#606 – The Expat Files: Exporting from Latin America and Business Opportunities

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now I wonder Hello there all you expat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started There's a reason in the last couple of shows I talked quite a bit about shipping and shipping companies sending containers Adwanas duties and taxes, etc Because you know a lot of gringos and expats and wannabes are interested in creating an export business out of local artists and items

[00:47] Or food exports, but the question always is what items would be feasible. What would work? What would be cost-effective and of course who would be your market now that could be actually selling locally made or produced stuff From your own website or Amazon or shipping to a wholesaler or retailer up in the states that will market the stuff for you But first, of course, you have to come down get your boots on the ground and find a product or two or maybe even develop A new product yourself from an existing one down here or modify some of the local items that local artisans and craftsmen are making In fact, that's what many successful gringos end up doing For example, they take a product like coffee honey or chocolate Repackage it give it the gringo spin and sell it as a boutique product on the internet and some even hook up with Walmart or a

[01:36] Big retail outfit up in the states in any event if it's a physical product You'll have to ship it right unless your market is completely local, but that's usually not the case Which is why I want to talk a little bit today about products that you'll find down here Latin America And you'll think to yourself man, I could sell a million of those up in the states Of course, the price will have to be right including packaging and shipping costs, etc And you'll have to be able to get sufficient quantities made to your liking specifications and attention to detail For example Latin America's on manana time and unlike the first world down here in Latin America When someone says an items gonna be shipped tomorrow, that's often not the case Whereas up in the first world if you get a shipping date You expect it to be shipped on or before that date or you get pissed off You might even change suppliers that said those of you who are watching this on YouTube now are gonna get a treat

[02:24] Why because just recently I made some trekking through Mayan indigenous country Visiting some small indigenous communities in El Salvador in Guatemala now note that throughout indigenous parts of Latin America You'll find little communities that specialize in making a certain kind of product And so they become very very good at things like wood carving leather working pottery jewelry making Textiles pelts purses footwear carvings ceramics handicrafts furniture making glass and wrought iron work Not to mention everything and anything made out of that Fantastic rainforest hardwood and note during the few months preceding Christmas. You really find some tremendous stuff Which is why if you've got boots on the ground off the gringo tourist trail You can't help but run across items that make you think in that moment, man

[03:12] If I only had a thousand of these things they'd sell like hotcakes on the internet For example, if you're watching this on YouTube right now, you'll see three different ladies purses I ran across and bought and these are just three styles out of hundreds as you'll see They're very nicely handcrafted beautiful colors trimmed in real leather hand stitched from hand woven hand dyed textiles Now I purchased these at a tiny kiosk in a small indigenous town I haggled a bit and I got one for five bucks one for seven and one for nine dollars Now I invite you to look at these on YouTube and tell me how much they'd cost up in the States Remember, I got all three of them for 21 bucks Now gringo ladies who've seen these things say they would go all day long for 50 100 even 150 bucks in the States

[03:59] Why because they're completely custom-made have leather trim and the fabric parts are hand woven and hand dyed and remember if you order in a Quantity 10 20 50 100 you'll get them for half of what I paid So see for yourself. Have a look on YouTube right now. Anyway I dumped 21 bucks and bought them because I want to pass them around at my January 2017 expat insider seminar I want everybody to see them feel them and know there are great opportunities here for exporting things like that I want people to see and feel the quality of these items. So the question is how do you sell them? How do you get them up on your website? How do you get them on Amazon or some accessory outfit up in the States that has retail stores and malls or whatever? Well, that would be on you and your investigation, of course

[04:45] But I'd like you to remember one thing all Latin countries export many things mostly basic products Including of course huge quantities of agricultural items like bananas coffee sugar Even roses orchids and tropical flowers Which by the way in some Latin countries makes up their second third or fourth largest export group and don't forget they export huge quantities of mining items and lumber as well as clothing and textiles and some assembled products, too So as it turns out and it's greatly in your favor Every Latin country has an export group or society that have regular meetings comparable to a businessman's social organization like the Rotary Club and these organizations over the years have Developed a kind of a relationship with their local Latin governments to make it easier

[05:35] Somewhat easy and predictable to import and export various types of products So every producer has access to and can operate under the same ground rules For example in Guatemala their export group is called a jack sport Which stands for the Association of Guatemalan Exporters simple, huh? And there is an organization like that in every Latin country Adjunctsport is spelled a G ex p o r t and I mentioned this because if you get into Exportation in a big way suppose you buy a coffee plantation or start growing avocados Then you'll want to join this group and find out exactly how they import and export things because they've got it down pat and they Have for years. In fact, let me read you part of their mission statement in English I'll translate here. It says the Guatemalan Exporters Association is a private nonprofit entity established in

[06:28] 1982 that represents promotes and develops non-traditional exports of companies in Guatemala providing a high level of assistance and service to Exporters serving the Guatemalan business community at large with their international trade activities Whether within the country or abroad we at Adjunctsport are an interactive dynamic trade group that participates and competes in all world markets and Assisting those companies who are preparing to export you got that companies preparing to export and that would be you Expats and gringos if you find that one particular product or products that you believe will be a good business In fact in the case of guanabala exports are such a big part of their economy There are so many companies that have joined and have paid dues to Adjunctsport that they now have a large

[07:17] Operations office and over 200 permanent employees all designed to help and hand-hold companies through the process of Exportation and not only that they have their own business import export school on the premises where they have ongoing classes and seminars that are very inexpensive and they even have classes for Companies that are not exporting yet But are coming online like for example if you've got a teak or avocado farm and the crop won't be in for some years down the line Now of course a lot of gringos and expats that come down to Latin America have developed or created some specialty items to export and they don't need a big outfit like Adjunctsport to help them because perhaps they're only selling a few items a month for example There's a gringo that buys and repackages natural herbal and medicinal products and sells them on his website and through Amazon

[08:09] He doesn't belong to Adjunctsport and never took any of their classes in fact He speaks Spanish terribly Nevertheless all that is only figured a way to ship things out of the country and make a nice profit And here's a guy who came down a few years ago as a backpacker and now he's working two days a week and live in The life of Riley. So anyway, like I mentioned every Latin country has an import export business membership group In fact, like I said, some of these groups actually give courses and have legitimate schools For example, the one in Guatemala Adjunctsport has what they call Escuela de Commercio Extirior That means commercial business export school And of course being that Latin Americans are just nuts about degrees and especially diplomas But they have to be nice suitable for framing diplomas, you know Anyway, right now I'm looking at Adjunctsport's webpage and the courses that they're offering in the upcoming month again in Spanish

[09:01] Of course, so it will help if you learn some but remember because you're gringo You have that huge gringo advantage going for you either way And if you've done any sort of business dealings up in the States or had a business of your own You've already got a giant head start and probably know quite a bit of what they could teach you and most of the general business Courses they offer except for the actual ins and outs of the export importation process within your individual Latin country Which of course will vary a bit because they have different tax structures and rates and IBA and the Duana fees So for example on the schedule of courses They teach things you get in regular business school up in the States like and I'll translate here negotiating sales and persuasion Sounds like Dale Carnegie stuff, huh? And then there's this one called how to read make and understand international contracts

[09:50] Now that one could be pretty valuable to a gringo and here's one called get this the mechanisms for an exporter to recuperate his bad credit Like that one. Hey, how about this for an idea? Then you won't have to take that course How about pay off all your old debts and bills? Then there's one called developing and evaluating export and import feasibility studies and projects And then there's one called and it's one's probably well worth it and it's called custom brokers and customs delays How to get your products through customs in a timely and efficient manner and how about this course? It's called how to bribe customs officials and their families. Just kidding Hmm you think Now the courses that I mentioned start in the evenings at six and last three hours

[10:38] That's the usual setup since I'm on a roll. Let me mention a few more courses here This one's called the new international rules and regulations pertaining to the agro Environmental sector and here's one that's probably worthwhile It's called long and short term storage and packing logistics and here's one called standard container inventory practices So anyway, that should give you an idea of the courses you could take if you knew some Spanish though What it really boils down to is if you import or export with your business, you're in no way out on a limb Reinventing the wheel by the way If you want to check out that edge export import export Association website to see just how extensive it really is and it's very complete. It's export.com

[11:24] GT and if you look near the top center of the page You'll see there's a link called Escuela de Commercio. That's all the courses and stuff They offer to all their members and if you want to know what those courses cost Well, some of them are free and some costs 10 or even 20 bucks again classes and handouts are in Spanish I know. I know you're thinking Google Translate, right? Well, unfortunately for scientific and business stuff Google Translate kind of sucks, but hey, you got to start somewhere, right? But again, remember as a gringo you're way ahead of the game If you're gonna market anything on the internet your own website eBay or Amazon that said what about finding unique products to sell and export I mean that is the key right the crucial part finding something you can sell Well, let me tell you the way to make that happen is to get some boots on the ground

[12:13] And that's off the gringo tourist trail because you see you're unlikely to find any unique Salable items in gringo ized areas because they've been well picked over already so that means forget Panama Costa Rica most of Mexico and Practically any place within five or ten miles of where a cruise ship stops Which is why by the way if you come down to one of my expat insider seminars where we spend probably 80% of our time off the tourist trail Nearly everyone who comes down for that week walks away with a number of good business idea For example, if you've never been to Latin America And you're thinking all I have to do is keep my eyes open for some interesting trinkets or souvenirs ceramics jewelry Carvings whatever and you'll be off to a running start. Well, that's certainly true

[13:01] But how are you gonna find what you might think is the perfect item or items to export in the first place? Well, I'll tell you how and I'll give you the Guatemala example because that's where we're doing the seminar now pay attention in Guatemala City A place that's way off the gringo tourist trail You can walk around all day in that city of two million and never see another gringo unless you're smack dab in the commercial slash Hotel district called zone 10 then you might see some embassy people or some do-gooders And of course if you're at the airport, you're in do-gooder central That said right smack dab in the oldest part of the city called zone one where the Central Park is in the cathedral The government buildings. There's a place called the Central Market a place even gringos who visit the country don't know about though

[13:46] They call it a central market It's not a wild and crazy food market like the ones I talk about all the time though They have one complete floor that has nothing but food and produce. I said one complete floor of food and produce, right? This Central Market is one square city block. However, it's all underground and goes three stories down So there's two whole floors a city block each of handcrafted local products We're talking about leather goods jewelry hardwood textiles pottery and ceramics. You name it everything and anything in handcrafted products Thousands and thousands of items some of us certainly tacky and laughable but others Absolutely, beautiful wonderfully fabricated and totally different than anything you've ever seen and at prices that are simply unbelievable

[14:34] And it's a guarantee that if you walk through this place and it'll take you a couple hours If you can't find a dozen items that you couldn't send back to the states and make some money with then You just don't have a creative bone in your body But you know what? You'll never ever get a chance to see places like that Unless you get boots on the ground and come to a Latin country that's off the gringo tourist trail by the way I always recommend that place to gringos coming down to Guatemala Specifically who are looking for ideas and things to export and as it turns out every big Latin American city has a similar market Again, it's all about the right kind of boots on the ground. By the way, if you know no Spanish That's not an insurmountable problem in past shows. I've mentioned many times there are fully bilingual expat concierge

[15:22] Ladies, they've got cars and they'll take you to see these places answer your questions and even do some negotiating for you By the way, I highly recommend you buy some of the stuff that catches your eye Take it home with you back to the states and shop it around show it to people bring some samples back See what kind of interest and comments you can drum up In fact, there are lots of handcrafted items down here that just need a little Modification to make them a thousand times more appealing to gringos up in the states So again hiring a bilingual expat concierge lady for whatever your needs are Often really is the best way to go whether it's to find a product You might want to sell up at the states or maybe you have on your expat wish list buying a car a motorcycle Finding a good contractor architect cleaning lady maintenance guy finding good first world doctors hospitals banks internet service

[16:10] Whatever you hire one of these ladies and they do all the legwork for you For example, what if you find a product? You're absolutely in love with you know, it'll sell on Amazon But your Spanish sucks and you can't get your points across to the person or person Who's selling or fabricating the things, you know lost in translation communication breakdown happens all the time if your Spanish sucks And if you're interested in looking for products like that where there are no expat concierge ladies No such service exists Well as mentioned in a show a long time ago All you have to do is go down to one of the local Latin universities go to the English department Put up your wants and needs and your telephone number on the bulletin board in English Of course and by evening your phone will probably ringing off the hook because first of all

[16:57] Not only will everyone in the English department want to practice with you a real live gringo They'll be thinking in the back of their minds that there possibly could be a job in it for them in the future They're thinking if they make a good impression and they do a good job They'll be the first person you call when you do your startup now remember off the gringo tourist trail all Universities have English departments. Everyone wants to learn their English, right? However, most students in those programs have never really spoken to a real live gringo in their lives Unless of course, they're in an expensive helicopter school Then they will have some real first world gringo and gringo teachers But it's only the two or three percent the Entitled kids of the wealthy that can afford to go to those schools that as opposed to all the crummy chaotic public universities with the broken windows and lights and bathrooms with no water many of those

[17:48] Disgusting universities have fifty to a hundred thousand students attending whereas an expensive helicopter University expensive in Latin terms that is will have at maximum maybe a thousand students So as it turns out about one in fifty university students attends a helicopter school and the rest well They go to that crappy chaotic socialist and indoctrinating public university. Hmm sound familiar So which do I recommend if you're looking for a bilingual student to take you around on whatever mission? You might have well, if you need someone with their own car You should post a note in English at a private helicopter University their parents all have dough so they're entitled kids all have cars just like up in the States Whereas a public university student who probably takes the chicken bus to school won't have a car nevertheless

[18:34] Their meager situation often makes them much more hungry and eager to go the extra mile for you now again It's not to say you can't do these things on your own But you'll find it almost impossible while I'm a gringo tourist trail where most people speak English to find any kind of new and interesting Handicraft product that hasn't been picked over exploited and marketed by gringos And here's another thing I can't repeat enough when you're off the gringo tourist trail you find Opportunities and ideas popping into your head all the time In fact many gringos have told me they've taken a traditional product made by one of these indigenous groups wood carving leather goods Ceramic whatever and just with a few tweaks and some creativity with an eye toward what might ramp up a first world gringo's desire for the product

[19:22] Suddenly or not. So suddenly they've created a nice little business for themselves But tweaking existing handcrafted products down here is not often necessary First off you'll find plenty of unique and cool products here that you just wouldn't want to change at all And of course, you'll be amazed how inexpensive these things are But again, you have to buy from the source and not through middlemen All right That said since we're on the subject of doing business with imports and exports Let me read a little email to you now remember last week I was talking about bicycles here in Latin America and how most kids down here being poor Don't often have the chance to have their own bicycles And the ones they do have are patched and duct tape and chicken wire together until well They just absolutely fall apart and I also mentioned that every Latin country has its own bike

[20:09] Manufacturing facilities which is why you get a cheap decent durable bike for under a hundred bucks easy and in response to that show I got a few emails and here's the best of the bunch comes from Don Goyo a pseudonym Of course, he says dear Johnny and I'll paraphrase a bit. He says Johnny after your show about bikes I saw this ironically then he attached a few photos that he got from Craigslist He says you can buy right on Craigslist an entire container of bicycles used and refurbished for only 20 bucks apiece But you have to buy the whole container to get that unit price could be a great plan B business idea for your next seminar group He says by the way If you're watching the show on YouTube today, you'll see those photos of containers stacked with bikes

[20:55] And then he says in his email I would be interested in any income producing idea along those lines doing it possibly with someone else and Happily make a visit to the warehouse that has these bikes if the numbers the relationship and the strategies make sense Obviously these bike units can only be purchased so low and wholesale or retailed so high Depending on the logistics costs and the usual risks. I'm curious to know if a project like this will fly Who knows maybe a few containers a year full of bikes can pay for some nice trips to finish off my Spanish skills Then he says it's nice to know there's a place called Eagle Liquidators that will repair their bikes and do regular on-site inspections and selections Which is an added value to the project and I would assume that Eagle liquidators who supply these containers can also supply a package

[21:45] Of spare parts with the deal by the way He says I did a quick Alibaba search to see what else is out there in the way of bikes inside Containers and I grabbed these two examples for a semi-filtered comparison, then he sends me two more links from Alibaba I checked them out and some of these containers come directly from Japan at 20 to 25 bucks a bike Anyway, dang Goyo finishes his email by saying at the very least The charitable crowd can offer a really big Santa sleigh of kids bikes for the price of a used car Meaning of course a container full which would be really great if the numbers work Yes, he said the poor kids will be really happy until they start crashing into stuff falling into holes breaking arms and teeth Etc, which is why you certainly couldn't do such a good deed up in the States because liability lawsuits and no deed going unpunished

[22:35] And all that whereas like you say Johnny down there in Latin America. There's no one to sue Well, thanks for that Don Goyo and looks like your heart's in the right place Want to give kids down here some very inexpensive Transportation that they never could get under wise that said let's quickly do some numbers and see if this bike container propositional fly Now by the photos you sent I can see they're packed into the container in three rows Assuming each bike is around five foot long. That would mean in a 20-foot container I have container they'd be four deep or around 240 bikes per half container meaning your normal 40 foot container would have eight deep or 480 bikes in it if you're watching this on YouTube, you'll see the photos So let's assume we're shipping a 40-foot container because it's much more economical than shipping a 20 footer

[23:28] so at 480 bikes in a container at 20 bucks a bike, that's 9600 bucks you'll pay just for the bikes and the shipping container from the US to pretty much anywhere in Central America It's gonna be around 1,500 bucks, which brings our total cost to around $11,100 now when they land at their latin country destination They'll end up in customs the adwana and pay anywhere from 5 to 20 percent import tax Let's use 10 percent and make it easy now. We're up to around 12,000 bucks Then they'll have to be shipped from the port unpacked cleaned up a bit dusted down retouched tested oiled, etc Now with such cheap labor down here, we can add maybe 500 bucks for that now

[24:16] Let's add rental of storage space and some miscellaneous unintended expenses Let's say another 500 that's a grand total of 13,000 bucks and let's divide that by the number of bikes 480 so to get those bikes to our final destination Will cost us around $27 each. Alright, like I mentioned you could get a brand new bike down here for under a hundred bucks Most parents can't afford that. So then what could parents possibly afford? I'd say maybe $35 for a bike and at a cost of bringing them in at 27 bucks That doesn't give you much margin or wiggle room to make any kind of substantial profit anyway So yes, the numbers seem to work but remember you'll have to have someone out there selling those bikes and spending the time just

[25:03] babysitting them as Potential clients dribble in and test them not to mention you just might have to register that company on the books and end up paying 10 12 15 even 20 percent EVA That's VAT tax on each one of those bikes if you're gonna follow the letter at a law anyway Which most people don't if so that'll add 5 to 10 bucks to the price of your bike just for the government share So in the end, it's looking more and more like a losing proposition Unless you truly are a benevolent gringo and want to ship those things in and not make a dime's profit Which I don't think Don Goyo had in mind at all though I could be wrong since he entitled his email a container full of cheap bikes a do-gooder's wet dream So yes, that's just more proof that you'd need boots on the ground down here before you think of starting a business

[25:54] For example in this case You could start by going on sites like olex.com and see what people are getting for used bikes Then with boots on the ground you check out some hole-in-the-wall bike repair shops where they're always selling some used stuff again It's all about getting your boots on the ground here and checking things out and why that expat concierge service is so valuable You start by doing a Skype with them showing pictures of exactly what you're talking about Have them do some scouting for you get some answers that way many if not most of your questions can get answered ahead of time Okay, that's said we're getting towards the end of the show and I've got an important announcement to make this show is going out on Friday October 28 that just gives you a couple days to sign up for my January 2017 expat insider seminar and still take advantage of the early bird discount, which is $500 per person on November 1st

[26:47] We're back to the regular price. I've got a few spots left Just go to www.thenewexpat.com click on Johnny's 2017 seminar link at the top of the page to sign up and get in on the early bird discount Times a-wasting check it out And of course if you're coming down do try to get an extra three or four days to take one of those famous John Galt pre or post seminar trips while down here do try to take advantage of all the boots on the ground Opportunities you can and you know those John Galt trips are just the thing and finally don't forget to check out my YouTube channel That's YouTube slash the expat files all one word And the advantage of that of course is to see exactly what I'm talking about in pictures and slides by the way Don't forget to subscribe. It's free

[27:35] This is the expat files living in Latin America if you want me to help you out with your own plan B Just schedule a one-on-one consult send me an email the expat files at gmail.com And if you want to learn how to move forward with your own plan B from right up there in the States go to www.xpatplanb.com and check out my three videos. See ya nos vemos