#371 – Indian E-Commerce Sourcing Opportunities with Lokesh Parashar
Ever wonder why India is emerging as the new frontier in e-commerce and Amazon product sourcing? We welcomed seasoned sourcing expert, Lokesh Parashar, to shed light on this trend. Lokesh, with his 30 years of experience, unraveled the vast opportunities, potential returns, and occasional hurdles when sourcing from India. One key takeaway from Lokesh was the value of investing not only in the product but also in the community by actively participating in events and fostering relationships within the e-commerce sphere.
Taking a closer look at the sourcing landscape, he shares his experience on how he made a remarkable transition from factory owner to supplying giants like Walmart. The challenges confronted after the 9/11 tragedy, his move to Canada and subsequent return to India due to his wife’s medical condition, and his eventual venture into sourcing for small businesses added a deeply personal touch to his fascinating journey. His takeaway was clear: opening his own US-based company makes financial transactions smoother and can even open doors to becoming one of the largest consulting firms connecting Indian factories and the US.
We couldn’t leave the topic of sourcing without comparing India and China. Factors like pricing, quality, business support, and even labor costs were laid on the table. We discovered that while China has an edge in infrastructure and logistics, India isn’t far behind catching up. We also underlined the importance of building personal relationships with factory owners and taking the time to visit these countries. Finally, an engaging discussion about the importance of creating a federation for sourcing agents in India and how their unique program lets Amazon FBA business owners get an Indian sourcing trip with just $999 all-in. Come join us on this journey, and who knows, you might just uncover your next big business opportunity.
In episode 371 of the AM/PM Podcast, Kevin and Lokesh discuss:
00:00 – Amazon Product Sourcing Opportunities in India
00:22 – Manufacturing Benefits in India
07:13 – Career Transition Into Exporting and Manufacturing
09:57 – Sourcing and Exporting in India
12:13 – Relocating to Canada, Seeking Medical Options
16:08 – Comparing Sourcing in China and India
22:56 – India’s Innovative Mixed Material Products
23:09 – Importance of Visiting India and China
26:12 – Chinese Factories in Other Countries
31:25 – Affordable Ecom Seller Trip to India
33:15 – Federation of Buying Agents, Trade Shows
47:24 – No Catch in This Great Offer
54:06 – Advantages of Expanding to India
58:24 – This Week’s Words Of Wisdom From Kevin
Transcript
Kevin King:
Welcome to episode 371 of the AM/PM Podcast. My guess this week is Lokesh Parashar. Lokesh is based in India where he’s been doing sourcing for over 30 years. He’s worked with some of the top retailers and brands in the United States and Europe, as well as Canada, including Walmart and pier one and you name it to launder list of top tier brands. He’s done a lot sourcing for them. He also helps e-commerce sellers source in India. It’s total expert when it comes to India and we’re gonna be talking about the opportunities and why you might want to consider moving some of your Manufacturing over to India. Plus, Lokesh has an incredible offer to set this program that brings sellers over to India and just a ridiculously low price to actually check out the factories, to check out this infrastructure and to have a little fun while you’re there. Enjoy this episode. Lokesh Parashar. It’s awesome to have you here on the AM/PM Podcast man. How you doing?
Lokesh:
Great, Kevin, and it’s been wonderful. I’ve been listening to your AM/PM Podcast around a year now since I got to know about it and really wonderful to have myself here as in the podcast.
Kevin King:
I’m glad to have you here. You know we met. I think it what we made it prosper.
Lokesh:
I think uh.
Kevin King:
Yes, I mean you’re based in India, in Delhi, right?
Lokesh:
I’ve been sitting in Delhi. So I, when I was a new online seller cruiser, Carlos, as a speaker, I heard a lot of our prosper Are you not coming to prosper? And I said why do I have to come back again? I was just like in january, I was in February, I was there and they said next month there’s a prosper, you must come. And I must admit, Kevin, I made All the right connections when I came to prosper like online seller cruiser something different, it’s like a week long engagement with, like my people, but I prosper. I. I think I connected all the dots. Then I was. It was a worthwhile trip to come back in one once, like almost a month, back to back from online seller cruise and then you came again back in uh in uh, early august as well.
Kevin King:
Right, that’s another to another events. I mean, this is a, that’s a trip, I mean coming over from India, just from India, from, if you flew direct. I know you took a route through the UK, uh, when you came in august, but even a direct flights, what about 14, 15 hours from deli to uh, chicago?
Lokesh:
right, I have always believed, Kevin, in relationships. Uh, and that’s my think 30 years of my experience and I’ve been teaching all this to all my factories and exporters and buyers and Anybody I’m I’m running a federation of buying agents, so we are talking about a lot of sourcing agents. Invest in your relationships. Don’t look at short term benefits. You might not get short term. You might get short term, but don’t be focused on short term. So when I invest, when I started this e-commerce journey, I looked at it right from 2018 and I could figure out that this is the next generation of customers and probably the future of e-commerce and retail together. And that is why I started investing and I figured out that if I have to Be in the community of those e-commerce, they only meeting conferences, they only meet in summits. Uh, there could be pockets of meetups. There could be pockets around Small things, like when I was in, when I was following my wholesale clients, I figured out that all the wholesale clients can be meet up in an international trade show, like high point furniture market or Las Vegas gift market or Atlanta gift market. So I was not going individually to their offices, I was meeting almost 100 200 people at one time in the market and In this, in this period of 30 years I have, I found out that markets, basically, are the growth generator of the business.
Lokesh:
Instead of, instead of doing hunting, you should be actually placing your net as a fishing net. Lot of fishes are there. You might catch one or two. And that’s how I made my Business strategy that if I have to be in the e-commerce business and I have to capture the business for myself, primarily it was for only for sourcing. Then I found a lot of other opportunities has been. I said, okay, then these people are meeting in e-commerce summits, they have meet, they are meeting in conferences, they’re meeting online cell across. I will invest my time there.
Lokesh:
I have a lot of friends which I made around online seller crews and, and I would say, the prosper and my aim is mostly to build relationship. I don’t look at a business I move primarily focus on. Will the people like my company? Can I add value in the place or a situation? I am standing or I am? Even we might have some dinner together. Am I able to add value in the entire ecosystem? It’s not about what business I’m going to get from here. I have never had that in my mind and that’s how I think dexter also saw that that I have a huge potential, and a lot of people from the speakers of the august recommended him that, yeah, you should bring location as a speaker in your October, and I think that’s how it used to be, although it’s a huge cost to me, but I’m sure I don’t take it as a cost, I take it as an investment. So I said yes then. Yeah, that’s so a lot of people.
Kevin King:
I mean, I’ve harped on this a lot is Going to events is one of the best things you can do because you and like you said, it’s a long term. It’s not necessarily, uh, a short term thing, it’s. It can be a long term where you go and you might meet someone. You met me and uh and in march, and then you know we’ve talked but we haven’t done any, any kind of business or anything really together. But then you know, six months, seven months later, I’m inviting you to come on the podcast because we met again, and so it’s if you view it as a long term.
Kevin King:
Sometimes you’ll make an instant, instant value add. You know, right on the spot. But a lot of times, you know, there’s people like you speak of norm. I’ve known norm since 2017. I think. I met him, uh and he and I he. You know we’ve been talking about different things, but we didn’t become partners on anything until just recently. I, you know, took that long and and that wasn’t because, um, there was an opportunity is it’s just wasn’t the right opportunity. It makes sense where we could put each of our skill sets To use, uh to for the greater good, uh on the right opportunity. So that’s, that’s value. But, uh, you’re known, though, what people are like. Uh, who’s this little cash guy? It’s your background. Is sourcing right? I mean, your main focus is on sourcing. You’ve, you’ve helped some of the biggest brands pure one, and some of the top. You know all these big brands actually in sourcing, actually in India, correct?
Lokesh:
Yeah, so my journey started when I did my engineering in 1993. Within a year I could find out that engineering and jobs is not a very good, promising career for me. I didn’t even actually like myself to be on the ground with the dust and everything else and making the billings and estimates and construction thing and I ventured into. The one thing I liked about exports at the time was that it can make you travel and create new products. That was the only hook I got when I was at an exporter’s friend’s office. So this career looks interesting if I have to change myself. So I did my export marketing diploma for a year and I became a local supplier to exporters. Right at the end of my export diploma they put me into an exhibition which was an international exhibition which happens now, where we are also part of the SOSIT BIA programs, and I got my first order and that’s how I got kicked up right on the beginning and I supplied to exporters.
Lokesh:
Then I transitioned into myself becoming an exporter. Then I started my own manufacturing and all the way went up till Walmart as a supplier from India, when Walmart started to source directly from India instead of coming to Hong Kong and Chenjin. And that’s how and again in that story itself, I can tell you my relationship with one person who was into buying agencies, a sourcing agent, and then he was in Walmart as a sourcing head, helped me tag along and grow and by the time when I was in 2001 which pretty much made me a bankrupt in that sense because my whole exposure was with US, with Tuesday morning and Oriental Trading Company, Gardner’s supply, pa1 so all of them were radio alerts and wholesalers of the US and my exposure to business was totally like when I got bankrupt because banks stopped supporting us.
Kevin King:
They said when 9-11 happened in 2001?.
Lokesh:
Yes, I came to Canada and, again from a relationship that I had grown with an exporter, they said you are a master of sales, I know how you sell and you have been talking to and you have been doing business with Walmart and I have a Walmart Canada opportunity that I would like to bring someone and why don’t you migrate to Canada and help my business? I said, yeah, I have nothing to do. I have a 2 million rupee debt to pay to my suppliers. That sounds interesting. If you give me a good pay, I can go to Canada. So next two years I built that business with him. I was working for him as a marketing manager and I really got to know how the buyers work from the other side. So all those years from 1994 till 2001, I had been a supplier and exporter, working with sourcing agents at buying house.
Kevin King:
When you say, supplier, did you own the factory?
Lokesh:
or you are like a trading company at that time I was a manufacturer and the exporters used to buy from me, so they are like back shipments.
Kevin King:
You actually had a factory, you had a lot of workers and villages actually making the stuff for you.
Lokesh:
I had factory earlier. I had people working for me in different places. Then I opened my own manufacturing unit when I was supplying to Walmart, because Walmart has protocols and compliances. You need to have a factory of yourself. You just can’t be buying from different cottage villages or people and becoming an exporter. If you are a registered supplier with Walmart as an exporter, you need to have your own manufacturing.
Kevin King:
What kind of products were they buying? What’s Walmart buying?
Lokesh:
I was a garden accessories specialist from India. Especially with the product development side, I had a huge strength. You can give me an idea and I can create an idea into a range of products for yourself. If you talk about garden, I can create a garden product. If you talk about barware, I can create a huge range of barware products from which is? India’s strength would be that I need to also make sure that the buyer is looking at my product when he’s competing with China and other countries. So getting an exposure like 23 years back selling to Walmart has now proved so worthy for me. Even today, when I’m looking at a product, like always, the mind goes towards the buyer and say, okay, as a buyer, will I buy this from India or should I try China or some other country?
Kevin King:
and that’s how I figure out which product to sell to my clients so was your factory this mostly handmade, hand assembly stuff, or are you doing molding and plastics and metals and stuff, or what kind of gardening stuff?
Lokesh:
so that at that time I did not had any molding, so all the tools and dyes were like outsourced. I used to have mostly the welding side, the finishing part, the construction of a furniture. So I was a garden furniture and garden accessory buyer. I was selling garden furniture to a lot of retailers. So all those things are like raw material you purchase and then if there is a tool and dye or if there is something to do with molds, then you outsource that part. But pretty much the rest of the manufacturing happens within in-house in your factory.
Kevin King:
So then you came to Canada when things went south, when 9-11 happened in the US, spent a couple years in Canada, learned a whole different side of things, and then what happened after that?
Lokesh:
so my wife got a hearing disorder. She was genetically having a disease which we discovered much later and we were pushed back in India because her genetic disorder stopped. And I asked all the doctors in US, Canada, Australia, Austria to figure that out. They said no, because of a genetic disorder you can’t have a cochlear implant, it will be too risky. And only the doctor in India said I can take that risk because I have an invention and he actually got awarded by the international doctors community for that invention where the implant can be also put in. And she was the first patient to be actually tried for that method.
Lokesh:
So that pushed us back to India for almost like two and a half years when my wife was not very comfortable going back then. That is the time when I switched from my product selling and a service to offering a sourcing agency service. Because now I figured out where is the gap, what the customer in the North American market actually wants from this factory. So that communication gap, those challenges of quality, getting 100% inconsistency in price, so all those big misses which in the factory can can miss when they’re supplying to exporters or to buyers. So I basically converted that into a service business and I said, okay, now I should be able to on something as a sourcing agent, as a buying house that’s what you’ve been doing the last 20 years.
Kevin King:
Now. Is sourcing so in your sourcing for big companies and small companies right? Everything from e-commerce people to still sourcing stuff for some of the largest well-known brands in the world right?
Lokesh:
In 2003, when I started the sourcing till 2013, I was primarily focusing on big retailers, big wholesalers. And 2008 again, we were pushed by recession, like the layman brother happened. So that was my first visit to us to Europe looking at business. I went to Canton, I went to Hong Kong fair to look for clients and I also saw that there is a wholesale market in Europe as well.
Kevin King:
But by the time in 2013, Did you go to those fairs or do you exhibit at those fairs?
Lokesh:
No, I just visit the fairs because I am not a product guy, so I can’t be displaying a product. So I’ve always been visiting and during those visits I could figure out a way to get business. How to get business, how to get the attention of the customer because they are there to sell or they’re there to actually buy from factories and how do you make sure that they are paying attention to you? In 2013, I opened my US company primarily to focus on small business as well, because small business when they’re doing private label. In that time there was no private label sort of a definition. There was like sourcing from China or sourcing from India. I figured out that they have real trouble in getting me paid in the India or getting paid a factory like $1,000, $2,000, $5,000. I said, okay, I will open a company in the US. You can pay me in credit card, you can pay me by anything in the US and I’ll manage all your finances from the US bank, because when you pay me in India, I can’t pay dollars to a factory in India from my bank. I have to pay them in Indian rupees.
Lokesh:
So that was the aim of opening my US company in 2013, but I never knew that destiny would be that it will become one of the largest consulting firm from the India which actually brings Indian factories to US. Because I have made connections and I, as I told you, relationship always helped. I got introduced to two consultants in US. They have 30 plus years in business. They have been bringing Chinese business to US, setting up their sales and distribution, getting the whole sales rep team set up like 200 plus people on the road selling their brand of the US company. They partnered with me for Indian factories, so from 2018 we started to talk about this. That, okay, how do I bring Indian factories to the US as a brand and as an entity in the US?
Kevin King:
and that is where my US business and a US entity really got a lot of attention so for people that are familiar with sourcing in China or going to Alibaba and finding Chinese manufacturers are going over to like the fair, like Canton or Yiwu or some of the other fairs, what’s the big difference between sourcing in China and India, or is there really a difference? What are some of the key differences people need to understand if they’re kind of new to actually venturing out from?
Lokesh:
China. When you’re looking at China and you’re looking at India, first thing you need to always get in your mind is do not compare unless you have an apple-apple factors. So you have to compare apple to apple in that sense that this product, which I am looking at China, is it possible to be done in India. And then all your factors of quantity, quality, factory parameters, your own business ethics, your credit with the factory which you can get from India or from the China part, and what kind of future business you want to get into with the factories. So there are numerous factors. When you are doing a private-label sourcing, it’s not only about one time buying and private-label sourcing, I can tell you as a hack of sourcing, it’s all about relationships. It’s not about going to Canton, it’s not about buying one time from factory. Unless you are staying with the factory for a couple of years, I can tell you will never make money. The biggest money and profit you will make is when you have good relationship with the factories. You will face problems but the factory will back you up. You will find a lot of inflationary recessions kind of situation, but unless you have a good relationship with the factory, these things will actually bother you and maybe make you get out of business because your prices will be zooming so high that you can’t even sell in the market. So when you’re looking at China and India first, is Apple to Apple comparison on prices, on suitability, Is it possible to do it in India or is it something which is actually can be only happening in China? That’s the first step I will say Now when you say that, okay, I have compared myself and I see that this is the possibility, for example, home textiles in India can really compete very comfortably with any Chinese home textile.
Lokesh:
So if you’re buying or if you are focusing on product which is into home textile category for example, cushion covers, table covers, kitchen linen, wall decorations made of textiles then you should not only focus in China, because the most competitive market which can offer you a price is India. The kind of variety, the kind of quality, the kind of quantity, the kind of business support which you can get from Indian factories in terms of home textiles, Chinese factories can never compete with the India in that sense. So that is where you should be thinking okay, if I’m into home textile domain, I should not focus on only China. Let me also explore India. So these are certain things which I would say could primarily answer your question that when we are thinking of going to China, how do we basically assess that? Is India also a good sourcing market?
Kevin King:
for me. What about the infrastructure? China is seen as the world’s factory and everything is just set up. All the wheels are greased, everything just moves pretty smoothly. Versus India is still playing a little bit of catch up there, getting stuff from Delhi down to a port. Most of the stuff in China is along the coast. Most of the factories are along the coast either in the north, central or south, versus India. India is a big country and a lot of stuff is spread out throughout the country. So there’s extra logistics and extra things you got to think about. So how is India these days? I’m sure it’s changed dramatically in the 30 years you’ve been doing it. But how is the logistical network? The streets are crowded. It can take. I’ve been to India a couple of times. There’s some new roads now that help, but it’s 30 miles an hour, 40 miles an hour with people and cows and everything in the road everywhere, so it can take forever just to go a short distance. So how is the logistics side of things coming when it comes to India as far as moving goods?
Lokesh:
As I said, when you’re comparing China and other countries in India, logistics and your timing are also a factor you should take care of. That is the most important component when you’re actually doing a private, liberal source in that how much time does it take for goods to come from China, or how much time does it take to goods to come from India? What are the freight costs of the product? What are the times between the factory and the shipping cost? So these are certain factors which are very subjective, depending upon your quantity. Is it a 25th container, is it a 40-bit container or is it just an LCL?
In the last 30 years, I would say, India has dramatically changed. Challenges are still there. We are going towards positive things, not yet there, as I would say. China, just to frankly admit it. In the last 10 years we have made a lot of inroads. The focus now has shifted to fast production as well as fast logistics. Infrastructure is improving but, as I said, we are still not competing with China on our logistics, especially when in terms of import duties or a preference from China to US in terms of the duties.
Lokesh:
So when you’re talking to Indian factory, you should not only speak about FOB price, you should talk about CIF price. What could be the landed cost at my door if I have to compare it from China and India and what would be my time frame from getting it from China and getting from India? What are the minimum order quantity an Indian factory can accept against a Chinese factory as a minimum order quantity? So all those factors which can build in the business of a private level. You should have all those checkpoints, just like a visa form. You should have all those checklist done and then you should compare your pains and pleasure of buying from China and pains and pleasure of buying from India, but definitely in terms of product selection. That is the core business. I would say that will define that is India competing with China and are they comfortable in terms of all the other factors involved?
Kevin King:
You said that India is really good, and I agree with you on the textile side of stuff. It’s also like a lot of handmade stuff, a lot of things made out of woods and even some metals and stuff they’re actually good at. But when it comes to, maybe, electronics maybe that’s an area that you might want to consider maybe India is not as strong, or am I wrong on that? What are some other areas besides the textiles that India is really strong and, worse, some areas that maybe it’s a little bit weak?
Lokesh:
on. So that’s again a great question and I’ve been asking my customers, who I’ve been serving Oriental Trading Company for almost 17 years now. They’re a catalog company, then I am serving almost seven years at a wholesaler. It’s a very niche, high end furniture and during our conversation when they’re in India, I said why do you come to India, that you you’re buying so much from China, you’re buying so much from Vietnam and other countries, but what brings you to India? I know it’s only maybe 10% of 15% or 20% of the business, but why also that business? And they always say that the kind of innovation, the kind of mixed material, the kind of challenges which Indian product can actually put us in front, that makes us very interesting.
Lokesh:
For example, I have a lighting buyer and India is no way competing with China when you’re talking about very commercial lighting or LED lighting. But if you’re doing a home decor table lamp or if you’re doing a Christmas ornament with lighting or LED, Indian factories can import all the LEDs which are very cheap to import from China to India. Get them incorporated in your lighting and then you have a plethora of products, a variety of product with the wood and metal, with wood and textile, with wood and metal or something mixed together with latest technology. So that is where India stands out. As I said in the beginning, don’t just compare Apple to Apple. You need to also figure out where is the strength for Indian material, which material I’m going to use to make it a finite product, and if it is easily available in China, for example, socks the socks which is like worn by almost every human being. India can never compete in socks from India. With China having a huge, big town which creates thousands and thousands of sq’s of different kind of socks, we have pretty much very small segment of people.
Lokesh:
Now, when I was at a trade fair and I saw an Indian, South Indian company displaying socks and it was primarily all the designs which I can say is we’re going on North America I had to stop and I said I need five minutes from you because you’re displaying so many socks items which are primarily North American designs and you’re from South India. So my first question and the last question is are you able to compete with China? And they said yes, if you give me a quantity of 500 plus pairs, I can guarantee you I’ll be China in your prices. I was really surprised. So these are the certain things which you can only get when you’re at the trade fairs. When you are at the ground visiting international trade shows, you’ll see a nice factory. We don’t have a socks industry, so I’m not sure. But if you were a really a socks guy as a brand and you sell a lot of good quality socks, again India would be maybe 10% of your business. 90% still will be a China, but add a variety and to get what India can bring, then only it makes us to come to India.
Kevin King:
You’re saying that’s good for maybe adding a different kind of variation, using a little bit different materials or different styles, India can be a good choice to supplement what you may be getting elsewhere. So are you seeing, with the labor in China has skyrocketed, the middle class has skyrocketed, the labor cost has skyrocketed. So a lot of Chinese factories are diversifying out of China. They’re building factories in Vietnam, they’re building factories in Mexico. And what about in India? There’s Chinese factories in Italy making, quote unquote, made in Italy things. So it’s all made by Chinese factories and Chinese workers in Italy. Are they doing that in India as well, or no?
Lokesh:
In the last 10 years, if I calculate my profession of 30 years, the first 20 years we were around 20 to 25% expensive than China. Right now, with the labor costs still not expensive in India. While China’s labor costs has risen a lot, I would say we are just about 5 or 10% expensive, or maybe at power with Chinese prices just because of the labor cost. Indian labor costs has not risen that much. It might have gone from $120 to maybe $150 or maybe for $150 to max $200 a month.
Kevin King:
So the average worker in a factory is making $150 to $200 per month in.
Lokesh:
India An average labor? Who?
Kevin King:
says like 8 hours.
Lokesh:
They come to the factory, they sit on the tables and then do some work. It’s around $200.
Kevin King:
Five days or six days a week. Six days a week, so okay. So it’s like the old Chinese 9 to 9, 996. 9am to 9pm, six days a week.
Lokesh:
No, it’s just 8 hours. So when they do 12 hours you can count $300. Okay, they get 50% extra for 4 hours.
Kevin King:
What about like in China? It’s huge to act like you said, talking about relationships, going to shows and finding out things, but in China one of the biggest things you can do is go visit your factory, visit and have dinner you know, it’s that FaceTime, that face-to-face and have sit down and have dinner with, with the, the owner of the factory. A lot of times that can lead to priority treatment. It can lead to Increased terms or credits or whatever is the same. The case in India is if you’re doing business in India, is it wise to get your butt on a plane, get over there and actually help people on the ground and to Give you a competitive?
Lokesh:
advantage. I would definitely say yes to it. Just like I told you, I am now Targeting or focusing on e-commerce players. I can’t be doing business when I’m sitting in India and just talking to Kevin or Norm or Carlos or Amy online. I have to be with them. I have to meet them in the, in summits or anywhere at any platform, or maybe the drop. As Gretchen, rob Stanley, I have great conversation with them. I have a great relationship with his him and his wife. That can only happen when you’re actually on the ground, when you, when you guys, are actually sitting in the coffee shop or you are honest on online.
Lokesh:
Select was together for seven days. Similarly, when you are coming to source, I would say you should never think of this as a cost. Your trip to India or China is actually invested. You have to make it If you want to build a big business which can run for 15, 20 or maybe 30 years with factories. So this investment of traveling to the fairs and meeting the factories may be Inquanting a short listing people from the trade fair and then, from tomorrow, next year onwards, you can a short list which are the factories I need to really visit. That is a must for your private little business. You test and that’s how I think a lot.
Kevin King:
Sorry. The problem with a lot of Westerners, a lot of sellers in Europe, in the US, is they’re scared. They’re scared to go to China, they’re scared to go to India. I like what if I don’t like the food? Is it safe? Is it, you know, it’s dirty or it’s this or that. And what they don’t realize is that Places like China China is more modern than the United States in a lot of ways. I mean China has its backwards areas but, and a lot of ways, China is far ahead of the United States and Europe when it comes to modernization and India is on its way. India is, you know, it’s behind, but it’s on its way and Just by going and you understand those cultures too, you understand the people, you understand their food, the way they’re living, and it Gives you empathy and it’s not just about meeting the factories and and making those connections, but it’s also, it’s just, it’s good for you as a human being to actually get out and see.
Lokesh:
I mean India. You know I wrote about this in a few months ago in my newsletter. You know I featured, featured India, and India is colorful, you know it’s. It’s an amazing place. It’s for a lot of Westerners, it’s love it or hate it, it’s extreme wealth next to extreme poverty. You know, one minute You’re stepping over poop in the road. In the next minute You’re walking on some of the best marble you’ve ever seen. And the history there and the people, the colors, the smells, the sounds, it’s just. It’s an amazing, cool place in the diversity of India, from Delhi, you know, the big cosmopolitan city, to going down to the Kerala backwaters to go to. You know you go all around India. It’s an amazing place and that’s something I think everybody.
Lokesh:
If you’re gonna be sourced in there, you need them back. You just said it’s an investment that you need to make because it might not pay off immediately, right that day, but it’s gonna pay off down the road. And I know a lot of people like well, I don’t have five grand or ten grand or whatever to. You know, get a, get on airplane, pay the hotel and who’s gonna hold my? I don’t know if I speak the language. Yeah, they speak some English and in China and India that a lot of people speak English, but I’m hard to understand what if I get lost? Or so I know you have a trip that you put together and you have. You know there’s a couple different trips out there and they’re all great, but yours is a little bit unique in a in the sense that You’ve figured out like, hey, let’s take down all the barriers to people wanting to come to India and for basically a thousand dollars You’ve. You’ve got factories in the government to actually supplement. You come into India because India is trying to boost their trade. But you’ve worked out with you through your connections over the last 30 years and you know, you know everybody Next to God in India, so you’re able to make all these connections and say, hey, look, let’s bring some Ecom sellers over, let’s take down all the barriers where they can say I don’t have the money or I’m not gonna be taken care of or how do I know it’s safe, and you bring them over for a week and it’s cost a thousand dollars.
Lokesh:
For a thousand dollars that includes your airfare on air India, I think from the US. That includes your hotels and nice. You know deep and good, good quality hotels. You include someone taking you around, a little bit tourist stuff and you meet factories and you meet everybody and You’re not under any obligation to make a deal. I mean, it’s not, you know it’s, it’s not another. You don’t have to leave there and make A deal. I mean, if you don’t find the stuff you’re looking for, enjoy your time and you learn something. How are you able to put that together? Can you talk about that trip that you do a little bit there, that I know you do a couple times a year? You probably have another one coming up here in 2024. But tell me a little bit more about that, sure.
Lokesh:
When I was in the business and I’m in the community. Guy Kevin, we must have known each other almost now a year when we met again. I have always thought that how do we help the community? I am involved with a lot of my social community work in my government of Delhi and government of India. So when I was pretty much established in my business, I thought we never had a federation or association of sourcing unions. Why? Every exporter from a different town they have city exporter associations, they have national associations, they have every retailer have their association. Everybody has their association, but why not sourcing? It Never had an association and that thought was somewhere there down the line with me.
Lokesh:
Ever since I started my business, I’ve seen how America works, I’ve seen how India works and lobbying is always there. You have a lot of common problems that you need to take care of. Unless you are a community, nobody can listen to you. Politicians will not listen to you if you are only one guy. So if you are 100 people, then maybe somebody will take attention to your issues. So we started the federation of buying unions in 2014 as an idea. By 2016, we had 76 sourcing unions joined as a WhatsApp group where we were only helping find good factories, saying hello to everyone. We had close connections and getting some 4 or 5 people together. But by 2016, there was a strong demand from all these people that let’s collaborate and build a society, a formal society where sourcing agents can come in and solve their problems. So in 2018, it took us 2 years to evolve that we started the non-for-profit society called Federation of Buying Agents. This is a Pan India sourcing agent network of close to 789 members now across India freelancers, buying agencies, big buying houses, larger offices they are all our members and we formalized this as an association of 3 G’s, like G as a growth of your business, g as your grievances to manage and G as generation of opportunities for your business. So that was the idea as a thought leader I had, and it was my present message, actually when I was elected as a founder president of the organization.
Lokesh:
We’re out of the areas we should be focusing on. The first area is to grow more buying agents or grow your business. In terms of structure, a lot of problems happens. It’s a trust based business. If Kevin has to source something from India and he’s taking a survey for the sourcing agent, he’s basically putting your dollars in somebody’s hand. In my mind, in my capability, they’re okay, Kevin, buy this product, it will be easy to sell and this factory will be the one right factory for you. I’ll manage the factory for you while you focus on sales. So it’s more of the capability. So we work in the growth area where buying agents are primarily hand-holded with a lot of issues vendor management contracts, how do you deal with customers, how do you deal with employees? How would you scale your business? So all those things are taken care. We are mentoring process for our new members.
Lokesh:
That area, the generation of opportunities, is where this, hosted by a program which you just mentioned, came in being At once. The e-commerce sellers or retailers, the wholesalers, are visiting India. All these trade fair organizations, export councils. They’re primarily promoting and paying incentives to government. They’re paying incentives to the buyers to bring business, to exporters of product, but they’re not placing sourcing community or sourcing consultant community as a person to meet the buyers. They treat us as an arm of a buyer, a representative of the buying community, and they host us in their trade shows in India as a buyer. But my member will never get access to any expire which is visiting a trade show. That is where we said, okay, we will host our own trade show and we will pay what the government is paying to because of the export promotion fund they have. We’ll pay it from our own pocket. So, and if we get help from government, that’s fine. If we don’t get help, let us build a community of exporters service providers like freight forwarders, logistics, packaging company, testing companies, accounting companies and a lot of service providers are involved where the market for them is exporters and buyers and buying agents and create an ecosystem where we can incentivize the buyer that you should explore India. And that thought actually came and I’m thankful to Carlos for that.
Lokesh:
When I was an online seller cruise, I was never hosting it at $999. Earlier, we were doing from 2018 that if a buyer is coming to India and he wants us to host them, we’ll give them a hotel, we’ll give them support on ground and we’ll offer them a meeting with sourcing agent. They can choose a sourcing agent. If they don’t choose, federation will just hire a cab and one person from the Federation will volunteer and figure out where they want to go. But on the online seller cruise last year, like this year itself, I said, okay, if I have to tap e-commerce industry. They are not the people who will invest $6,000, which was which is happening in the market that there are people who are charging $6,000 that bring e-commerce sellers to India.
Lokesh:
I said I don’t think so. I should be one guy who should be spending $6,000 to bring bring it to India and look at product which I might not even be interested in Because most likely India would still be 10 or 20% of our business. If I’m doing private level sourcing, I would be more inclined to China. So how do I make it attractive and also take care of the interests of my sourcing agent members? So that’s how we figured out a way Okay, I will bring this business to sellers that you only pay $999. While the entire $5,000 of the incentive which we’re offering, including flight ticket, will be equally amortized and contributed by exporters and buying agents.
Lokesh:
So only one condition which we put on the e-commerce seller is that the first day when you arrive, like overnight Amy came just for the experience and I’m sure she was happy you arrive at any of the time, during the afternoon, night or whatever you stay, you just relax. Next morning is the first day when you do a hosted bar program B2B, NCB when you are required to meet 5 to 7 sourcing agents. You can no commitment to sell or to appoint any sourcing agent, but just meet them. They should be able to sell their business and services to you. You should be asking them questions and you should figure out whether I require a sourcing agent in India or not. Maybe in future I might require you. Just take the contacts and then you have 25 to 50 exporters displaying products, depending on your. You have filled a form of the registration or website. You have given us the priority of your product to source. You can also say I don’t know what to bring from India, so we can figure that out for yourself and we bring 25 to 50 exporters in a B2B display of product and you will be spending the whole day talking to the exporters figuring out what you want to buy.
Lokesh:
The federation support staff will be with you for all the time, right from the day or the time when you arrive at Delhi airport. There is somebody with you at every time. The only time you need to take your credit card out is only when you are trying to shop or doing something which is not in business, which is your personal choice. You want to go to disco or you want to go to a party. That’s the only way you pay for yourself. Otherwise, all your food, all your hotel, all your B2B exhibition, all your trip is all accounted for in that $999. So first day is the one which is actually paid for. Second and third day you should figure out you want to go to a trade fair or you want to meet any of these factories, or, if you have appointed a buying agent, you can ask him or ask her. Okay, please come tomorrow and let’s go to a factory which you would think is good for me, or maybe factory which we met today. You want me to handle my business now, so you can also walk with a sourcing agent. If you don’t want it, federation will also give you a support to figure out how to go to a trade fair. But next two days is all business. We are not giving you any leverage in that sense. So three days is all business.
Lokesh:
Now, next three days, which is primarily to look at India and what you discussed right now. India is a different country. It’s not China. You might have gone to China, but India is completely different than what any other country. Just like US was a new for me. Canada was a new for me when I arrived first time. India, when you’re having first time, is a new country for you. So next three days you want to explore India. Please don’t do any business. Go to Kerala Backwaters, go to Kowa.
Lokesh:
We have packages for you, which is pretty much in our budget, where you can go to Taj Mahal. If you’ve never been to Taj Mahal, you can go to Jaipur Fort or you can. We’ll also in built, as per the MEV suggestion, a trip to manufacturing town as your trip in the next three days. That there should be something to do with manufacturing across one particular category. So these are couple of two packages will be given to you. You’re not paying anything, you just have to choose. Okay, this is what I want for myself, and all arrangements for your hotel, for your flights, for your train, for your car, will be arranged by the Federation. So six nights are all paid for. You arrive on the first day, you leave on the seventh, but seventh night or eight morning you should be back home. So this is what Federation wants that the sellers should get an value of the money.
Lokesh:
Our members are getting an opportunity to meet the commerce sellers and they can figure out that this is the new, and that’s my personal thought as well that this is a new community you should focus on when you’re looking at business. If the business has to come from overseas clients, it’s not about whores, wholesalers or retailers. It’s more about e-commerce sellers, because now we have e-commerce sellers were even eight figure and nine figure sellers and they are huge in terms of buying as well. You should be focusing on that as a sourcing agent. That’s the whole mathematics we have done, and I made MEVs actually at the last day, I showed her all the calculations and she was happy that, yeah, in spite of all that we did, we could still have some profits in our pocket in the sense that we could figure out all the expenses. And the key point here is there is no minimum. So we’re not saying that you should be having a batch of 10 people or 25 people coming together. Then only we can host it. We can figure out this with even three people or five people. So that was learning of the 17th or August trip of MEVs that we can also do it for smaller groups. So this is how the whole hosted by program is offered to e-commerce sellers.
Kevin King:
So it’s not a set date necessarily. These are the two dates of the year you can do the trip. But if you could three, five, 10 people together Maybe your friends or you’re in a mastermind or something you can organize a trip specifically for those people right, we have two months gap between each event.
Lokesh:
So we had one in August, we had one in October, we are doing it one in December and one again in February, then against March, April of 2024. So every two months you should be able to figure out you should sign up now. At least you should be knowing that okay, which is your preference, if we get three or five people together and it’s a two month gap, we’ll just let you know that which month we can fit you in.
Kevin King:
Basically $1,000 includes the airfare from like Chicago or LA or somewhere right, yes, anywhere in the.
Lokesh:
US or anywhere in the Europe, wherever you’re coming from, you only pay $999. So there is a seller which has just signed up. He’s coming from UK but we have asked him only for $999. We aren’t saying that if you’re coming from UK you only pay maybe 700 or something. We’re not saying that because somewhere it’s all mathematics is $100 and $200 will not make a sense or make, doesn’t make anybody richer or poor, so we’ll just kept it a standard for anywhere in the world you’re coming from we’ll be Australia, New Zealand, UK, Europe or North America anywhere in the in the world you only pay $999.
Kevin King:
Okay, so it’s 999, includes my airfare, includes six or seven nights of hotel. Six nights includes six nights of hotel, includes your team helping organize with the logistics of the, if you want to meet a factory or if you want to meet the suppliers or if you want to go to the Taj Mahal or do something. But is that extra? If I mean, like you said, Amy, when Amy visited you, she went to a factory, but you said you could go to Corolla Corolla’s a ways away from Delhi, is that extra cost or is that included?
Lokesh:
So what we did in August and we learned a lesson that in this cost we have to give them a tour package. So what we did in October and what we did in December would be that we’ll give me giving you options of the place where you can go, because when we have a group then we cannot have one person going one place and the second person say East and the person said West and the South it. That becomes a lot of logistic challenge for us. So we’ll give you a tour package.
Kevin King:
So a fun trip is included, whether if you want to make that a business trip and go to the factory like Amy did, you can. But you recommend enjoy India, pick some place you want to go the Taj Mahal, the pink city, the, you know, Varanasi or Corolla, or go or wherever there’s. There’s tons of options, but you’ve got little options and so the group as a group basically does that.
Lokesh:
Ideas that, as a group, you’re going and you’re learning how India actually works, so that when you go back and if you’re working with a sourcing agent or you’re working with a factory, you should have that in your back, in your mind, that, yes, these challenges might happen in India.
Kevin King:
Now, some people out there may be listening to this. I mean, this just sounds. What’s the catch here? This sounds too good to be true. A thousand bucks I can’t even buy an airplane ticket for a thousand dollars to come to. India. So and you’re saying I don’t have to make any commitment to to buy anything. Y’all are hoping that you do, you’re hoping that they find a connection with and that’s. That’s where the payoff is down the road. But there’s no catch to this at all.
Lokesh:
So there’s a commercial catch and the catch is a simple mathematics is nothing like a hack the exporters of product. They are looking for business. If I am a sourcing agent and since I am in the business for the last 30 years, I’m managing 18 companies clients like 18 companies are basically managed by me as clients. So when an exporter is displaying a product and if my team is walking in the fair, they’re looking at 18 buyers from one eye so they might have an opportunity of getting some business from any of my merchant. So when we are hosting this one day event where we have 50 exporters and we have three or five buyers, but we also have seven to 10 sourcing agents walking in the display, and that is where the factory says okay, you are asking me to pay something extra, which is, in fact, is a cost to me. If I’m exhibiting in a big fair, it’s actually four or five times of what you’re asking. I’m getting a guaranteed time with a buying agent or a sourcing agent and an overseas buyer is there. I will be happily paying this cost. So that is where the heavy cost is coming from the exporters.
Kevin King:
Okay, they’re supplementing the cost to get access to the agents you bring and to the potential buyers For them.
Lokesh:
the big business is going to happen from the sourcing agent, because sourcing agents will be in India forever, so they will meet up there, they will fix up an appointment to go to their office, and that’s how the business happens.
Kevin King:
That’s smart. So you’re taking care of everybody at the same time and making a good deal. That’s actually really smart. Okay, all right, I see that now and again. It’s also a lot of more looking at it. Just like we said at the beginning of going to events, it’s a long-term investment. In some cases you may not have a deal, may not come out of that trip, but it may come down the road from that buyer, or maybe it’s not even from that buyer, maybe it’s from that buyer’s buddy, but he comes back and he’s in a mastermind or he’s in an event and someone’s like yeah, I’m looking to source in India. I looked on Alibaba, I couldn’t find anything. You know anybody’s like oh yeah, Lokesh, here’s a whole list of people. So it pays down the road sometimes. So that’s the investment that they’re making, where they can gamble on supplementing this for you and take a lot of the risk and the burden off you as a seller. So this is almost like it’s a win-win. It’s like a no-lose thing for you as an e-commerce seller to do this, unless you just, for some reason, don’t have the time. But, like you said, if you’re serious about your business, you know I had this in my newsletter I talked about back in September. I talked about sourcing in China. I wrote about sourcing in China and I told a little story about going to dinner with some guys and getting better terms and stuff by eating this crazy food. And then I segue that into I promoted, not promoted, but I mentioned here’s three different trips of people that lead people to China. And then I did the same, a similar thing for India, and I had a couple people you know that I send them the newsletter out to a couple people to proofread it before it goes out and just to make sure you know all the links are working and everything and one of the guys said to me like I didn’t like this issue as much, because the big action thing here, as you’re saying, is you need to go on a plane and go to China and visit your factories. And who’s going to do that? Nobody does that. And I was like that’s the problem right now Is that attitude is costing you a huge opportunity to cost a huge amount of money. Just in my case, I went and I had dinner and I was in Shenzhen.
Kevin King:
The factory owner if you didn’t see the newsletter the factory owner took me out to dinner serving all this nice stuff, Peking duck and all this you know stuff and this is nice restaurant. And the next thing that comes on the plate was this look like a freaking slug, like a caterpillar or something. It was moving and I was like what the heck is this? It’s C cucumber, which is a delicacy in China, and I’m not gonna. I was like I’m thinking there’s no way in hell I’m going to eat this damn thing. It’s freaking moving. It’s kind of half raw. But I had I knew like, look, if I eat this thing in front of him, this is going to bond us together as brothers and and it’s going to pay off dividends in my business. So I took a fork and put it in my mouth and ate it.
Kevin King:
Well as a result of that man, I never want to do it again. I’m not. I’ll say next time bring something different. But that as a result of that, I went from 30% down 70% when it’s ready to ship to 10% down 90% 30 days after it arrives to the United States. Yeah, I went from a four to six week to usually turnaround time when I placed a new order to about two weeks. I went to those terms alone with this particular product.
Kevin King:
Save me I don’t have to go back and do the math I don’t remember the exact math but probably save me from having to get a half a million dollar loan, you know, to finance inventory and to pay interest on that and everything. So the value of going to whether it’s China, whether it’s India, where it’s Vietnam, Mexico, Turkey, wherever the heck you’re sourcing is, you need to get your butt on a plane and go visit your factories. I mean, I used to do this back in 30 years ago. I was in. I was printing magazines and calendars and stuff. I still do some of the stuff but and I would actually do is called a press check. So you would actually. You know, I had a factor. I live in Austin. I had a printer in Chicago, so when they were making my, my magazine, I would go up there and do a press check and they actually had like a little room in the printing facility, like it’s like a little like an Airbnb, like one of the offices was turned into like a hotel room with a bed and TV. And you go and you hang out there, you go to dinner with the sales rep or the owner of the company and then you go and you watch your stuff coming off the off the press and you kind of sign up on and say, yes, it all looks good or no, you need to change the color a little bit. And people used to do that all the time and now with the internet and zoom and I got, we don’t need to do all that stuff anymore. Yes, you do, it’s still.
Kevin King:
This is a human business, it’s human relationships and it and you need to go, and what you’re doing here is a service. It’s not a, it’s a business, but it’s also it’s a service to people to make it easy and pain free to go over and look at these opportunities that could revolutionize and could completely change the trajectory of what you’re doing. And just by switching to India alone, like, like you said earlier, it’s not all products are appropriate for India, but the ones that are. If you can do that immediately, you just got a 25% advantage because you don’t have to pay that Trump tariff that you have to bring brings us. You probably got a quality advantage because a lot of times the handcraft and the craftsmanship coming out India is not always, but typically it’s a little bit better, and they’re they.
Kevin King:
Most of them speak English as a first not as a first language, but they speak English more fluently or at least understand it. You might, the accents might be tough sometimes, but they at least understand it, and there’s just so many advantages to doing it. And then you get a trip to go and experience the culture and expand your mind and expand it’s. This is like this is really good, which what you’re doing here, and so I. If people want to actually find out about that or like get in touch with you I got questions or see how this works, what’s the best way for them to do that?
Lokesh:
So we have a website of the Federation called fba.org.in, and you’ll see. FBA is a known, known name for e-commerce, like Federation of buying agents. Fba.org.in Okay.
Kevin King:
fba.org.in yeah if you go to fba.org.in, that’s. That’ll direct them to more about the app. Where?
Lokesh:
This is called, hosted by a program that’s a global logo of a globe and you can figure out and you will fill a form as a registration. It’s a one time incentive for you. So if you’re coming first time with us, you might have come to India. We don’t care, it is first time with us, you’ll get an incentive. So if you’re coming back again and you would like to be on our platform, then we don’t offer this to you. But yes, all the first timers were coming on the Federation website and they would like to explore India. That is all. All are welcome.
Lokesh:
And just to add to your conversation, when Amy was here we had a toy fair. I primarily had this notion as a sourcing agent that we are not good in toys as competitive as China and which is somewhere right. But Amy proved me wrong in almost five of the exhibitors that location. If this guy is selling at this price and this product is export quality right now, she saw she made me, saw on her phone the kind of people, the prices people are selling on Amazon, like nine to 10 times of the margin people can make. Or there were couple of drop shipping options which she proved on the right on the floor with me. Look, if you want to do this business right now, I can tell you can make a million in only drop shipping this product. So in that sense, I was also educated of how the right factory can be actually found out in India as well. Since you are an e-commerce seller, you know your math’s.
Kevin King:
Lokesh, I really appreciate you coming on today and sharing all this stuff about India and opening some people’s eyes. So what some of the opportunities and stuff are. It’s been great chatting with you. Appreciate your time. Great stuff from Lokesh there about sourcing in India. I think it’s a great opportunity. In fact, I’ve just moved some of my sourcing over to India. I had the guys over at Zignify you might remember Sebastian from an earlier episode of the MPM podcast back in August. I had him on and they did a bunch of sourcing for me and some of that was in China, some of that was in Vietnam and some of that was in India. In India was the best quality and the best price by almost half, and so I’m actually manufacturing some stuff in India now. So take a look at India and consider Lokesh’s trip. It could be a pretty awesome opportunity for you. We’ll be back again next week with another great episode. Also, sign up for the Billion Dollar Sellers Newsletter, billiondollarsellers.com. Today’s words of wisdom. Before I let you go If you feel behind, it’s only because you’re comparing yourself to where others are. If you feel behind, it’s only because you’re comparing yourself to where others are. See you next week.
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