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Custom manufacturing for Amazon

Ryan Shaffett’s Custom manufacturing Background

Ryan been living in China for 18 years – running biz there for 12 years.
Started as a traditional manufacturer.
XQ has a handful of clients – medium sized US companies, sporting goods industries.
They’ve seen the trend towards FBA.

Is Custom Manufacturing something that FBA Businesses are doing more of?

XQ have one key client fully FBA based business.
But they are increasingly tweak services to meet FBA clients
Most clients go from Private Label to custom manufacturing.

What brings clients to you?

The best clients have good people who communicate well.
It can be very complicated to work with a Chinese factory to develop own products.
Ryan tries to save a lot of hassle.
They can reduce own staff in own country.

What are the key distinctions between Custom Manufacturing for Amazon and Private Label?

Advantages of Custom Manufacturing for Amazon

• Truly unique
• As opposed to Private Label -which can be an exercise in  “who can push the most product?”
• Higher profit
• Know niche read clients feedback
• How it needs tweaking
• Dealing with PL manufacturers
• You are the mould owner –
• If you develop a product – I’m going to charge the client for development costs.
• Different price structure

Summaries of Pros and cons of Custom Manufacturing

The advantages to a privately developed product are:
1 – It is very hard to hijack/copycat
2- Often margins are much higher with privately developed products.
3 – You can tweak it with all the features you know the market wants.

What are the main downsides?

Disadvantages:
1- Minimums tend to be higher, like investing at least $2,000 or more on an order.  Large plastic molds can cost up to $10,000 and more.
2 – You have to wait between 1-4 months to get your product in hand.

Downsides of custom manufacturing for Amazon

Time

• Prototyping
• Mold development is time consuming (could take a month)
• Typical turnaround 1-2 weeks china
• Every project different
• 1-4 months or longer if multiple prototypes

Money

Plast ic inc molding costs $1K-10K
No top end
It’s a Barrier for small FBA sellers
How many units
Small key shared objects can be tricky.
You Can’t try out the market

• It’s an upfront commitment
• You might try a single cavity mould
• Then develop a twenty piece mould
• If product bigger than a breadbox everything is a one cavity mould
• Manufacture costs

Different manufacturing techniques

Some clients are already very expert – detailed CAD drawings etc.
Also work with clients who have hand sketched drawings and a concept
XQ manufacturing will have a conversation

Multi material products

These are great but A bit more complex
Basic types of multi material products include some basic electronics sometimes
That’s where the initial investment goes into developing the printed circuit board design.
Wood
Wood based products – fairly easy
A lot of plastic and rubber products are also quite straight forward.
Extrusion – tube, board etc. – is often used.
They have lower costs than plastic injection moulding.
Metal
Machining  is used for metalwork (but also for plastic). Machined metal is often huge – for large components, Casting is also common.  Forging and bending are other common techniques.
Textiles
Textiles – have own in house general assembly and own textile factory usually.
This would apply to,  for example, Bags and tents.
Foam
Foam – pouring foam – is used in for example animal shapes, and targets
It expands and has a lot of elasticity
It heals well too.
Typically high volume but lowest cost per item.

Money and time implications of different materials

Wooden product exports from china – need to hit basic minimums.
Wood inspections adds $200 of inspection fees
Plastics are v cheap to mass produce once the mold is made.

Metal

Machining = each piece takes same time on machine. That can be more per piece costs
Metal more expensive if say box or complex shape.
Plastics
There are many kinds of plastic
ABS is a common material – very hard – hit with hammer
If you’re going to do an ABS, you need a tougher mould.
Hard steel – more machining time – double mould cost
PE (plastic) – can’t do a suitcase
Stiff rather brittle
PU – more flexible
Product can be hit by a golf club – a lot of bounce needed.

How important is it to work with material or process experts?

It’s great to go in knowing what you want.
It’s on a spectrum.

Pain points/USPs

1. Actual expertise in product development process
2. Level of trust – see them grow – not selling the design
3. Enabling people to express creativity- realise the vision without the pain

You can tweak a product.
You’ll know what the market wants more than anyone else.
You can bring the product to life with tweaks too.
________________________
Contact details for Ryan: 

Xqmanufacturing.com

rs@Xqmanufacturing.com

Transcript

Michael Veazey 0:56
Ladies and gentlemen, welcome to the new show. Thank you, hey, collective podcast. This is a podcast for advanced sellers and people who are serious about scale their business, so delighted to have the right person for that we’re going to talk about developing your own truly unique product as opposed to just private labeling something that’s the natural step after private label. Not an easy one. But we need an expert guide. And fortunately, we have that in Ryan Chaffetz of x q manufacturing. So Ryan, warm welcome to the show. Thank you very much, Michael. Glad to be talking to you today. Yeah, great to have you on. And thanks. Thanks for coming and giving us some time. I believe you’re coming to us from China today. Is that right? That’s correct. So tell us a little bit more about what’s behind that because I know you’ve you’ve got quite a deep China background, give us a bit of flavor of what you’ve been doing for the last 1015 years of your life.

Ryan Shaffett 1:44
I’ve actually been living in China for 18 years now. This is where I’ve lived. Most of my professional life came here just out of college. 14 years ago, I started my business, I was an amazing learning experience for me, especially this first few years getting our feet under us and deliver our business. And just in the last three or four years, we’ve really been getting into really the last two years, just the whole world of supplying FBA based businesses.

Michael Veazey 2:11
So as you said, FBA is quite a new thing for you. So you got a much deeper background in doing other things outside the FBA space. And

Ryan Shaffett 2:18
we’re general manufacturer we produce goes across a very wide brand wide band of products. But guess the FDA focus, which currently makes up about clients who have their primary business focus with FBA mixed up roughly 40% of our clients right now, but it’s the fastest growing element of our client base right now.

Michael Veazey 2:40
Brian, it sounds like private label sellers, or formerly private label sellers or FBA sellers are coming around to getting products made for them. Is that a trend that you’re seeing coming from your end?

Ryan Shaffett 2:51
Yeah, I would say definitely, for two largest clients and they’ve been they’ve had their own brand for a while. I think their business model kind of predates them FBA focused but currently their FBA focused so for their for them, they’re a bit more familiar with custom manufacturing, but for the wide variety of smaller clients that we deal with the same custom manufacturing does seem to be more of a new concept that they that they’re trying to figure out wade through as we work with them.

Michael Veazey 3:22
Right. So custom manufacturing is the key word that we should be using is that the sort of main term that

Ryan Shaffett 3:29
I’ve personally used, we’ve mentioned before that just add another nice term is a private manufactured products, which is just a little bit of a play off of private labeling, but with with some very key distinctive,

Michael Veazey 3:42
okay, so that at least the obvious question of what are the key distinctive, then all the key distinctions.

Ryan Shaffett 3:47
So for some of the advantages that you’re going to have, if you’re going to develop your own product, personally, I mean, when we’re just when people are private labeling, obviously, the the opportunities for hijacked brother people coming in with the same products and just competing and competing on who can spend the most advertising or pushing the most reviews, is a very typical model, especially for small businesses to wade through. But when we’re into custom manufacturing, you’re going to have a product that’s truly unique, it’s not going to be the same thing as somebody else, a different label on it. Obviously, when you’re going this far back up the supply chain, instead of dealing with distributors, or middlemen, of course, you’re going to typically see a higher profit margin as well. And then also, hopefully, if you’re in a product niche, you’re going to know your niche, well, you’re going to know what the where the opportunities for improvements are, you’re going to be reading your clients feedback on your in your competitors posts, you’re going to know how this product needs to be be tweaked to get the best product possible, or even maybe meet a market need that there’s a little bit of a void. And right now that you see, combining products are some pretty in any given way. So those would be the big positives. But there’s also some some different challenges. If you’re looking at custom manufactured product versus just sourcing doesn’t matter if you’re sourcing from a middleman or if you’re sourcing from a distributor on Alibaba, the process of custom manufacturing still going to be different from a sourcing type relationship. And what are those? What are the negatives? Is that gonna be the next question.

Michael Veazey 5:26
I was gonna say, before we dig into that. I mean, you certainly we need to know what the downsides are. But I think let’s just reflect a bit on why it’s worth bothering in the first place, because obviously, this is going to be a bigger undertaking the outsourcing but I think you just pointed out a distinction, which is this is not so much as sourcing exercises and finding what’s out there. It’s an exercise in CO creating, I suppose, in a way as an associate different relationship. But as you said that the fact that you can put a ring around things in terms of the competitive nature of Amazon now, and that the higher profit margins, because as you put it, going further back in the story supply chain, is a very interesting way of looking at things in terms of business models, I think, to talk about where you are in the supply chain, I think that’s a very good sort of rule of thumb, because retail arbitrage obviously, you’re very, very close to the consumer, you’re just flipping things from from some Walmart or whatever, wholesale, you have a relationship with distributors private labeling, you think you’ve got a relationship with the factory, but it’s probably with an agent in China, right? And then I guess, when it comes to custom manufacturing, you really have got to go right back to the source. Otherwise, it’s going to be a bit of a mess,

Ryan Shaffett 6:29
in some ways.

Michael Veazey 6:30
Yeah. Tell us a bit more about then the the downsides of that all the costs of that, because obviously, having higher profit and being more defensible is incredibly important. And I can’t stress that enough to anyways, relatively new to the space, you still listening to podcasts. And you know, anyone who’s been around the block for more than six months will know how critical that is. So what are the costs we have to pay for that?

Ryan Shaffett 6:51
Well, one of the major costs that you’d be looking at would be the time cost. So when you’re looking at sourcing something, you know, you’re going to a Chinese middleman or Chinese better factory, and you know, they’ve either got ready goods, or they’re, they’re ready to go. But when you’re talking about something that you see in the market is a market opportunity, we need to go into prototyping, then we might need to go into mold developments. And then we’re going to start manufacturing products. So instead of a typical turnaround, maybe one two weeks dealing with a Chinese supplier, or one day with a US distributor, you’re going to be looking at a process that every project is different, I can’t stress that enough. But something that’s going to take anywhere from one to four months, or maybe even longer, if it’s really a multiple prototype kind of situation where we’re sending you a prototype, you’re giving us feedback on it, we’re tweaking some things again. And then mold development itself can can take a month or so depending on the complexity of the product. If you need a mold, again, every project is different. So there’s the time cost for sure the money costs Well, every project is very much different. But this is actually. So if you’re looking at making a plastic product with plastic injection molding, here to spend anywhere from $1,000 to of course, there’s no there’s no top end of this, but 10,000 20,000, there’s all it was all typical numbers as well. But that actually prevents a barrier for the small FBA seller, that’s just a middleman doing doing small numbers, they’re not going to be ready to jump in and do a mold development. So as you said it makes it makes it a bit more defensible investing in that cost to speak of another advantage as well, as you’re saying earlier with when when you’re dealing, let’s say with supply for you, me not Valley, Bob, maybe their factory, maybe they’re not both exist in that in that world. But another distinctive, where customer refactoring is different is that you are the one developing the product, you are the mold owner. So if I, if I develop a mold on my own, if I design a product on on my own, I’m going to charge the clients I’m selling to for the time and energy I put into that as well as my mold costs. Now if I’m if my clients coming to me with an idea and saying this is what we want to, we want to do, and we’ve put them on the mold costs, and they’re the ones investing and now they own it all. And we’re going to we have a different we have a different price structure that we create in those situations where it’s a client driven prod project, versus something that we wouldn’t develop on our own.

Michael Veazey 9:25
It’s just to summarize that then it sounds like that The main thing is that we’re looking at upfront costs higher, certainly much longer time scales. But the advantage of back isn’t just a barrier to entry for everybody else, which is obviously incredibly important given that the low barrier to entry on Amazon is kind of cool if you’re the person entering and really bad if you’re the incumbent, the person who’s trying to defend the market share, right, but so that’s a great loss. But also it sounds like you pay up front. So you pay a lot of money up front, but then presumably the unit cost of you getting a mold made for $10,000, the unit costs are actually going to be Noah, is that right?

Ryan Shaffett 10:01
Yeah. Okay, and like plastic products are just surprised that per piece prices just so surprisingly low, when you’ve developed the mold yourself typically.

Michael Veazey 10:12
Amazing. Okay, that makes a lot of sense. I just want to let that sink in. Because for a lot of us, and that would absolutely be me, I confess, I’ve never really developed a unique product. And I’ve done tiny tweaks to products in it. And they mostly went fairly wrong. When I went off what I mean is surprisingly wrong. When I change what I thought were incredibly superficial features, everything seemed to melt down, which we can maybe talk about in a second. But yeah, the difference i think is quite profound that you’ve described that which is the the money you spend, I guess if you average it over a significant number of units or time would end up being about the same, but it’s weighted very much up the front end. Is that Is that a fair summary?

Ryan Shaffett 10:49
Well, I think it’s I think the tweak your your summary a little bit and say if you’re looking at significant unit, it’s definitely going to end up being cheaper and for you in the long run to devote to develop a mobile. So we’re talking a lot about plastic based products as a good example. Again, everything’s different textiles and whatnot. But, you know, if you’re if you’re doing if you’re doing a plastic product, the first question we’re going to ask as well, before we make the mold is how many units are you predicting here, because if you’re making a small key shaped objects, we could do a mold for $1,000. But if you’re going to run a fitting year, you’re hoping to sell a million of these little key shaped objects, the mold that we’re going to make for this, we’re actually going to make a mold, a cavity mold, that’s going to have maybe 20 different keys and it all at once. And so we’re making a moment big for for key with a single indentation in it, single product coming out of it, the purpose price is going to be maybe 10 cents, 15 cents, I mean, we’re making up numbers here based on the thickness, but we have a mold with 20 cavities. And it’s we’re talking like two, three sons, peace, everything, the whole equation changes. And so there’s a lot of different ways to go about that. So all that’s to say, if you’re if you’re investing in the mold, on the front end, in the long run, you’re really doing enough quantity, it’s going to be cheaper than even buying from a factory that has an existing mold. It should be at least

Michael Veazey 12:19
Yeah, it makes a lot of sense. I’m like, Yes, you know, that’s the entire point, if you get a primitive sense of where I’m at in the supply chain, if your person buying something, for example, I’m buying a microphone to use as a podcast, I don’t want 10,000 in my house, I don’t need them, I just want to buy one unit, and therefore it’s going to cost me you know, $99 in the case of this microphone, or whatever. And then I guess if I’m wrong. In a local shop, I don’t really want 10,000 units either because I can’t shift them but I might want 100 a month and therefore it’s okay to sell them to buy them $50 and sell 400. And so there is a certain resources logic about if you really serious about scale, that actually the per unit cost is going to end up cheaper because you own more of the supply chain if you like. So, I mean, this probably so really stupid, the obvious to you haven’t done it for whatever 18 years. I mean, to me, this is still a revelation, maybe that shows how stupid I am. But I suppose I’ve been brainwashed in the private label model for four years. So I just hammering this home for those who suffer from the same affliction. Tell me a little bit more about this thing you were just talking about. If you’re thinking projecting forward doing, you know tons of units, that you would change the mold that you create, I mean, how does one begin to figure that kind of stuff out?

Ryan Shaffett 13:29
Well, that’s a conversation that we’re going to have with the client, you know, we’re going to talk through that we’re going to give them some options. So one of the Another disadvantage about the about the private custom manufacturing model is that you can’t try out the market as easily, you know, is buying buying 10 units fail fast they sell, you’re making a commitment up front. So one model that a client might do is they want to try it out, maybe they’ll just spend $1,000 on that single piece mold, and single cavity mold, then that allows them to try it out. Now, it really hits big. If it’s really one of those those winter products, then they might come back and they develop the 20 piece small if your products bigger, I mean any if your products bigger than a breadbox most everything’s with one cavity mold. There’s there’s a lot of different equations there. But if you’re doing a key shape product, we’re probably going to quote you on three different options. This is what it would cost you friends and purpose for a one cavity mold of five cavity mold and a 20 cavity mold. You make the call with how much you want to invest. How much confidence do you have in this product? How do you think you might want to tweak it for a second generation? Six months from now for a second generation product? So that’s

Michael Veazey 14:40
Yeah, I like what you’re saying that I mean, yeah, you can’t try the market out. But you can still scale up from single cavity mold, which is obviously the upfront cost is a lot cheaper but the per unit or the per piece prices tell you being China for what did you say the word peace very naturally, I went songs by units. But yeah, same thing. If anyone’s listening is confused by that distinction, I think, yeah, single cavity mold cheaper up front, but more per unit. So there is still a way in other ways to scale from a, you know, moderate commitment to more serious commitment to really big commitment based on market feedback. Right? That sounds like that’s what you’re saying. Okay. And the other thing to say is that nobody I’m not. And this is the above all, the thing that I’ve realized is that lots of people teach different business models, retail arbitrage, private label has to manufacturing, you know, there’s probably something else like build your own factory course coming out next week. But the truth is, I think there’s nobody got

Unknown Speaker 15:32
started. Yeah, you would be the person to create a course.

Michael Veazey 15:35
But I mean, there are a few people famously who started off private labeling and ended up just literally building their own factory animal is pretty damn rare. But it does exist. But I mean, even Wilt Chamberlain and his brother, I famously owned their own warehouses, because they buy them from their folks, which is kind of unusual. And again, that does exist. So I suppose what I’m saying is, though, there is no reason to be rigidly tied to one level or other of commitment to a type of product, right, you can start off retail arbitrage and something and end up doing custom manufacture products. I mean, I know, several friends of mine, who you’ve got into that in exactly the same way. So I mean, I think that’s not a major downside for me, as long as you don’t go straight into custom manufacturing, without any knowledge of a marketplace. I guess that’s not such a big problem, I would say.

Ryan Shaffett 16:19
And one of the other advantages, if you if you’re investing in a product, and it ends up not to have the market you thought it would be? Obviously that’s the downside.

Michael Veazey 16:28
Yeah. I mean, everything’s got its cost. Right. Let’s talk a little bit more. I mean, tell us a bit more about some of this manufacturing terminology you’re coming up with? I mean, you mentioned plastic products and molds, and cavities. I mean, without Obviously, I’m not expecting to become a mechanical engineer at the end of this. But could you just give us an overview of the different manufacturing techniques that will be applied to different materials, and the sort of implications for somebody with a small business person head on?

Ryan Shaffett 16:55
Well, first, let me say that one thing, what we try to do is set ourselves apart as as a company is just being able to communicate with our clients. And so we work with a lot of different clients. Some of our clients are already experts in the product area, they’re sending us a detailed product specifications, charts, CAD drawings, whatever, and quality control standards. And we will work with that we also work with clients to have some hand sketch drawings, general concepts, they see a market opportunity and we have conversations with them about how to develop it, but we try to set ourselves apart obviously, as a US run manufacturer in China, we’re obviously pretty unique. And so we can come alongside and work our clients through a lot of the the terminologies and the decisions that they’re going to have to make and guide them the best. And we see that if our clients are going to have success, you know, we’ve got our their mold in our hands, we’re going to be the best solution and continue Actually, we want to see that moved from that 100 unit mark to that million dollar million unit mark, because that’s good for everyone. But so terminology so multi material products are where we’d love to be when we’re not just making a single material product or something that’s a bit more slightly more complicated in its assembly. So we do some basic electronics, sometimes electronics investment is a bit more developing your circuit boards and everything. So that’s something we don’t do don’t do a ton of but there’s the electronics and circuit development boards for developing your circuit boards for that then we’ve got we got wood wood based products, which are which are fairly easy wood crafting luckily is not not the most complicated rocket science in the world, we do with a lot of plastic and rubber. So those are generally plastic injection molded occasionally you can get into extruded products, which just basically means that the shape is continuous it’s a two dimensional shape stretched out long you know flat board are the two a U shaped channel or whatever it be. So, we often use those in other products the the setup costs for for extruded products there are less than for plastic injection molding the injection process, then we can get into can also get into into machining different materials. machining typically comes with with metal work, but you can also machine plastic products as well. Yeah, machine the metal is obviously a huge part of a lot of products, you can also catch things as well. But machining is a very common process for a lot of the products you might see I’m on FDA, and forging and vending, all sorts of things. And then textiles, we have our own house, own in house General Assembly in our own textile factory here as part of our facilities in a small woodworking workshop as well. So textiles, nano textiles we love We love textiles, because it’s something we’re very competent in. bag is intense. And all sorts of things involve a textile elements to them. those are those are the broad areas that we work across foam. Pouring foam is a big thing, we make a lot of archery targets that are poured foam and in the animal shapes and things like that. So the film expands, and it’s got a lot of elasticity to it special type of film that allows it to heal while we pull the arrows out. But the the pouring phone works in a lot of different products. So those products typically take up a lot of volume, but are better pretty low. But one of the lowest cost items you can get per per cubic meter.

Michael Veazey 20:40
Okay, so let’s just take a second to absorb some of this stuff and just reflect back. I mean, obviously, again, so two people with this have engineering background, some of this stuff will seem unbelievably basic. But I mean, a lot of us do not have that. So basic electronics sometimes. And I guess you as you said that’s investing in the circuit board, nice to know that wood based products are fairly easy, because I got a feeling from a marketing perspective that because it’s such a huge, so general drive towards sustainable and environmentally friendly products and stuff. I mean, there’s probably a perception of those as being somehow more sustainable. I’m sure there’s probably the opposite to the truth. But I’d say that’s quite right. I guess it depends where the word comes from. Right? And yeah, that’s

Ryan Shaffett 21:22
a very, very common wood based product that that’s build is very environmentally friendly, and generally is. So yeah, bamboo, bamboo is a popular thing. And obviously China is the number one place where bamboo products coming out of sweet we do blue bamboo textile products, because there’s a there’s a textile yarn you can make out of bamboo. And then there’s also wooden bamboo products, which we have coasters fans, we’ve done a variety of things out of that, when you export wooden products out of China, there’s some there’s some basic minimums, they’re not very high, but some basic minimums, because China needs to do wouldn’t spend to make sure the word was lawfully harvested. And so there’s a couple hundred dollars worth of just inspection fees before something goes out when you’re dealing with wood.

Michael Veazey 22:11
Okay, but that sounds pretty straightforward. I mean, so that’s so what is actually an interesting material to consider from that point of view, because I’m mostly looking at things from the triangle, sort of holistic perspective from the, from the the top of the business down, which is if you can find a product. That is why I suppose it’s the Blue Ocean Strategy idea without being pretentious about it. I mean, in other words, so if it’s low cost to us, because it’s straightforward, and easy to inspect, and, and the certification level is fairly basic, but it’s also higher perceived value by the consumer. That’s a sweet spot to be in, right? So I’m always trying to look for those sweet spot. So would sounds quite interesting to me. And especially bamboo, as you say, for textiles is all the rage bamboo socks, you name it. That’s interesting. And then which which of these things we talked about plastic and rubber, and metal is there. And this is the primitive dumb question, but Forgive me, is there a particular type of material that is generally more expensive and or more complex to work with, to put it in simple terms?

Ryan Shaffett 23:09
Well, as mentioned before, I mean, plastics are really cheap to mass produce, once you get that initial investment in with your molds, you know, metal machining, sometimes it’s also just the process machining a metal, you know, each piece that you go through is going to take the same amount of time on a machine. So those processes can be a little bit more per piece, if you’re looking for if you’re making a box, make that box out of foam or plastic is going to be super cheap. What’s it going to be a little more expensive? metals probably going to be a little bit more expensive, especially if you’re machining and sometimes you get those little tin boxes that are folded, which can be more of a different type of automation. You can do those on?

Michael Veazey 23:52
Yeah, okay, that makes sense. So basically, device of plastic is the most mass produce of all kind of material in the sense that the mold is the thing, but the material itself, I guess the word plus that we forget that it is a it was originally used. And the Germans use it, for example, in plastic arts, meaning stuff made in 3d. And it’s a very broadly based term. And I suppose what it means is, it’s a material that can be plastic Lee moved. In other words, it’s very flexible, it’s very marketable, I guess that’s kind of the essence of the stuff. I guess that’s why there was invented because we’ll forget that before, whatever it was scented odors invented, everything was made of metal, wood, and whatever else has both. So yeah, there’s something intrinsic about the material that is therefore basically around the cost is upfront, it’s about the mold, and then everything else is cheap, right. That’s the basic nature of plastic, if I’m understanding,

Ryan Shaffett 24:43
well, you pointed out a good thing there that there are a lot of different types of plastics to deal with. You know, when you’re looking at making a suitcase, a roller board that you take on an airplane, you want to be very careful about what plastic you choose for that if you’re doing it out of plastic. Abs is a very common material, because it’s very hard, you can get hit with a hammer, and nothing’s going to happen to it. But if you did that same suitcase out of P, I don’t even know if you can do that large without it. It was been in work. But you know, you take a hammer to that and everything’s just going to come apart right away. So tell us about the

Michael Veazey 25:13
plastic then. So a BSP, can you just break this down for us a little bit and give us some examples of real world products that would be made that because I know

Ryan Shaffett 25:24
I’m not the best engineer in the company. But just a few general types. Abs is a very hard plastic. So you actually need to make a more robust mold. If you’re going to do an ABS because the pressure needed to fill up that mold is going to be a lot more. So we have to use a harder steel for that which takes more machining time. So you can double your mold cost, you’re dealing with a heart if you need to fill it with a hard plastic like ABS P is one of your cheaper types, it’s a can be stiff and rather brittle. P you is going to be a little bit more flexible. And the low density poly p you and there’s how density CPU. But that’s got a little bit more flex to it, we make a product that can be hit by a golf club, sporting good product, and it has to have a lot of balance to it. We need to choose the right type of plastic to make that happen. And it’s a very special special type.

Michael Veazey 26:16
Yeah, and then there’s obviously just massive amounts of kind of put it well, General expertise and experience it comes in okay. Yeah, you may not be an engineer, but I’ve you’ve you’ve lived in this world a long time. So you’re talking a lot of sense. And if you were an engineer, you probably start talking in a way that would cease to make sense to me or anyone listening very quickly. I suspect.

Ryan Shaffett 26:34
Hopefully I’m a good middle ground. There we ever we’ve ever engineers on staff and one of my main jobs is to be a communicator. Yeah, my main job, most of my job is related to sales. Yeah,

Michael Veazey 26:47
but I think good sales is in communication. I’m as a member speaking to a coach of mine years ago, he was to sales coaching in a market be salesy or into person baby said, coaching and selling same thing. And I think to some extent, selling and communicating often comes the same thing on if you’re not getting a sale, it’s often because you’re not very, very clearly communicating why somebody should buy your thing and why it’s different from anybody else. So just as an aside there, and I think, yeah, you are doing a lovely job of communicating this stuff, I think. So let’s bring a little bit more on to what you guys do. I mean, it’s not a big sort of pitch necessarily for you guys. But it’s it’s something for people to explore working with somebody who can guide them through the process. What are the main sort of pain points that you you’ve seen, with people say, coming from a private label background, so they have some experience of products, they said, they understand the markets on Amazon and possibly eBay or through e commerce stores, they have some understanding of the basics of manufacturing, but they want to develop a custom product, what do you think their names say three pain points are that they generally would experience.

Ryan Shaffett 27:50
We’ve talked a little bit about timing and how that’s different. You know, I’ve had clients that I’ve started working with, and you know, we get some of their product going with put it on one of our containers to the US. And then clients like, hey, I need this product by by by Christmas, this other product I want to introduce and it’s really important, you have to find a way to get it done. And I’m thinking you’re both just left yesterday, and we haven’t even started talking about a mold yet. So we’re we haven’t even talked about the prototype or whatever. So that was that was a hard thing for that client to to accept. He’s like, No, you know, you don’t understand how important this is. You don’t understand how, how good this opportunity is going to be. And I unfortunately, I didn’t have an answer that was that was going to solve that problem for for that client.

Michael Veazey 28:38
Yeah, I think that’s there’s a classic thing that they say in dealing with the Chinese that if you seem to be in a hurry, then this is your part from the US. They’re super sharp business people, and they will normally pick up on the fact that you’re in a hurry and raise the price. But then also, yeah, this this stuff takes time. And I know from speaking with friends might have developed unique products, that the time scales cannot be really social compressed amount, we know every so often I get together in groups of some pretty advanced people, and we thrash this out. And, you know, normally the conclusion is yet there’s no magic way to speed this up. But you what you want to do is make sure that the costs are reduced, and the quality is improved, really. So tell us a little bit more about this thing. There’s one thing that came up a while ago, and it’s such a discussion was the question of when you’re, you know, say you’re running a three or $4 million a year business, something along those lines, you’re probably going to be your own product development manager to some degree. But you’re going to have to work with other people who are between you and the factory or even within the factory between you and the actual guys, you just say right? Let’s order 1000 or 10,000 of these units to develop the products. How important is it to get somebody who’s got very specific product knowledge in say, working with ABS plastic as opposed to pq plastic or P plastic? If I’ve even got those abbreviations, right?

Ryan Shaffett 29:52
Well, we love our clients who know what they want. We love it when a client that comes to us and says, you know, these are these are the exact specifications is this is the tolerance that it can be that the tolerance of air that we can have in certain measurements. Those are great, those are really easy to quote on quickly, you know, it’s much easier than the fire that comes to us and says, women’s products, I see an opportunity in that, can you make me something cool. Or, obviously, there’s some there’s some, there’s some other clients little bit more, obviously a bit more understanding what they’d like to create than that. But it’s on it’s on a spectrum and client as a general direction will will work with them. But they don’t, they don’t have to be experts on their product area. And that’s that’s kind of a service that we try to offer. But that we can maybe hopefully, we can save you the cost of employing one or two employees in your home country, just by working with us that we have our experts here and our experts are going to cost less than your experts.

Unknown Speaker 30:56
Others. Yeah,

Michael Veazey 30:57
I think also what struck me very strongly the compensation of the couple of guys who are definitely creating very much custom products. And by the way, they’re doing way better with them in terms of profitability and sustainable profit than with private label products. Just to reinforce the point I can say from experience with my not my person experience, but those my friends of mine who are doing that. Definitely worth it. Absolutely hundred percent. So which is why I’ve got you on the show, because I know how important this is, and I think is only going to be more important. But he was saying about how when you’re creating a product, and I can’t remember even what materials are, so I’m going to break any confidence because I can’t remember. But he had a product that was made of two different types of materials, maybe one was foam. And then there was some form of plastic. And now I know from this conversation with you just how very how many types of plastic there I had a vague sense of that. And he was saying there’s many, many, many more, I’m sure,

Ryan Shaffett 31:48
sure. There are other patented types of plastic out there that do bombs and the major international companies are selling if you need very specific things that will handle. We’re high temperatures and whatnot.

Michael Veazey 32:02
Now, I’m sure but without blowing people’s brains with more specifics, but the point being that he was trying to create a product that was made of some foam and some plastic say I think that’s what it was. And he said Actually, he realized that that between him as the basically the product development manager for his company, and he needs to be in a way because he knows what his customer wants, he knows where the company needs to go, and what they stand for, and therefore what their products are and the price point versus quality and the positioning in the market all that stuff. But between him and the manufacturer, he was realizing that he was needing to employ experts in very specific types of manufacturing. And so it sounds like you would be able to substitute for that. So So having to employ somebody who knows all about how phone behaves in different situations and how that would work within your products. You guys would be able to provide some kind of service like that, Is that about right?

Ryan Shaffett 32:55
We can definitely be a part of that process. And it’s it is recently bold to say that yes, you might be able to save save a higher two or a consultant or two in your native country by working with a company like ours. But I also don’t want to totally undermine the value of in house, knowing the direction that you want to go knowing what you want to get done. But hopefully with our services, it wouldn’t be an essential thing that you’d have to do.

Unknown Speaker 33:24
Okay, that makes a lot of sense.

Watch my full interview with Ryan Shaffett

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