My plan was to spend two days at the Canton Fair and one additional day looking at other fairs, before making my way back to Hong Kong. I wanted to use the first day to get a better understanding of the scale of the fair and how to deal with exhibitors and the second day talking to suppliers. At around 2pm on the first day, I stumbled across a small area tucked away in a far corner of the last hall that contained a few rows of tea merchants. There were maybe 15 merchants in total. I had a vague idea of what I wanted, so I walked past each booth to see if any of the exhibitors had teabags displayed. My search was immediately narrowed down to three vendors.
The first vendor I spoke to made high-end mesh pyramid teabags containing loose leaf green tea. While I was optimistic at first, it because apparent that the language barrier would be too difficult to overcome. My foreign language deficiencies were again on full display. As I backed out of the conversation, I reached into my right pocket and handed the woman my business card and told her that I would be in touch. The woman, who had followed me out of the booth, seemed pleased with this and quickly retreated, clutching the business card with both hands.
I had devised a simple strategy when it came to handing out business cards. I had two sets of business cards printed — one that contained my real name, email address, and phone number and one that contained my real name, with a fake phone number, and a throwaway email account that I rarely checked. Every single person you speak to at a trade fair expects that business cards will be exchanged at some point in a conversation. The last thing I wanted was to be contacted by dozens of exhibitors that I had no interest of doing business with. My left pocket contained the real business cards and my right pocket contained the fake business cards.
The second vendor proved to be much more helpful. I approached the large corner booth and spoke to a young man named Andrew. His English was impeccable and it was clear that he had a lot of experience dealing with western clients. He sat me down and offered to make me an oolong tea, which I gladly accepted. Andrew went on to explain that his factory had recently moved away from manufacturing single and double chamber teabags. He mentioned, however, that he had a good friend in town who worked for another company that had a very large OEM tea factory on the outskirts of the city. Without warning, in the middle of our conversation, Andrew picked up his phone and started dialling. In quick-fire Mandarin, he arranged a meeting with his friend, on my behalf, in downtown Guangzhou. He scribbled an address in Mandarin on a piece of paper, along with the name of his friend, Tony, and told me in no uncertain terms, “Go there now. You meet Tony at 4.00pm.” My first thought was that this was some sort of an elaborate set-up to harvest my organs. I decided to give Andrew the benefit of the doubt. I reached into my left pocket and carefully handed Andrew a genuine business card. He was one of the lucky ones.
The shuttle wasn’t scheduled to arrive until 4.30pm, so I caught the subway into the city centre; the station was right outside the venue for the Canton Fair. Within an hour, I was standing in the heart of Guangzhou’s commercial district. I distinctly remember stepping outside of the subway station for the first time. The air was a hazy grey and thick with smog. Twenty-foot-tall trees lined the streets, but did nothing to offset the heavy, low-hanging pollution. Apart from the poor air quality, the scene felt familiar. The buildings were tall and modern, the streets were teeming with people, the roads were busy; it felt like any other large city. Seeking refuge from the air, I made my way into a nearby Starbucks and ordered a drink. I was early for my meeting, so I had some time to kill. I sat down in a comfortable purple velvet chair angled towards the street-facing window. Next to me, two Chinese businessmen wearing matching black suits were having an animated conversation that I gathered was about a nearby construction project. Waiting in line was a well-dressed woman clutching a bright pink Miu Miu wallet with a monogrammed Louis Vuitton handbag draped over her shoulder. At the table in the centre of the room, several students sat, hunched over phones, each wearing a different North Face backpack, along with New Balance and Nike sneakers. The uniform of any American college student. I sat there sipping my iced coffee, soaking everything in: the smells, the people, the languages. I could have been fooled in thinking that I was in a Starbucks in Lower Manhattan.
With 20 minutes to go before my meeting with Tony, I made my way to the counter and asked for directions. Thankfully, I was told that I didn’t have to go far — the office was directly across the road. The building had a dated exterior, but the lobby was modern with floor-to-ceiling marble. Moments after entering the lobby, a man walked up to me with an impossibly large smile on his face and introduced himself. It was Tony. He was slim, short, and fresh-faced with neatly parted black hair. I was expecting to meet an older business executive dressed in a suit, but Tony was young, dressed in a blue polo and light-coloured chinos. For some reason, seeing that he was dressed casually put my mind at ease. We entered the elevator and made our way up to the 20th floor in silence. I was then taken down a long sterile corridor with reflective white tiles and barren white walls and into a large show-room filled with dark wooden furniture. The furniture was arranged around a large conference table that was awkwardly positioned in the front half of the room. Glass cases containing thousands of boxes of tea lined the walls. The room seemed out of place in an office setting: it had been modelled after an oriental tea house.
After a few brief words, Tony set up a portable DVD player in the centre of the table and played a promotional video profiling the company. I gathered from the graphics and unusual scene transitioning that the video had been made in the 1990s. Despite the fact that Tony must have seen the video a thousand times, I could see him swell with pride as the narrator reeled off the company’s production capabilities. The metrics were meaningless to me, but it was hard not to get pulled in by the triumphant operatic music that accompanied the over-enthusiastic narration.
When the video finished, Tony took great care in removing the disc from the DVD player and gently placing it back in its case. He then safely stowed the DVD in a nearby cabinet before returning to the table. Tony went on to explain that he was interested to meet me because he had spent some time in New Zealand with a customer a few months earlier and was hoping to take his family there on a vacation the following year. I was taken aback. Was this just a sales tactic to find a way to relate to me? If it was, he had me completely fooled. He proceeded to list off the names of towns he had visited and the places he had stayed in New Zealand. He clearly knew more about the geography of my own country than I did.
The conversation progressed smoothly. We discussed ingredients, production lead times, and packaging options. We then got onto the subject of pricing. At this point, I was determined to work with Tony. The only thing standing in the way was the price. If it was anything like the figures I was quoted in New Zealand, there was no way I could proceed with an order. “What is the unit price for tea bag production for a minimum quantity order?” I asked, forgoing the previous pleasantries of our conversation. Tony answered immediately. “For what you are looking for, it would be about $1.85.” I sat back for a moment. How is that possible? That’s even more expensive than what the quotes I received from the New Zealand company. Who can afford $1.85 a teabag? He could see the confusion on my face and continued, “…per box. So, you want 28 teabags per box. The teabags cost just over $0.02 each and the packaging is approximately $1.00 per box.” At this point, my confusion swung the other way. How was it only $1.85 per box?
I felt like there was a very good chance that Tony had made a mistake, so I wanted to place an order before he realised. Shortly after Tony finished speaking, I informed him that I wanted to proceed with a MOQ order. An MOQ order is an order for the minimum quantity of stock that a seller is willing to supply. Tony was visibly pleased and said that he would send through a pro-forma invoice later that evening. He then stood up and took a few steps to his right where he picked up a non-descript white tin off a shelf. “I have a tea that is very similar to the one you want. Try this and make sure you like it.” He placed the tin on the table and left the room and returned a few minutes later with a tray containing hot water and eight porcelain cups. He brewed the teabags for a few minutes and told me to try the tea. It was still far too hot drink, but I followed his lead. Temperature wise, it was scalding; taste wise, it was perfect. The tea had a slightly earthy taste with a refreshing oolong base. Even though it contained most of the ingredients from my original loose-leaf blend, the two teas tasted nothing alike. The teabags had such an unusual taste that I couldn’t recognise any of the flavours. The blend was exactly what I was looking for. I didn’t want my customers to be able to compare the taste of the tea to anything else on the market. It had to taste healthy for anyone to believe that it could have the health effects that were being claimed. Consumers aren’t going to believe that a peach flavoured tea is going to help with digestion and excess water retention. It’s exactly what toothpaste manufacturers have known for a long time — toothpaste has to have a minty taste for consumers to believe that it will help in cleaning teeth. We wouldn’t buy toothpaste if it was chocolate flavoured, even if it had the same effects. The taste profile has to align with the purported effects.
From the outset, I was very conscious of the fact that I didn’t want customers to be able to compare the tea to other conventional tea brands on the market. Aside from the taste, I had to worry about how the pricing and packaging affected the way customers perceived the product. If the price was comparable to the price of supermarket-branded tea, customers would immediately put it in the same category. However, if the price was much higher, customers would be unable to make the same comparison. The goal was to make customers think that the high price was justified because it reflected the effectiveness of the product. The trade-off is that a higher price will always shrink a potential pool of customers; this doesn’t, however, mean that that profits will fall in step. Basic economic principles tell us that demand will fall as prices rise. For certain products, demand can increase, to a point, as prices rise.
I also learned over the following year that if the packaging or design I used looked even remotely like supermarket-brand tea, customers would start comparing the products and questioning my pricing. Once I had this realisation, I decided to move away from boxes, and packaged everything in pouches for future production runs. Customers in the West aren’t used to seeing tea in pouches, so it created product confusion that helped in justifying the inflated price-point. This is also the reason I chose to include 28 teabags in each pouch rather than a more conventional number, like 50 or 100. Offering 28 teabags was a key point of differentiation that allowed me to make the consumption guidelines more prescriptive as opposed to being merely suggestive — “For optimal results, consume twice a day, 10 minutes before eating breakfast and lunch.” Just like a doctor’s orders. Consumers will always follow prescriptive instructions — they don’t like thinking for themselves. These strategies allowed me to charge eight times the price of conventional tea brands for a product with identical production costs.
Another important lesson is that consumers don’t want value, they want the perception of value. In the pre-MP3 era of the music industry, a physical CD containing 12 songs might have cost $30. At $2.50 per song, consumers were only too happy to part with their money. What the music industry knew and consumers didn’t seem to know was that only two or three of the songs on an album needed to be good. The rest were just included to make consumers feel better. The reality was that consumers were actually paying $10-$15 per song — they just didn’t know it. Even if you had explained this to a typical consumer, they would have still felt better receiving 12 songs rather than three. This is despite the fact that they know that they are only buying the album for those three songs. Consumers need their perception of value to line up with what they think something is worth. There would be outrage if a pharmaceutical company developed a single pill that could cure breast cancer and the company tried to charge $50,000 for the treatment. How could a single pill possibly be worth $50,000? Instead, pharmaceutical companies are incentivised to create extended treatment options that align with the prices consumers and insurance companies are prepared to pay. It’s all about creating the right perception in the minds of consumers. Realising this, I decided to create packaging that was far larger in size than it needed to be in order to justify the price I was charging.
Another important lesson is that consumers don’t want value, they want the perception of value
The key is getting consumers to think that they are getting more than they actually are. Why would a therapist, for instance, write a book detailing everything they know about cogitative behavioural therapy and sell it for $30 when their clients are prepared to pay $350 an hour, each week, for treatment sessions? A person might read the book and come away knowing and feeling exactly how they feel after going through a full year of treatment, but they would never be prepared to pay $18,000 for the book. So why are they so willing to pay $18,000 over the course of a year for one-on-one treatment? It’s because there is a perception of value attached to in-person treatment options that can theoretically be tailored to a particular client’s needs. Why would a therapist write a book with limited market appeal when they can charge someone close to $20,000 each year to impart that same knowledge? In a just world, customers would be prepared to pay a similar amount for both the book and the treatment plan. If that amount was closer to $30, the business model wouldn’t work and the industry would cease to exist.
Once the first cup was out of the way, I was ready to call it a day. I felt like I had everything I needed. I wanted to get out of there to give Tony a chance to process the invoice. Tony, however, had other ideas. He picked up the tray and told me to follow him. He led me outside of the room and walked towards a door at the end the hallway. He turned his back at the door and pushed it open, like a surgeon entering an operating theatre. The door obediently swung open. I followed him inside. It took me a few moments for my eyes to adjust to the brightness of the room. Moments later, with my eyesight restored, I could see three old men sitting at a stainless-steel table in the centre of the room. The men were each holding bone white porcelain cups and sipping on tea. Following each sip, they aggressively spat into knee-high copper pots positioned between the men on the tiled floor. The pots were almost full — a hard day’s work. The men didn’t bother to greet me. The scene felt so foreign to me that I didn’t know what I was witnessing. Tony explained that the three men were great Chinese tea masters, who were in charge of blending every tea that the company produced. I didn’t know how Tony expected me to respond, but I acknowledged his comment with a nod and tried my best to look impressed. “How does one go about becoming a tea master?” I thought to myself. I always like to speculate about how people get into different lines of work. This one was a mystery to me.
With great deference, Tony addressed the men who were at this point uniformly hunched over the table. Their faces were completely expressionless. They made no effort to make eye contact with Tony as he spoke, but they must have been listening. Without outwardly acknowledging Tony or anything he had said, the tea masters got to work as soon as the instructions had been relayed. I took a step back and watched as they slowly and deliberately took pinches of finely ground herbs and placed them in a stainless-steel bowl, before mixing the blend by hand and carefully spooning the tea into empty teabags that sat on a wooden bench at the back of the room. The process was completed several times, with slight variations in each blend. They didn’t speak. They didn’t write anything down. They operated with some sort of telepathic understanding.
The men grew in confidence and speed as they mixed each blend. Within minutes, they were haphazardly throwing herbs towards the mixing bowl, often missing. The whole process took no more than 15 minutes. Tony then lined up the six remaining cups from his tray and proceeded to brew a different teabag blend in each cup. I stood a few feet from the tea masters, staring out the window as the tea cooled on the table. Tony then motioned for me to try the tea. After taking a mouthful from each cup, Tony handed me a pen and a small piece of paper and asked me to rank my top three. It was an easy choice. My top choice was smooth, but earthy with a slight sweet note at the end. Once I had tasted each blend, the masters had their turn. They each took small sips and swirled it around in their mouths before spitting into their respective pots. There was clearly an art to it. The masters agreed with my selection. I had no idea how they were going to replicate it since they didn’t record anything, but I had complete faith in them.
I could see that it was starting to get dark outside. I glanced at my watch. It was nearing 5pm. I had no idea where I was in relation to my hotel, so I was eager to start making my way back before it became too dark. Immediately following the tasting, Tony packed up the spare teabags and labelled each blend in separate pouches before placing them in a large white plastic bag with the company’s name printed on the side. Without saying another word to the tea masters, we left the room. I wanted to thank them, but they seemed disinterested, so I decided against it. Tony walked me to the elevator and handed me the bag full of samples. He shook my hand and thanked me for coming, before explaining that he had another meeting to get to. The elevator arrived shortly after he walked away and I got inside. I couldn’t help but smile. How lucky was I? I had come to China with no real plans and only a vague idea of what I wanted and somehow managed to find a tea supplier. Not only that, but I found a tea supplier who spoke English and had a strong connection to New Zealand.
No-one likes to talk about the role that luck plays in life or in business. We like to pretend that everything we achieve is the product of effort and hard work. It has certainly been my experience that luck carries you a far greater distance than hard work ever will. There is no secret formula. In life, there are certain things that we can control, like where we live or what we choose to eat for dinner and certain things we can’t control like our height or our skin colour. If we focus our energy on the things we can control, we can place ourselves in a position where we can get lucky. That doesn’t mean that something will happen, just that something could happen. Someone else could have gone to China on the same day, with the same intentions, and experienced a different outcome. That person could have been smarter, better prepared, and had more money than me and still walked away with nothing. You can’t account for chance encounters. As someone who has been to China and found a supplier, it would be easy for me to recommend the same course of action to others. Lottery winners will always advise others to purchase tickets. Second-hand advice should, however, be taken with a grain of salt; the disclaimer here is that results will vary from person to person. The variation may be explained by the things we can’t control, like gender bias or racism, but in many instances, it can be explained away by nothing more than dumb luck. What I experienced was dumb luck.
If we focus our energy on the things we can control, we can place ourselves in a position where we can get lucky
When I recount the story of my experiences in China to others, the reaction is always the same — the focus tends to be on the heavy dose of luck I received in meeting both Andrew and Tony. In business, luck goes hand in hand with risk-taking. I got lucky because I took a risk — I got on a plane to China, went to a trade fair, and found a supplier. The outcome, while fortunate, was not a random occurrence. It happened because I put myself in a position where it could happen. In making the decision to go to China, there were two possible outcomes: I find a supplier or I don’t. I have come to realise that if you are content with the worst possible outcome, you are probably making a sound decision. The worst possible outcome here was that I went home without finding a supplier and I was completely fine with that. In my mind, there was no real downside. No matter what happened, I still got to go to China and have an experience that was completely outside of my world. In life, we rarely experience the worst possible outcome. As we travel down a path, opportunities will always present themselves. We can’t orchestrate our entire existence. Sometimes it’s best to go down a path and see what happens — so that’s what I did.
I have come to realise that if you are content with the worst possible outcome, you are probably making a sound decision
There’s a simple reason that most people don’t choose to go into business — the consequences of failure are far greater than they are in conventional lines of work. If we were instructed to walk across a plank of wood that was three meters long and six inches wide and was lying on the ground, most of us would be able to walk across the plank without any trouble. If the wood was raised a few inches off the ground, it would be slightly more challenging, but again, most of us would be able to walk across the plank without any difficulty. If the plank of wood was then raised one meter off the ground, the fear would naturally arise that we could fall and injure ourselves. Falling from this height could lead to a broken bone, which is obviously an undesirable outcome. Now, if the plank was raised ten meters off the ground, the consequences of failure would be amplified further. A fall from this height would certainly lead to broken bones and could conceivably end in death. When the challenge is the same, why does it become so much more difficult when the height is raised? Why is it harder to sing or speak in front of a crowd when we can perform flawlessly in the private of our own home? In life, we get to choose our own height. Most of us will choose the safest option, a few inches from the ground, where the consequences of failure are negligible. If you want to achieve great things in life, you have to play amongst the clouds. You have to be prepared to take risks, knowing that at any moment, you could slip and fall.
Tony sent through the pro-forma invoice and artwork template later that evening. Unfortunately, I was unable to access my Gmail account because Gmail is one of the many western websites blocked by the Great Firewall of China. I knew very little about VPNs, so I took it as a sign that I should cut my trip short and head back to Hong Kong. I made my way back first thing the following morning. I was able to check into my hotel in the Central district of Hong Kong early and went straight up to my room to check my emails. There it was. Tony’s email. The next four years of my life. In a matter of minutes, I had opened the email, paid the US$1,800 deposit and emailed Tony back. I wanted to get the process started as soon as possible. At the time, there was no way that I could have afforded a graphic designer, so I spent the next two hours mocking up the packaging. What I came up with wasn’t pretty, but it wasn’t entirely awful either. I emailed Tony the artwork as soon as I had completed it. In 24 hours, I had found a supplier, placed an order, paid the deposit, and designed the packaging. Given the four-month lead time, I felt like there was no time to waste.
Designing the packaging without any input from a graphic designer was an expensive and valuable lesson. It had never previously occurred to me that the colours we see on a screen will vary from device to device. That means that when we choose a colour for packaging or printing based on how it appears on a computer screen, it is unlikely to be the true colour that will appear once printed. The pink I had chosen on my screen, looked absolutely nothing like the colour that came to be printed on the boxes. I also didn’t consider whether the design would be appropriate for retail. As it turns out, it wasn’t. The awkward orientation wouldn’t have worked on retail shelves. Worst of all, I didn’t think about whether the box would be suitable for shipping. When I received the tea four months later, I immediately knew I had a problem. The cardboard was too thin. Tony’s company didn’t have any other clients that utilised ecommerce in the same way, so the problem had never previously come up. The grade of cardboard used was fine for traditional retail, but did not hold up structurally when shipped. After several angry emails from customers and a few unfavourable Instagram posts complaining about crushed boxes, I was forced to spend even more money on corrugated cardboard support to protect the boxes while in transit.
In theory, these problems won’t arise if experienced graphic designers and creatives are hired. But, what does a business do when no-one actually has experience creating products and packaging for ecommerce? You can’t hire a creative who designs packaging for a supermarket and expect them to understand how to create a product specifically designed for an online audience. There is almost no expertise cross-over. After the mistakes I made, I was eager to get outside help when it came to redesigning my packaging. Over four years, I met with or spoke with over 20 creatives and creative agencies from New Zealand, Australia, and the United States to discuss the possibility of working together. I can safely say that I have never met a more out of touch group of people in my life. The quotes I received for a simple pouch design ranged from $25,000-$50,000. It was work that would have taken a competent designer a few days to complete, but would somehow take a team of people several months. It’s like any other sham industry. Creatives charge small clients the same as large clients without ever understanding how their clients make money and how the business models differ in terms of revenue generation. They drag out projects to make clients think they are getting value for money and that the work is more difficult than it actually is. Most of the people I spoke to couldn’t wrap their heads around the difference between an online and an offline business model. If you are designing packaging for a hot sauce company that will stock its products at supermarkets, you may get away with charging $30,000 for a label design. If the products are stocked at supermarkets across a country, the hot sauce company will receive a large capital injection as a result of each supermarket’s order, which will more than cover the design spend. If a business doesn’t have a product that can be stocked, it won’t have the same capital cover, which will make it more difficult to justify the cost of the design spend. The big problem that creatives have is that it is much harder to create marketable expertise that has any sort of longevity.
In most other professions, expertise is developed a period of over years, which makes it easier to complete work in the future. Most lawyers, for instance, utilise precedent templates that can be used over and over. If a bank needs a five-page legal opinion, a lawyer will use a template document that can be changed and finalised within an hour. If a lawyer had to create a new document from scratch each time the bank needed an opinion, it would be an incredibly expensive exercise. Creatives responsible for packaging design don’t have that luxury. They have to start from scratch each time a client walks through the door. Of course, each design agency will have systems in place to standardise work, but the creative nature of the work means that it could take a very long time to get something subjectively right. A brand name could come to someone in a matter of seconds or it could take weeks or it could take months. Who’s to say? Expertise isn’t going to help or speed up the process; in fact, it could slow down the process and hamper creativity.
It’s very difficult to continuously create original designs without burning out. How do I know? Because I have done something and, unlike most creatives, I was accountable for the outcome. Creatives are never accountable for the work they produce. They don’t care if a product sells or it doesn’t. They don’t care if the packaging they design looks the same as everything else on the market. They don’t care that the packaging designs date. In fact, most creatives now design packaging, logos, and campaigns that they know will date poorly. They have a vested interest in hooking clients in so that they are forced to come back. Car manufacturers use the same strategy with consumers. Cars are designed to look outdated a few years after they are released so buyers are encouraged to purchase newer models on a regular basis. That’s a big reason vintage cars have become so popular — they don’t date. They are stuck in time. While I understand that businesses need to make money, I don’t have a lot of time for companies that deliberately cut corners and release inferior products for temporary gains. Unfortunately, that’s where the world is heading. We won’t see iconic car designs in the future, just as we won’t see iconic packaging. In the future, everything will look the same.
While most creatives operate with no accountability and an inflated sense of self-importance, there are good ones out there. The trouble is finding them. Just like when you find a good accountant or a reliable lawyer, it can be hugely advantageous in life. It comes down to luck, and trial and error. The problem for me was that I couldn’t afford to not get lucky. Most companies are fine getting an inferior end-product from design agencies, because even the worst designs won’t sink a business. I couldn’t afford for anything to go wrong. I knew that my product wasn’t great. I knew that my business model needed to be retooled. I also knew that I wasn’t crazy.
On the one occasion that I was going to go ahead with a creative agency, fate intervened. A few hours before I was due to sign the $30,000 contract to design a master pouch and logo, I got a call from the agency head. He informed me that one of his clients had vetoed the work on the basis that there would be a conflict of interest, since they were about to launch a tea brand of their own. I was dumbfounded. I had no idea why he felt the need to discuss the project with another client. I spent over an hour on the phone with him trying to change his mind, begging him to take my money. After I hung up the phone, I sat there in silence and started to sob. What more could I do? I was prepared to take the greatest risk of my life and they still wouldn’t take my money. I later learned that the woman who had taken exception to the agency completing the work came from a rich-list family who owned a baby formula business in South Australia. A woman with hundreds of millions of dollars at her disposal was scared of a one-person company with no capital backing. After that experience, I never again considered outsourcing design work.