Azim Makanojiya: The other company then told them that they can still service us. They got their orders for three weeks but didn’t pay the factory. In the meantime, they built their own factory in China and started doing orders. They left the factory with unpaid bill of about $175,000.
We’re now basically the sole company that sources from them. We started with one factory over there and he [Chandler] has built up to 20 factories that he sources our orders from. He personally owns about five factories and he sources the surplus orders from about 15 other factories.
Sramana Mitra: So you have a good supply chain established at China at this point.
Azim Makanojiya: Sourcing was probably one of the biggest hurdles that we came across. Then, there was shipping.
Sramana Mitra: I was just coming to that. How do you handle that?
Azim Makanojiya: The edge that we had over any company out there is the shipping. The reason that we cannot be disrupted is because of our logistics. We are a smart logistically built company. The way our order flow goes through the system and our connection with UPS and FedEx is phenomenal.
In 2013 I met with FedEx and UPS and agreed on some great terms where we basically lease a certain amount of space from the aircraft every day at great rates. Now, we’re probably the only company that could get wrist bands from China to the US in one business day. We were missing out on a lot of those customers who wanted to get their orders within two days. With this deal, we could fulfill those orders straight from China while other companies are still making them here and paying large overheads.
Sramana Mitra: In the beginning though, the Chinese company was shipping to you and you were doing the pack ship in Houston, right?
Azim Makanojiya: In the beginning, they were actually shipping to customers as well. It had to go from China to Hong Kong, from Hong Kong to the US. Rather than a one-day delivery like what we currently have, it took us five days. We now do a transit route directly from China all the way to the US.
Sramana Mitra: To make that happen, you did a special deal with FedEx and UPS, right?
Azim Makanojiya: We had exclusive opportunity to deal with just one company. I think it was more of a strategic move in using both companies. We read that prices do increase. We wanted to keep relationships with both companies even though we paid a little bit higher to have both companies as part of our supply chain. It was better to have both companies just in case one company raised their prices, we still would have the leverage to use the other company as a competitive resource.
Sramana Mitra: So, you were doing $6.9 million in 2010. How much did you do in 2011 through to 2013?
Azim Makanojiya: I don’t know the exact figures but we were growing significantly throughout the years. In 2011, we were probably doing $10 million and in 2012, a little shy of $15 million. We’re approaching a good $9 million this year, as of August 2014.