How to Sell handmade on amazon for Profit
What does Rural Handmade offer Amazon Sellers right now?
For Amazon sellers who want to sell handmade on Amazon, there are two solutions: data-driven or designer-driven.
Rural Handmade has built algorithms that follow consumer behaviour eg Alibaba, Etsy, Amazon etc.
They share this with entrepreneurs who want to sell handmade on Amazon or other marketplaces and tell them key areas to focus on.
The system is still in Beta but Rural Handmade can advise in person.
How does that compare to eg Jungle Scout and similar Amazon research tools?
Those tools are based on BSR etc. solely from Amazon data.
Rural Handmade has replicated this kind of thing from different sites.
It’s not just for those who want to sell handmade on Amazon – it’s about different portals.
Rural Handmade is trying to rely on the global e-commerce markets as a whole, not just Amazon or any particular marketplace. However, if you want to sell handmade on Amazon, they are an excellent start, as they cut out the non-handmade Amazon data.
3Design for handmade items
Sellers then work on a basic design. Then Rural Handmade can make a professional design (if the Amazon seller doesn’t have that capability in-house).
They then hand on work to SE Asia.
If an Amazon seller has only a broad design idea for a handmade item, can you give recommendations?
Yes, they can start from a very broad idea and they can do research.
If you want to procure 10-15 SKUs, you upload ideas and designs to the site.
There are catalogues in different segments.
They can help you
You could start building a brand with £100
Protection against copying/defensible
The problem in Amazon is a big fish consumes a smaller fish.
Whereas if it’s handmade, it’s hard to copy. It would be very hard to find the locations. So selling handmade on Amazon is a fantastic way to defend your product against being copied.
Suppliers or competitors who want to copy product have to go through the same supply chain.
There is basically no plastic in rural handmade goods so that rules out a lot of Chinese factories from easily copying the goods. And sustainable local materials – eg recycled metal, etc. are not easy to find.
For example, for hemp, you’ll need to go to Nepal, and the export of it is restricted.
Hedging risks when launching new Amazon products
If you buy one SKU for $5000 vs. 10 SKUs for $5000, you are hedging the risk of a product not performing as expected.
If you research and launch 10, you may see success with 2-3 of them. If you sell handmade on Amazon, you have the opportunity to spread your capital among multiple SKUs.
With the same money, you’ll learn a lot more – and you can build on the basics when they succeed.
Production Capacity/scalability with handmade goods
There are £120-200M people in SE Asia involved in handmade
The potential to scale is potentially there – but Konark isn’t looking at mass production of handmade. It’s about OPTIMAL production – price is so that consumers don’t have to take out a loan.
Then keep innovating – small, medium batches.
So it’s not a model built around mass production with “me-too” products.
A lot of makers are not as educated as many sellers and their vision is limited.
The first few iterations for them are painful because they’re used to making things quickly.
But 120-150 million people in rural SE Asia are now being organised by Rural Handmade.
You can get a capacity of 300-500, even up to 5000 units per batch, depending on raw materials.
Can you start with low MOQs with handmade products?
Anything between 300-5000 units of handmade goods is probably doable.
Could start off with a smaller batch – say 100 units.
But it does have to make a business case – there are minimal shipping costs.
What’s a typical price per unit for handmade goods?
A leather handmade bag would say be £3-6 ($4-8)
The reason it’s cheaper is the “disintermediation of the supply chain”
Logistics of handmade goods
They have local transport partners – people with a truck!
Move from village to central warehousing in India – from then, drive to the ports – Mumbai (Western India) – can be 5 CBMs for 5 clients etc.
They can go direct to FBA or to other warehouses.
Logistics and shipping is a 2000-year-old practice.
The India supply chain myth
China has been able to consistently and frequently shown its quality is there.
But Indonesia and India have been working for a long time.
Designing your handmade goods for the Amazon market
Have about 5-6 people – backgrounds are an engineering and product development.
3 kinds of people – they just need a few great people to solve complex problems.
The best thing is to find entrepreneurs who are really clear in solving the problems.
Sophisticated craft product designers
Rural Handmade can also work with retailers or brand builders with their own design expertise.
For example, Interior designers are always on the lookout for sustainable sourcing.
It’s generally for a higher price point too.
It’s a huge trend!
Amazon is always developing
There might be a “sustainability” tab for Amazon someday.
They do already have Handmade for Amazon.
It’s a growing trend.
Positioning and price point for handmade goods on Amazon
Handmade is a very under-explored market.
A lot of high-end bags eg Louis Vuitton are made in SE Asia not in China.
In the end, you need to look at the competition.
Also, you need to actually solve the consumer’s problem.
This is somewhat harder to work out.
European incomes are quite static.
They can’t 2x-3X the price they pay for sustainable. So the classic Amazon positioning of “affordable premium” works very well for handmade products from developing countries.
The way to lower cost price: “Dis-intermediation” of the supply chain
A usual supply chain is 7-8X players
Let’s compare with John Lewis:
- Buying agent – scouting for ideas
- Float designer across vendors in different countries
- Buying agent Eg in Nepal, we can do this in hemp – buying agent
- Local buying agent
- micro-enterprises owner
- Artisans: They work with maybe 150 people
Rural Handmade’s model is simpler:
- Rural Handmade
The internet and mobile phones have really changed things.
How do Amazon sellers compete with “Amazon Handmade” if we are selling handmade goods on Amazon?
This came into existence because of Etsy. But the issue with this is scalability.
As Amazon Prime members, we should figure out how to make an informed purchase.
RH is not trying to compete with Amazon Handmade.
It’s good if artisans live in USA or UK. But if in rural Mozambique, that won’t probably work.
Amazon algorithms don’t necessarily like it if you run out of stock. So you need to aggregate.
Advantages if you live in the West – hard to get a product out unless it makes a business case.
How to compete with traditional Retailers?
UK Retail is about £300 [check] Billion per year
Sourcing products – it’s very old fashioned
- They touch and feel it
- They don’t use state of the art things.
Supply chain issue for traditional brick and mortar
- The issue they also have the same supply chain as Amazon but amazon being virtual, there is an overhead issue (employees)
So the way to fix this is to change the supply chain.
You need to find something that is not on Amazon – USP. Or add value.
Traditional retailers don’t tap into Consumers’ minds
If you look at a retailer – 100 consumers walk into a store – can they share that with us?
Retailers generally don’t strive hard enough to reach consumer expectations.
If consumers ask for “do you have this?” – often not.
People generally do want to buy from local stores but they don’t have product.
This is where Konark feels they can solve this.
If they start documenting what consumers want – Konark can use predictive algorithms to see how that works.
How does that translate for Amazon sellers?
Exactly the same but people want to buy local – can be online or offline.
You need right products and designs if you sell handmade on Amazon, just as you would in a brick-and-mortar retail store.
You live in the markets (USA, UK)
Chinese manufacturing don’t have the understanding of US and UK/European culture.
You can then focus on QC and
Story is branding
You can also built a story – handmade is clearly loved by the consumer!
You can just use the makers’ story
And relationship with maker.
Rural handmade focusses on the development outcomes.
The key focus is in sync with UN sustainable development Goals (SDG)
- Gender equality
- Equal opportunity
These are deeply tied in with this stuff.
The Fifth Revolution will be the maker revolution
The future is local, sustainable, handmade.
Humans will literally have no work in the next 20 years if we have the “Fourth Revolution” of robots and Artificial Intelligence (driverless cars and so on).
They will go back to pre-industrial revolution setup. Human intellect and creativity will always need using.
Sustainability is massive – and handmade and sustainability are close siblings.
How do Amazon sellers explore working with Rural Handmade?
Check out the website
If Amazon entrepreneurs can solve problems for customers, that’s one step.
Michael Veazey 0:37
Ladies and gentlemen, welcome back to the cinema collector the place with 678 figures and ecommerce sellers, as we can say of conduct of rural handmade Second, it will just tell me where you are. And I know you obviously from Indian, you’ve lived all over the globe. Where are you today?
Konark Ograot 0:48
So I actually live in London. And this is all for, for hopefully next time we move.
Unknown Speaker 0:54
Excellent. And where are you in London?
Konark Ograot 0:55
I live at a Canary Wharf says offices at Canary Wharf? Yep. So you’ll see coming hydrolysis be free.
Michael Veazey 1:01
Excellent gets he gets nowhere and people physically sometimes in the world. Now I’m very happy to be part of London myself. It is a very, very global community, which I think is an excellent starting point for anyone who’s selling online these days. So speaking of global, we’ve been discussing rural handmade goods, and you’re very exciting business that connects world and makers to marketplaces and sellers, including those who sell on Amazon or other ecommerce channels. So let’s get into the nitty gritty of how people could actually make money. Let’s talk through some of the details. So what can you do for retailers right now.
Konark Ograot 1:24
So for retailers and for businesses in general, what we have we have two solutions, number one is that they determine solution. And number two is a design solution. Now, the solution is basically what we do internally, as a company, we have built view, gotten some predictive analytic tools that helps us mapping understand consumers buying behavior. So what that basically essentially means is that we are in trend, we know exactly what people are buying. And this is across not just an Amazon, but in Alibaba. And it’s the invasion of the websites that we keep, you know, you keep using them as as to pivot on what’s selling. Now this information of data, actually we share with entrepreneurs, and to help them understand what are the key areas they should probably focus on. And then they will eventually go back and come up with their own design ideas, which we then commissioned into a low cost make to order product with help of these, you know, many, you know, hundreds of thousands of makers that we have based out of Southeast Asia. So India and Yvonne, she looked like one of these,
Michael Veazey 2:10
you got the the data side as well, that’s very interesting. So tell me a bit more about this data sites. We mentioned the previous episodes, if you didn’t catch it, folks really, really worth catching the data side interesting. So you have what is essentially is like a Jungle Scout type thing, or what’s the nature of that, compared to the standard Amazon research tools, for example, which is probably the most familiar things that people will be familiar with when they listening
Konark Ograot 2:27
to Jungle Scout. And all these different software’s also use a really simple process of actually web crawling, then they kind of you know, look at the DSR and different models that they’ve actually done, they totally understand what is selling what is not selling, and then show it to you, what we’ve done is basically replicate the same model, that would only do the contents for different different websites. So it can be for its he can be for Alibaba, it can be for different different websites. And the idea is, is to basically not just capture the Amazons of you know, sales and how the product mobile Amazon also look at different ecommerce websites and borders. Because at the end the day we’re trying to give the best and most informed of, you know, knowledge bank to our entrepreneur partners, and we just don’t want to lie on Amazon. But we want to actually allow the global e commerce market. And and that’s what we kind of standard. So this is obviously the citizen, the niche. Phase Two is the development phase. And we’ve run a few trials, and we do believe it. But we’re happy to share whatever knowledge we have, you know, as we pivot on to a specific domains of what the entrepreneurs eventually wants to make its way
Michael Veazey 3:17
and it’s good to have a tool that works in a slightly broader trend apart from the US just because something’s not a trend on Amazon yet doesn’t mean it isn’t going to be I mean, if Amazon represents a 50 cent of e commerce in the USA, it could be that sooner or later, every trend is going to go on Amazon, at least most of them. I suppose some things might only be on Etsy or something. But yeah, it’s good to break away from the Amazon echo chamber is what’s going to cause it because yeah, that gets a bit too narrow pretty quickly. Yeah, let’s get back to the design side. Are you saying that you mentioned before that silicon does sketch a design on back of a napkin kind of thing, and then give it to you, then you make a clear design with drawings, what have you, and then you hand it on to rule makers basis, Southeast Asia, and then the process starts. So let’s let’s look into the details of this. Let’s say I want to make for some reason, you’re saying another thing. I’m quite liking this idea. So let me roll with this. I will make a leather kind of messenger wallet, which is designed for globe trotting entrepreneurs. I’m liking this already. Actually, I might make this so that if you heard it first folks that couldn’t compete with me. So again, this is the paranoia Amazon sellers house because they used to something of Alibaba that so easily replicated. So let’s say I want to make a message, everything is going to need to contain a laptop, maybe Notepad, maybe a phone charger, and a few cool things like that. What if I’ve just got the idea is, is that can I come to you at this stage and say, How do I got some guidance for me in how to make this differentiated? Or the kind of exact genetic bags that are on trend right now, would you be able to go from this general is that what I need to come with a much more specific research idea to fit.
Konark Ograot 4:23
So we can actually cater to both the audiences if you have a specific need as specific as we can possibly do it for you. And also to entrepreneurs who have a broad idea of you know, you want to do something in one specific level, but we don’t have a designer so we can give them recommendations in terms of why don’t you try this and try that. And if you like the idea, we commissioned the designer a product to ensure the sample, if everything’s fine, we then you know, producer to do women always need. So interesting thing is that, you know, I think entrepreneurs are like eating a lot of them. And the one thing I’ve seen is that they are very scared of the manufacturers or people from China, you know, hijacking the listing. And the thing that I have seen is that if you can actually get down to the handmade space, it becomes very, very difficult, literally impossible to copy design. Because if somebody has to copy you, they’ll have to go to the same lean ground as us. And it’s a very tedious task to do. So it is a strong defense ability. At the same time, there are tools that you use in the hand, the industry is really uniquely sustainable, very organic, very natural, raw materials can be difficult, it can be recycled metal. So there’s basically no plastic, which means it’s difficult to replicate it because some of these images are difficult to find if you don’t go to the in these remote areas where they actually are invented. So for example, if you wanted things to be made in hand, then you probably have to go to let me borrow? Where does he leave it to export him? And then you have to question the design and do what you couldn’t do it in most of the world. So So this is where you are able to create a very defensible kind of a brand, especially hijacking since
Michael Veazey 5:37
that’s really, really great. And I’d really think this is absolutely critical, because I was talking the other day to Kevin King for the show, if you didn’t catch that, folks, look out for those guys. 10 k collective.com, we’ve had a very sobering call with Kevin King about the black hat tactics the Chinese suppliers are using now, China is a big country, but actually the number of companies that you’re looking at 4050 or 60 companies in the southern coastal region with an employee 10s of thousands of people. And they are the ones who are just basically just playing every trick in the book to try and dominate on Amazon. So trying to compete against those guys, even legitimately is hard enough, because they have the capacity to create, as you said plastic which is particularly silicone in abundance, but also they are not playing by the rules, and they’re probably not going to be so anything that keeps us as far away from those kinds of products as possible is going to be safer, more defensible. So yeah, I couldn’t agree more on the idea that it’s very, very hard and awkward to copies is fantastic news. So that’s an extremely good point. Thank you for bringing it up. Because it is probably as you said, the number one thing that keeps me awake at night, as I’m as excited about financing accounts expansion is probably getting copied by or undercut by Chinese manufacturers.
Konark Ograot 6:26
Absolutely, there’s one thing I would add Michael, which is an interesting thing. So right now as we speak, and everybody understands Amazon is extremely difficult to, you know, to be ranked you to replenish. Now, if I can get your value proposition, which is you buy one SKU for 5000, or you buy seven to 10 sk use 5000 you literally as you kind of launch, you’re already hedging your risks. Because if you rely on one product, and it does not work, you’ve lost all the money. If you do your research and you launch 10 of them, you probably might see success and three, two of them, and others might not work. But now you could then would say more money have learned a lot more now you can actually do just do to do to continue the success stories you have, and then keep reinventing the wheel of launching new products. So you have to now launch not just one but little more than you know, you know, close to half a dozen if you really want to be successful selling on Amazon, because it is it’s a bit of, you know, a black box on on success rates if you if you don’t really want
Michael Veazey 7:13
I completely agree with that. And I like the black box idea, which is another engineering concept. Try that. But it’s in other words, we’re not sure what happens inside the mechanism. And really, the truth comes in for all that there are some very clever data scientists, you know, using algorithms to like it just got helium 10 by the name of that the best three that I know are the best known, but they are very clever at using minimal data to extract a lot of potential information. But it is at the end based on the DSR, which is very little data. So it’s just not going to be reliable. Plus, everyone else is saying the same data and again, talk about the Chinese, they will use Jungle Scout, so they see the same data. So I agree that there’s no substitute for experimentation. And that implies success and failure. So it’s an extremely good point. But it really is a very powerful point to the point where I would say somebody’s only got $5,000 in their back pocket. Just because you could afford to lose one product, I don’t think that means are ready to launch a business these days. I think if you’re looking at mass produce products, then that is Yeah, it’s just not enough. But talking of which that brings me very nice to the question of mo keys. My perception is that with roll handmade stuff and accuse or lower, which are implying Street, that capacity is more of an issue. So let’s talk about interviews. First, what are the minimum order quantities that you can start with for roles and make it
Konark Ograot 8:07
so obviously the the handmade industry is a tricky industry, especially because a lot of makers of the basically not as educated as a lot of us are of individuals also a limited. Now, the way this works is, the first few iterations that they do is painful for them, because they they used to just, you know, meetings in a quick manner. But once we have commissioned the design, now to replicate this product is actually a very easy job. Now, how many can we replicate? The answer lies in the number. So and I can’t emphasize this enough, the fact that this is the second largest employer, only in Southeast Asia, you have got the 220 250 million people working directly and indirectly, in this industry, very skilled people can do you know, 300-500-5000, sometimes as well, you know, depending on, you know, how crucial and what kind of things are needed to meet this. So scalability is actually not a problem, though, especially on a problem for Amazon sellers. Because they don’t order in hundreds of thousands of quantities, they probably do, you know, between 500 to 5000, probably more, but in a small range. Sustainability is definitely not we’ve never had an issue of affinity rather, we’ve had an issue of not enough numbers. So people come and say, you know, hundred pieces and 50 pieces, that doesn’t make a business case, because you mentioned you’ll be spending a lot of shipping, you won’t benefit, the makers won’t benefit, we won’t we won’t benefit collectively, so so I think anything between the $300 seems like a good idea to start with, and then we can, you know, move on, and then it’s going to scale up to whatever numbers you
Michael Veazey 9:19
need. Okay, so the keys needs to make a certain amount of sense. So there’s, there’s a sort of lower limits, I mean, so you say 300 units is a different number, what sort of price but let’s take a specific example. It’s always easy. Let’s say I’m making a leather bag. So it’s about depending on which would you like metric or Imperial, I guess it’s like, you know, about a yard or meter wide and say 70 cents, which it was, and he said last messenger bag sites across your chest kind of thing. It’s made of leather. And of course, I’m sure there’s like 10,000 different qualities of leather, which I don’t know about. But let’s say it’s nice, like they couldn’t find Italian leather, which is kind of high brand. But I don’t know what those sort of Indian or Indonesian equivalent would be, you know, what sort of cost per unit might be looking at this is a very long as a piece of string question, I do realize, but just trying to get some flavor.
Konark Ograot 9:52
Right? Absolutely. So this kind of product, which roughly cost you between, I would say between the range of three pounds to six months, which is obviously not a lot. And and the big reason why we’re not expensive is because of the disintermediation we have in the supply chain. And we’re not we’re not a typical Alibaba mediator, who has connections with exporters and manufacturers, we literally work seamlessly with the maker community. So these are SMEs and and micro enterprises. So so we we actually be honest with you, we have the best prices that anybody could offer in the handmade space to you. And so we are three to six. And then again, it depends on if you want to order a small bag, so we don’t like hell bent on 300, we can start off by by smaller ones, but supposedly this one, we can solve by doing hundreds but because it’s between three to three to six pounds per unit, essentially what I’m trying to say it has to make a business case, if you’re trying to sell an Amazon, if you’re trying to ship it, a lot of these these costs that are incurred in an enormous supply chain. And you know, you can’t expect to do a business by you know, 20 pieces and 30 pieces. If you do that, you’re probably better off buying it locally, in wholesale market.
Michael Veazey 10:42
Absolutely. And there’s no reason by the way that somebody can’t start off by selling something wholesale from and make it that if I’m tickling the global city like London, you’re quite likely to find there’s probably some guy who sells all handmade stuff from I don’t know, Morocco, for example, I came across EM is letting you buy the goods and build stuff we came across with business model while ago in Birmingham, at the exhibition center there or whatever the the common with the name of the now, but he probably you know could do some stuff in the UK where he done his markup to it, you could test the market for that with you know, 10 pieces, and then what you what scale up, you become something like you guys, but having said that 100 units or three pounds each or something. And that’s usually manufacturing costs. But that’s that’s a really pretty cheap way of testing a market, in my opinion. So anybody finds out a lot, maybe needs a different business model. But tell me a little bit more about the other costs. How does shipping work is obviously shipping out China is a very, very tested, standardized thing from Shenzhen Guangzhou that the usual Eastern ports. So let’s say that I want to sell in the USA, I’ve got my warehouse, it’s a Amazon’s been kind to me and give me one warehouse to send goods to you, as opposed to three, which doesn’t always happen. And let’s say that warehouse is in California to make it easy. So how would you go about doing supply chain and logistics on that you help with or do you just how you deal with the logistic side of things,
Konark Ograot 11:38
we could we could help you with logistics, it’s not a problem. That mean we have, you know, local transport partners, which basically essentially are people who have a truck, they help us you know, move the product from this village of this remote area to a central warehousing, which we have in India, which manages in the entire Southeast Asia operation, from the center warehousing within drive all the way to the boats, depending on which part of the world you live in, you know, Mumbai, which is this large, boldly sort of the best part of India. And then you can shift upload, the container can literally be, you know, five CDs for five lines. And then it shifts all the way to the US or to the UK or to the to Germany or Japan, it doesn’t matter that we can help you even even down there. I mean, I live in the UK. So we have a lot of you know, lots of partners, which will help you then you know, reach to Amazon FBA or you have a different warehouse if you want to not to be long term storage fees of storage fees in general. So so we’ve got all these partnerships in place. And it is going to be probably logistics and shipping is actually you know, I always often say that it’s like a 2000 year old practice, and it’s very lean, it’s very well organized, absolutely no problems.
Michael Veazey 12:29
Great. I mean, because that’s one of the things that people talk about speaking that I did an interview just yesterday with somebody that UK based as well as British behavior based guy and they do a lot of shopping around. They said, most stuff that they sell help people sell rather is based from China, we said that one of the reasons is because the logistics is just more organized in China than for example India. So your experience seems to say that actually, it’s not that disorganized, something that I don’t know, I have no person expensive shipping stuff in from India. So I can’t really speak to experience. Can you speak to that for a second that visual people give us a reality check if it is difficult?
Konark Ograot 12:53
I don’t know it. Is it specific to be easy? I think it’s definitely not complicated. I think that’s what happens. Obviously, I think the China has been able to, you know, show the, we don’t have consistently and repeatedly that the quality is there and and the recipes in place. And a lot of these countries, not just India, Indonesia, India, India, Southeast Asian belt is begin to streamlining a lot of these, you know, processes and stuff. So I think it’s definitely not a problem. We have not seen any problem. And the Amazon just have a small bit of it in general that a lot of things that you can actually that already gets shipped across the Southeast Asian men.
Michael Veazey 13:19
Yeah, I mean, it’s not as you say, this is not these are not new industries. On example, Pakistani steel industry supplies a great deal of Western hospitals with surgical steel and things like that. So it’s not like they supply chains haven’t been in place before. But it seems like I mean, I’m maybe the fact that you guys have proper partnerships with connections and sounds wherever the local culture may be. And that’s just as true in in China is even more important. But in the end, it comes down to having somebody on the ground who’s an expert and understands that people have relationships, and then things flow smoothly. And it is totally possible to have completely against me, it’s important for China, if you get that wrong, I’ve done that a couple of times myself. So yeah, in the end, I guess it comes down to logistics, is it an expert specialist area? Now somebody knows this stuff, but you have a problem. So sounds like a handle on that, which is great. Tell me a bit more about the design side of things. We talked about some of the the capacity to the costs, you mentioned, you could do a sketch on a piece of paper and then give it to something How does that work in practice? And what are the sort of cost of that?
Konark Ograot 14:00
Absolutely. So that’s a good point. So So what is it not just a small team, we’ve got about five to six people, the backgrounds, our engineering, Jordan development, and just general, you know, accessory designers. So the 300 people, we have three set of minds we have, and that’s it, depending on how complex the project is, it goes, you know, in between the teams, and then they come up with the best possible output. And we’ve tried to keep it very simple to you, because I think we just need a few great minds to help and solve these complex problems. And our biggest value that we get is from the entrepreneurs who come up with the exact solutions that they’ve identified for the problem. And then to convert that into an image that isn’t necessarily the most complicated thing. It’s the first part is that what you truly believe in, which is something I often see, I think what makes Amazon great is not the consumers is actually the sellers, who actually bring the right product for the consumers. And and we are still Republic is very different. We really want right entrepreneurs to come with the writer, problem solving ability, and then we commissioned it into a low cost network model. And so everybody wins, the makers get deployment use and more products, and you become a better seller. So it’s a win win for literally everybody.
Michael Veazey 14:58
I think what you’re implying is really that come back the basic job, what is the you talk about this intermediation, the supply chain will come back to that very buzzword e word in a minute. But one of the things I guess I always think about the supply chain is as will chain and puts it, if you’re not adding value to the supply chain, sooner or later, you’re going to be priced out of it. So I guess one of the things we can offer as I was in sales, or you know, somebody who’s going to be part of the supply chain is really understanding the customers need. And I think that’s actually the main thing that I could offer. I’m not an expert in making things. I’m not an expert at logistics. I’m not Amazon, so I’m not providing a marketplace where people can physically buy things. So what do I think what I do is I take the trouble to really understand a particular consumer and the exact needs they have, and then look around at what else is on offer for them and see where the gaps are like they really need a leather bag that is you know, light and that they can take on a plane without problem what I’m think about my leather bag, but for some reason we have this kind of idea, but I have no idea. So you know, but it may be I’ve experienced the fact that my laptop doesn’t meet the fitting, it works out. So I want to in this way be centered around a laptop, for example. And I understand because I’m a consumer and and my mates often travel with their laptops to Amazon conferences and what to Nicole, then you starting to have a something to offer. Right? I think in the end, if all we offer is a vague idea that we want to make some money, which is a lot of people start off with, we’re not adding value. And I love the fact that you’ve just said, Look, the design is actually the hardest thing. It’s sounds like you’re saying understanding the ladies under Is this the hardest thing Is that about right? Absolutely. Absolutely. Yeah. So that’s really good to be clear that our job is to go and understand the customer really. And people skip over that quite quickly as they want to look for the magic x. I mean, even more great entrepreneurs you think I think should know better. We’re just very obsessed with Amazon algorithm hacks. I’m like, Dude, what about understand the consumer like really, really, really, really understand the consumer. So that’s really good. So let’s move on to the question of pricing and positioning thing you’ve already mentioned, the positioning of handmade goods, is this very sustainable, that you’re helping people to develop better lives in rural communities, which is very powerful. What about price points? What sorts of price points and and profit margins Can people make? If they say let’s take all that handmade bag for three pounds cost? Or something that’s a five pounds to be generous? If I’m selling it in the UK or us what kind of price points right, and we have to make that.
Konark Ograot 16:37
But that’s a really good point. I think the thing with handmade is, and what you’ve seen is it’s an unexplored market. Now, a lot of these leads on bags or Gucci bags, and you know, the prices they sell out, and a lot of them actually do manufacture them in Southeast Asian countries and not in China. Now, they have been obviously able to put up a price point, which is obviously, you know, beyond most people’s imagination, but I think individually boils down to what do you feel is the right price? Looking at the competition? How well do you strategize your marketing opportunities around the product? Right? And how well do you actually solve the customers problem? So Amazon, obviously, it’s price sensitive, it’s it’s difficult to be the first page but having said that, this value proposition hasn’t been tested as much. So we don’t we don’t really know what the prices are, if it is handmade could be or should be. So but I still feel that you could probably start started off by you know, getting traction and then move on to, you know, launching products at a premium price. I think that probably would be the right strategy. But but basically would have made the analogy London and I see some prices, which I feel is you know, how is it even possible? And so it’s bittersweet? It’s a tricky question to ask, because
Michael Veazey 17:32
I don’t know the answer to it. As long as it was kind of dumb question, but it’s kind of in the end, the question that you have to figure out, as I said, I mean that the main thing is we want to know the income side as well as the cost side, but I guess you could flip it on its head and say, Okay, you know what, it doesn’t really matter. If the selling price isn’t what you expected, as long as you a keep the buying price very affordable and being minimize risk. So as you said exactly what you said earlier, I think the previous episode, which is if you’ve got $5,000, to spend 1000 pounds, you so much better at spending a certain amount on 10 different skews and seeing which one takes off. And then actually the price point is less critical than then you can start exploring, okay, which things will make the bigger price point? So I mentioned it just because it’s always the price of the question. Everyone has the top of their mind, how much money can I make from this, but I think it comes back down as well to one thing you said, which is really important, which is a very good position when Amazon is affordable premium IE, high end feeling product, but an affordable price. And you mentioned that sustainability is a bit of a luxury good at the moment, and not very far with a lot of people. So if we could be the people to make sustainability affordable. I guess that’s pretty solid positioning, right?
Konark Ograot 18:23
Michael Veazey 18:24
Tell me about this word, this buzzword disintermediate concept is intermediation. This is supply chain, you got to talk about it cuz I can’t even say it. What does that mean? And why is that important?
Konark Ograot 18:31
So So distribution basically is a simple concept in which what we’re trying to do. So let’s look at what does a big giant like john lewis and Walmart would do is they have to make analytics. So usually, the way this works is that john lewis would have somebody call as an angel buying agent who just wants with us to just keep scouting for different different ideas of products and fits the john lewis region sector. Now, what they do is they have a designer or an idea. And they fill this design, they look at different vendors across different countries. So let’s see if there’s a vendor or buying agent based out of the bar loses, you know, what we could look at him exactly the same dimensions with the quality and it’ll be the same thing. My engagement then contacts, local, you know, manufacturers or local manufacturers, exporters and mix of everybody. Now these different local manufacturers and exporters and eventually go to SMEs, that will use micro enterprises, which are the people we work with directly. Because any other industry, the unique thing is that nobody employs people, for some reason, they all work as contractors, it’s basically a massive gig economy, that is just just working in an organized manner. Now, these people these micro enterprises then have these 20 people and 50 people and hundred people in and 150 people would then make the product and all these different different exporters or manufacturers, what they do is they aggregate everything with the quality control and and send to the bank agent, and the bank agent shifts it to the john lewis agent or john lewis warehouse. Now, this is a very naughty process. And what we are saying is that in 2019, when we know that these SMEs will employ 10 people, 20 people in the mix of contractors and as employees, we could directly to them. So what happens is now for that 5%, of 3%, and 7% gut that everybody’s taking, we pass it on to the entrepreneurs. And so the benefit massively, so if you actually walk with us, they’re just the entrepreneur, little handmade, and then the makers are the SME of the maker community. And this is what we will be classified as a completed disintermediation office obliging. Excellent. So you
Michael Veazey 20:05
got the entrepreneur role, handmade the office and and I guess, in the end, pick the consumer, I suppose you’ve also got Amazon. But yeah, you could go direct to consumer. So yeah, and essentially, what you’re saying is if you get a vision of how this stuff works, I mean, everybody, there’s so many intermediaries and organization in the way that across history, and this is because the Silk Road, which is some of the ancient ways that east and west trade has happened is, I guess, it’s always been a lot of people taking a cut out of everything, right. And it sounds like the way it hasn’t changed for a long, long time, like hundreds of years, 100%
Konark Ograot 20:25
hundred percent. And we think because of internet and and mobile phones, we truly believe is that if you live in an amorphous pond, and the future is all about you live in the remotest of the regions, then if you want to buy your business, salt, Salt Lake City, Utah, you could directly reach out to them to our technology, maybe maybe we come up with an app and then connect you directly. And then we will just do quality control and assurance of design ideas, and stuff like that. So yeah, that’s basically a win win. And I think future for us, we truly believe future is local feature is handmade, and visually sustainable. And if this is enough, I can often talk about that we believe that the fifth revolution, which is just very close, I think after the revolution off, you know, IoT and driverless cars, it’s going to be happening be, you know, creative space. So So I think, I think I mean, it is definitely, you know, in the future we’re talking about,
Michael Veazey 21:05
amazing. So all right, so let’s come back to one other question I’ve got around this, which is the Amazon being a very smart company probably implies people smart as you. And they’ve actually created something called Amazon handmade, which I didn’t know existed until I was researching for this interview. And this came into existence. Because Etsy, it seems, because obviously, that’s just taking a piece of the ecommerce pile over a modest piece in terms of essentially revenue, the moment which Amazon’s looking at and taking, we want some of that. So how do we compete with Amazon handmade, which, as far as I understand, is trying to reach out to the same artisans that you’re reaching out and trying to cut out the middleman as well.
Konark Ograot 21:29
Right. So absolutely, I think Amazon having this brilliant, I think we as consumers, as Amazon Prime members should actually actively seek out and figure out how do we actually buy Hand me just as simple as that, if you’re buying something, why not make an informed purchase? So normally, we’re trying to compete with Amazon handmade, I think it’s a brilliant platform for makers across the world. What he’s saying is that Amazon handmade is good for you, if you live in the UK in the US, but he’s living in Mozambique, I don’t think the in the next 10 years will have a maker from Mozambique be able to sell seamlessly in the UK, because of you know, many issues, including supply chain. So what we’re saying is that we are becoming an aggregators of these micro, you know, wonderful or micro industry members, and then have them reach out to the Amazon fraternity, which is, you know, different set of, you know, our sellers, as well as the community in general. So it’s basically solving the same problem, but could help have a different mindset.
Michael Veazey 22:11
Okay, interesting. So I guess what you’re saying is that the Amazon handmade, although they have a very clearly a picture of somebody who looks like they’re in central India, at least just from their their parents have enough background there in maybe it was all Photoshop over there, kind of given the impression that it’s about doing something you guys do, but in practice, as you say, which makes sense that is not really practical for somebody enrolled into at the moment to get the supply Amazon, but actually it needs aggregating together and the communication issues need solving. And you’re the guys to do that. So that doesn’t make sense, I suppose worth checking out. I mean, it seems Amazon is making play into it. It’s not really their natural territory. Let’s say that I mean, is it that they’re not actually that have the mindset that see, they are not geared to handmade when it was international playing spaces is they’ve made offices they have over in the in the southern coastal region in China, I would say. So that’s definitely an important cultural difference, I think that we can actually explore that Amazon is basically looking at China, whilst we’re looking to narrow Southeast Asia. The other area, of course, would people would consider is existing retailers, and how to get ahead of those, obviously, Mr. john lewis, that’s a strong retail brand, gradually, they are shifting online, although a lot of doing a pretty horrible job of selling online, but some of them are doing better gradually, how do we compete with their traditional retailers as well,
Konark Ograot 23:05
we actually, we generally do not want to compete with retailers where we want to partner with retailers, and we actually genuinely feed for them, you know, stats about the UK at about 350 billion pounds. And unfortunately, every year 14,000 retail shops go bust your business. And what you’ve seen is the is the mindset that the leaders have, I mean, if you look at it as a pure products, they still have this very, you know, very old school way of touch and feel. And to feel Yeah, this is probably gonna say that because I saw it online and in the stock the product, which basically is a massive cash flow problem, because it’s a, it’s a possibility that might not sell, because not using, you know, the state of our techniques and tools to actually secure things. On the other hand, the big problem retailers is that they, their supply chain is exactly the same as Amazon supply chain, which is most of us from China, and then the strong product. Now just the nature of retail, the way it works is you cannot compete with online Amazon Marketplace. Because of you know, the whole process of Amazon being in a virtual shop and you have a physical shop, there’s an employment problem, there’s obviously problems with rentals, and monthly electricity bills, etc. So what you’re saying is that the only way to fix this is if you can fix the legend and you find a reinvented supply chain, where you can actually find products, not necessarily on Amazon, or something that have a USP or something that you have as a wholesaler was a way to avoid this, you know, added value. And once you start rediscovering the supply chain, you then will see a change in your sales change in the way you operate. And this is what we want you to start thinking and also starting today, they can actually make a big value for the retail space. And they have, you know, 300 square feet, 500 square feet, 3000 square feet, it’s a beautiful little space they have which they are under utilizing at this stage.
Michael Veazey 24:28
Yeah, again, I guess what you’re saying is they got to add value in a way that other people aren’t. So if I was into the marketplace, and they’re working with the same Chinese factories that say john lewis’s or john lewis’s brand, you know, that the BP CELTA job that was our, then as well as the disintermediation thing, you’re going to disintermediate Are you going to be part of this equation and add to the supply chain as the cost there for the consumer, you got to add value. And I suppose one of the values you can have is that personal contact you can have in store on in Tokyo, which I guess in theory, we were talking earlier about really understand the consumer, I guess, in theory, if you work in shop and you physically meet consumers, you should be able to really understand the consumers as well. I mean, do you think that that’s the strength, the traditional retailers have
Konark Ograot 24:57
100%, I think I think this is exactly what we think needs to be done? Well, when customers walk into a store, they generally want to help the local, small and medium sized enterprises. And when I walk to the store, my intention is to buy, the only problem is I did not find my product that I’m looking for. And this is where we think we can actually disrupt this whole retail business in the sense that we can actually have them procure and store products that the customers are looking for. And once you able to solve this problem, the retail is gonna come back, it’s gonna bounce back in a way that you probably not seen it right now.
Michael Veazey 25:22
Well, so this the Savior, everybody’s High Street, that’s going to be quite the, if you can pull that off that I mean, the next thing is going to be something the Middle East crisis, I mean, that’s going to be, you know, impressive. Okay, so that’s great. So let’s talk a little bit more about the the final piece, which I think is that you were talking about the USP and the branding. So we talked about supply chains, about some some costs, we talked about traditional retailers, in the end, a lot of these things come down to differentiation, in order to maintain healthy price and to keep you know, your product selling especially this by any other product that became $1 cheaper in the end. So tell us a little bit more about how you think the the whole handmade thing is a USP or as part of your branding?
Konark Ograot 25:54
Well, I mean, since it’s all handmade, at the end of the day, what we’re trying to do is focus on the development outcomes. And and you know, this is a little bit broader. But our key focus is in sync with the United Nations Sustainable Development Goals, which are often called SSDG, which is basically 17 goals that they have outlined, which just talks about, you know, things like, you know, reducing poverty, and gender equality, stuff like sustainability, equal opportunity, just really basic stuff. And we don’t have the is basically deeply tied with the sustainable goals that you initially come up with. And this, if you look at these goals, this is exactly what we believe, can help us transform the world we live in. So you know, selling the right products, giving opportunities with makers transport of innovation, from point A to point B, will make this world a much better place to to live in. And this is such a strong brand statement I’m trying to make. But it generally is what we were doing as a company, the whole purpose of this company is is to connect is to educate is to offer better prices is to is to transform the way people buy and shop for not from the retail online and everybody else. So and then how do you go deep into it? I think it’s like a proxy will be functional for, you know, specific domain that you’re working in. So it’s a massive, massive, you know, it kind of a kind of a blind opportunity that we see, as companies were
Michael Veazey 26:57
amazing. I wonder if On that note, it’s like listening, that you’re vision reach up and that and that’s absolutely true. What I love about your vision, it’s also very, very practical, very, very businesslike. And I think when you combine vision and very business like that, that’s a serious entrepreneur. So you know, I think you’re very impressive guy. I really love this. So many things about this, and how do people explore working with you and with all handmade, if they want get in touch with you?
Konark Ograot 27:15
Absolutely. So I mean, you can just go to the to the website online, if you go to a doodle hammy.com we actually on Instagram within Facebook, do give us a like to give us a follow up on Instagram, and drop us a message on any of these platforms. You can also personally write to me, I’m always happy to engage with you in multiple places understand what your needs are. We are we are a growing company. I think what we’re trying to do is make this world a better place. And if it sounds that entrepreneurs can actually, you know, come out with problems that they think it’s solved the customer needs. That’s like one step towards making this world a much better place. And at the same time, you know, as we said, we have the best prices. There’s no reason why we collectively can’t make sustainability more affordable for all consumers.
Michael Veazey 27:49
Amazing. Can’t top that as a message. So thank you so so much for coming on to the technicality podcast. Absolutely pleasures all mine.
Transcribed by https://otter.ai