#426 – Navigating High Returns and Tariffs: E-Commerce Strategies with Shan Shan Fu
What if you could transform your career from tech to e-commerce and redefine the meaning of freedom income? Discover the inspiring story of Shan Shan Fu, a former tech professional who found her calling in online retail. From navigating the turbulent waters of PPE sales during the pandemic to launching a flourishing clothing line on Amazon, Shan Shan opens up about her journey, sharing insights on managing high return rates and low margins in the fashion industry. With the looming threat of new tariffs, we explore innovative strategies to ensure profitability and growth, all while discussing the lifestyle benefits of remote work from stunning locations like Medellin, Colombia.
Join us as we explore the revolutionary concept of Kindred, an initiative that turns home-sharing on its head, offering people the chance to live globally by exchanging home credits. Our discussion highlights Austin, Texas, as a vibrant hub for internet marketing and gastronomy, where Michelin-starred dining is now an exciting feature. We dive into how platforms like YouTube have been invaluable for self-education, enabling entrepreneurs like Shan Shan to stay ahead in rapidly changing e-commerce landscapes.
In our forward-looking discussions, we tackle the exciting potential of AI in product development and marketing, where technology is reshaping how products are visualized and sold. Shan Shan shares her approach to continuous innovation, emphasizing the importance of launching new products and optimizing supply chains by exploring manufacturing opportunities in places like Vietnam. Don’t miss this episode packed with practical advice and inspiration for anyone navigating the fast-paced world of selling on Amazon.
In episode 426 of the AM/PM Podcast, Kevin and Shan Shan discuss:
- 01:00 – Discovering Success With Shan Shan Fu
- 04:01 – Defining Freedom Income vs Passive Income
- 08:18 – Entrepreneur Travels With Kindred Program
- 08:53 – Global Home Sharing and Foodie Explorations
- 11:57 – Fashion Business and International Manufacturing
- 12:47 – Success Through Strategic Relationships
- 22:27 – Navigating Tariffs in Clothing Industry
- 28:44 – Navigating Tariffs on Imported Goods
- 30:35 – E-Commerce Product Ideation and Expansion
- 33:42 – Effectively Targeting Female Influencers
- 37:54 – AI-Powered Product Development and Expansion
- 39:44 – Launching New Products for Growth
- 44:05 – Kevin King’s Parting Shot
Transcript
Kevin King:
Welcome to episode 426 of the AM/PM Podcast. Got a great guest for you this week. I’m your host, Kevin King, and with me today is Shan Shan Fu. Shan Shan sells clothing. She got her break during COVID selling PPE, selling a cloth mask, did really well and pivoted into the clothing. So we talk a lot about selling clothing and the return rates and dealing with the new de minimis rules and the new tariffs and everything that’s going on that Trump’s going to be implementing next month, in January, and we talk a little bit of strategy about how she might be able to mitigate some of that and might be able to help survive in an industry where there’s low margins and clothing and high return rates. I think you’re gonna really enjoy this episode. I hope you’re having a great holiday selling season. Here is Shan Shan. Welcome to the AM/PM Podcast. How are you doing, Shan Shan?
Shan Shan:
Hi, I’m good Kevin.
Kevin King:
It’s good to see you again, I think where did we meet first time? Was it in Paris? I think.
Shan Shan:
It was in a Paris mansion.
Kevin King:
A castle, actually a castle, that’s right. Howard Tye’s Elite Seller Society mastermind a few years ago in a mansion in Paris. That’s right. And I remember you were the one that was always sitting close to the front asking all the questions. You’re like. You’re the ones like I got a question. I got a question. I got a question. That was you right.
Shan Shan:
Yes, I was very curious.
Kevin King:
You just started about around not too long before that, right?
Shan Shan:
I started in 2020 during the pandemic.
Kevin King:
So what were you doing before this whole Amazon venture?
Shan Shan:
I was working in tech at a consulting firm. We were a company that’s famous for launching Advil.com, Viagra.com.
Kevin King:
Oh yeah.
Shan Shan:
Yeah, and it was great, but it wasn’t. I was looking for something that had more of a passive income, because I’m a huge nerd about passive income, and then, when the pandemic hit, I thought, well, this is perfect, I should start an e-commerce company.
Kevin King:
So what were you doing in the IT? Were you coding, or were you doing marketing or business development? What were you doing?
Shan Shan:
Yeah, BD. So my job was to go to the Fortune 500 companies and get the contract signed.
Kevin King:
And this is for developing a website?
Shan Shan:
Yeah.
Kevin King:
Or doing a whole marketing campaign, or what? Can you tell me a little bit more detail?
Shan Shan:
Websites, IT integrations, pretty much anything to do with IT. It was an IT consulting firm.
Kevin King:
And so then you said you’ve always had a desire to do passive income. Is that because you’ve wanted to travel or something, or what was driving that desire?
Shan Shan:
Yeah, it just passive income. Life is just what I find a much better life. I was at a e-commerce happy hour for the Million Dollar Seller Club and I remember looking around and everybody was so happy. Every founder there was so happy. I feel like that’s because we’re all running passive income. You could travel, you pick the times that you work and there’s hard moments and easy moments, but it’s all your choice. And when you work for someone else, there’s so much less control you have. Sometimes clients will be mad at me, but there was nothing I could do to fix it, so I had no control over anything.
Kevin King:
I like to define it a little bit, maybe differently. So I don’t think what we do, selling on Amazon and e-commerce, is passive income. I think it’s freedom income. I agree with you 100% that everybody in there is happy and I always like to say that, especially Amazon entrepreneurs that are successful, they work hard and they play hard. They have the money to spend, so they’re willing to do the nice dinners, the nice events, the nice trips, but they’re also working hard. Now some of them may have a team, so they’re not necessarily. That doesn’t mean they’re in the weeds, so they have a team doing a lot of it. But I don’t think it’s passive income. I think it’s freedom income. You’re not working for someone else, you’re calling the shots, you’re doing what you want. If you want to take Friday off, you take Friday off. You want to go managing in Columbia, you just pack up and go to managing Columbia like you are right now. But passive income to me would be more like you know, like my buddy, like a Manny that sold Helium 10 for gazillions of dollars and now all he does is invest and he, you know he’ll buy Bitcoin or invest in a startup company, or he invest in different things and he does nothing other than sit back and wait. To me, that’s more of a passive income. Would you agree more with that description than say we have more of a freedom? Or you still think it’s what you do. You don’t have to do much. It’s the way you set up your business. It’s totally passive.
Shan Shan:
I think you’re right, Kevin, because I’m definitely working. And I work, you know, I work sometimes late in the night, because that’s when Asia wakes up. Um, so it’s not passive in the sense that I am working, but it’s. It’s just more control, it’s more freedom. I get to do what I want to do, like being Medellin right now.
Kevin King:
That’s exactly right.
Kevin King:
So how’s Medellin right now? By the way?
Shan Shan:
Oh it’s great. I mean, I went to a Michelin. It’s Michelin star in the US, I don’t think it’s Michelin star here, but it’s the same brand called Alice Yellow, and it was this gorgeous, you know 17 course meal and it was only $200 USD for two people.
Kevin King:
That’s a half a month’s wage for the average Colombian. The average Colombian, I think, makes in Colombia. I know all this because I used to be married to a Colombian. I’ve been to Colombia a lot. I don’t know what it is exactly today, but a few so it could have changed a little bit but a few years ago, the median salary was about the equivalent of $500 US per month in Colombia, and that’s for a six-day, 60-hour work week.
Shan Shan:
Oh my gosh.
Kevin King:
Even people in the banks that work in banking jobs, or lawyers, they might be at $1,000 a month. And then there is a class in Columbia that does make very good money. Some of them are involved in nefarious things. Some of them own a lot of businesses that are aimed at the tourist market and stuff, so there are people that do very well in Columbia, but the average person that you’re seeing on the street when you go out is making less than $1,000 a month, and most of them the people that are cleaning your Airbnb or your hotel or wherever you’re staying are in that $500 to $700 probably range per month, but that’s cool. But Medellin, though, has a pocket there, and I know some of the locals are not so happy because it’s become a huge nomadic destination. There’s a huge pocket there of people that move there because they love that everything is cheaper and they also like the Medellin. For those of you that don’t know it, some people call it Medellin, it’s two L’s, but they don’t know how to pronounce it. It’s called Medellin. It’s up in the mountains. It’s about what? 4,000 feet up or 3,000, 4,000 feet up elevation, and it’s a really cool little city. It’s Pablo Escobar’s old stomping grounds that’s what it’s famous for, but they’ve really cleaned it up. But it’s become a huge destination for e-commerce, entrepreneurs and digital nomads. Have you seen that there? Where you’re staying? Is there a huge community of them?
Shan Shan:
I have not met any locals yet, but I see what you see, which is that most people are kind of local, but then you’ll hear English and I’ll hear American accents, so there’s definitely a lot of X spots here.
Kevin King:
Yeah, yeah, Medellin, it’s extremely popular for it. I know a couple people in the Amazon space that actually are based there, that base their whole operations there. They just they love that culture. It’s a cool culture. So where has your travels taken you from as being an entrepreneur? I know I saw you in Paris. I saw you in New York now you’re managing what? Where have you been able to go? uh, as a result, of having this freedom business?
Shan Shan:
So I just um came from San Diego, Chile, uh-huh, and I’m about to go to Carthagena. Um, I went to Austin this year. I went to Montreal um, I’ve basically lived in New York for five months for free this year, living in like beautiful apartments using an app called Kindred. It’s like a startup where you can live anywhere you want in the world and it costs nothing but credits, and you get credits by renting out your home. So my home is in Miami. So by renting out my home, getting credits, I can live anywhere in the world for free in like nice apartments.
Kevin King:
Oh wow. So it’s kind of like a barter system, like a trade trading barter system.
Shan Shan:
Yeah, exactly.
Kevin King:
Huh, I never heard of it. Kindred K-I-N-D-R-E-D.
Shan Shan:
Livekindred.com.
Kevin King:
Oh, livekindredcom. Okay, so you were. So now, now, now, I’m upset. You were in Austin and you didn’t even reach out. I’ve been in Austin for 30-something years.
Shan Shan:
Oh, I didn’t know you lived there.
Kevin King:
Yeah, yeah, I live in Austin. There’s a huge internet marketing community in Austin, Probably, I like to say you know, Silicon Valley is known for computers and that’s where all the high-tech computers, headquarters of the computer world, headquarters of computing science. Austin would be probably the world headquarters of internet marketing. There’s such a huge community here. It’s not the biggest place for Amazon sellers New York or Miami New York, especially because of Brooklyn or Miami, probably has a few more in the US, but Austin is really cool. I don’t know how much you got involved in going to the internet marketing party or any of that kind of stuff that happens here in Austin, but it’s every single month in Austin. It brings out a couple hundred different people from Facebook and Instagram and all this different stuff. There’s a ton of that here.
Shan Shan:
Well, I actually want to go to Austin more. I have some friends there. I will probably go a few times a year, so next time I’ll definitely hit you up.
Kevin King:
There you go and I’ll take you to a restaurant that’s better than the one you went to in Medellin. I’ll take you. If you like Michelin star and you like good food, I’ll show you some good food in Austin. We just got Michelin stars for the first time here in Austin. Michelin stars most people don’t realize this that you actually have to pay in the US, outside of Europe, parts of Europe, you actually have to pay to get Michelin stars. So what happens is in Europe they give them basically for free. But in the US for the longest time only Los Angeles, San Francisco, New York and Chicago had Michelin star rated restaurants. And then just recently Florida’s tourism board said, hey, we want Michelin star restaurants too. So they paid to have Tampa, Miami and Orlando rated. So now there’s Michelin star restaurants in Florida, and Texas did the same thing with Sallas, San Antonio, Austin and Houston and we just they just came, they just announced them like two weeks ago here in Austin and I are here in Texas and Austin had seven out of 15 in Texas. So Austin’s definitely a foodie city as we have the most, uh, Michelin star restaurants uh, in in the state for sure.
Shan Shan:
Amazing. I’m excited to check it out. Thanks, Kevin.
Kevin King:
Sure so. So when you got into e-commerce, you said you got into in COVID. Uh, how did you learn what, what? Where did you watch YouTube videos? Did you take a course from somebody? How did you actually learn the basics to get going?
Shan Shan:
I really just watched YouTube videos you can learn anything on YouTube these days and I watched hundreds. What I would do during the pandemic is I would put them on the background as I’m cooking or whatever, and so even if you don’t hear everything, you still absorb stuff. And I did that just nonstop, like 24/7 I had in the background. Eventually, my mindset started changing. As I was hearing more and more, I started understanding the lingo. I call this passive learning, where you’re learning and you’re not. You know, but you’re not like dedicated, right, it’s not like an MBA, but you’re still learning. And I started understanding lingo. I started understanding the problems, and then I just didn’t have a product. That was my only problem. So when the pandemic hit and everybody was short on face masks, that’s when I was like, okay, that’s my first product, and then I just did it.
Kevin King:
Everybody and their brother was jumping into PPE and face mask and everything. What did you do because you did very well with it? Were you right place, right time? Or did you do something differently in your differentiation, or what did you do that led to your success with that?
Shan Shan:
So mine were more fashion masks, Like they were like pretty patterns, they were cloth. And I did have an advantage. My father worked in import export so he connected me with an agent who found me a lot of masks really quickly and it also was shipped really quickly. At the time shipping was very fast. So I got all the masks in hand by April and I ordered in March. So by being in April I kind of like a first mover, I was able to do really well. Now I wish I got in February of 2020. But April was still pretty good.
Kevin King:
April is still pretty good. Were you able? Because, because of the relationship with your through your father, what were you able to get terms? Did that help with cash flow?
Shan Shan:
Yeah, so I was able to sometimes get 90 days. So it’s kind of just based on trust. It’s if you work well with them and they know you’ll pay, you know they could sometimes delay until 90 days. So because I’ve now I’ve worked with them for years and now they trust me, so I get favorable terms like that.
Kevin King:
So how’s the face mask business these days?
Shan Shan:
Oh, it’s done, it’s totally tanked. It tanked by 2021. Was like the last year where I had any sales, but it was the perfect testing ground, because then I learned how to do the whole process. And then, in 2021, I started looking for products that weren’t face masks, and I stumbled upon tights, stockings, socks. Those were the products I launched a year later and that now it’s 95% of my products.
Kevin King:
Is this the same manufacturers, because they were doing cloth masks before. Are they now doing clothing for you, or is it different manufacturers?
Shan Shan:
Some of the same. So the phenomenon that happened in China was that any factory that could make face masks switched to making face masks, because if you were making children’s diapers, suddenly you were making face masks because there was a global demand, people were begging for it. But then, when it was over in 2021, the factories went back to making what they were originally making, and a lot of them were clothing manufacturers, because it was cloth face masks. So that was also another big reason why I ended up in clothing, which is a tough category.
Kevin King:
No, it’s a tough category because you got sizes right, you got different sizes, you got different colors, so it’s a lot of inventory management.
Shan Shan:
It is, and the toughest part is really sizing. In America there’s such a wide range and there’s a lot of returns. Especially in my category is women’s clothing. Men’s clothing, I think it’s not as bad. I don’t think men return stuff as much as women do. Women will return everything they don’t wear.
Kevin King:
I hear a lot of women on Amazon especially, will buy five outfits, have them all shipped to them and return four of them. You know, whichever one platters their body the best and they keep, and the other four they return. So do you see in clothing a really high return rate from the women that are buying from you?
Shan Shan:
Yeah, usually it’s at least 20%. But 10% is good, like a 10% return. That’s usually a winner. If it’s under 10%, that’s like amazing. And in any other category of clothing if you had 10% returns you’d be in trouble.
Kevin King:
Yeah, you’d be suspended above 5%. You get suspended in pretty much any category except for clothing.
Shan Shan:
Exactly.
Kevin King:
So what do you do with the return? I mean, you’re you, you have to. There’s a cost Amazon’s charging you I think it’s a little bit different in clothing, but they, they, they’re charging you for each of those returns. So you just absorb that as part of your, basically as far as your landing costs or operating costs.
Shan Shan:
I just absorb it. I actually just tell them to throw it away.
Kevin King:
So you don’t even have them, ship it back, you just have them. So a lot of people would say, well, they’re just, everybody knows that and they’re just going to scam me and they’re just going to keep it. But it’s in the end that’s just part of doing business. There’s going to be some people that are unethical and some people that will do that. So you just have them discarded. That’s interesting. That’s actually cheaper to do that than to actually have it sent back for sure.
Shan Shan:
Yeah, there’s no point, because when I used to have them sent back, sometimes it wouldn’t even be my product. They’ll put somebody else’s socks into the bag and return it, so there was no point. So now I just have them dispose it.
Kevin King:
And then you had to deal with it. So you just had to either have Amazon dispose it and pay them, or you had to take it back to your warehouse and deal with and donate it, or whatever we’re going to do. So, yeah, it’s a pain in the ass. I mean, you might not be able to do that on a high-end luxury item you know if it’s a $1,000 pair of Louis Vuitton shoes. But what are most of your things selling for? What price range? Are most of your things selling for? 15 bucks, okay. How is Shein and Temu affecting that? So you’re in that price range where Shein is selling a lot of stuff and Temu has. That made it much more difficult to sell.
Shan Shan:
So far no but Amazon is really scared of it. And luckily, there was some regulation that just came out. Biden came out saying that they were going to do something where they don’t allow Temu and Shein to get that amazing favorable shipping cost that they have. Like I don’t know if they’re going to add tariffs or something like that, and I’m sure Trump will do the same. So I think it won’t be as big of a problem as people think it is due to the regulations.
Kevin King:
Yeah, but what that’s called is de minimis, and so de minimis right now in the US is $800. So you can ship in up to if the value of what you’re shipping, the package, is less than $800, you don’t have to pay any taxes or tariffs. So if I ship a just I’m explaining this to the audience for listening purpose. If you ship in a container full of goods, of leggings, and you’ve got I don’t know, probably a lot of leggings in the container, but 20,000 leggings in a container and each of those leggings’ landing cost is $3, you’re paying duties on $60,000. $3 times 20,000 units in the container. And those duties right now, under Trump, there’s a 25%— well, he implemented during his presidency is a Trump tariff. We call it the Trump tariff. It’s a 25% duty and then there’s on top of that a 25% tariff and on top of that it’s a duty. I don’t know what it is in clothing, but let’s just say it’s 30%. You’re paying on that $60,000, you’re paying another $20,000 in taxes versus if you ship in one by one and keep it under $800, or ship to Mexico and then have Mexico divide it up and ship it in the States, you don’t pay that $20,000. So that’s how Shein and Temu have been selling a lot of stuff cheap, and then what they also do is they use a lot of times ePacket, and ePacket is a special arrangement with the US government that allows you to ship something from China in conjunction with the US Postal Service cheaper than I can send it across the street. I can send something cheaper from China to my house using e-packet than I can to send something from me to you if you were living in Austin, and it’s subsidized by the US taxpayers and the Chinese government. And all those packages come in. Most of those packages come in on special planes to Huntsville, Alabama and then it gets dispersed out.
Kevin King:
So Temu and Shein have taken advantage of that and they can offer dirt cheap prices and then they beat up their suppliers for really low margins and that’s what’s happened. And now Amazon has come in and they’ve started their own version called HAUL H-A-U-L. That’s their own version of Temu. Everything’s under 20 bucks and dirt cheap and just usually not so good quality. So that’s what she’s referring to. But it has to. But and Biden has there’s been talk of actually repealing that or changing that, but as of now it hasn’t happened. So we’ll have to see where that goes, but I don’t think they’ll take it away. I think they’ll just lower it from $800 to like 100 bucks. A lot of countries, like where you’re at Colombia right now, it’s $25. So if I ship something from the United States into Colombia under $25, I don’t have to pay any duties. If it’s over 25 bucks, I have to pay taxes to Colombia. And the taxes there I forget the exact number it’s not too terribly bad, but I know like in Brazil the taxes can be two to three times the price of the product. In some cases it can get really ridiculous. And what’s about to happen? With Trump coming in, he’s saying that he’s going to keep that 25% tax, but he may actually change it and make it 60% on everything coming from China, plus an additional 10% until they do a couple things. So it could be 70%, which will affect you. If you’re making your products in China, you’re going to be paying 70% tax.
Kevin King:
And then, to keep Mexico and Canada in line, keep people from using the loopholes where they send to Canada or Mexico. He’s going to put a 25% tax on anything coming from Canada or Mexico, at any level, and then he’s telling Canada and Mexico that’s going to stay until you quit sending so much fentanyl, quit sending so many immigrants into the US. And Canada does the same thing. There’s a lot of immigrants come from Africa via Canada. Until you quit sending so many people into the United States, I’m going to keep this tax. So he’s using it as a bargaining chip, but it’s going to affect us as sellers. So that’s what I just want to explain to everybody. That’s basically what’s going down. So that’s got to be something that someone like you in the clothing industry has to be planning for. So I’m assuming you have really good margins that you’ll be able to absorb that.
Shan Shan:
I mean, the margins are a bit thin, as clothing is one of the thinnest. Well, I’m curious, Kevin, what do you suggest for people like me in this situation?
Kevin King:
So there’s two things. One is you start sourcing from somewhere else, but Trump is going to put a duty, a tariff, on everything, no matter where it comes from. So China is going to be the most penalized at 60 to 70 percent, Mexico and Canada 25. He’s talking about 10 to 15, maybe 20 from everywhere else. So even if you switch this to Turkey or to Vietnam or to Bangladesh or India, you’re still probably going to have a tariff on it. But in your case I would be looking at switching that. Clothing is one of the things that’s a little bit easier to switch. Some more complicated things that take a lot of molding. China’s just really set up to handle that, especially in small quantities, better than most places in the world. But clothing going to Vietnam or Bangladesh or India or some of the Central American countries could be a smart move. It just depends on the materials you’re using. If there’s something that’s special in those materials you might have to. That stuff still may be coming from China. But that’s one step.
Kevin King:
The next is to try to work a better price with your see if your supplier will help you absorb some of that 70%. You know it’s not 70%. It doesn’t mean everything’s going to cost 70% more to the consumer, because remember the 70% if it’s, if it turns out to be 70%, that’s on the land, on the, on the actual invoice price, so it’s not on the actual selling price. So if you’re $15 tights, you’re buying them for $3. 70% of that is still a lot of money. It’s $2.10. Your $3 tights are going to go to $5.10, plus all your shipping costs and everything. Your landing costs are going to go up. That’s going to force your margins. The only thing you can do is raise your prices or source differently or get a better price from your manufacturer. The problem is there’s going to be a transition period, because when you raise your prices, then everybody else has to raise their prices eventually too.
Kevin King:
But some of them have enough inventory in stock that they don’t have to raise it for a while. So maybe you just ran out and you got your new shipment that just came in and you’re like well, I just had to pay an extra $2 a unit. I can’t sell for $15 anymore to maintain. Man, you’re like well, I just had to pay an extra $2 a unit I can’t sell for 15 anymore to maintain my margins and to have any chances of paying my bills, I got charged 1699. Now, well, someone else that got smart, uh, uh, and ordered right now, before Trump takes office, before January put in their order for some crazy number of units 50,000 units, uh, cause they could cashflow that. And then had those, those shipped over. They can ride that wave for, let’s say, you’re selling 3,000 a month or something, they can. You got 50,000 coming in. You can ride that way for a year and keep your price down, while everybody else is suffering and going out of business or trying to raise their price and it’s not working. And now they’re having to come back to your price and they can’t. They can’t make it. So that’s what a lot of big companies are doing. If you look at some of the big shoe companies, um, I think it’s Steve Madden. They just said they placed a huge order. Um, and they’re trying to shift 25 to 40 percent of their manufacturing out of out of Asia to other countries. So that’s another big clothing company just said the same thing. Uh, who was it? Not Jay Cruz, jeez, it’s one of the other ones. So that’s where you got to be thinking and you got to act quick.
Kevin King:
So that’s what I would do is, if I was successful in clothing, I would actually be placed in and I had the cash flow or I could get really good terms. I would go to your supplier and say, look, I need a year supply right now. Go ahead and make it. I need it shipped right now. Go ahead and make it. But let’s work together on this so we can both make some money. While this we figure out what this is going to be, because right now nobody knows. But, and work with me on the terms. Don’t, I’m not going to pay you for this year supply in 90 days, let’s work for I’m gonna make monthly payments to you as it sells or something. Let’s work together because that supplier can go to the Chinese government and they can get sign of sure loans which you can’t get. But the Chinese government, since you have a relationship with your supplier and that you said you’ve been, you said earlier that’s one of the keys, you’ve been dealing with some of them for several years you can go. They know you have a track record. Your supplier can turn around. Instead of going to a bank to finance this, they can go to the Chinese government. It’s a program called Sinosure and they can say look, we have our client Shan Shan. She’s really, really good. She’s always paid us on time. She wants to place this big order because you know what’s coming, help us finance it. They can get the money from the Chinese government and then that helps them cover their costs and then they can extend you terms. So you’ve got to get creative on some things like that, and that’s what I would recommend.
Shan Shan:
And Kevin, when do you think realistically Trump can implement these tariffs? Like we’ll have a one-year waiting period.
Kevin King:
No January 20th.
Shan Shan:
So the day he’s in office it’s in.
Kevin King:
Yes, the first day he’s in office he can do an executive order. It goes into effect right there that day. So they could be fought in court, but there’s a process so it could be repealed. There’s a few things, like with NAFTA and with the agreement between China um not China Canada and Mexico and the US that are a little complicated a little bit, that he might not be able to implement. That on day one he can make the order but it might not go into effect because there is something that comes up at the end of 2026 that expires. So there is a few things that could take a little, a year or more, but not the China one. Not the China one. It could be the day he comes in. Every shipment that arrives, starting that day or the next day, has the tariff on it and the tariff will raise about 2 point I think. I just saw a statistic 2.4 trillion dollars and there’s a lot of economists saying this is not good for the US economy because this is just going to raise the prices of everything. And it’s true, it is going to raise some prices, but it’s also going to force. There’s going to be a rough period. It’s a rough transition period. There’s going to be some factories that start manufacturing in the US or manufacturing somewhere else and, as they transition with, the smart ones are getting ahead of it right now.
Shan Shan:
So when? So just to recap, you’re saying that to avoid these tariffs, you would have to have purchased, have on in China and have already shipped it and already have arrived.
Kevin King:
You definitely has to be shipped. I’m not 100% sure on the arrives, because the tariff is usually charged when it arrives, but I’m not sure if it’s in transit. I’m not 100% sure on the rules on that one. It definitely cannot be sitting in a warehouse in China. It’s good. It’s going to either have to be on its way or it could be. It has to have arrived. That one. I’m not 100% clear on which of it it has to be. If I had to guess, I’d say it has to be arrived. There could be some sort of loophole rule that says as long as it ships, it’s on the water, it’s left China. I’m not 100% sure on that. That’s a good question for a customs broker. They would know that answer. But that’s one of the calls I would be making to your customs broker and saying what can we do to get ahead of this? But that’s what I would be looking at. Or if you could make your socks and tights and stuff somewhere else. You’re still going to pay a tariff, but it’s not going to be nearly as bad.
Shan Shan:
Yeah, that’s a good point. I guess I have to get working on that.
Kevin King:
This passive job. You know you got to do a little bit of work, right?
Shan Shan:
Yeah, yeah.
Kevin King:
So how did you decide to get into the socks and tights and that stuff? Was it using a tool like Helium 10? You saw an opportunity or is it just you’re like you know what? This is just something I love and something I’ve always wanted. I want for myself, so I’m going to make it and sell it, or what got you into those markets?
Shan Shan:
It was partially Helium 10, having good, you know, supply and sorry, good demand and low supply, but it was also part of it was just that I like them. Um, you know, I feel like this is something that I don’t think we should do, but we always kind of gravitate towards what, what we see often, and, as a woman, um, I often see fashion. So I keep kind of going back there and I’ve been trying so hard to move into non-fashion items because fashion doesn’t have the best margins and it’s hard because I don’t see a lot of those products. Like, if I was a chiropractor, I would know what kind of chiropractic tools I could sell or any kind of subject matter expert. So I wonder if maybe the key is to partner with people who are subject matter experts, where, you know, I’m kind of the e-commerce expert and they’re the subject matter expert and they know something about products that I don’t see.
Kevin King:
That’s a good point. Actually, that is something a lot of people do, something that they know about. They love dogs, so they do dog products. They love fashion, so they do fashion products, and there’s nothing wrong with that. But then other people are just opportunistic, like where’s the money? I don’t care if I’m selling a um eraser heads to erase a pencil pencil marks from the kids, or I don’t care if I’m selling a screws or something you know, a set of screws, I don’t care, um. But partnering with someone that’s actually that knows that industry, I think would be a smart move, because then you have someone that has insights and they know what the feel is. Because now, if you don’t know an industry like at one point I used to sell beauty products. When I first started selling third party on Amazon, I was selling different beauty products for women. I was selling makeup mirrors was one of them. I don’t look at me, I don’t use a makeup mirror. I was selling eyelash serum that actually helps your eyelashes grow. I was selling a 3D fiber lashes right when those came out and I didn’t know squat about that stuff. But if I was a woman I would actually have a basic idea that even how to apply these. It was better back in the early this 2015. People send me a customer service letter like how they get the 3d fiber lash mascara and it’s in two bottles I guess there’s a dry bottle and a wet bottle and they’d be like how am I supposed to mix these? And I had no clue. I’m like I have no idea. Let me find out and I’ll get back to you. I didn’t say that, but I had to find out and just let that email sit and then answer it as soon as I could get the answer. But knowing the market and being something that you’re passionate about definitely helps, but I think that’s a smart idea that you have is if you’re in an area that’s not you be the e-commerce expert and get someone that’s the expert in that category.
Shan Shan:
Exactly. So, hey, all listeners, if you’re a subject matter expert and you want a buddy to partner with, that does all the e-commerce work hit me up.
Kevin King:
Now, are you just doing Amazon, or have you ventured into Walmart or Shopify or any other marketplaces?
Shan Shan:
I am on Walmart, I’m on Etsy. I do have a Shopify website, but it does almost no sales. I just don’t have enough time to grow that. I would love to, though I think that would be wise. So next year I’m hoping to one of my goals. I have many, many goals, but one of them is to try to expand my Shopify presence.
Kevin King:
Are you doing anything in social media like TikTok shop or anything like that?
Shan Shan:
I tried. I didn’t do TikTok shop yet, but I really want to. That’s also one of my goals. I did try to do influencers. A problem with my products is that they’re sexy, and when it’s a sexy product, the influencers are wearing it. Their followers are men, so their followers are not buying my products, and that’s something I found when I had a bunch of influencers. Hundreds of thousands of followers wear my products, pitch it and I got zero sales zero. But then the New York Times they published one of my tights on one of their models and a fashion accessory feature with Louis Vuitton and Chanel and that day I got explosive sales because the audience was women that read that article. So it’s a little harder for me, um, that’s why I kind of gave up on it, but I do want to go back and try to figure out how to get influencers with female followers.
Kevin King:
There’s gotta to be a way to do that. I mean the influencers if they’re at a certain level, they get the demographics from Instagram and stuff. They have their demographics, they know what their audience is, and there’s tools that do social listening, that will analyze the comments and the names in the comments and some AI tools that will tell you oh, this influencer is 85% women and 72% of them live in the United States and 6% in Canada and wherever. And I think, if you target it that way, I agree with you that some of them out there are going to be, especially if it makes a woman’s body look good, it’s going to be guys following them instead and they’re not going to buy your product. But there’s got to be ways to actually filter those influencers into the ones that are appealing to women and go after them, and there’s filtering mechanisms and tools that will do that for you. So that’s what I would recommend for you on that side of things, because I think that could be really good, a really good market. Another one is Temu just opened up to US-based sellers. So now it used to be only Chinese-based sellers and shipped in to the US using the diminis rule that we talked about earlier, but then they went to invitation only and you had to be personally invited to sell on Temu if you’re based in the US. Now it’s open to everybody, so you can actually go to Temu and at your price point you said $15 is one of the average price points. That would be a perfect team of product and so I would be reaching out to, I would, I would. You could probably just Google I don’t have the link in front of me on but a cell on Temu, Temu, US-based or go to Temu.com. There’s probably something there. Us sellers, Temu, something along those lines, and you could probably find the direct link to actually set up. You can set up and be selling within a day or two on Temu. Temu is the second biggest or second most downloaded app for several months in a row recently, so it’s got a huge, huge following. And then Amazon Haul now, but Amazon Haul is primarily just Chinese sellers shipping from China, so that one would not be open to American-based sellers right now, but Temu definitely is. I would recommend you check that one out.
Shan Shan:
Interesting. Yeah, I will definitely.
Kevin King:
So how are you coming up with new ideas? Are you doing? Is it the customer saying, oh, I wish I had this or this? Are you using tools like Helium 10 to go and find new ideas? Is it just like you come up with it yourself? You’re like, oh, this would be a cool idea. Or you see something somewhere and you get inspired and you’re like, I’m going to make that. How do you come up with your new product ideas?
Shan Shan:
A lot of it is you know. The more you know an industry, the easier it is, and the first day that I started doing fashion I had no idea what to sell. Now I can like look at Amazon and be like that’s going to sell, that’s going to sell, that’s not. But lately I’ve been using a lot of tools like PickFu is one for product research. Another one is a very interesting AI. I’ve been using ChatGPT and DALI to help me generate ideas and the best one I’ve seen so far I met this founder in New York. She just started a company called Savannah.AI where it will take basically an image that you have, that you can take just like by yourself, and it will generate that clothing item on a model and it could be Naomi Campbell, it could be like Gisele Bundchen wearing that product, and I had them generate some samples for me and it was pretty good.
Kevin King:
So wait, the Savannah.AI. So you take a, you create a content, you give it a prompt and you say create a blouse, a blue blouse that has stripes or whatever, and put it on Giselle, or how does it work? Can you walk me through exactly how it works?
Shan Shan:
Yeah, so so far, what I’ve been doing is the products I already have. So let’s say I have. So let’s say I have, you know, pink socks that have a certain look. And I can say, hey, Savannah, take this picture of the pink socks I have and put it on a you know Naomi Campbell, or put it on a model that is blonde or is African and is this size, like plus size or thin, or I could just tell exactly what to generate, and then it would generate that exact model that I want wearing my product. And this is a big challenge that AI has not been able to solve, because right now, they can come up with ideas right, they can make up something new but they’re having a hard time taking an existing idea and putting it, having someone use it, having someone wear it. That’s where it’s been challenging. And these guys, Savannah.AI, they’re there Like they’re able. So it could be any product. It doesn’t have to be clothing. It could be like you know, you’re selling home goods and you want to have a family using your home goods, and it looks like they’re using your home goods.
Kevin King:
I’ll have to check that out. What’s next for you? You got more travel. You got more launching products. Now you get on your list to figure out. What am I going to do? Am I going to place a big order with my factory or am I going to try to start manufacturing somewhere else? But what’s coming up for you?
Shan Shan:
Yeah, well, you’ve got me noodling, Kevin, so I’m going to work on fixing my supply chain. I’m going to work on TikTok shops. That sounds pretty cool. Launch more products, probably about 50 next year. You got to keep launching always.
Kevin King:
50 new products or 50 new SKUs?
Shan Shan:
Products, products. ASINS.
Kevin King:
So okay, but some of those aren’t variations, that’s actually unique items. That’s a lot.
Shan Shan:
Yes.
Kevin King:
That’s like one a week.
Shan Shan:
Yep, yeah.
Kevin King:
That’s not pretty. That’s a passive job to me, yeah.
Shan Shan:
It’s easier in clothing. It’ll be hard if it was like not clothing but clothing, because it might be slightly different pattern. You know what I mean. Like it might just be almost like a different color, but the pattern is just a little bit different. I count that as a different product. Because if you don’t launch, keep launching, you don’t grow.
Kevin King:
No product is going to last forever. You’ve always got to be innovating, and most products they have their run and then, like your face mask, you had your run, you did really well, you made some good money, and now that’s history, and that happens with most products. So you’ve got to constantly be feeding the churn, because there’s going to be churn, or maybe you end up sourcing these 50 new products. You keep your manufacturing in China for the ones you have, and the new ones come out of somewhere else, out of Vietnam or somewhere where you can compete, and that’s the end of the game. But part of it. You’re traveling. So that means, since you’re traveling so much and you have this freedom job, that means you’re going to be in Iceland for a Billion Dollar Seller Summit, right?
Shan Shan:
It’s in Iceland. I love Iceland. I’ve always wanted to go there.
Kevin King:
Yeah, it’s in Iceland in April. The next Billion Dollar Seller Summit is in Iceland, April 4th to the 9th. Seven, eight, nine figure sellers, about 150 of them, average seller. Last year in Hawaii was doing 25 million. The median seller is 7.5 million. So it’s a high level group and the speakers that I bring, I vet them heavily. I mean, in fact, one of the speakers recently who’s done well at my events in the past. I don’t bring the same speakers back to back, so maybe someone spoke three years ago so I’ll invite them back if they did well. This one did well a few years ago. And then I heard some reports from a couple of events in Europe that he was speaking at and someone said, hey, his talks weren’t very good and it’s kind of recycled and this and that. So I messaged him up and said hey, if you pull this at BDSS, I’m pulling you out of the speaker list right now, you’re not coming. I’m hearing some studies. He said don’t worry, don’t worry, no, no, no, no, no, no. So that’s how. What I expect out of speakers is like next-level, cutting-edge stuff and they compete for cash prizes. So they’re competing for a $5,000 cash prize to be voted best speaker. It’s not so much the cash that motivates them, it’s the honor, and I publish the top 10. So if there’s 15 speakers and your name is not called when I started number 10, 9, 8, 7, 6, it’s almost embarrassing for some of them. Like well, I guess I didn’t do so well. So what happens is during the event they’re one-upping each other, so one person will go and they’re like oh man, they just talked about this. I need to change my slides and I need to add this to it, and so at the end, everybody in the audience gets just massive value. And then we do a lot of other cool stuff too at BDSS events, and we get some cool stuff planned in Iceland. So love to have you there if you’re able to make it. It’s in April.
Shan Shan:
Yes, that sounds awesome, I’m down.
Kevin King:
Well, I know you got to run right now, but I really appreciate you coming on and sharing some of your journey and we’ve got to talk a little bit of shop here. This has been fun. If people want to follow you or reach out to you or anything, do you want to stay hidden over there in Medellin or in Colombia? Or is it okay if someone uh listen to this one to reach out? How would they do that? Like you said earlier, if they get ideas.
Shan Shan:
Yeah, just uh add me on LinkedIn. Shan Shan Fu, Millennials in Motion will be the easiest and quickest. And mention, mention Kevin King, and so I accept it. And or you can email me at hello@millennial shops.com.
Kevin King:
Awesome. Well, Shan Shan, I really appreciate you coming on this. This has been awesome.
Shan Shan:
Thank you so much, Kevin.
Kevin King:
See you in Iceland.
Shan Shan:
See you in Iceland.
Kevin King:
Chatting with Shan Shan in this episode. Hopefully, you got some good insights and good information that you can apply to your business as well from this. We’ll be back again next week with another episode of the AMPM podcast. You can subscribe to my newsletter if you want to get to stay on top of all the latest happenings. It’s BillionDollarSellers, BillionDollarSellers.com it’s totally free. Every Monday and Thursday, like clockwork, a brand new edition comes out and we’ll keep you on top of all the latest tactics and strategies and what’s happening in the Amazon and e-commerce world. Until next week. I hope you have a great rest of your holiday season and remember January is also a really good selling time too. It doesn’t. Things don’t end at Christmas. Before we leave, I’ve got a parting shot for you. You know, if it doesn’t sell, it just means it’s not creative. If it doesn’t sell, it just means it’s not creative enough. Have a great one. See you again next week. Merry Christmas, Happy New Year.
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