The steady increase of Asian manufacturers - Looking for New Markets

Last week the Wall Street Journal posted a really interesting graph on the front page that shows the size of the China manufacturing sector.  WSJ subscribers can read the entire article here.  The graph speaks a thousand words.

I don’t think it comes as any big surprise that Chinese manufacturing is increasing at such a huge rate. A walk down a Walmart aisle or a trip to the Apple store is about all the proof that you need.  Add to that the ongoing TV, blog and news commentary related to China’s recent moves to allow the Yuan to appreciate against the dollar.  Will it lead to a surge in U.S. manufacturing or a decrease in the trade deficit with China?  (Yuan is a unit of the Chinese currency the Renminbi) Only time will tell.

Being a a global e-commerce and global logistics blog, I’m less interested in discussing the trade deficit and more interested at looking at the major trends for trade routes and where all these Chinese manufactured goods are going, who is buying them and where are they being sold.  I also think there are a few new trends developing that people should be aware of.

• Asia to LA/Long-beach trade route will continue to grow.
• Asian manufacturers will enter the U.S. market.
• The middleman will be redefined.
• The difference between International shipping and cross-border e-commerce.

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When I think about business continuity I think about two things.  First, is dealing with unexpected surges in growth.  Second, dealing with an unforeseen disaster that takes your business offline for some amount of time.  These could be considered two sides of the same coin, dealing with success.

I recently posted a blog to Practical E-commerce that discusses how to deal with unexpected success.  Outsourced fulfillment and unexpected success.  I think the critical point that I wanted to get across, has to do with simple breakdowns in your supply chain that can cause major headaches.   The example of a large supplier shipment getting stuck in customs for a couple days and generating a massive back-order day is amazingly common and really needs to be planned for.  I won’t reiterate the entire article there; but, I recommend giving it a quick look to help you plan for success in your marketing and sales efforts.

Disaster Recovery  for your shipping infrastructure is probably not something you think about a lot.  Shipwire has had to.  Frequent readers of this blog will remember the multiple blog posts over the past few years about USPS API failures during the holiday season.  You can bet that after the first time we experienced that, we put in place some disaster recovery plans.

The Shipwire model allows merchants to place inventory in multiple global warehouses.  This has helped some of our UK merchants overcome natural and man-made disasters over the past year.  Here are a couple of examples:

1.  Royal mail (the UK national parcel carrier, think USPS in the UK) went on strike earlier this year.  I won’t bore you with details; but, Shipwire merchants were in better shape than most because we knew about the strike and were able to work out alternate plans.  (See here for our running blog on the Royal Mail Strike).  Additionally, many of our merchants had inventory in multiple warehouses.  We were able to re-route orders to non-UK facilities in a couple of limited cases where the buyers needed the packages and international shipping was an option.

2.  During the Icelandic volcano eruption a couple months back, air shipments were non-operational into and out of the UK.  Shipwire had a variety of foreign (non-UK) merchants with inventory in the UK that were able to continue selling in the UK because they were not reliant on international air shipments.

Having inventory in multiple warehouses is an amazing business continuity plan and gives your business lots of options in the event of a giant sales success or a business problem.

I wanted to share a really interesting e-mail that I got from one of our customers who runs the foremost Tenkara fly fishing website.  He is looking at Shipwire as a disaster recovery service because we can ship his inventory from multiple warehouses.

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Last week the super search brains at Google pushed out a new version of their industry leading search engine.  Nicknamed “Caffeine”, the rational for it was that content is exploding with the advent of the real-time web (Twitter, microblogging, video and location based services to name a few).  Google’s old engine reindexed the web every few weeks; but, it wasn’t fast enough.  So they jacked up the Caffeine load and sent it spinning on its merry way.  I for one was a bit nervous about this release for Shipwire’s SEO and did test it in the test Sandbox a few months ago.  I think results may actually be better for us with it’s release; but, only time will tell.  You can bet we’ll be trying to get as many inbound links as possible over the next few months.

If you know anything about SEO, read this and spend a minute commenting on this post and tell online retailers how to stay current and quickly post fresh content.

What does this mean for the small business online retailers? Candidly, I’m not entirely sure; but, I’m willing to take a few guesses.  As with all things SEO the impact will be felt depending on your level of SEO intelligence and your website’s capabilities.  The big change to the search algorithms has everything to do with Google being able to index new content faster and faster and make sense of the proliferation of content being generated by micro-blogging and shortened links.  I ask myself almost daily, what is the value of this twitter feed that flows like a river.  Do I pay attention to any of it other than which is directed @shipwire?  Some people I’m sure manage their RSS or Twitter feeds much better than me, so it looks more like a babbling brook (bad analogy on purpose) and less like a unfiltered river of nonsense.   If I’m wondering of the value, think about Google, they need to find value in this real-time web data, make sense of it and provide it to searchers.  When an idea or webpage “goes viral” Google can’t wait two weeks to give it relevance; they want to give it relevance much sooner.

Retailers, its time to get fresh.  What this means is that fresh content is going to mean more and more.  So, blogging and micro-blogging will likely become more and more important to keeping your website fresh.  For some retailers that are constantly updating their product catalog, then they may be at an advantage.  If your product catalog doesn’t turn over much or you don’t update any pages of your website with much frequency; then perhaps it’s time to look for simple ways to do that.  If you really like all that free organic search traffic from the great Google water-hose, then it’s time to think of fast ways to get fresh.  Here are some thoughts.

• Product videos:  Google owns YouTube, you can bet that it will be indexing the bazillions of new user generated videos pretty often.  Even if your product videos are utter crud; probably good to get them up there.  One of my favorite e-commerce bloggers is John over at ColderICE (Internet Commerce Education).  He has a hilarious story of getting over 100K views on a video about folding a bandana.  The video is pretty bad; and he still got 100K views.  That to me is fantastic and proves the point that you need to be on the interwebs like YouTube
• Blog your deals. Blogging is easy and keeps your website fresh.  put your blog in a subdirectory (http://www.shipwire.com/blog) of your website not a subdomain (not http://blog.shipwire.com) to increase relevance.  Don’t have time to blog with a traditional blog like Google Blogger, Wordpress or TypePad, then set up a Tumbler account and just e-mail some content in once in a while.  Generate fresh content and link to your own products to keep them “fresh”
• Tweet already.  Set up a twitter account and just tweet your deals or your favorite website links.  Even if you don’t have followers, you can bet that Google is indexing Twitter more and more now that they spent something like $25M to get access to the Twitter post stream.
• Forums and community sites.  Find a few forums that discuss your product vertical, or put up a forum on your website.  In Internet years these may seem pretty old school; but, the Google release on Caffeine specifically mentioned forum content as something that is fresh, relevant and they want to index faster.  Before you go nuts in a forum though learn the etiquette of the community and just respond to a few recent forum posts.  Don’t embed lots of links in it; just give yourself a respectable link or two in your signature if the forum allows it.
• Photos.  Not sure about this one; but, I’m betting that if Google is indexing video then they will likely be trying to also index all the public photos on locations like Picassa (Google owned) or Flicker.  Maybe your products could use their own photo album with lots of links to your site?  I know that I for one do search for Images in Google about 5% of my searches.  (Where do you think all our snappy blog images come from).

Geek out on Caffeine.  The Google team put out some metrics on what Caffeine will index.  It’s pretty impressive.  “Caffeine lets us index web pages on an enormous scale. In fact, every second Caffeine processes hundreds of thousands of pages in parallel. If this were a pile of paper it would grow three miles taller every second. Caffeine takes up nearly 100 million gigabytes of storage in one database and adds new information at a rate of hundreds of thousands of gigabytes per day. You would need 625,000 of the largest iPods to store that much information; if these were stacked end-to-end they would go for more than 40 miles.”  Wow!  100Million GB in one database,  that is a lot of tweets.

What do you think? Add a comment if you have another quick thing that online retailers can do to quickly keep their website content fresh and stay up on Caffeine.

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One of our merchants, Keetsa, is in the news again! We love to see our merchants being mentioned in the news, especially when it is good news. Kate Milani of the Wall Street Journal posted an article called “Three Best Ways to Export.” Milani says “International customers can be a source of growth that businesses can’t find on U.S. soil when domestic spending slows.” She highlights Keetsa and it’s phenomenal growth to their willingness to listen to their customers and begin exporting.  We couldn’t agree more!

Keetsa began doing business in August of 2007, one year later they began exporting, and today they have grown to “six locations, 15 employees and about 40 distributors,” per Milani’s article.  What has allowed Keetsa to grow their business so quickly and successfully? Their success is surely due to the talent within the company, but Keetsa also has something powerful behind their business model… the only thing that wasn’t mentioned in Milani’s article… Keetsa uses Shipwire to take care of all of their overseas storage and shipping needs. Joe Alexander, founder of Keetsa, tells us “Exporting might seem daunting at first, but it opens up an entire market… Don’t be intimidated.” He is certainly taking his own advice and smiling all the way to the bank. And we here at Shipwire are smiling with him.

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Nate Gilmore, our VP of Marketing, has attended the Toy Fair in New York held at the Jarvis Center 2 years in a row and now he has twice the information to share with us! While attending the 2009 Toy Fair, Nate made sure to not only play with as many toys as possible, but also to get a feel for how the attending toy retailers were managing their business and what their concerns were when it comes to storage and shipping logistics.  Some important concerns to note from 2009 were (1) “Toy retailers buying smaller amounts, requesting more frequent resupply and not wanting to take on the risk of inventory, (2) Toy packaging and its impact on fulfillment, and (3) Manufacturer drop ship fulfillment options for Toy makers.”

We all know 2009 was a rough year for many due to the economy, so naturally toy retailers were focusing on keeping inventory levels in line with sales (rather than overstocking), optimum packaging options to save money, and also exploring different shipping options such as drop shipping. Read more about Nate’s adventures at the 2009 Toy Fair here.

The concerns from 2009 were still prevalent in 2010, especially interest in Drop Shipping, but according to Nate (who apparently did not have as much time to play with as many toys this year for he talked to 100 toy retailers!) we also see a trend to want to automate processes more, make the shipping process easier for both merchant and consumer, and to grow sales by expanding overseas fulfillment. It’s clear that although there are hurdles to be faced, toy retailers want to address them as well as continue to grow their businesses in a more efficient and cost saving manner. The economy has taught all of us to be frugal again, waste less, and save more. Which is great… and will no doubt lead to more play time. To read Nate’s article on the 2010 Toy Fair go here. If you are a toy retailer and are interested in trying Shipwire out, sign up for a Free Trial here.

To read more from the man himself, go to Nate’s blogs on the 2009 Toy Fair and the 2010 Toy Fair.

Interested in meeting Nate next year? Click below to save the date for Toy Fair 2011:

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Shipwire has always made it easy to ship goods back and forth between the US and Canada, but it just got even easier.  For those merchants in the US or Canada that need to ship freight quantities across the border we made it much easier by upgrading our Shipwire Merchant Freight options.

Just key in any large freight order using our Ship from Warehouse tool and you will see “Merchant Freight” quoted.  When satisfied with the quote, select the option and your inventory will be prepped and shipped.   Shipwire will do the rest from booking with the carrier, to preparing your Bill of Lading.   And as an added bonus this even works via our API so your shopping cart can feature freight shipping quotes.

Couple limitations you should know about.  The freight quotes are for the transportation and not the customs and duties brokerages that you may be subject to.  It is recommended that you confirm your Canadian and/or US business registrations and Tax ID’s before using cross-border merchant freight to limit any delays.

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