guys.
Franklin it is it is this if -- a company that makes products widgets here in the United States I'm just automatically gonna go to China.
And all of a sudden my costs are going to be cut -- half a -- billion more widgets every year I mean there are a lot of pitfalls he had to consider along the way aren't there.
Absolutely and and I think that you know if Europe continue to look at China as a low cost producer.
I think that's going to be it's not because I don't think the R&B is going to continue to stay at this level I think you need to be able to leverage China as.
As a place which has good talent.
Great infrastructure emerging infrastructure and the ability to produce value added goods and services so I think the challenge.
But companies now in the longer run is to move from made in China to created in China.
And to create -- value added goods that are useful for the global market with.
And also for selling within China because China is becoming an increase -- market -- for for the four for our company it's.
-- -- money can I -- if I am making something how much money do I see by outsourcing at all to China.
I think right now what we typically see is suppliers have about a 4050%.
-- from the cost of bear.
Purchasing in China right now.
The factories are generally making about a ten to 15% mark up.
So you're looking at a very.
You know a very competitive market right now with the factories in terms -- sourcing.
But I think as the price of you know labor increases and as this aren't being increases I think you're your margins are gonna be a little bit squeezed -- in that area which is why.
Again it's -- went to create these value added goods and services.
Frank someone ask you about the the government there or governments because we were distraught about local governments outside of the big cities mean how -- you are convinced.
That it look it's safe here that -- other -- the issues of the past aren't gonna rear their ugly heads.
You can do business here and be confident that in ten years from now you're still gonna be doing business here and being successful Latin.
I think you need to understand I think two things one is that.
Chinese people are very pragmatic so they're here and I think it's the same it is as in America we're here to do business and we're here to make money.
And that based on that I think there's a lot of competition is also actually.
A lot of competition between the city governments so they're competing guessing each other and to attract foreign investment into -- able to deliver products.
Products -- I think that's what think its second think the most important thing is that you have.
The right relationships that are going to last for long term if you have a relationship that's gonna last ten years and I think you're very very -- in China.
Question of the mistakes companies make when they tried to get and establish relations in China.
I would say the first I'd say there's there's two general mistakes won the first mistake is.
That you want to apply your western business model to China.
China is a different animal -- -- different market and plays by different rules is very important to be able to adapt your business model is very important.
To be able to find the teen.
But you can empowered to make this -- -- in China.
I mean that's the first thing the second mistake is.
To feel that to think that you're going to make profits immediately.
China is a long term play it takes time to build relationships it takes time to understand the marketplace.
And EE -- you you should understand that.
We're here you're here to make profits in the long run it's going to be a long run -- not quick profits beautiful stuff Franklin thank you so much.
Thanks thank you very much actually -- dismissed --
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