#61 The Canton Fair – Lessons Learned – with Danny McMillan – Part 1 of 2
Danny – remind us of your background in 2 minutes or fewer!
Danny first got his start in the music industry selling vinyls years ago. That where he first got to work with products and marketing and all that. In 2008 he began working online with different startups which led him to Amazon last year. He was able to consolidate the knowledge he gained from those two industries and put them to use with FBA.
What is the Canton Fair and when is it?
The Canton Fair is basically a trade fair with suppliers that takes place in April and October. It takes place over three phases and is the largest fair of its kind. To put it in perspective the rough estimate is that it’s about the size of five NFL stadiums. Each phase has different product verticals and you decide with ones you want to go to depending on your categories. The Canton Fair has roughly 20,000 stands and an average of 200,000 people for each phase.
Tell us more about your recent article about the Canton Fair…
Danny wrote an article for Web Retailer which is the UK bible for online marketplaces. He wanted to do an article about a lesson learned. Danny likes the approach where he goes off and does something then reports back. With this piece, he wanted to create a guide for people that wanted to participate in the fair. It would cut down on the planning needed and allow them to cut through everything by learning from his mistakes.
Why travel all the way to Asia to find products?
Traveling to the Canton Fair gives you a competitive advantage. Many of the products won’t be on Alibaba and many of the suppliers at the fair aren’t in China. This can give you a 6-8 month advantage on your competitors that don’t go. For example, say you go on Alibaba and order spatulas. Your competitors can get the same thing, from the same factory. By attending the fair, you can find a product that isn’t on Alibaba and isn’t made in China; they could be made in Pakistan, or India, or Korea making it difficult for your competitors for follow the supply chain.
There are a massive amounts of people that are getting into selling on Amazon but only a very small portion will actually attend the Canton Fair giving you an advantage over most other sellers.
What is a rough budget needed for attending the fair?
Depending on your lifestyle you could do it for around £1800 – 2200. Danny and his business partner paid about £3500-3800 but they went out every night and ate well. However, you can do it on a budget. There are indirect flights with Turkish Airlines for about £350. It will take you longer but you can save money. You can find 3 to 4 star hotels for £80-100.
For a two year visa, it’s about £150 and it can take around 5 weeks to get in from of the Chinese consulate. However, Danny uses an agency handle the Visas, Visa For China. For £45 they can handle the processing and help expedite it. The important thing to remember is that this is an investment in your company. You are paying for a massive competitive advantage at a relatively affordable price.
How much time does it take out (including travel)?
When Danny and his business partner went, they spent about 11 days there. It’s broken down into three phases with pack down time in between each phase so you need to plan around that.
Danny spent a day there during phase one, then took a train to Hong Kong where they had a meetup. Next day he had a presentation and then a HK TVC show. Then they went back to China to attend phase three for a couple days with a factory visit thrown in.
One of the biggest mistakes Danny made was only taking one pair of trainers. He had cuts all over his feet and ankles and had to cover them with band-aids. So take two or three comfortable pair of trainers and rotate them. Do research on finding good shoes. It’s more than the blisters. It’s you shins, thighs, and the backs of your logs. You should plan on walking 12.5 hours a day so you definitely want to make sure your footwear is up to par. Also consider starting a cardio regiment to get your fitness level up before hand.
There are three zones at the fair. Zones A, B, and C. To get from A to C is about a 20 – 30 minute walk.
How do you prepare for the fair and how long does it take?
In order to prepare for the trip, Danny brought on a VA to go through all the data. He trained this VA to see everything from his eyes with took awhile. Then went through all the data and all the products and picked out the best ones to pass on to Danny.
HOWEVER When they got to the fair, they didn’t use any of the research because they found better products and better quality!
Instead they diversified. Rather than focusing on products for private label, they looked into wholesaling, and direct distribution deals with the factories own products and brands for exclusivity on Amazon.
That’s not to say that you shouldn’t plan at all. For example, let’s say you are in the pets category, which is one of the biggest on Amazon, and you didn’t plan. Then you wouldn’t know that pets products don’t have much of a presence at the fair. It was in phase 2, and was only 25% of one hall. It probably would have taken an hour to walk around. So it probably isn’t worth it to travel over there for maybe an hour’s worth of fair.
How do you avoid getting overwhelmed by the massive amounts of options and product?
It’s about being disciplined. Once Danny and his partner understood and got comfortable with the way things worked, they began simply walking down every aisle. One person looking one way and the other person looking the other way. They would just skim over every item until one jumped out at them. They might go through 10-12 rows and find nothing, then get to the end and spot something really interesting.
What is the difference between sourcing online and live at the fair?
When sourcing online, you look for an item, then find 20-30 suppliers. You will message back and forth trying to get to know them, wheedle them down to 3 or 4 and get samples. Sometimes the samples aren’t good and you move on and end up paying $100-150.
At the fair you get to see them face to face and learn their body language and get to inspect their items right then. Instead of spending weeks trying to find a supplier online, you can do the same thing in minutes at the fair.
What are the key advantages for attending the Canton Fair and HK over online?
Find unique products: The opportunity to see products before anyone else. Many of the products you won’t be able to find on Alibaba because they don’t list on there. Many that are listed haven’t been updated. So you’re getting to see the product before the company has updated it for everyone else.
Connection. By going there and meeting the suppliers, you are showing that you are serious and they will take you seriously. Rather than the cold emails they get that sometimes fall through, you are able to get to know them in person. This may make them more likely to go to you for an exclusive deal.
Speed: The ability to choose products based on quality right away rather than the drawn out process of ordering samples online.
Competitive Advantage: over the 99% of sellers that don’t go to the fair.
Danny’s plan is to attend the fairs twice a year and settle all his supplier needs there. That will free up the rest of his year to actually develop and launch the products as well as be able to do the Amazon seller meetups and his speaking engagements. He plans on releasing 10 products in August, so by handling his suppliers in these two weeks a year he is able to make that goal a reality.
Some of Danny’s other focuses this year.
Monthly meetups surrounding Amazon and FBA in London. Currently they are doing one a month but getting to the point where there will be two. Go to http://www.meetup.com/TheAmazonSeller_UK/ to join the group.
He just did one in about how the music industry can utilize Amazon for Merchandise using FBA and Merch by Amazon. See the slides here.
Merch by Amazon is a print on demand service from Amazon (currently on Beta in the USA only). There is a set fee as well as 15% of the sell price. It was developed for content creators.
Danny is currently getting in on the ground floor, trying to figure it out. His goal is to be at 150 shirts by the end of the year. [This is something I’ll definitely be getting Danny back on to talk about specifically – as well as other guests.]
How can people get in touch with you or follow you?
Best place is Danny’s website, www.dannymcmillan.com.