Oct 28, 2023

Sourcing and Manufacturing Options Outside of China - With Mike Michelini

Introduction

In this episode of Seller Sessions, host Danny McMillan interviews Mike Michelini, an expert on sourcing and manufacturing in Asia, specifically Thailand. They discuss the pros and cons of manufacturing in Thailand compared to China.

Key Takeaways

• Thailand is known for handmade, natural products vs China's expertise in electronics and injection molded plastics
• Northern Thailand specializes in wood, handmade goods, natural products. South Thailand near Bangkok has more traditional factories.
• Response times are slower in Thailand - you have to follow up more but once engaged, they commit
• Use Facebook and Line app to source suppliers in Thailand
• Higher minimum order quantities (MOQs) in Thailand - educate on holding inventory
• Packaging options less abundant than China - focus on great branding
• Overall quality has been higher for Mike in Thailand vs China

Comparisons of Manufacturing in China vs Thailand

• China is the "world's factory" - expertise in electronics, injection molded plastics
• Thailand better for handmade, natural products - wood, dried flowers, clothes
• Northern Thailand known for wood, handmade goods, natural products
• Southern Thailand near Bangkok has more traditional factories with port access
• Response times slower in Thailand - have to follow up more aggressively
• Once engaged, Thai suppliers very committed
• Source Thai suppliers via Facebook and Line app vs Alibaba
• Higher minimum order quantities (MOQs) - educate to hold inventory
• Packaging options less abundant than China - focus on great branding
• Quality has been higher in Mike's experience with Thailand vs China

Sourcing Suppliers in Thailand

• No Alibaba-like platform - use Facebook and Line app
• Search Facebook in Thai for suppliers and products
• Engage via Facebook Messenger then move to Line app
• Get friendly with emojis and build relationship
• Recap terms in a quotation for clarity
• Prepare to educate on holding inventory for lower MOQs
• Packaging options less abundant - develop great custom branding
• Overall quality has been higher than China factories

Tips for Manufacturing Outside China

• Expect higher minimum order quantities (MOQs) and educate to hold inventory
• Develop great custom branding and packaging to stand out
• Build relationship with factory through messaging apps
• Don't assume same level of urgency - follow up aggressively
• Confirm terms: pricing, MOQs, delivery timelines, inspection process
• Leverage inspection companies expanding across Asia
• With lower volumes, consider negotiating payment terms favorable to you
• Be prepared to educate on your needs like lower MOQs

Mike's Joint Venture Brand in Thailand

• Mike partnered with long-time plastic manufacturer in Thailand
• Started joint venture company and private label brand together
• Mike has 30% equity stake, manufacturer holds 70%
• Manufacturer finances inventory for launch around $150k
• Mike's company makes payments over time to pay back capital

Cross Border Summit in Thailand

• Mike's signature event connecting Amazon sellers and experts
• Started in China alongside Canton Fair schedule
• Moved to Thailand and postpones 2 years for border reopening
• Occurs annually in March/April timeframe
• Valuable for networking and meeting suppliers
• 2023 summit scheduled for March 30-31 near Chiang Mai
• Check CrossBorderSummit.com for details

Conclusion

Thailand offers a compelling option for sourcing quality products outside China. With the right expectations and preparation, you can find great partner factories to produce your products. The Cross Border Summit provides an opportunity to network and meet potential suppliers in Thailand.

Keywords: Thailand manufacturing, China manufacturing, sourcing outside China, finding suppliers in Thailand, Cross Border Summit