Monthly Archives: November 2005

Invest…ING

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Whether starting your own business or just looking to add security to your life, investing is important.

About once a month, I get a phone call from a friend or a friend’s friend who is a financial manager and wants to help me ‘wisely’ invest my money. They will tout great statistics and flow charts and quotes from successful people that all indicate that I should invest my money in their mutual funds or trading programs.

I’m like every other person trying to live the American dream. I want freedom. One of those freedoms is financial freedom. Everyone with some common sense and/or who has read The Richest Man In Babylonknows that it’s important that you pay yourself before others. We are supposed to invest.

It’s safe to say that I am a skeptic of the glitter and gold of mutual funds and financial planners. I am an entrepreneur. If I have money to invest, I want to invest in my own projects, or in those of other entrepreneurs and businessmen who have gained my trust. To me the best types of investments can (overly) simplified into two main categories: real estate and businesses that are about to take operations to a higher level. I realize, however, that I need to have a money set aside to accumulate for these larger investments. I’ve also heard it said, and I agree, that everyone should also have at least 6 months of money storage to in case of those almost certain ‘rainy days’.

Given the nature of the different companies/projects that I am involved in, it is also very important to me that my money remains as liquid as possible. For this reason I have a small savings account where I accumulate a little bit of money each month for just such purposes.

The best savings account that I have ever worked with is ING. It’s an online bank that offers 3.3% interest on savings accounts and up to 4.7% right now on CDs. ING has great customer service and it’s really user friendly and has a ton of great insentives to keep saving with them.

ING has a great referral program where everyone that you refer (through a simple email) that starts an account with at least $250, gets instant cash of $25 and the referrer gets credited $10. It’s not much, but it’s great that they reward you on top of already getting the best savings rates I have ever seen.

So, amid my actions and plans to investment in start-up businesses and real-estate I know just as well that liquid cash stores are super important. ING is the best company I have seen yet to help meet those needs and even provides a small amount of interest… enough, in the eyes and experience of some, to even be considered an investment.

Trading… What is it? Why is it so complicated? How can it be simplified?

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What is trading? Most often when people think of trading, they think of stocks and bonds. At least, that’s what I used to think until just about a year ago when I got involved with my first international trading company, RigidFlex Plastics International. The definition of trading is broad and simple. I like the definition that wikipedia gives which pretty much says, trading is the general term used to describe the interaction between two parties that exchange goods, (most often something for money). Anyone who is directly involved in wholesale, retail, brokering and anything that goes on in Amazon, Ebay or similar sites–is a trader.

Marco Polo is probably one of the most popular traders in history. Some of the biggest and most successful companies in the world right now are nothing more than trading houses, Mitsubishi, Hyundai andAmerican Trading International to name a few. A kinda fun example can be found in traders that are out of this world as well. Let’s look at Star Wars for bit. Hans Solo was a trader and had totally equip the Millenial falcon with hidden cargo bays to smuggle goods and avoid the federation tarriffs. Jabba the Hut was a trader. Every now and again I think about the scenes in Star Wars where everyone is hanging out at Jabba the Hut’s lair and these different traders from all over the galaxy are eating and talking. The funny thing is, these guys (and women) are probably talking about the different prices on the plates and napkins for all the intergalactic canteens that Jabba franchises, not to mention the going rate and existing supply scrap metal and old robot parts and which planets have an excess or shortage… Okay, you get the picture.

To trade you just need a buyer and a seller and a product. Unfortunately all of that can get pretty complicated when you look at all of the different players involved in getting a product from the manufacturer in one country to a converter or end-user here in the states. A few of the different factors you need to take into consideration include the following:

      L/C (letters of credit)

ocean freight

land freight

bunker fees

gas surchage

shipping bond

entry fee

merchandise processing fee

harbor maintenance

customs and tarrifs

and a few more

Fortunately, you can simplify things a lot by having a reliable Import Broker and Export Broker. At RFPI we use Copper Smith for all of our import, and Adora Intnernational for all of our export. Coppersmith is a huge company with affiliates just about everwhere that can handle even some of the most complicated shipments. Adora is a trustworthy, small town establishment out of Houston Texas that has been in the business for three decades and has followed through on everything we’ve ever needed from them.

Keeping track and updates on the different shipping prices and tarriffs can get distracting from the real meat or your trading. I haven’t yet found a software or website that manages all of the different aspects of it, but I can imagine it would be pretty helpful. I’m certainly open for suggestions.

The risks and stress can be pretty high in this business, but then again, so can the rewards.

You need to be agile to make it with Agel

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A lot of people want to start their own business, but have trouble finding the right opportunity. A lot of people want to be their own boss, but don’t want to venture out to develop there own model or risk their own capital for payroll etc.

I know we all hate the “M” word. It’s okay… I’m going to say it… multi-level marketing… MLM. The term carries so many different biases it’s almost hilarious. What ends the joke so quickly, is when we take a second to look at how effective it really can be. In 2003, Amway reported the global market for multi-level-marketing to be 82 billion dollars large. I was reminded again this past week as I was approached by a number of different friends regarding a new product line and company known as Agel. Before I identify a few gaping fallacies I observed with Agel, let me give a quick background regarding my familiarity with MLM companies.

As special contractor at Morinda Inc, (the mother company of Tahitian Noni International) I saw first hand the effectiveness of rapid market penetration with low overhead provided by network marketing companies. As part of the original team that pioneered the research, development and marketing roll-out strategy for the animal products lines at Tahitian Noni International, I had a unique opportunity to work with the corporate family and distributors alike to introduce the new product line. After a year and a half of release, the product line has already grossed over 12 million dollars and remains today the #2 best selling product behind the Original Tahitian Noni Juice. In addition to some hands on work, I also wrote my honors thesis on Nutraceutical multi-level marketing companies in China: Past obstacles become future opportunity. (It’s over 60 pages with in-depth industry interviews and more.–It should be in the BYU Library by January if anyone is interested.)

I’ll avoid any ethical or philosophical points here, but let me just give my thoughts on the Agel opportunity. If you watch their promotional video it identifies a number of different advantages that their product has; in addition to an incredible comp plan, and strong scientific foundation, (what vitamins don’t have scientific data to back them up), it identifies two other points which I think help to illustrate the weakness of the product and foreshadow its difficulty in sustainability:

        No competitors! I can’t believe that Agel dared to say that because it is a liquid vitamin pouch that it has no competitors. That statement carries at least two major fallacies. First, everyone who is in involved in the MLM industry knows that it is, for the most part, a fixed pie demographic. ‘MLMers’ buy from the MLMs, it certainly doesn’t share with the standard retail industry. Every nutraceutical MLM with their own unique product (and they’ve each got one) is a competitor. Secondly, a liquid vitamin is relatively the same as any liquid juice supplement out there. Whether its

Malaleuca

        ,

Tahitian Noni Juice,

    Xango

       

          or whatever, the Agel liquid vitamin supplement is certainly a direct competitor with them… I wander if maybe Agel just doesn’t know it yet…

       

      It looks cool! I can’t believe they really included that in their campaign. I can understand maybe using that line if you were selling clothes or trendy accessories–but it really weakens your product for a health supplement. When you think about it, this point really just drives home what I feel is their their biggest obstacle for long-term sustainability: Their demographic.

      Their ads are filled with happy, active people ages 18-30. Their lingo is clearly as ‘hip’ as they can be. Their packaging is cool. But their real story and marketing base is weak. I’m concerned that they sell the product like it was more of a fashion fad than a real health supplement. Don’t get me wrong, they do a great a job of hitting their demographic. Just last week I had two people–ages 23 and 22 who approached me to see what I thought about helping them sell their product and pentrate Asia. Even with very limited required involvement, I decided rather adamently not to do it. Of course I have my own ethical/philosphical disputes with their model but really, I just don’t see it as a long term solution for people who are in an age and demographic where they should working to acquire long-term skills and experience for their futures.

      In short, I don’t think it has long term sustainability, and unless you’re a cereal MLMer, it’s not a good investment of your time and money.

      First Prove Your Model

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      We recently had a publicity strategy meeting for Somethinglocal.com. We sat down and tried to identify as many things as we could that would increase traffic, build brand equity, increase down loads and more, (what else do you usually talk about at an internet marketing meeting). We identified some great things we could do that would be news worthy, along with a number of different strategies to synergize our upcoming podcast with our upcoming quick-time commercials, Big Aland other promotional efforts we have coming up.

      Of all of the things we talked about, the one that rang the most true was this: Prove your model, and it will do most of the promotion itself. Of course this is not the case with everything, but if it’s a model that really provides goods or services that people need, you can bet they’ll tell their friends about it. Myspace, Amazon, Google Adsense,Commission Junction, Ebay and more, provide a service that benefits their customers and brings them back for more. I might be wrong, but I bet the budget for the time and money to market these services is relatively small. I know I mentioned only big models, but I’m pretty sure the same applies to little things as well. Wasn’t Craig’s list just a small start-up?

      Somethinglocal.com satisfies a need. Local bands need to connect with their fan base in such a way to be exposed, promoted and make profit for further development. It promotes bands and sells their music. Bands get 69% of all of the proceeds from their downloads. The rest of the money is used to promote the bands through the different modules of the website. It hasn’t been a smooth transition for somethinglocal.com, but we’ve finally got the backend working as of last week and we’ve already got over 10 bands with a balance in their accounts. As we really help bands sell their music, it will help lead and orchestrate the other marketing aspects of Somethinglocal. It’s still too early to tell just how successful our model is in practice, but it looks like we’re on the right track. Either way, it seems our marketing and promotional strategy has a clear top priority: First, prove the model.

      Let Me Introduce Myself:

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      I am the fourth of thirteen children, born to Mr. and Mrs. Merle and Lark Keller. I grew up in a small home nestled deep within the west side of Salt Lake City. My dad is an American-born German who grew up in Chicago and is now an electrical engineer. My mom is a compassionate and very strong willed farmer from a small town called Panaca, Nevada. My parents have always stressed the importance of obtaining a good education, hard work and sharing with those in need. I am just about to graduate from Brigham Young University with my bachelor’s in International Studies and minors in Asian Area Studies and Business.

      Entrepreneurship has been part of my life for nearly as long as I can remember. I am currently involved in 3 different business ventures.Somethinglocal.com, a company that strives to satisfy the real needs of local bands and fans. Somethinglocal.com is dedicated to offer profit, exposure and promotional opportunities to local music artists. I am a partner in an online publishing company, Global Insight Media Communications, that publishes for a number of different industries, including: debt consolidation, budgeting, call center outsourcing, BPM, and more. I am also a partner in a company called RigidFlex Plastics International (RFPI). RFPI is an international trading company that specializes in commodity plastics and packaging.

      Other than creating and building different business or service opportunities, my personal interests include: Outdoor sports, classical literature and poetry, playing guitar, singing, traveling, public speaking, community development, poetry, scuba diving, fine arts, running, martial arts (Brazilian Jiujitsu), theatre, foreign literature and films.

      I like the opportunities and freedoms that business can afford. I believe that money is a stewardship more than a privilege.

      I enjoy international and cultural studies.

      My favorite color is yellow.

      Please feel free to comment on my blog any time, and please introduce yourself. I am interested in the feedback or questions of others.

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