How To Source Products Worldwide And Save Millions | Sebastian Herz

Sebastian: I see many people coming up with ideas of what the product could be. But if you don't have traffic, you have nothing. So what you need is to find a place where you can actually sell your product and you may need a quite clear. Idea about that. The same is when you have a webpage. You need to know how to get the traffic there, because just having a webpage. Just because you have it, that doesn't help.

Matt: Welcome to the e-Commerce podcast with me, your host, Matt Edmundson. The E-Commerce podcast is all about helping you deliver. E-commerce. Wow. And to help us do just that. I am chatting with today's guest, Sebastian Herz, from Zignify about how to source products worldwide and save millions, which is a pretty bold claim, isn't it?

So I'm looking forward to this conversation, but before Sebastian and I dive into our conversation, uh, let me share with you some, uh, of my podcast picks. Uh, if you're, uh, if you're, uh, in the UK and, um, You're of a certain age, you'll, you'll laugh at that statement. Anyway, uh, podcast picks as, uh, here, check it out.

How to make the most of your EU expansion strategy with Andy Hooper. That was a great conversation that Andy and I had about, uh, going from the UK into the EU or from any other country, actually into EU and. Uh, expanding out and seeing what you can do there, you can access our podcast picks, uh, and also our entire podcast.

Uh, start that sentence again and our entire archive of podcast episodes for free on our website, ecommercepodcast.net. Plus, if you are there, why not sign up for our newsletter, uh, which we send out to you, uh, with our podcast pick along with the notes and links from today's conversation with Sebastian.

They all get delivered straight to your inbox, totally free at no cost to you, which is pretty amazing, isn't it? Now, if you are struggling to grow your e-commerce business or if you feel like you're constantly spinning all these wheels, juggling, uh, all these plates as they like to say and trying to figure out what to focus on next.

Well, let me tell you, I have been there and I know how frustrating it can be, and that's why we created, uh, the e-commerce cohort and we're stoked to say that the e-commerce cohort sponsors this show. E-commerce cohort helps yeah e-com businesses like yours deliver an exceptional customer experience that drives results.

And to help you get started, we are super excited to tell you about a brand new free resource, uh, which you can get called E-commerce Cycles. It's a mini course which walks you through our proven framework for building a successful e-commerce business. We'll show you the spec, the specific steps, uh, we take in our own e-com businesses.

If you've ever wondered actually, what does Matt do behind closed doors? Well, we take you through it, uh, and you can see exactly what we do and how we not only. Uh, take these principles about how we implement them. And the good news, like I say, is this course is free. It's like a little mini course. It won't take too long, uh, but it does give you some good insights and really, really helpful if you run an e-commerce business.

So go check it out. Uh, you can watch that right now. No email, no money, nothing. Just watch it ecommercecycles.com. Uh, that's ecommercecycles.com to access this free training. And get started today, it's time to start delivering e-commerce wow to your customers. With the help, of course, of e-commerce cohort.

Get going. See how you get on. Let me know. I'm really curious. Genuinely. Now. Let's put that to one side and let's chat with Sebastian. Now, Sebastian Hertz is an e-commerce expert with a wealth of experience dating back to 2014, which in digital years is a really long time ago now. He has successfully launched two brands that are now available in popular retail outlets such as Kaufland, Globus, and a whole bunch of others.

He has sold over 500 thousand products across various platforms, including Amazon, Shopify, and retail outlets. Sebastian not only helps other sellers source high quality products, but also guides them through, uh, the process of reaching wider audiences, including TV shopping and big box retail. Oh, yes.

That's a heck of an intro, isn't it? Sebastian, welcome to the show, man. Great to have you on the podcast. Looking forward to this conversation. Uh, how are you doing?

Sebastian: Thank you so much Matt. Uh, you probably see me smiling the whole time. And what an energy you're bringing here to the table. That is, that is insane.

And you hear all the podcasts all the time, you know, and it sounds so, of course, recorded, but you're bringing in, I can prove it here. You can bring it in life. With all of that energy, I'm blown away.

Matt: I'm such a, you're such a sweetheart. You're such a sweetheart. No, no. It's, it's, it's, uh, it's very kind of you to say, so, uh, Sebastian and, um, you know, we try not to be boring, uh, because I, I, you know, why would you, anyway, enough about me.

Let's talk about you now. Um, whereabouts in the world are you? What's your accent? What, what, uh, where are we hailing from today?

Sebastian: Yeah, I'll, I'll try to stop smiling. Um, that is actually from Germany here right now, the east part of Germany. Um, a city called Leipzig. It is, ah, um, between Munich and Berlin.

Mm-hmm. Eastern part. That's where I'm sending best greetings from right now.

Matt: Very good, very good. So, It says here in my notes, right? Um, cuz Sadaf, who's a show producer, she puts questions together and one of the, the one of the things that we like to think about is the opening question. What's the very first question you're gonna ask somebody?

Uh, and the, the general thing that Sadaf and I talk about a lot about this is, well, the opening question has obviously got to put you at ease cuz you're on the podcast. Uh, and it's also got to hook in the listener, right? So they've gotta go. This is a great question and I'm, I'm drawn in from the start.

So, This first question really intrigues me, uh, and it's, and this is what Sadaf has written. Uh, so maybe you can explain this. Some call you the connector. What's the story behind that?

Sebastian: Oh, good one. Um, thanks Sadaf for what, what an intro, um, in the, well, I guess it all dates back to, yeah, I started originally in 2014 and I think I've learned a lot of course on my own along the way, and now I'm very, happy of connecting people with the next solution. So for the e-commerce, area, at least I think in Germany, some people know that. I know some people who may help with the next, hurdle to jump with the next challenge that's, ahead. And I'm, super happy.

Wants to get, you know, beyond the sourcing. Once you have a product, you, didn't win anything. But you need all the additional solutions, whether it is the pictures, the SEO listings, whether it's the outreach or getting into big box retail and or for example, getting into podcasts. So Matt, maybe I'll send some, some brands soon your way and I guess to help, uh, people, you know, solve, solve the next, the next riddle.

Matt: No, it's brilliant. It's interesting, isn't it, uh, Sebastian that, um, you've been called the connector because like you, one of the things you, I mean, one of the beautiful things about podcasting is you get to meet some incredible people from around the world and you end up spending a lot of your week when you talk to somebody going, oh, talk to this person and talk to that person, and, and connecting them in and, and bridging those gaps.

And it's just really interesting to see what happens as a result of that. Um, okay, so I now understand. Um, that you are the connector. So tell me a little bit about your story. How did you end up at Zignify, you started in 2014, you've sold half a million products. What's the sort of the, the, the, the quick version of that story?

Sebastian: I think originally my way was not set into the e-commerce industry. I went to university for electrical engineering and industrial automation and stayed with,

Matt: uh, of course you did. Of course you did.

Sebastian: Of course. Why? Because I'm German. All every German is an engineer. No.

Matt: Yeah. Yeah. I like that. Very good.

Sebastian: But the industrial automation was not necessary or was not meant for e-commerce. It was for the big oil and gas plants out there for chemical, pharmaceutical, food and beverage production as well as automotive. And, uh, I stayed with that for 12 years, but then later on decided, Hey, I'm, I'm, I'm putting so much effort into work.

Why not build your own business? And that's actually when, uh, I used to live in China or used to live in Asia for six years. Okay. And, uh, when the time in China came to an end, I said, Hey, I'm, I'm, I'm right here at the source. Why don't I start my own business? And back then was listening to, uh, Scott Volkers, the amazing seller.

Mm-hmm. And found out a way, how can I sell own self-made products or white label products on Amazon? And this is how it just took off. Um, I had the first brand bought. We went on a world travel work from the motorcycle, 242 days on a travel, moving from Singapore all the way back home to Germany, working full-time and having everywhere, better internet than anywhere in Germany.

Um, believe me, it's uh, yeah, yeah. Gobi Desert. You have great internet, even in a deepest storm. So it depends, of course, where you are. And then it, uh, developed into, you know, starting a second brand. And my wife, or my better half, she's been in sourcing for 18 years and, uh, she's been sourcing for a lot of big companies back then.

And people just started asking us like, Hey, I mean you're doing the sourcing for your own products, can't you do that for other brands as well? And that's pretty much how it just took off. Um, till to the day we have, well, two sales people right now, we've never really made a paid advertising. Yeah, post. Um, and it just spread like through the word of mouth of doing sourcing, and this is fantastic where we're right now, actually two years later with global product sourcing Zignify global product sourcing, and we've helped a few thousand, um, sellers getting their own brands ready from the idea all the way through to getting, um, the products ready for sale.

Okay. So that was the journey of exploring it on your own, needing it for yourself, and then. The word spreads if you do a good service. Mm-hmm. And I think somehow the way has now found us, you and me here on the podcast. So thank you very much for having me.

Matt: No, no, it's great that you're here. And it's interesting listening to you talk about that because I, I'm a firm, I, my experience is the better you get at doing something.

The more people ask you for help, right? Yeah. And it's, um, the better I got at doing e-commerce for my own businesses, the more other people were asking me to help them. And so I still do e-com. Um, but then we started doing the coaching and then we started doing the courses and all this sort of thing. It all came, it wasn't like we'd started out to do that.

It just sort of, sort of came out of what we were doing that actually a lot of people going, oh, you seem to be alright. How can you help us? So I'm curious, um, Sebastian, the people that come to you then, Uh, about products, are they, um, are they companies that are already doing something that have got budgets or are they, um, entrepreneurs or even people who are looking to get started?

They're not even entrepreneur. They're like, you know, sitting around the kitchen table trying to think, what can I sell online? Um, or do you get like a mixture of, of clients?

Sebastian: It is by now, for sure, a mixture in the very, very beginning. It's mostly, you know, You surround yourself with like-minded people, and those are either the ones who start their own brand, who wanna start a, uh, a product business with physical products or tangible products.

Um, talking about like, not, not apps or, um, any courses, but literally things that you can buy, for example, on Amazon or any workshops, um, and that you can order to home. So yes, it is, uh, the ones who start in the very, very beginning because you need some help with how do I find manufacturers? How do I negotiate the prices?

Where do I find them? Either in China or other Asian countries or the uk? A lot of it in, uh, in, uh, Europe to shorten the delivery ways and have lower delivery costs plus shorter times. Also, sometimes in production and or of course, marketing aspects of saying, Hey, I have some USPs made in Europe, or made in the uk.

Um, as well as for American sellers than quite often in Mexico or South America. So we have the smallest ones who are in the very beginning, and I'm super, super happy to, to even teach them in the beginning. This is how you do your sourcing on your own. And once you're ready and you understand, hey, I don't want to spend my time on sourcing, but focusing on how do I grow my business in terms of sales and marketing, that then they would be, uh, ready to come and do sourcing with an external partner.

Mm-hmm. Or, you know, I myself did one of the biggest and longest mistakes I think ever, of doing your product pictures for the first 5, 6, 7 years all on your own because you think, oh, I need to take money here in the, in the product, uh, images. But, uh, what they look like in the end. Any professional photographer will make a lot better images than I do.

Matt: There's a lesson there, isn't there? Give it to the people that know, know the best. So I'm curious. Right. And, and, and I was having this conversation with my, um, my son. So my son's, um, at university. Okay. He's doing, um, theoretical physics. I still don't really know what that means if I'm honest with you, Sebastian, but that's what he's doing and all power to him.

And he said to me, he said, dad, I want to start an online business. I wanna do an ecom business to substitute, you know, uh, to to create some income while I'm at uni. What do you think I should sell? And we had some conversations about that. So I'm kind of curious, right? Let's start with somebody like that.

So Josh is my son. Josh comes to you. So, Sebastian, listen, I want, I'm, I wanna start an online business part-time. How do I go about sourcing a product, a great product to sell? Um, what sort of conversation would you have with Josh?

Sebastian: I mean, first of all, I'd probably give him my hats off to Josh because of studying, uh, theoretical physics.

I mean, that's probably willing to go the hard way and learn the hard way, which is awesome. Why? Because I personally believe it makes very good sense. It may be slower. Um, instead of going, you know, with big money and just spend it all on the experts immediately, but you will learn so much deeper, all the ways long that will be needed in order to build a business.

So it sounds like, at least from whatever he studies, whether I'm right or not, um, and I guess he may not be a lazy bum, but that he's willing to learn those things. Mm-hmm. So one of my suggestions will of course be, I mean, first figure out what would you like of course to do? Are you a person who's plain profit driven?

To say, do you want to analyze the market, first of all and see where is potential? How big are the niches? You know, for example, if you go on amazon.co uk and you use tools like Analyze or Helium 10 or several of the other tools, and you analyze how deep the niche is, how, how big the market is, how much money you can make on there, or is he a person to find out he would like to build something from the heart?

My very first brand was something I was excited about small size wallets. I was excited about protecting, banking cards and, privacy protection. So you really stand behind it and you put a lot of effort in there and a lot of hard blood, or you do a lot of things from the heart. so that would be one of the first decisions where you would want to go plain profit.

Or do you build a brand with, something behind it and the willing, to hustle? Mm. Once you decided that. Um, you would probably wanna see where do you wanna get the products from and, and how big do you think of going in the beginning? Do you wanna learn in the beginning on your own, how you do the sourcing?

So how to find whatever, 30 to 60 potential producers, how to contact the producers, how to get the prices, how to go through all of those things. Um, compare them, list them down, and yes, take the hours of effort. Or are you a person who says, Nope, I would like to focus on sales and marketing immediately.

Let's make sure we get a good product. So those are the the ways I think that would decide towards, go with an external one or learn it first of all, on your own.

Matt: That's really interesting and, and. If he, I'm just trying to think questions that Josh would ask. Cause I think it's just really interesting if people listening to the show and going, oh, I'm thinking of starting to do something, and here's this guy who's, who's gonna help me get products.

What sort of, um, niches and products are doing well at the moment? Is it as simple as, as asking that question, Sebastian? Or is it a lot more complex or nuanced?

Sebastian: I mean, the bigger the niches, the more competitors of course you will have in there. Mm-hmm. Um, for sure. Usually we say like, what is the thing that.

People give a lot of money, or parents give a lot of money to it's products for the babies or for their children. Yeah. And what do they give you more money for? They're pets. So the baby niche and the pet industry of course is one where there's a lot of competition going on, but there's also huge money to make.

Yeah. Cause there's a lot of, there's a lot of demands. So one of the things for sure, for Josh also to ask in the beginning is like, I mean, I see many people coming up with ideas of having probably good ideas of. What the product could be. But then thinking it's like, where do you sell it? It's the same as, I mean, everybody right now probably, hopefully knows you have a webpage.

It can cost 10,000, $20,000 or anything. but if you don't have traffic, you have nothing. So what you need is to find a place where you can actually sell your product and you may need a quite clear. Idea about that. The same is when you have a webpage. You need to know how to get the traffic there, because just having a webpage.

how many pages are being run on a WordPress? Is it 60 million?

Matt: It's Crazy. There's hundreds of millions Now. Is it 800 million? I can't remember. It was a big, old number when I saw it.

Sebastian: It's a big number. And how do you get the people to be interested in your store? Just because you have it, that doesn't help. You do need to, of course, have the idea as well, where to sell it. So when it comes to finding niches on markets, I mean you may as well know the deeper you go into the niches, the higher you could, for example, charge for a product. If you're taking a normal pillow for a side sleeper, you know, you're put it in like 19 pounds and you're selling it on Amazon.

If you're putting a side pillow, it's like a side sleeper pillow and you make this for some medical use or some, um, orthopedic treatment use, all of a sudden you can charge a lot higher money. The market may be much smaller because not everybody wants to have a side, or everybody may want to have a side sleeper pillow, but the demand of the market of saying, Hey, I need this for orthopedic reasons.

Mm-hmm. Or I need this after, um, physiotherapy, then there will be less people. But maybe you charge 79 euros and if you do all of this done together with some medical great, whatever, you may find a very small niche, but very high price. Yeah. So all of those things should go into the factor of what do you want to build and where will you sell it?

So big niches, the bigger the niche, the more competitors you will have. The smaller the niche, the higher prices you could charge, but the less competitors you have. But maybe the harder it is to get into the niche because you may need a lot of more certificates for your products. Yeah, so that all depends on how serious do you mean business?

Matt: Hmm. No, this is good. Those are all good points. And actually as I'm, as I'm, as I normally do, Sebastian, uh, just to prove, I, I take copious amounts of notes whenever I talk to people. Um, always wanting to learn and it helps me keep, keep my my train of thought going. Um, and one of the things that I've just sort of, Listening to you talk is, I've got a, a chat called Norm Farrar in the back of my head.

I dunno if you've come across Norm, the Lunch with Norm podcast, uh, Norm. Norm, yeah. Norm. Great guy. Yeah. Yeah. He's great guy, isn't he? Norm? And, um, he, um, he came on the podcast, I think we've traded podcasts several times. He's been on our mine and I've been on his, and he's just a great guy and I've got him going in the back of my head.

You can take an ordinary product and then just, you know, Improve it and make it better. Um, and that's, that's kind of, that was his strategy. And I'm, I'm sort of coupling these things together, so. Okay. So what happens, um, Sebastian, if, uh, it's not Josh coming to you, um, but it's, say me and I've got an e-commerce business, I'm already trading online.

Um, how do you help companies like us, for example, uh, improve our products? Um, Is the process the same? Is it the same questions, or is there some other things that I need to think about?

Sebastian: I mean, for, um, existing brands, what we do quite often is of course, finding, um, additional products that can be sourced and that can be sold, whether those products should, for example, still be in China, or the question is, do we wanna switch it over, for example, to get away from China, both for price as well as time reasons, and or also for marketing USPs.

And one of the additional things that we very often do for existing brands is we go in and we look at the best sellers. Mm-hmm. And we reinforce the best sellers where, what you said in the opening, what was quite blunt and direct is, uh, yes, this may turn into saving millions of dollars, for example, of best sellers buy.

Mm-hmm. Let's say if you have a product that, uh, That, uh, one single one. We have a good example, a German guy selling in the US. He's not even selling on Amazon, but super successful over a Shopify's store. let's say they're having some beauty accessories and, we found a new supplier outside of China.

US has 27% import, uh, anti anti-dumping taxes on this very product. And, uh, we found the product $1 cheaper. And now he's selling this product for 500 thou about 500,000 times a year. Wow, that's half a million of dollar of straight savings on the product purchasing cost. Yeah. Plus it's another 27% of the import tax of whatever order.

Um, then is, and then at the same time, he has about 15 products or so by now. So you can imagine the potential of saving, um, money on your best sellers or the, the top sellers, for example, with the demand of course, of finding. Um, quality of same or better level. Mm-hmm. And those are just in, let's put this in air quotes.

Uh, the smaller sellers we do sourcing as well as for some of the biggest aggregators we do sourcing for. Can I say that? I don't know. One of the biggest marketplaces for their own brands, uh, and for the big box retailers in their own product or in their production. So whether they sell online or they sell in the stores, there is for the big ones, for the established ones.

Possibility to extend your portfolio. Yeah. Get more products, increase your revenue, and at the same time, you may know the same. And the real money is made in purchasing, not in sales. I'm adding, brackets in there, not only in sales, of course money's made, in sales but if you directly add the source, save money in there, you have bottom line savings. And that's

Matt: Oh, massively. Yeah. Yeah. Massively. So, and I, I mean, I can testify to that, right? You are always fighting to, to lower your manufacturing costs, um, or your, uh, purchasing costs. So, One of the things that intrigues me, Sebastian, you've mentioned it a couple of times, is obviously sourcing products in China.

Now I'm sitting here, right as an e-comm entrepreneur, and I'm going, yeah, I can see. I get that if I want to buy in a product, um, and I'm just looking on my desk and so I'm just gonna pick a random product I have here. Um, Apollo Creed, right? Uh, just a little doll thing of Apollo Creed. If you're a Rocky fan, you'll know what I'm talking about.

If you're not, you won't have a clue, that's fine. Um, but I have this on my desk, right? And if I, I'm sort of sitting here thinking, well, I could sell these or maybe I do sell them. Um, and I, I need to sort of go out and look for different manufacturers. I get why I'm gonna come to you because I'm going, the world is massive.

And there are so many people out there that can help me that I just don't know where to begin. And this has always been, um, the problem that we've had is we've got bigger in our sales as our businesses have grown, it's finding the suppliers that can help you in a way that you, you, you really need to work with a supplier, right?

So I get why I'm gonna come to you as an agent, and I get actually why Josh is gonna come to you and say, Hey, uh, Sebastian, you know, you need to help me. I wanna get started. You've mentioned a couple of times though, um, China, um, and e and you even mentioned sourcing products, maybe now outside of China, now in the state of the world as it currently is, who knows what it'll be like when the podcast airs.

Um, I'm curious, has there been a move of manufacturers to try and find products outside of China? Are people nervous about China right now?

Sebastian: Yeah, I mean, we're still at the moment. Let's, let's cut the short, try to build the story, but I'm, I'm ending up at where I wanna end. Um, it's actually by now we sell about 50% of our projects are still sourcing inside China.

Okay. A couple years ago, we were about 10% outside of China a couple years ago, mean literally, two years ago. Um, what happened over the last years? I mean, you've seen, you've seen it through Corona, you've seen it through, uh, uh, lockdowns in companies, lockdowns in full cities in China. We had the sewer canal problem, we had massive increase in container prices, all of those things.

So this is what, um, actually, and the price for shipping, the time for shipping, the delay in the production, um, due to lockdown factories and the full order books and so on. Those were the main reasons why people moved a lot away from China. And what I'm, to be honest, personally missing is always for me.

Point number four is the marketing. The additional USPs that you had when you sell a product where you can say like, my second brand that we have is a cosmetics brand, it's made in Germany. Mm-hmm. So in every time I'm going out there, I can say, Hey, you know what? Compared to all of the other products out there, we are made in Germany.

Yeah. By the way, we're still cheap than the other ones, the premium brands. Um, but. Yes, it has moved from, we used to have 10% of our projects outside of China. China grew massively, but the rest of the world just overtook it, right? So now we're about 50% of the orders, um, that we have outside of China. So in a lot of it, for the US sellers, we do Mexico, for uk, we do a lot of, in UK or in Europe.

Um, Turkey as well has gone a lot. Africa is coming more and more South America, more for the Americans. Um, but also other Asian countries. We even have customers in the US who big fat print on their not made in China. Yeah. Um, that's what they put on some of the products to distinguish the difference from their products compared to all of the competition on the market.

Because yes, you do see it that, especially also during Corona, so many new brands started sprouting out of the ground. Everybody's, uh, trying to get a piece of the cake and it's becoming tougher and tougher. So also one of my hints by now that I'm putting people towards to is, or I'll, I'll show it. Do you have it actually here?

No. Um, I have, for example, I have like one of the cards that you put in the wallet. Mm-hmm. Um, that protects a, uh, wallet against RFID theft. I used to be very early in the market, but then I used to have in Germany, 63 direct competitors. It's a complete me too product. Wow. So with this one by now, to be honest, Don't go into Me too products.

Always differentiate your, product. And I suggest by now, try to set yourself off in terms of price to a higher price to a premium brand. Yeah. Because the more competitors you have, the, the blocker card that I used to have was 15 euros. Now we're down to five. And it's just a race to the bottom.

Yeah. You have the same affordable product. Somebody will underbid you and it may be the Chinese. Mm-hmm. And you just keep the race going until you have something, unless you have a product. Which is premium, which is different where you have USPS in there. Um, and then you can set yourself off price wise, maybe even yes, three times the price of the average market.

Um, my personal target, especially for my second brand, is I don't target at Amazon ever at all to become a best seller. Bestseller sounds great. Sounds like a lot of sales, but if you have something that is in comparison with your product, the bestseller will most of the time be the cheapest, um, product, but the higher prices you have, the more money, the more profit you may also have for marketing where you can place yourself advertised on spot number one.

Matt: Yeah, yeah. No, that's, that's, um, well, I mean, going back to the China thing, I, I like, I, I get that Corona made everybody wake up to China. I think also, if I'm honest with you, the. The war in Ukraine has probably opened the world up a little bit more to China, certainly in the States going, we're just not happy right now with China.

And I can see that people actually, it is a USP now just to put on there and say, this product is not made in China. Um, so it's intriguing that, sorry?

Sebastian: Sorry which still pleased to know you can really get the very best quality in China and the uh, I mean we used to live ourselves many years in Asia. Um, And we had surround ourself with expats Back then, I myself was in the world market leader for industrial automation.

We had, uh, people in the same house who worked at Mercedes, at BMW, at all of the biggest companies. I mean, you get the greatest product, the greatest quality from China if you're willing to pay the price. And quite often also better quality than you may easily achieve over here. It's just a perception in the customer's mind that made in China.

Is something bad. Um, maybe to add on here is, um, the UK used to, I think, was it after World War I or during World? World War I, they actually founded the thing of made in Germany. Mm-hmm. Yeah. And made in Germany used to be a topic of boycotting German industry. Yeah. Yeah. To saying, this is bad quality. This is German.

Do not buy from there. Mm-hmm. Um, our countrymen, however they've made it, I can't understand what the quality at the moment, what they're doing. But they turned it somehow around. To say that made in Germany is like the best thing in the world, which for sure not necessarily, but you see where a stigma in a customer's mind Yeah. May control the whole purchasing behavior. So made in China, not true.

Matt: Yeah. It's interesting you say that. So you can still get quality products in China, I think, I think from my own point of view, I think it's not so much the quality that I would doubt cuz I, I'm fairly sure that, I mean, I've bought stuff from China, deliberately from China because it's, the quality's gonna be good and the price is, is fair.

Um, I'm, I'm a bit of a woodworker, Sebastian, in my spare time, my, my hobby, I, I like to get in the wood shop. And so some of the stuff that you buy online from the states could be 30 times higher than the same product that I could buy from China. And you're kind of like, There has to be more to it than made in America for me to spend 30 times do you know what I mean?

And, and you kind. And so, but then you get into the ethics of it, which I think is a bit of a gray area. And I'm, I'm like you, I'm intrigued to see where it goes, because you're right in England, made in Germany was, we, we would tell people that just because you don't, you don't buy products from Germany, which don't do that.

But of course, in the eighties, in the nineties, uh, in the nineties, and, uh, Well, up until 2012, I used to directly import products manufactured in Germany and sell 'em in the uk. And they were always three or four times the price, but they were always to the millimeter perfect. Uh, and that was what you were buying, you were buying very well engineered products.

And so that was turned around. So, okay, so I'm, I'm buying products. Um, I'm, I'm looking at the sort of the global market. Um, How do I, how do I make sure in a, in a, in this global market that I find a good quality supplier? I mean, that's one of the things that sort of scares me is like, h how do I know that who I'm dealing with is actually gonna be of any use for me as a business in the long run?

Sebastian: There's like the pitch possible, right? It's like go to Zignify.

Matt: Yeah. I open the door for you there. That's fine. Uh, you can pay me later.

Sebastian: Straight through. Can't help myself. No, I mean, um, just even, I mean, if you do the sourcing also on, on your, on your own. Um, what we usually do when we go, for example, to China to source products for anybody, we usually look for about 30 potential producers outside of China.

About 60. Why? But once, because they don't answer that quickly. They may not, uh, produce anymore what they show on the webpage. The webpage may be wrong, and so on and so on. Plus, it's more difficult to get answers, um, or you need to contact them sometimes five times, six times, sometimes seven times in order to get a proposal.

But, uh, the major reason why getting so many proposals is so that you can compare the prices. Mm-hmm. Now you don't want to go into a market and have like three proposals. That's what a lot of people teach. Yes. Because it's quick. Yes. Cause it's easy. But to be honest, the more proposals you have, reasonably more proposals, the better your prices will become.

The more you can compare, the more you know the real market price. And you can then go and get like 2, 3, 4 or five of them and say, guys, Send me samples. I wanna look at the samples. Um, and then you have already pre-qualified the ones where you say, um, they, they could be reasonably priced. So let's get samples.

You will do for sure quality control on your products, right on the samples. One of the big things is please also never, never, never, never make a final payment to a producer before you have checked the mass production quality. Mm-hmm. You can do a quality inspection in the middle of a production, fly there, or send us, you know, if we're there in those countries, send us there or any other, uh, sourcing agency that offers that.

Um, do it during the production. Do it after production. Do it before final packaging and final, uh, ship out. Do it after pallet packing, depending on how large your pallets of course are, if you need pallets or just simply boxes. Um, but do the quality control. And that's, I mean, I think that's the answer to the question.

How do you make sure you get the best ones? Mm-hmm. Get as many, talk as many as reasonably possible, and then check the quality. And only if the quality is good in the end, then you do the a hundred percent the final payment. Mm-hmm. Um, longer you in the game, you may be able to make a payment then, you know, after delivery.

But most of it will of course be a hundred percent upfront. Or if we are within EU or European, um, Um, um, well, what's the English word? Like the European, um, business, business network, but the business union, um, economical union, whatever it is.

Matt: Um, EEA. What's it? It's the EEA, the European Economic Association. I think that's what it stands for. Yeah.

Sebastian: Yep. Um, and then you may, you know, also like order and pay after delivery, but very important is to quality control. Mm-hmm. Um, I give you one short reason why you should also always do it for the mass production. You may think that the samples are good and it's actually one of my, I'm sorry.

It's very sad for, for the person who was affected, but it's kind of my favorite story. He, uh, ordered the product from a supplier. Before he came to us and said, all right, um, sample number two, that's the one I would like to have place. The order, everything went through, production happened, uh, shipment, all went good.

All through into Germany. Boom, off into his storage, he opens the container and sees, oh my God, that looks very different from the sample that I wanted to have. They tried to make the same red, the same stitching, the same everything, but what did they do? And the supplier who wanted to produce sample number two, Bought the samples from other companies and said, look, we can produce it.

And then when they were supposed to produce it, they tried to do the best to copy the product. So you may also find out that suppliers buy samples from other companies to pretend that they have. Mm-hmm. Uh, they have produced products. So what you can do is also all the check, uh, the backgrounds with the companies, have video calls with them.

Um, you know, get them by surprise. Whenever you have one of the, the salespeople in there, it's like, just ask them randomly. So, uh, are you in the company right now? Are you in the factories? Like, are you the real producer? Yeah. Yeah. Yes, I am. It's like, okay, what kind of phone you have? Why do you ask? I have an iPhone.

iPhone 13. All the Chinese usually have an iPhone. I was like, all right. Um, I want you to turn on the camera right now. I would like to have a walk with you through the factory, and then you'll see all of a sudden, oh, them, or this is an office, there's no production here. We're a trading company. Boom out.

Um, do the background checks, check the legal pages, check if they are a trading company or not. Um, are they the real producers? Have they produced that thing before? Can you show me the real production? I wanna, uh, see that you have done mass production for this very product. Show me some pictures or show me the stock that you have left in your, in your warehouses.

All of those questions that could turn out into nah. I would like to see the reality. Is it true? Yeah. Um, yeah, but ask others simply for help. It helps definitely. Speaking the local language from the producers, of course.

Matt: Yeah. I'm so, I'm sure it does. I'm sure it is. What are some of, then, Sebastian, what are some of the common mistakes you see people making when sourcing products?

Because, um, I mean, you've, you've given a few examples there. Like the guy that thought he was ordering one thing but ordered something completely different. But I'm just kinda, what are the common mistakes that we would make, maybe.

Sebastian: Um, when you in general, not getting enough proposals, not checking the quality enough, the quality control also on the mass production.

And when you wanna source outside of China, you need to know, um, you know, China has Alibaba. Mm-hmm. So the Chinese, that's what I usually say they answer. The salespeople are very driven to sell. Because they get a base story and a good commission of every order. So they're driven to, to answer day and night on Sundays in Chinese New Year, all the time, they show, Hey, I'm here.

Hey, I'm there. Hey, I'm this. Um, and I usually say the quality of the answer. That's a different topic, but they show they're there and they, they want to sell. Now, when going outside of China, there is no Alibaba where you place you can't find someone. Alibaba, you have some other platforms as well. Where you can get the, um, some of the suppliers, but many times you need to call them, email them.

You need a lot more patience, most of us. And you can probably second that, that also in the UK if you call some company to produce whatever, some metal, uh, shields or do any plastics or any woodwork, um, um, it may be difficult to get the quotation from them. Why? Because most of them, they are not as sales driven as the Chinese.

They don't have a salesperson specifically answering every potential platform. Yeah. So what you need to bring outside of China is more patience. It may take 5, 6, 7 times of contacting the same one, um, the same potential supplier in order to get a proposal. Because they very often also think like, well, uh, you can you compare the prices anyhow only to China.

Yeah. I will not get the order. Um, or, or my colleague who's on vacation right now, we don't check their email or I'm sick and, or I'm on vacation or I have Corona and, uh, well, we are closed because of, uh, wealth or something like this, you know? Yeah, yeah, yeah. Having 2, 3, 4 large customers and not wanting to deal with the smaller, um, potential customers who may turn big. That is something we have really missed to adapt while China has just driven that forward.

Matt: Wow. All top tips, Sebastian. Now I, I guess my final question on this, cause I'm aware of time, um, if someone's listening to the show, they go and this is great. Um, Sebastian, I'm kind of listening to you and I'm thinking this is cool.

What are some of the things they should have in mind when working with a product supplier like yourself? Like, um, What are some of the mistakes you see people make there? Because I, I get the appeal because frankly, product sourcing does not thrill me at all on any kind of level. So I'm gonna go, I'm gonna go see Sebastian.

That's awesome. Um, but how do I know you are the right person to go talk to?

Sebastian: One of the things I, um, I mean we grew out of on demand and we want to do the sourcing the same way as we do it for ourselves, for our own products. Um, we want it open, honest, and 100% transparent. And that is why when you go, for example, to sourcing companies, I mean check, do they get a percentage of the order volume?

So it means if you place an order of 20,000 with them or 50,000 or even less, do they get a percentage of it and do they tell you the supplier name? Most of the times they don't. I personally don't see a reason if you order for $500 or $500,000 that it should cost you anything different. Um, if I get a 10% whatever on there, that would be $50 or $50,000.

Hmm. The work is the same. Now, if you don't have a chance to know who is the supplier, you'll never be able to get in contact with, and all of the reorders have to be done through the same sourcing company as well, which then will ask a sh a smaller percentage, but a 6%, uh, on $500,000 order is $30,000.

Mm-hmm. To be honest, it takes about 10 hours of work and 10 hours of work for $30,000 for a reorder. Not bad. Come on. Yes, we could charge that. But um, again, ask questions. Why should you pay a percentage? Do you get the context to the real supplier? So in worst case, you can take over on your own. Can you place the reorders on, uh, by yourself if you want to?

And do you get two, three proposals? Or is the target to get 30 to 60 potential producers in order to get the real market overview and make sure that you get the lowest possible price. Another question to ask is, um, when you work with a sourcing company, do they get a kickback or they do they get a bribe by, um, one of the, uh, producers And how do they make sure they don't get any bribes?

Mm-hmm. Ask those questions. Ask us those questions as we can. Doors open for me. Yeah. Here we go. Zignify, answer those questions. We wanna make low a price as possible.

Matt: Thanks. I think they're really good questions. I think they're very thought-provoking questions as well, Sebastian, because what you're actually saying is demand transparency, um, in a, in an age, which wants transparency but rarely gets it.

And I like that. I like that a lot. And so, um, if anyone is gonna contact Zignify, contact Sebastian and say, right dude, tell me about, tell me about this. Do you get a bribe? Do you take a kickback? Et cetera, et cetera. That'd be really interesting to see what you come back with. Listen, Sebastian, um, I feel like I'm just getting going with the conversation, but time has escaped us.

How do people reach you? How do they get ahold of you if they want to do that?

Sebastian: Fantastic. I mean, thanks again for sure. Here, I think you see it. Where's my, my finger? Zignify.Net in the beginning a Z, or in the end, a Y. Zignify.Net or, um, you can book a, a free of charge call in there. We'll have a 30 minute talk through your sourcing, look through your current strategy.

All of that's for free. Um, but also feel free. I'm usually active on LinkedIn, on Facebook a bit. It's Sebastian the connector Herz. Um, my transferred there to the profiles and yeah. Other than that, I think it's the simplest thing is really Zignify.net On that to just book a call.

Matt: Yeah. Just book a call on Zignify.Net, that's Zed i g n i f y or if you're outside of the uk, Z I G N I F Y. I dunno why in the English speaking language, the English pronounce the, the, the last letter of the alphabet, Zed, and the, uh, American English is z.

Who knows, somebody somewhere, I'm sure can explain that to me. That's clever than me. Anyway, we will link to Sebastian's info in the show notes, which you can get along for free, along with the transcript at ecommercepodcast.net. Uh, and of course, if you're subscribed to the newsletter, that will be coming automagically to your inbox.

Uh, Sebastian, listen, it's been an absolute treat man. Thank you so much for joining us. Uh, here on the e-Commerce podcast, I have lots of notes. Uh, I have no doubt that we'll be talking in the future, uh, as we've got a whole bunch of stuff going on, but, um, it's been an absolute treat. Thanks for coming on, man. Much appreciated.

Sebastian: The same here. Thank you very much for having me and Matt. Keep up that amazing spirit. I mean, the energy you put in there is wow. I'm blown away. Thank you very much.

Matt: He's such a smooth talker, isn't he? Uh, so Sebastian Hertz a great conversation. Sebastian, thanks for coming on the show, man.

Also, a big shout out to today's show sponsor, the e-commerce cohort. Remember to check out their free online training at ecommercecycles.com. We've put that together for you so you can see how we implement in our own e-com businesses. Uh, and be sure to follow the e-commerce podcast wherever you get your podcast from because we've got yet more great conversations lined up.

And I don't want you to miss any of them. And if you're listening to the audio, you miss Sebastian giving you a big thumbs up when I said that. Uh, but before we wrap up today's episode, lemme just take a moment to invite you, dear listener, to become a part of the show. Now, if you're an e-commerce entrepreneur or an expert and would like to share your insights with our audience, well, we'd love to hear from you or.

Maybe it's not you, maybe it's someone you know who would make a great guest, then please do send them our way. Uh, to be totally transparent, we have got a massive wait list of people that want to come on the show, but we are very keen to start adding, uh, e-commerce entrepreneurs and those with experience, uh, in e-commerce across multiple sectors also.

So just head over to our website, ecommercepodcast.net and get in touch. Uh, we are always looking for, Fresh perspectives and new ideas. So don't be shy. Whether you are just starting out or have years of experience under your belt, we would love to hear from you. So that's it from me. Thank you for listening.

Uh, and in case no one has told you today, let me say this in case no one has told you yet today dear listener, you are awesome. Yes, you are created awesome. It's just a burden you have to bear. Sebastian has to bear it. I have to bear it. You've gotta bear it too. Now, the E-Commerce podcast is produced by Aurion Media.

You can find our entire archive of episodes on your favorite podcast app. The team that makes this show possible is Sadaf Beynon, Estella Robin and Tayna Hutsuliak. Uh, our theme song is written by Josh Edmundson. Uh, and as I mentioned, if you would like to read the show notes, head over to the website, ecommercepodcast.net where you can also sign up for the newsletter that I've mentioned.

That's it from me. That's it from Sebastian. Have a fantastic week. Thank you so much for joining us. I'll see you next time. Bye for now.