RSS Feeds:Within a few days, I was on the phone with the Hong Kong trading company, Swift Tread*. (*I've changed the names of this supplier and its employees to protect the guilty.). Vinnie Meola* was a 30-something American who had been in Hong Kong for over 10 years getting his former employer’s sourcing business off the ground. The company eventually folded, but Vinnie stayed and started his own trading company. His partner, Lenny Chang*, a Hong Kong native in his 50s who pretends to understand enough English to inspire a certain amount of confidence, is the actual liaison between the factory and the customer.
Doing business with an overseas supplier created some anxiety, but since Vinnie is an English-speaking American, I felt confident in Swift Tread. The fact that Vinnie and I are both Jersey boys further helped me to sleep at night—at least for awhile. Swift Tread submitted the low bid on the tooling and per-piece price, and came highly recommended by my entrepreneurs-turned-book-writers friends. It seemed that the stars—at least in the Far East—were lining up for me and my new toy company.
"Henry was quick to to inform Mr. Ling that he did not speak Cantonese, the local language. This deception positioned Henry as a spy for me, pretending to not understand the conversations between my agent, Lenny, the molder, Mr. Ling, and the tool maker. After a short while, Henry pulled me aside and advised me to get my business out of Swift Tread as swiftly as possible."
On my first trip to Hong Kong to meet my new manufacturing partners at Swift Tread, I visited the two factories they had identified to manufacture and assemble Automoblox. The plan was to have the wood factory ship the hand-made wooden parts to the plastic factory, where all the injection molding and final assembly would occur. The plastics factory Swift Tread selected was impressive. The list of customers alone sold me; they were shipping directly to all the big US retailers. They had earned Supplier of the Year from several noteworthy US manufacturers (I even took pictures of the plaques proudly displayed in their lobby), and they had in-house tooling capabilities, impressive engineering resources, a spotless factory and effective QC processes in place. Swift Tread and I agreed on a timeframe of approximately 12 weeks from the time I placed the order for tooling and the time the first container of Automoblox products would be shipped. The plan—which at first seemed safe, simple and straightforward—eventually became the cause of anxious days and sleepless nights.
Getting ready for The Show
While the manufacturing work was underway, I made arrangements to showcase Automoblox at the American International Toy Fair in New York where I hoped to make industry contacts that would help launch the business. Prior to my association with Swift Tread, I had relied on Saunders Studios to craft two rounds of Automoblox models for concept evaluation and for product photography.
“My Hong Kong suppliers had painted my precision/patented connection system to match the specified colors, adding thickness to the parts and resulting in tighter tolerances of the interlocking components. In other words, they didn’t work.”
With the toy fair dates fast approaching, I decided to display appearance models, rather than actual molded parts of each of the seven Automoblox cars. I enlisted Swift Tread to do the models at a greatly reduced price compared to Saunders Studios. Swift Tread had the opportunity to examine the models that Saunders Studios had made for me—models that accurately represented the design aesthetic and the desired function. I was assured that Swift Tread would have no problem executing models of equal quality in time for the toy show. However, in a phone conversation, Lenny warned me that the models were “not too good.” I paced the floors, waiting with reluctant anticipation for the “not too good” models to arrive. My fears were confirmed when I opened with shipment to discover models that were far worse than “not too good.” They were sloppily assembled and did not function at all. My Hong Kong suppliers had painted my precision/patented connection system to match the specified colors, adding thickness to the parts and resulting in tighter tolerances of the interlocking components. In other words, they didn’t work.
With less than a week to go before the show, I had no choice but to use my original Saunders models for display purposes, and to employ the embarrassing models from Swift Tread for demonstrations. I spent the entire trade show trying to convince prospective customers that “the manufactured parts will work just fine when the final products are produced.”
I took a few small orders at that trade show in 2003, but mostly licked my wounds and gathered leads. A call from the managing editor of AutoWeek magazine would normally be a welcome and exciting opportunity for free PR, but I had to apologize for being unable to send samples. He was enthusiastic about the concept, however, and said he’d be interested in writing a future piece about Automoblox. I promised to get him samples hot off the assembly line as soon as I could. That day couldn’t come soon enough. When I finally received the first shots from the mold in September 2003—already far behind schedule—I was feeling reasonably confident about the work, but didn’t know at the time that several more months would be spent in a futile attempt to correct the tooling needed to achieve the desired functionality.
Next stop: Big boys
In October 2003, I was contacted by the president of BRIO® US, who expressed interest in taking on Automoblox as the sole North America distributor. Within a few weeks, we put together a distribution deal for 2004. There was also some talk of taking over the manufacturing of the line, and we discussed possible terms. But I wasn’t willing to let Automoblox out of my control at this point; I still wanted to achieve my dream of being a manufacturer.
"I began to get suspicious of the relationship between our hosts and the factory when several phone calls were placed during the drive to the factory, requesting directions. I was led to believe that they owned the factory, but they were actually brokers paid by factory owners to lure American business people to their facilities."
To my delight, BRIO issued a purchase order for 10,000 pieces! With the order came a Letter of Credit with an estimated ship date and an expiration date. (This means that if the Letter of Credit expires and Automoblox doesn’t deliver, the sale is invalidated.) This order put Swift Tread under fire to resolve the tooling issues in order to meet the delivery date for my first customer. BRIO also talked about annual forecasts in the 60,000-100,000 piece range. At this juncture, and at the height of my anxiety, I felt it was necessary for me to leave my position at Colgate; a week later I was on a plane to China.
During my farewell rounds at Colgate, I stopped to say goodbye to a colleague Yvonne Hsu. Yvonne has the kind of energy that inspires commitment from her team, and she and I worked together under crazy deadlines. I shared with her my plans for Automoblox, and she expressed her support and encouragement. Although ideas for Automoblox had been playing non-stop in my mind, my friends and colleagues at Colgate (for obvious career-related reasons) were unaware of my personal project. Yvonne told me that her dad, who was in the manufacturing business, might be able to help me, and she suggested I give him a call. She warned me that I needed to be prepared to talk specifics, because Henry “isn’t the chatty type.” Her warning sufficiently scared me enough to put off calling him right away, but by February, I mustered up the courage to call for some advice.
Henry, born in Hong Kong, agreed to meet me for lunch in New York. I showed him my product, and shared with him the trouble I had been experiencing with Swift Tread. The pre-production samples functioned to some degree, but still not correctly. I told him about my upcoming trip to China to work with Swift Tread on final tool modifications and check out some new factories. To my surprise, he offered to accompany me on the trip! I explained that I was not in a position to pay him for his assistance, but he told me not to worry about it, and we agreed that I’d cover his airfare. His offer was one I could not turn down.
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