# 9 – MFG, IMPORT, # 9 – MFG, IMPORT, EXPORTEXPORT

Production CostingsProduction Costings Job CostsJob Costs OverheadsOverheads Allocating CostsAllocating Costs Inventory ControlInventory Control Financing InvoicesFinancing Invoices Getting Supplier DealsGetting Supplier Deals OutsourcingOutsourcing ImportsImports

Assembly = Manufacturing, TooAssembly = Manufacturing, Too !

MANUFACTURINGMANUFACTURING

““It doesn’t matter what It doesn’t matter what you produce. And it’s not you produce. And it’s not just about cranking out just about cranking out volumes. You need to volumes. You need to make money on each make money on each item, each production item, each production

batch. That means batch. That means CONTROLLING CONTROLLING EVERYTHING.”EVERYTHING.”

THREE TYPES OF THREE TYPES OF COSTS COSTS

FIXED COSTS. Pay for these FIXED COSTS. Pay for these whether you produce or not.whether you produce or not.1.1. Rent Rent 2.2. Basic services, Basic services,

telephone, etctelephone, etc3.3. Management salariesManagement salaries4.4. Heat, electricityHeat, electricity5.5. Permits, licensesPermits, licenses6.6. Other Other

THREE TYPES OF THREE TYPES OF COSTS COSTS

SEMI VARIABLE – Fixed costs SEMI VARIABLE – Fixed costs that increase with level of that increase with level of activity.activity.1.1. Electricity Electricity 2.2. Heating Heating 3.3. Telephone Telephone 4.4. Promotion Promotion 5.5. Staff Staff 6.6. Other Other

THREE TYPES OF THREE TYPES OF COSTS COSTS

VARIABLE COSTS. VARIABLE COSTS. Directly tied into Directly tied into production.production.1.1. MaterialsMaterials2.2. PartsParts3.3. ShippingShipping4.4. Packaging, suppliesPackaging, supplies5.5. Subcontractors, Subcontractors,

outsourcingoutsourcing6.6. Other Other

INVENTORY INVENTORY Control costs and quantitiesControl costs and quantities Average pricingAverage pricing Last in first outLast in first out First in first outFirst in first out Physical countPhysical count Get rid of obsolete itemsGet rid of obsolete items Restocking with suppliersRestocking with suppliers Security Security

BILL OF MATERIALBILL OF MATERIALEverything you produce, either one Everything you produce, either one item, or a batch, should have a BILL OF item, or a batch, should have a BILL OF MATERIAL prepared in advanceMATERIAL prepared in advanceCost of materialsCost of materialsCost of labourCost of labourCost of packagingCost of packagingAllocation of fixed and semi variable Allocation of fixed and semi variable expensesexpensesWHY? Need to know your costs to set WHY? Need to know your costs to set selling priceselling price

SUPPLIERS SUPPLIERS Keep suppliers ‘honest’Keep suppliers ‘honest’ Competitive pricingCompetitive pricing Best terms, discountsBest terms, discounts Consignment if possibleConsignment if possible Double check their invoicingDouble check their invoicing Check qualityCheck quality Check quantitiesCheck quantities Be an aware buyerBe an aware buyer

A TIP ON SELLING A TIP ON SELLING PRICE PRICE Be competitive, but…..Be competitive, but…..

Never under-sell yourselfNever under-sell yourself Never give your product / Never give your product /

service away too cheapservice away too cheap Recover all your costs and Recover all your costs and

expenses allocated – your expenses allocated – your Bill of Material and Job Bill of Material and Job CostingCosting

Be confident in what you Be confident in what you do!do!

IMPORTING (1)IMPORTING (1) Find a supplierFind a supplier1.1. Trade shows, Trade shows,

gift shows gift shows 2.2. Internet searchInternet search3.3. Alibaba.comAlibaba.com4.4. Dhgate.comDhgate.com5.5. Made-in-Made-in-

china.comchina.com6.6. Kompass Kompass 7.7. Trade Trade

magazinesmagazines

Contact and Contact and gage response, gage response, communicationscommunications

Import Import regulations regulations applicable?applicable?

Order samplesOrder samples Establish Establish

relationship with relationship with supplier(s) supplier(s)

IMPORTING (2)IMPORTING (2)

““Importing from China Importing from China interested me. The best interested me. The best thing I ever did was call thing I ever did was call

and speak with the and speak with the suppliers, regularly. I suppliers, regularly. I became a customer became a customer

instead of just a number.”instead of just a number.”

IMPORTING (3) IMPORTING (3) Understand Understand

terms and terms and paymentpayment

Find quality Find quality independent independent inspector thereinspector there

Clearing houseClearing house Customs brokerCustoms broker Transport Transport

companycompany Import # Import #

CanadaCanada

Get certificate of Get certificate of genuitygenuity

Direct from Direct from source, or third source, or third party?party?

Check import Check import dutiesduties

Telephone themTelephone them Set up secured Set up secured

payment payment (PayPal)(PayPal)

Order aheadOrder ahead

IMPORTING (4)IMPORTING (4)

““I ordered black ceramic I ordered black ceramic tiles. I got brown, and half tiles. I got brown, and half

were broken. Badly were broken. Badly packaged. I had already packaged. I had already

paid. Next time, I hired an paid. Next time, I hired an inspection company to inspection company to

visit the supplier. What a visit the supplier. What a difference!”difference!”

EXPORTING EXPORTING Identify a target region or Identify a target region or

city in a target country. GET city in a target country. GET SPECIFIC.SPECIFIC.

Canadian Trade ConsulatesCanadian Trade Consulates Internet searchesInternet searches What competitors are doingWhat competitors are doing Distributors Distributors Build relationshipsBuild relationships Be clear on terms, product Be clear on terms, product

specs specs Trial orders. GET PAID FIRST, Trial orders. GET PAID FIRST,

ALWAYSALWAYS

QUOTE FROM “VOYAGES QUOTE FROM “VOYAGES OF SINBAD” MOVIE OF SINBAD” MOVIE

““I know you are going I know you are going on a long voyage. But on a long voyage. But

remember, trust in remember, trust in Allah, but always tie Allah, but always tie

up your camel.”up your camel.”

OUTSOURCING OUTSOURCING Downloading Downloading

part of your part of your business, filling business, filling needs you needs you cannot handlecannot handle

ProductionProduction CertificationCertification RegulationsRegulations Packaging Packaging

Production Production designdesign

BrandingBranding DistributionDistribution Raw materials or Raw materials or

parts sourcingparts sourcing Always specify Always specify

terms, quality, terms, quality, specifications, specifications, costs, timing, costs, timing, returnsreturns

ASSUME ASSUME NOTHINGNOTHING

Importing, exporting, Importing, exporting, outsourcing…outsourcing…TAKE TAKE

BABY STEPS, AND BE BABY STEPS, AND BE CAUTIOUSCAUTIOUS

““I have had many I have had many problems in my life, problems in my life,

but most of them have but most of them have never happened.”never happened.”

FOR NEXT WEEK..FOR NEXT WEEK..

If you are importing, If you are importing, exporting or outsourcing, exporting or outsourcing, do a test case re a sample do a test case re a sample product, parts or service.product, parts or service.

If you are manufacturing, If you are manufacturing, do up a Bill of Materialdo up a Bill of Material