Boost Your Business with Digital Signature Legitimateness in Mexico

How to eSign a document: digital signature legitimateness for small businesses in Mexico

everybody in the e-commerce world is talking about supply chain and there's a lot of focus on mexico but a lot of people don't understand what they're dealing with how to do it right or maybe when to stay out completely today's guest is an expert in sourcing from mexico that is literally his life's passion right now is helping entrepreneurs and small businesses specifically e-commerce businesses figure out how to do it right it's going to be a great episode listen to the end here we go [Music] hey everybody welcome to another episode of the am pm podcast i'm your host tim jordan and today we are talking about sourcing now this is one of the most i don't know challenging but also relevant topics in the whole e-commerce game because we can come up with great ideas we can figure out and sell it but if we can't get the products the whole business goes kaput as they say when i started sourcing early on my private label game i was sourcing mostly in china and i think that's kind of the origin story of most people but i always had an interest in latin america many of you know that i had a company even based in guatemala and central america and we tried to do the sourcing thing it wasn't a raging success we had some successes but there were a lot of hard lessons we had to learn there are a lot of differences in culture that we didn't understand going into it and it was tough it was tough to scale up years later this crazy thing called the trump tariffs happened and items that were being exported from china into the us some of them became a lot more expensive and people started thinking hey we need to find alternate alternative sourcing locations then when covet happened especially and all the supply chain slowdowns and price increases especially from china started happening everybody started thinking hey we need to source elsewhere so i did an episode specifically about sourcing from mexico maybe a year ago a little more than a year ago a lot of things have changed since then so i thought it'd be great to talk about it again because now all eyes are focused on mexico now what i was saying earlier that i already had an interest there is true this isn't a brand new thing this isn't something that based on covet or based on the tariffs is relevant now no it was always an interest it was always something we needed to learn about it's just been amplified now but i don't know a whole lot about it so in this episode i've brought in a buddy who literally does this for a living and not just sourcing not just finding products he specifically works with e-commerce sellers and small businesses so his content and his insight should be extremely relevant to us so welcome to the podcast omar dar hi team how are you i'm good so omer you have a company that's called witch wreck and you were actually introduced to me by a very good friend of our community and said hey you need to talk to omer and right now you're currently looking at potentially doing a project for me personally right absolutely hopefully you'll be very happy about what we offer i hope so too cheap make it real cheap no i'm kidding but you were suggested to me by somebody i trust which means a lot because there are a lot of people that claim to know how to source or claim to know how to find products but it's actually rare that someone really does so i wanted to have you on to educate me as well as our audience about what's going on in mexico i know that there are some best practices some things to avoid not every product is good for mexico and also just in the past year the entire landscape of sourcing there has massively changed so i'd kind of like to uh to get like the most recent update from the last year but first off tell us how you got into this position give us the intro to kind of what you're doing now and kind of give us the the credibility speech why why your content is so good and why you know what you're talking about first of all thank you for having me on on the show um so my story begins in uh israel i'm in israeli originally born and raised and as you might know most israelis are entrepreneurs and this was my career path for the past 20 and 20 or so years i had multiple businesses i know the pain of being an entrepreneur and the journey and how tough it is so i think that uh many of your listeners are are actually going through some of the issues that i went through er and sourcing is definitely one of the hardest things to do in order to get your product to the market i have lived on four continents uh worked on four in four or five countries and had businesses worldwide and i lived in the us for 11 years in total and had a business there and it was the experiential marketing and i think i know pretty much the the the hurdles of working in the us and the the issues that uh an entrepreneur has there uh three and a half years ago i i had opportunity to open a business in mexico and my idea was to serve the american market um through throughout my 11 years living in the us of course i had a very big network of entrepreneurs i was actually giving some lectures to young entrepreneurs and one of the things that always came up uh were a few issues the first one is building a team which is very expensive in the us the second one was sourcing and when you're sourcing how do you trust and how do you know that you you if when you pay the money you actually get what you you ask for and i think these were the the pain points that we were focused on solving and what i'm doing right now is actually solving those issues that i just discussed in order to give a much smoother uh journey for uh entrepreneurs small medium companies that are looking outside of the us are looking to move from china because of the geopolitical changes that we are seeing in the past few years and you mentioned last year and the changes in the trump administration i think that the trend has changed in the last more 10 years i i think trump is only a change that was very visible and very apparent but we started seeing changes years before i think that when you look at china as a country china is moving now from a manufacturing country to a leader in technology and the period of china is as a as a manufacturer i i don't say it's going to be end anytime soon but it's definitely changing the there is a big change in the goals that the chinese have uh where where they want to see themselves in 10 15 20 years and uh if you realize that the this long-term change that we are seeing right now you understand that that it's not going back it's not uh one administration or the other that uh policy that uh changed what we are seeing we just saw a catalyzator when when it when trump when trump came into power and when the corona happened and now with the war in ukraine that we are seeing that influence the logistic costs and etc etc so i think that focusing on mexico and other manufacturing country and finding more options worldwide is is a very important step for entrepreneurs and for small medium companies the the big one already are doing those moves years ago so mexico is not new as you you said is not new for manufacturing uh the biggest automotive aerospace companies already moved here 10 15 years ago and now only now the the small medium companies realize that this is the time to make some changes so there's a couple things there i want to address the first is you gave a sales pitch for diversifying right like there's a lot of reasons why china has become less of the go-to it's still the go-to but it's dwindling in desire so to speak to source from so i understand that and i think we all agree that like that's exciting to understand but we do need to and i'm going to ask you this in a minute like specifically talk about the differences between china and mexico because not all good and it's not all favorable i think that we would be mistaken to assume that mexico is going to be the new china and i think it would be unfair to tell people that like we can completely outsource there but the other thing you mentioned that i love is the specific implications for small and medium-sized businesses because when we say hey global sourcing or sourcing practices or manufacturing capabilities the things that apply to large businesses like the automotive manufacturers don't apply to us it's very different so i think it's a really smart idea to be very specific very specific in size very specific in scope and very specific in the type of sellers that well i say sellers buyers product buyers that are going to sell so brand owners and how they interact with manufacturers in a different place because the parity the matching up of the small businesses with maybe the small to medium-sized manufacturers is very very important and nobody's really talking about that so first off let's talk specifically about kind of the the differences between china and mexico can mexico directly compete with and replace china does everything work for mexico um is mexico the future china yeah i think not i think to to expect that there is a new china coming up is not realistic china i mean their policy were very different than other countries in the world they subsidized and supported their manufacturers i don't think any com decades like that's been going on for 50 years correct so i don't think we are seeing a new china but i don't think that uh one country will replace china but i think as a when we look when we look globally on the manufacturing countries that are growing up whether it's romania in europe whether it's vietnam in the far east mexico other latin countries there will be a replacement when you look at the global arena but nobody no not no single country will replace uh china when we talk about mexico versus china i think that uh it's very important to understand that there are major uh differences i'll start with the what people are used to uh to do so far so up until now you go to alibaba in china if you're a small entrepreneurs you just want to try the first batch you go on alibaba you order it you get it it's come out of this million catalogue of i don't know hundreds thousands of items that you can choose from you can do very little customization customization maybe just uh labeling it or something like that this is not the situation in mexico mexico you don't have this kind of uh in majority of the industries you don't have this kind of catalogue i mean you cannot find all these uh small flashlights or things like that uh sold very cheaply that if this is what you're looking mexico is not the place for you however mexico when it comes to customized items so if you have in mind uh a product that you want to do product development or you already have did the product development and you have like the prototype and you want to take it into manufacturing this is where mexico fits in the quality is there the the speed to market is there prices are pretty competitive again it's not china but you need to understand the difference in pricing even between china and mexico when the chinese do a t-shirt they do two million t-shirts out of it so obviously economy of scales play a great role here when you go to mexico and you want to create your new uh parallel line you bring it to the manufacturing he wouldn't create a million out of it he will create 300 units out of it so obviously comparing this to china is comparing apples to uh to oranges it's two different things that you are looking uh you're looking to compare so i think that the understanding first of all that the market that if you go to to mexico you need to look for different items than what you are used to look in china that's the first thing that you need to take into consideration now of course there are industries that are they have these catalogs let's say the glass industry so if you if you want to order different wine cups or anything like that of course mexico yeah mexico can produce it but again this is very specific industries you won't have in electronics the same possibilities as you have in china now if you if we want to talk about the advantages and disadvantages between china and mexico i think that the biggest advantage is the pro proximity to the us it's a near shore uh uh sourcing which means hey you have the control so you're able to fly two hours three hours from uh your your city to all the main cities in mexico and visit the the manufacturer you can uh uh check the quality while you are there communication it's much much easier obviously the cultures are much similar compared to the chinese culture the time zone is the time zone so you don't have to wait in the middle of the night for an email and if you need something really quick being done it's a huge advantage logistics wise obviously much cheaper much faster no you mentioned the us mca the agreement between mexico and the us and the tariffs that are not existent on most products so no duties there all of that come to a lot of the money being saved so when you take all these factors into consideration you save them manufacturing wise specifically it really depends on the product so there are products that i can certainly say that are as cheap to produce as in china but again if you're looking for something that is off the shelf most probably you wouldn't find it in in a good price in mexico but if you're looking to produce something of your own we can mexico can compete with the with china yeah let me let me pause in here ask a question you're talking about specific categories right there are things that can be found in mexico and if you can find them you're saying there are huge advantages right the proximity the ability to build the relationship the logistical cost the the speed all that stuff i understand that so big advantages um smaller category list how do you go about finding that category list like if people are listening right now thinking hey i wonder if my product my product idea can be produced there how do you figure out what can be produced there sure so i can give you the the main categories that are uh worth looking into so apparel this is big and huge in mexico i mean and probably any material whether it's spandex or cotton or whatever 95 you know fabrics is is uh is really depend on the country so let's say silk less less available in uh in mexico there is no mexican production of it but apart from that the rest of them exist so we are doing lines of swimwear sportswear and leather uh material almost everything exists in the latin so we we not necessarily bring source everything from mexico the fabrics we can bring from over uh latam and it's very quick to to reach our manufacturers of course if it's a specific uh um item of specific fabric we can bring it from uh the far east uh but again it all depends on the the process that we are building and we we can source almost everything other uh industries uh merch industry so you know i have big lines that are doing merge whether it's t-shirt printed t-shirts or glasses with prints on them all of that exists in mexico big time glass and wood anything that you need exist here with wood i would say that like any other countries you know uh importing wood or wood products uh requires a bit more uh work when it crosses the border but again we this is the reason you still have to have the fumigation and the lacy act documents and all that stuff right exactly exactly okay steel industry very very strong so from emt pipes for the electrician now from you anything to do with steel kitchens now when you say steel i know that this breaks into a lot of different categories if you're looking at metal products are we looking at more industrial stuff or can you get like home decor can you get like heavily machined um precision parts or is it more lawn and garden items like kind of break down the metals and steel products a little bit yeah so steel is actually being manufactured in mexico so we have plenty of connection in that industry we can create almost anything that the manufacturer in mexico can so we there is variety of products that we can bring specifically i have projects on pipes and things like that but since this is being locally mined we can uh get any product from steel um a big advantage is anything to do with the construction so we have projects for kitchens uh for tiles for uh granite uh flooring wood floor so all of that can be sourced from mexico up until now it was coming from china i can tell you that uh especially i'm not talking about one kitchen nobody buys one kitchen directly from the manufacturer but if it's a developer that wants to to bring 40 50 kitchens it makes sense to bring it from here rather than china from time point of view from quality point of view which is much better than china and from uh uh pricing right now with all the tariffs and everything it's very competitive compared to china well let's talk about let's talk about quality and let's talk about pricing for a second because of course price matters now you just made the statement that the quality in mexico can be much better than china can you delve into that just a little bit more i think that uh again it's all a question of control i think that uh when you buy from china it's very very unless you are physically there it's very hard to control it the same thing is true to any country the difference is that with mexico you have much more the ability of much more controlling it it's the language of this ability to come to mexico and and to see the production while it happens and of course to find the right partners like us that is actually sitting with in the facility when production is happening and do the quality control and the communication is easier you know when i'm sure that you had experience working with the chinese middlemen or it's never easy it's never in the communication the time the time zone that you need to communicate in it's it's always very very hard and i think this is an experience that many of your listeners are sharing this doesn't happen in mexico mexico in that sense it's much easier and uh not just through me but i i think that once people will start understanding uh that culture is very important when you go to uh do business and the ability to communicate in similar cultures they will find it much easier to do it in mexico rather than china now you made a statement that pricing between mexico and china for the products you can source in mexico is very competitive now when i think in my mind back to like everything we've talked about you talk about how logistics is cheaper import duties is cheaper shipping's cheaper all of those things so if you're saying that the overall price is competitive but some aspects are less expensive does it mean that typically the product sourced itself in mexico apple's apple's comparison is going to be more expensive than china but because the other costs are reduced it breaks even yeah i think that in some cases you can see that the actual manufacturing the x works price could be a bit higher than china why because the chinese subsidize it in many cases and then and that's the the honest truth not because their their workforce is cheaper is actually more expensive but they actually subsidize it when we look but when we look at the ddt cost i mean the the the actual when you send it to the client the end the overall landed cost in the us yeah then you can see that it's either matching cheaper or a bit higher but but when you compare all the factors makes more sense to do it there if you can if the product exists of course yeah if you can and we need to keep specifying that we're talking you know these great things about mexico but there's a lot of things that you just cannot source there so let's talk about investment because in addition to subsidies in china another reason that china has been very competitive is just the amount that's been invested there and the length of time they've been manufacturing right so there are a lot of companies in china that do injection mold plastics there's not that many in mexico and maybe they're newer and maybe they have newer machines and they're still getting ramped up to scale do you think that over the past year or two or three years these smaller manufacturers we're talking specifically about have started receiving large investments are really investing in their capabilities when it comes to technology because i know in a lot of like latin america a lot of stuff was handmade or a lot of things were manually created but do you see them modernizing and mechanizing to increase capabilities and reduce costs with with no doubt so the industry here so saw a huge growth in the the past uh almost two years i mean it's it's i'm visiting factories that a year and a half ago we did our first project and now they have new machinery i'm when you you spoke about the plastic injection when i started two years ago with my first project with one of the companies they only had one options for me we did an electronic device we needed to source the to find a partner that will do the plastic injection now that they have five or six only in guadalajara for example so we definitely see a lot of money coming in i don't know if it's just from investment it's i know it's that there is a lot of money coming in for production and a lot of them are reinvesting the money in order to uh to increase capacity improve on technology so they can supply more to uh to the end user to the end client everybody understand here uh that the market is changing everybody everybody is getting ready for this change and i think whoever gets as a client right now we'll see even in a year two years five years you'll see an improvement reduction in prices uh this is this is what's happening right now mexico is becoming a central point where people are coming to manufacture and the market reacts ingly now the chinese government has always been very pro-manufacturing right from simple export laws to you know subsidizing that manufacturing to even giving loans for manufacturers do you see the mexican government becoming more pro manufacturing or pro entrepreneurial in the last few years to help support these small businesses growing up or is it more of a grassroots everybody's kind of figuring out on their own no no i think that there is a support from the government they also see the benefits of bringing more money in more taxes to them there is definitely a government involvement it's not on the levels of china i think that the chinese especially the the the their government is more centralized decisions are made much faster much stronger mexico is more uh fragmented i would say in the decision making that said there are uh incentives to to go into manufacturing there is uh definitely the the the trade agreements with the us uh is pushing uh and the local the local states in mexico to allow more options i'll just give you an example uh mexico is a big exporter of avocado to to the us avocado jalisco state up until a few months ago was not allowed to export to the us there was a big lobby in order to do that and they recently pushed for it because they knew that the industry will will win will gain a lot and they just approve it and now this export obstacle was was lifted and uh we see it all across the industries that uh whatever obstacles they are they're trying to lift it in the pace of mexico you know it's not again it's not china and uh but but definitely there is a positive uh change not just uh from uh the bottom up but also from the top down what's one of the biggest mistakes that you see small business owners like myself making when they first try to start sourcing in mexico first of all going by themselves i think it's a waste of money it's tough first of all it's tough to find it you need really to be an expert locally in order to uh to bring the right manufacturer to the table so i would always advise [Music] to do it uh with an expert with somebody that understand the language the culture that that is the foot on the ground uh that's number one the second thing is quality and there needs to be a quality control over uh manufacturer especially the small ones they need more attention and the third one is not understanding exports from mexico to the us it's not not every company not every small mom and pop shop can do exports there are ways on how to do it right and in order not to incur cost when you import that that you didn't anticipated it's wise to do it with the professionals that know how to do the the import process yeah my experience has been a lot of times these smaller manufacturers the mom and pop shops are the ones i want to work with right like i have a better relationship with them there's more rapport quality can be higher but yeah we forget that it's not just about buying the products now we have to ship it and this especially happened in china everybody just assumed five or six years ago that every manufacturer knew how to export well a manufacturer of a product in china may be exporting to 20 different countries and everyone has different rules and laws so that's when people realize hey you need to have independent freight forwarders and logistics providers so yeah i can understand completely how that would be the same thing in mexico and in addition to logistics there are some very specific things that manufacturers need to know about e-commerce sellers right if we look at what happened over the past six seven years in china like now everybody knows what a fn sku sticker is for amazon or everybody knows about the right labeling for cartons or everybody knows about drop tests right do you think that in addition to the logistics education need to be caught up that manufacturers are interested to hear specifically about different types of sellers whether it's online or whether it's retail are they getting educated i mean i think that some of them do some of them don't and give it to the to companies like us to deal with it uh i think it's not uh there is this there is still a road to go with a small uh manufacturer here so they are used to work in a certain way uh and many times it's it's more uh and the fear of trying something new for them and you need to walk hand and hand in a hand in order for them to actually bring the benefits to a foreign company so we have this kind of companies that you know we we basically help them understand that their advantage will be even bigger if they will start exporting and it's it's never been that easy it's it's a process it's building the trust making sure they understand that nobody's trying to uh to throw them into the deep water without uh helping them how to swim so it's a process it's it's an and this is something that it will take especially with the small manufacturer it will take years to to uh to bring the the good ones out of them to the point where they can export by themselves so how do people find manufacturers you said hey you can't just land and start you know trying to meet people and shaking hands how do people get connected successfully with manufacturers mexico is a very uh close community i mean they they are like uh you know if you know in the village somebody then you'll find who is doing what there are areas of uh different trades so you really need to have a deep understanding of the market and it's a lot of market research it's actually going there and and going to one factory and try to get through those people other factories it's a very specific world and that is very specific process so there is no easy answer the majority of mom and pop shop don't have a website you cannot just go online find those uh places that have the advantage that you're looking for online they many of them when we when we met we we met them we we meet them they don't even they cannot even provide an invoice imagine that and obviously i we cannot work without uh invoice so we bring into the mix our accountant to help them uh do all the process from from zero so the the the short answer is that you need people that understand the market there is no shortcut to that there is no uh alibaba uh to tell you that an american e-commerce guy will start uh do a market research and will find something i'm not sure it's the right way again and not because i'm uh owning the company that i own i think that the reason why my company is viable and is is working is because there is this uh huge need in the market and there is no uh easy solution at this point so what about future manufacturing product categories you've talked about things that you can source there that are produced well what do you see in the next two or three years that will be added to that list that maybe not be on it now do you think electronics are in the future so electronics is already being produced so we have a few project of electronics when you talk about let's say the plastic injection part of electronics resin plastic resin is is being produced in china mainly so that's the reason why when you look at the prices of the specific part of the plastic injection in a project is higher than china but when you are looking at electronics there are great teams here that are doing electronics that know how to put it to assembly together we we have a few big projects that the client decided not to go to china because they anticipated the changes in the market and they are very happy with the result in mexico so it is existing and it's growing and it will continue to grow um i think that the plastic injection definitely we see more factories dealing with plastic injection i i hope that the raw material will start to be produced uh in mexico so we can actually reduce that part of the of the project and the cost of that part uh i believe that it will at some point other things that i see we have a lot of artisan work ceramics as i told you would work i hope that when it comes to the ceramics manufacturer there will be a bigger scales of ceramics so replacing completely what china now has to offer the very cheap plates and things like that uh i think that there is a huge potential there for uh for manufacture and i believe that somebody at some point will uh decide to to to take that route maybe there are and we are still looking for uh the really big ones the one with the capacity of producing millions of items a month and but this is a big one that i think will change very soon so if you're talking to a bunch of smaller e-commerce businesses right now what would you tell them is the most exciting thing about mexico specific to them now we're not talking about logistics we're not talking about you know potentially the same costs but like specific to e-commerce sellers who may have been discouraged in the past because they've tried and gotten frustrated what's something encouraging you would share to this community to get us potentially re-excited about mexico absolutely merch big glass items wood items so kitchen kitchen items items for the the the house can be found here in the core yeah the core um i think that's for e-commerce specifically uh printing anything to do that is printed boxes we had a big project of uh card games uh so all of these exist we can do it very well in mexico so even though it's a limited catalog of product types it represents a massive massive number of products that are perfect for e-commerce so omer this is great information we understand that uh you know we need representation in mexico to do this well and we need experience so give yourself a shameless plug if people wanted to find out more content and information about your business and the services that you're providing i assume they can go to your website which is what wetrack.com very simple w-i-t-r-e-k that and uh you guys are specifically or your company is specifically helping small brands connect with small and medium-sized manufacturers and you understand e-commerce which i think is unique and i've never really talked to a sourcing company or a service provider that does that with those things in mind because you know the big manufacturers have their own sourcing agents but what they do is very different than us that's awesome and you're going to be around the us right like i see you guys are popping up at conferences you're popping up at um different kind of educational scenarios i know you were just at asd and you were just at prosper show in vegas anywhere else where people can come and find you and connect with you so my partner is the one doing most of the traveling for that i'm more focused now on creating new business in europe uh right now i don't have the schedule in front of me but we have a few uh ideas on what to do in the next year we will have it on our website once we we have new uh a new uh trade shows that we are planning to to go we will put it on our website for everybody to see so with trek.com when they post the event schedule make sure to shake the guy's hand and get to know them i was referred to them and i was told about them through personal relationships which really goes along with everything we've talked about sourcing successfully from mexico it's got to be personal relationships you got to shake people's hands you got to get to know them personally and if you will invest the time to build that social credit and build that trust then you can beat out 90 of your competition who's never going to go through those actions into those practices and you can start to lock down supply chains for your specific brand or niche or product because you've invested in that in that relationship time so very very valuable well thank you so much omer for being on any last words before we uh before we sign off yeah of course uh whoever uh is interested they can contact me at uh omer tweettrack.com and i'll be happy to answer any any questions any uh advices we are here to help our goal is not just uh the business our goal is also to to help entrepreneurs achieve their uh and and create and fulfill their dreams so i'm very happy to contribute from my experience to them and just hope that uh everybody will see it as an open invitation to to come and uh and ask for our advices amazing thank you so much i think that understanding there are limitations of sourcing in mexico is important but also there are a lot of opportunities so if any of you are listening like i said before that that got discouraged or maybe ran into some walls recognized this is all kind of groundbreaking and new so of course it's not going to be super easy but keep investing in those relationships and education figuring this out because i personally believe that this is going to be very very impactful in my business personally and those of a lot of people that i know so really good content again thanks omar for being on thank you all for listening uh like i always ask if you found some value in this if this is if this is good stuff let us know by leaving a review on over a podcast platform you're listening to you can also go to am pm.com to look up past episodes you can find us on facebook am pm podcast and send a message to our facebook page and let us know what other content you'd like to hear uh the good the bad the ugly all that good stuff we love feedback we appreciate it thank you all for listening we'll see on the next episode [Music]