Woke up at 3am in Manila for this live Yahoo Finance TV: The Final Round – debut
Check it out here
Here’s the transcript of the interview if you wish to just read:
[00:00:00] Third party, Amazon sellers are being impacted with factories in China shutting down due to the spread of the Corona virus. Joining us now to discuss is Michael Michelini. He’s a partner at Alpha Rock Capital. And Mike, first of all, you sell a lot on Amazon, but we can’t detail exactly what it is. I understand cause it’s very competitive and you have a lot of trade secrets, but you have about 10 brands
[00:00:23] On Amazon. What has business been like for you the last two weeks? Can you get what you need? Are you able to fill all the orders that are out there? So far we’re lucky. We, we stocked deep. It’s our strategy always, and we were prepared already for the Chinese New Year, so we had already stocked well before the, uh, the Chinese New Year has already shut down, but this extension of the Chinese New Year has really been a shocker to,
[00:00:51] To us, as well as many. But for now, we’re, we’re mostly in stock for most of our top selling products. And Mike, if you could guess right now how much inventory you have, what your availability would be to acquire new inventory. And I, I guess, um, you know. A related question is what’s the climate like in China right now with folks going back to work?
[00:01:11] Certainly here’s stateside the situation with respect to coronavirus has gotten a lot more serious and folks are a lot more alarmed. But, um, it seems perhaps that the virus related fears in China have stabilized, but I don’t know if that’s your feeling as well. Yeah, for sure. I think, of course, China’s all about business and getting things back to normal.
[00:01:33] The, the government wants to ability, they’ve, uh, they made a huge you know, a lockdown of the, of the people leaving their homes, and now there’s this really big frustration to get business back to normal. So there’s this huge pressure from the suppliers and factories to get back to work. The factories have been reopening in late February, we’re hoping next week and March, things should be getting back to normal.
[00:01:57] The biggest problem is not the factories reopening, it’s the workers getting back from their home towns, especially in there, the epicenter in Wuhan. A lot of people are concerned that they’ll be able to even get back to the factory. So the big concern is there’s always this turnover every Chinese New Year of new, new staff.
[00:02:16] Hiring and old staff, not returning, but especially the huge turnover. Now with the backlog of orders, we’re really concerned, maybe quality problems or, or, uh, just, just a prioritizing of which supply, supply to make, uh, for which, which customer, which fact, which, uh, which buyer like us. Right. Hey, Mike, I understand that your family is, uh, stuck in China.
[00:02:40] Is that the case? And is there anything you can share with us about that? Yeah, it’s been a, it’s both the business and a personal thing for me. I have a, a wife, I met while I was in China. I’m currently in Manila and my two children are with her family in North China. And they’ve, they’ve been there since the Chinese New Year.
[00:03:01] I came down here for, for work, uh, with, with our investment company for Amazon and she stayed behind with her family. And then we had heard about the virus coming out. But it wasn’t made to be such a big deal before the Chinese new year, uh, in, in, uh, early January. So they’ve been on quarantine that at home with limited amount of time to go out to buy groceries.
[00:03:25] And, uh, I, I do my daily call video call with them and, uh, everybody is [00:03:30] healthy at home, her parents, my wife, my children. But of course, it’s very, very nerve wracking time for all of us. So you certainly have a lot going on, on a personal level, and also work-wise here. I mean, best of luck to your family and getting reunited with them.
[00:03:47] Overall, are you optimistic that you know you’re going to be back with your family, that business will be back to usual. Or, do you think that we have some more hiccups here along the way that will be felt, uh, as far over here as the United States? But this isn’t done yet, or you think we’ve turned the corner?
[00:04:10] So I’m watching this closely, of course, as all of us are. It seems like we had said in this earlier in this interview, it seems like it’s spreading more overseas and is stabilizing in China. I think the biggest concern that we’re all watching is when the factories reopened and the work, work starts back in China, will it start to spread again?
[00:04:33] That’s, I think probably what we’re going to start to notice next week once factories really get back to back to normal. And the hope is that it’s really contained and that things will be back to normal. We just got to hope that, uh, it’s always a balance of personal health and, and, uh, as well as business, right?
[00:04:54] Business, we want to get back to normal, get products, shipping and selling. But of course we want. The, you know, even if they’re not our, our own staff, even the factories, staff, and well being, you know, we do want people to be healthy and, and safe. So it’s, it’s a tricky balance, but I think the biggest concern is, will the virus spread once factories start reopening in March?
[00:05:16] I’m like, just real quick, before we let you go, are you going to change the way you do business from now on? Has this changed anything for you? So we, we, we are well diversified. So of course we have investors. We’ve been raising money to buy [00:05:30] brands on Amazon. We mentioned we have 10 brands. So we do have India suppliers.
[00:05:35] We, we do have US. We buy in America as well and sell on Amazon US. Uh, we have other supply chain with the, with the trade. It’s been a rough year, honestly, with trade war last year. And then even there was a Hong Kong uprising, which caused some just, you know, disruption. And now this virus, it’s just been a really rough year for, for China supply chain.
[00:05:56] So we’ve already been looking at diversify, but I think that this one, especially. It’s been more effective to make us as well as many others that we know in the industry to really look for diversification of supply chain outside of China. Uhm, Mike Michelini. Thank you so much for staying up – a partner at Alpha Rock Capital.
[00:06:13] A great to get some time with you. Thanks for having me.
Here are responses from friends on Facebook
Highlight: Alpha Rock Capital partner @michelini on the company’s products on Amazon amid coronavirus: “We stock deep is our strategy always, and we were prepared already for the Chinese New Year… for now, we’re mostly in stock for most of our top-selling products.”
Feedback from the article
11 mins · Public
In 2012 I had the opportunity to visit Shenzhen China. I had originally made the trip to Shenzhen for business and was there for a little over a week doing training for a newly launched website and accompanying marketing strategy. While there I had the opportunity to meet Michael Michelini
a talented entrepreneur and Internet marketer who is well versed in Co China/US commerce.
I’ve been following his vlog ever since. While it was great to see him on Yahoo Finance today, I also feel for him since the current Corona Virus has kept him and his family apart and of course is making business in Asia difficult for all.
From Brandon Dupsky
MERCHANTS – Coronavirus impact on the supply chain.
Great job Michael on Yahoo Finance TV today. Wishing your family a safe time in China. Looking forward to catching up with you next week.
You have been watching this closely from the beginning. So far no noticeable impact on my suppliers. Glad I’ve diversified my products offerings.
thanks for sharing Brandon, yes super scary times many have stock as we planned for a long chinese new year – the big question is – can factories get back to normal in March, and catch up on the backlog
As you and I discussed at breakfast in HK back in Oct, this will be much like it was for CNY in 2009 with a waterfall effect. The supplier’s supplier’s supplier is out of stock, no workers, can’t get parts from their supplier kinda thing. Then as you… See More
yes…. even if factories re-open — it is always a risk after CNY if the workers come back ….. this will be huge turnover….. and ya…. rushing orders – angry pushy / ignorant buyers who dont give a shit about anything but shipping on time and then QC issues……
1 min · Rahul’s friends and Michael’s friends
Hear from our good friend Michael Michelini
about how supply chain in the far east are affected due to Covid-19 and how the businesses in the US, especially e-commerce companies are facing the challenges.
Gian Luca B. Goode
Interesting interview, I honestly expected it to be more number focused and technically oriented talk but I guess they need all the small talks about virus and china to appeal a broader kind of viewers.
I seriously think that march/April will be a Black bimester for so many businesses and that the economical implication of this virus are waaaay undervalued globally.
Besides gdo and supply chain issue, we will experience suffering in many areas of business: tourism, restaurants, airline company, logistics.
I mean just check Maersk report… Basically all container freight transportation slowed down to a historical minimum between Jan-Feb, no one has an idea when things will go back to normal, and when they will, there will be such an overload in the maritime transportation that will put the global system under huge distress.
Tourism-wise its a nightmare all over the world in all areas of business and regions, so many cancellation, February 2020 has already been claimed worst month in history for airline company, the only negative quarter in the recent years.
In Italy probably in less than 8 weeks many restaurants will go out of business unless we have a wonderful weather in spring and people globally get back travelling and being optimistic.
Nonetheless this virus has also some good side. It showed the worst and the best out of everyday people, it has been proven to be the 2020 black swan, and will be a big case-study for the years to come for all the underlying implication and side effect to the global system.
Wish the best of luck and health to you and your family, say Hello by me to all the ARC crew and keep rockin in Manila!