12
Aug
08

Message To The World

I’m writing this post because I’m a firm believer in the message that Ben Schaffer from Bulletproof Automotive is spreading. He provided us all with a very helpful document, in wich he explains where to look for when buying stuff from Japan

You can donwload the article here or read it when you press continue to read below this post.

I will let Ben do the talking… (remember these are Ben’s words not mine)

The original blog post is as follows:

Why am I writing this? I’m disappointed by the massive number of enthusiasts out there being misled by parts suppliers. I want everyone to have the facts before they make a special order purchase that is sourced from Japan. Buy from whoever is truly the best for your needs. Don’t just believe what you hear from your local supplier; understand how to call out BS. Don’t even believe blindly what I tell you as a parts supplier (if you’re buying from my companies)…feel free to challenge me with the right questions if you’re buying from me. I expect as much.

What is unique about this post? I’m going to spill a lot of behind the scenes info and secrets about how an importing company works (relative to the customer’s order and experience). Although it is the industry standard to not talk in depth about the behind the scenes details (the less informed the client is, the more BS the parts supplier can get away with to keep the sale), in this buying guide I will shed light on the secrets and potential pitfalls.

What is my goal of this post? I want everyone out there to be better informed. Its as simple as that. If people are better informed, they will make better decisions. If people are better informed, there will be less companies scamming people and less horror stories in the industry that we all hear about (parts took 8+ months to get, vendor stole customers money, etc) which reduces consumer confidence about buying imported parts.

Lets begin!

Facts helpful to know about your parts supplier:

1. How often are they shipping from Japan to the US? Is that an average, or is it a repeating system that is always consistent? How do they do it? Is it a believable answer? (size them up and see if they are capable to doing what they claim)

2. What method are they shipping from Japan to the US? Is it Air or Ocean?

3.  With the brand you are looking to buy, is the supplier directly buying from the manufacturer?

4. Ask them to explain what their estimated lead-time/wait time is for your order. Ask them to put it in writing. Ask them to break down how they reached that estimate. Specifically ask them: How long does it take for the supplier in Japan to produce the part? How long does it take for you to ship your container or air shipment once you receive the part from the supplier? How long does the shipping transit time take (including customs on both ends)? Production time and shipping delays because of the supplier holding their containers are two HUGE factors that can make the lead-time change drastically.

Why these questions?- An in depth explanation point by point

Q1 – Most parts are shipped by ocean freight (exceptions are small items like brake components, lights, bulbs, accessories which sometimes are shipped air depending on the supplier’s preferences). On these ocean freight shipments, they are shipped by container. Most importers are small shops which need to fill the container before they ship (otherwise they are paying for empty space which they don’t usually do, or they are paying for LCL which means loose cargo shipments and those are excessively expensive making it unpopular amongst importers).

So in Q1 what you’re really finding out is…what is their process? If they are doing full containers, they are almost guaranteed to be waiting to fill the container before they ship. This situation is usually what leads to upset customers and horrific leadtimes (the stories you hear of parts taking 6+ months to get). Fact is that it is very hard for an importer in this industry to fill containers quickly, meaning they cant ship quickly and parts sit in Japan in many cases for months before actually being shipped. The alternative is the supplier pays for LCL shipping at a significantly increased cost or ships semi-empty containers at possibly an even higher cost. In short, you want to know with some assurance how long is the worst case your order will sit in a warehouse in Japan waiting for a shipment to leave…because it could be (and surprisingly often is) many months.

(So you might ask, how I solved this for my clients? 3 years ago I started a freight division of my business specializing in shipping ocean freight from Japan to Los Angeles. I’ve become successful at that business because of my assurance to my wholesale freight clients that I ship containers (whether full or empty) every two weeks. Because of our success with this freight business, along with our success as a parts supplier, we’re able to move enough volume to reliably ship every two weeks and we dont worry about waiting to fill containers and holding up orders. I started our importing in 2001 with containers every 2 months, by 2004 it was containers every 1 month, by 2005/6 it has been containers every 2 weeks and sometimes even faster.)

Q2 – If it is ocean freight, Q1 is much more relevant. If it is Air freight, expect a huge shipping expense on any large sized items because airlines charge a ton of money for “dimensional weight”. Example: A bumper may cost $1000 extra to ship by Air vs. Ocean.

(my solution – I don’t do air freight unless it is by specific customer request and at additional expense. Even in those cases I still advise my clients against it. Because we ship by ocean freight so often and fast, it allows more savings to our clients and allows us to price match any company in any circumstance without the need for air shipping)

Q3 – This issue of how they are buying has a couple of effects. First off, money must change hands and communication must be made. When your shop is buying the parts, if they need middle men to get the product then that slows down communication, requires extra shipments in Japan to get the product from factory to their warehouse, and also requires two routes of bank wires (vendor to middle man and middle man to factory). A bank wire in itself takes a couple of days, communication often takes longer. If there are many parties involved expect possibly multiple weeks of extra delays.

(What do I do? – For our main product lines we buy direct and we keep a balance of money on account with the vendor. This eliminates any waiting for a bank wire and any waiting for communication. An email with the order is sent same day to our supplier and the order starts being made instantly (routine process allows this efficiency). In some cases we dont buy direct (we offer about 250 companies from Japan, some very obscure brands included, we’re direct with about 50). When not direct, it takes usually an extra week with our process due to bank wires and communication. Normally it would take longer than one week, but because we have staff in Japan we can do it faster than the usual situation.)

Q4 – This is the big one…this is the one where most clients are misled and what usually leads to bad experiences and bad rumors.

First off, any company saying that you will have your product in 4 weeks or less and it’s coming by ocean shipping is lying 99.9% of the time).

Here’s how you can factually understand lead-time in a clear and accurate breakdown of steps

Step 1 – you place order with your supplier (order doesn’t start until you pay the supplier)

Step 2 – Your supplier processes order with factory in Japan:

+1 week if they need to do bank wire to supplier (fastest being 2-3 days)

+1 week if they need to buy from a middle man (fastest being 2-3 days)

+ more time if anyone in that communication process is slow to respond. (this is one area where delays can happen)

Step 3 – Your parts are being made in Japan

With the exception of major companies like HKS (which there’s no need to import because of HKS national distribution centers), almost no company keeps stock of their parts in Japan. FYI – Japan invented the JIT (just in time) inventory system, now popular in businesses around the world.

+ more time for the factory to build your parts. Most companies average 4 weeks. Fast companies can do it in 1-2 weeks (but very rare), some companies take 2-3 months…and in rare cases even a little more. Ask your supplier for average lead-times for the same brand and same part you’re requesting (only reliable if they have sold it before). Use your best judgment to decide if that information is reliable.

Step 4 – Your parts are ready in Japan at the factory and ship to your supplier’s collection point

+ a couple of days to ship to your supplier if buying direct

+ a few more days if shipping to middle man first and then your supplier

Step 5 – Your parts are at a collection facility in Japan, waiting for shipping

+ more time depending on how fast your supplier has ocean or air shipments leaving Japan. Know your supplier well, this is the biggest area for major delays.

Step 6 – Your parts are en-route

If air shipping, approximately a week from Japan to USA because of customs

If ocean shipping, approximately 4 weeks (2 weeks on the water and a week on each end for customs/loading/unloading)

Step 7 – Your parts arrive in USA

+ time for your supplier to receive parts, check inventory, repack and ship (If a big and efficient company with multiple warehouse staff, possibly 2-3 days, if a small shop this could take 1-3 weeks to turn around a full container shipment)

There you have it. You now have the insider set of tools you need to calculate your own lead-time and to call out BS when a supplier tells you a nonsense lead-time which you now can factually check to see if it is real or not.

Lastly, a separate but very important topic – Understand the financial stability of the company you are buying from. Once you prepay them for your order, if they go out of business you’re pretty much screwed (look online for stories of this happening over and over). The average life of a company in this industry is only 1-2 years (making your odds a bit dangerous). Try to understand the supplier’s history, evaluate their stability, and if you can even quiz them about their financial strength because that would be another layer of security. (How I answer this question for my business – I’ve been in business since 2000, making my business one of the oldest in the industry for what we do. You can see our inventory on our Bulletproof website, we have no bank loans, no credit card loans, we own all of our inventory (and cars) in full and we even have money kept on account with most suppliers in Japan. If there was ever any financial problem with my business, I could liquidate my inventory, get lines of credit,  etc so there is a long runway of options before any collapse that would endanger my client’s prepaid funds)

You should ask as many questions as you can to your supplier and evaluate their answers carefully. If the sales rep you’re talking to cant answer the questions adequately, ask to speak to a manager or owner. Be patient and wait until your questions have been answered to your satisfaction. If your supplier has your best interests in mind, they will answer your questions accurately and quote you a fair lead-time and be able to explain/justify it (if they are really smart, they will add a couple of weeks of padding to their quote and be able to beat their estimate by delivering you parts faster than you expected). If your supplier has their best interests in mind rather than yours, they will quote you the most optimistic lead-time possible (usually 4-8 weeks is the standard BS answer), try to close you on the sale, take your money and then deliver the parts either late or VERY late. This gets them your business, locks you in to the order and after that most shops really don’t care what happens because they are so focused on just closing that sale.

I’ve spent a good chunk of my life learning these systems in great detail, refining them, trying to educate my clients and trying to beat expectations at a higher and higher percentage of our client’s orders. This post is not supposed to be about my business however. I encourage every buyer to understand their options. I just want smart buyers that don’t get burnt by the latest overly aggressive shop to lie to them and take their money. Putting the power into the customer’s hands can ensure that people are more confident buying Japanese tuning parts because they understand the process. That helps not just the customer, but the companies in Japan making the parts and the entire industry as a whole.

Understand the process. Understand your supplier. Don’t get burned. The reality is that there are far more dishonest companies out there than honest companies. If you don’t do your homework, don’t expect your supplier to do it for you. Most shops just want your money right now and that’s it, they’ll say what they need to say to close the deal. It is your responsibility to ask the right questions, to test them, to make sure you can believe their answers and to make the best decision with who you want to buy from.

I would encourage two things of you all reading this:

1. Spread this everywhere you can, I want more people in this industry to be better informed. Put this on message boards, on other blogs, email it to your friends…whatever you need to do to avoid the next person being let down or ripped off.

2. Feel free to ask me questions in the comments section of this blog. I’ll do my best to answer them all. I wrote this post in 30 minutes, it may need more detail or refinement in some areas. So feel free to ask anything you feel needs answers or more clarification.  This is all done for your benefit to educate and inform.

Lets keep this industry and passion for tuning cars alive by spreading informaton and further evolving the ethics and understanding out there!

 

Advertisements

1 Response to “Message To The World”


  1. 1 charcoalx
    12/09/2008 at 07:41

    fantastic info inside the post. thanks!


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: