- Speaker #0
The one big thing, and you brought up that China built the world's factory. This isn't a new thing. The best way to become a world power is to be the number one manufacturing country in the world. And if you look through history, as that's happened, world powers are created on the back of making products. I think people are starting to realize that a little bit. And they're like, ooh, for political reasons, we need to have a strong manufacturing sector.
- Speaker #1
your watch all marketing misfits with norm ferrar and kevin king mr ferrar another day another dollar how are you doing another dollar no no no hold it there's inflation in there and he's canadian canadian dollar knock off that's right no it's about 10 cents about 10 cents that's right I know every time you come down to visit the states, it's like I get all of a sudden it's like I know Norm's coming when I started getting shipments of random cigars. I'm like, and I'm like, where did I order this? Oh, OK, I think I ordered this stick in my humidor. And then Norm shows up like, where does the cigars come that I that I ordered? Like, no, nothing's come. And then you're like, you sure that this one and this one, I'll check the tracking. and this one you're like they were delivered a month ago kevin um i'm like oh yeah some random stuff did show up i couldn't remember oh it's this box right here yeah you're like that's mine but then you you were so kind though you gave me like this one's for you kevin and this one's for me i really appreciate that that was very very kind of you no
- Speaker #2
problem sir no problem i don't want to put norm farrar because
- Speaker #1
in your building who the hell knows norm farrar but they've probably seen me they probably think that we live together or something you know i just got a bill yesterday from ups it reminded me of you oh something it was a bill on an old ups account and it was like for 38 or no 88 dollars and someone shipped something from germany to toronto so someone's using like snagging my old account number or something that this is from five years ago and used it to ship something and bill said bill to the account and then amazon I mean, not sorry, Amazon UPS is like sending me a bill. I ain't paying this. Yeah. But that was a that was an unpleasant surprise. But sometimes you actually get pleasant surprises like cigars showing up in your place or you do an event called Market Masters. And you have this all these people come to this think tank and last minute one of Vanessa, a good friend of ours, Vanessa Hong says, hey, I know I know this lady that would be really good, really good fit for your event. I just met her at an internet marketing party. So I get on the phone with her and we talk. And I'm like, yeah, come on out. You can sit on a, I don't know you. I don't know you at all. But you can come on out and see how it goes. And she ended up sitting on a couple of the hot seat panels. And she brought her husband along with her. And she's like, you know, my husband's a pretty smart guy too. Anything you want to know about sourcing or products or this or that, you know, he can help out. So over the course of the weekend, he ended up sitting on a couple panels. And I'll never forget, there was this $130 million seller. Remember? Oh, yeah. Doing $130 million on Amazon alone, the husband and wife team. And they come in and they have all the stuff they want to get help on. And he's on this as a panel, as an expert on the panel. And we start taking, the whole panel starts taking the talk a whole different direction. And by the end of it, he's just like laying out. like all kinds of like brilliant stuff, like super smart stuff. And like talking about all this stuff, I'm like, damn, this dude, this dude's good. And not only is he good, his wife is amazing too. And so she's speaking at my event at L8 360 in Iceland. She came out to the last one and they're just like a power couple. So I'm really looking forward to, to this talk today because it's going to be, I think pretty, pretty cool, pretty enlightening for a lot of people.
- Speaker #2
Yeah, I can't wait. And sup Mary, sup. I just had to, she'll know what that means.
- Speaker #1
Just the impact that they had. Luba, you remember Luba? She was at the event. She came to the second one and we just had, you were at a few weeks ago. And she actually, the first night she went, Mary came out and she went and cornered Mary and she talked to her for like 20 minutes. And afterwards, Luba came up and said to me, she said, you know what? They changed my life. Her and her husband. The last time when I was here, I met them. Some of the stuff they said to me completely changed my life and I owe a lot to them. So, I mean, that's the power of surrounding yourself with really smart people. And, you know, you just never know when someone shows up. We had this happen. We talked about another podcast. Someone showed up at a dinner that ended up, we're like, who the heck is this guy? Why is he here? And it turned out that he's a powerful player. And the same thing with our guest today. So this is cool.
- Speaker #2
Yeah, but before we get to it, I don't know what's happening, but it sounds like either your ass is whistling or there's a wind or something that's happening.
- Speaker #1
i got bad gas sorry that's what i thought so anytime you're listening now from now on put cushion on the on the chair to try to muffle the sound but it's just not working because when you have a fat ass you know things so
- Speaker #2
whatever you're listening any listeners you know just think of kevin anytime you hear that especially um it's um my balcony you've been to my place and
- Speaker #1
I'm right next to another high rise. I'm in a high rise. And right next to me, it's a little alleyway, basically 20 feet between them. And the wind is just howling through there. And it's blowing things like chairs around on my balcony. Literally upside. I can look out the window over here. They're upside down.
- Speaker #2
Excuses, excuses. All right.
- Speaker #1
Let's bring on Jason. There it is. That's better.
- Speaker #0
Hey, guys.
- Speaker #2
Hey, how's it going, Jason?
- Speaker #0
Doing great. How are you guys?
- Speaker #2
Oh, I'm crying a little.
- Speaker #1
So Jason's on the podcast today. Jason Acevedo. Just in case you want to use the Googles to see who this guy is. Are you on the Googles?
- Speaker #0
Dungeons and Dragons Master with the same name. He takes over the bulk of the listings.
- Speaker #1
So Jason, what's your story? I mean, for the audience that most people hear probably like, who is this dude? Tell us a little bit of background about where you come from, what you do and that kind of thing just to enlighten everybody.
- Speaker #0
So kind of the simple version is I started my first manufacturing company. I was 15 years old. We built it from $600 in a garage and just kind of got into making just about everything. Our early career was heavily kind of in the marketing and product launch space. So we took to market in Walmart and a bunch of the other major retailers. Roku was one of the bigger products that we helped originally launch. And then through that, we started manufacturing the packaging, the retail displays. Nowadays, we make 10 parts inside of every General Motors transmission. We make every dishwasher inlet hose for General Electric. I mean, it's just kind of a... broad swath of American based manufacturing companies that are, we've got plants throughout the U S and kind of specialize in all these different things. A lot of them are things that you interact with every day of your life, but you don't realize that they're actually being made in the United States.
- Speaker #2
Are you seeing more manufacturing coming back to the States?
- Speaker #0
We are seeing more coming into the States. One of the big changes is going on is for a long time. It's been cheaper to produce in the US. And Tim Cook from Apple's actually talked about this for years. But nobody was willing to, it was scary for a supply chain manager to start moving things into the US. COVID kind of acted like an accelerator when people couldn't get things out of China. And all of a sudden they were forced to look into US companies again. And that's really what kicked off the, just the hockey stick that's going on. in American manufacturing right now is once they learned that there were suppliers there, that they were price competitive with overseas. And I mean, the story of today has been what tariffs are going on, what's going on here. So we're seeing a mass increase and it's a good time to be in manufacturing.
- Speaker #1
I remember going back to back in the 90s, I wasn't 15, I was 18. I was trying to manufacture some stuff, and I have to go to this is before the internet. I have to go to the library and go to the Thomas directories. Yes. I don't know if you remember this, like a whole encyclopedia of manufacturers and look in there and find the page for dishwasher hose makers or whatever and be all this listing of people, and that's how I found people. And then you start doing this Amazon thing, and everybody is sourcing from primarily China, so I'm in Vietnam and a few other places, but primarily China. And then Trump in 2017. 18, was it, or 18 implements the 25% tariff. And now he's just added the additional duties on top of it. So in some cases, it's adding 50% to the cost. And like you said, sometimes it's cheaper to manufacture in the U.S. Or even in cases in the past where it was more expensive to manufacture in the U.S., by the time you added in the cost of money for waiting for it on a boat and the cost of duties and stuff, you're better off to pay the more expensive price in the U.S. than you are to bring it in. And then there's a lot to say about made in USA banners and all that. But the problem I think a lot of people have always found is most U.S. manufacturers tell you to F off. Yes. Unless you're going to, I mean, you go to China and he's like, I need to do 500 of this or a thousand of this or 2,500 of that, bend over backwards and take care of you. You do that in the U.S., they completely ignore you. Don't return your calls. Don't answer anything. They're like, no, I'm not going to play with you.
- Speaker #2
That sounds like my girlfriends back in high school.
- Speaker #1
That's true. But so has that changed? I mean, are they now more receptive to small orders? Are they just not set up for that? They really need the big production runs to make this efficient.
- Speaker #0
So one of the big problems in manufacturing, and the short answer is no, it hasn't changed for most firms. We take in a lot of smaller clients. We've got our mass blue chip clients. Because we started so small, we truly do believe of like getting with a brand when they're just kicking off. We do take them in, but there's a couple of holes in that. American manufacturing had to get super, super lean for a while there because they just weren't competitive. So one of the ways they leaned out was they got rid of all their customer service. So the person taking your phone call is more than likely an engineer that really doesn't want to deal with it. And they just don't have that, hey, let's actually work through getting this into production. And the other part of it is a lot of American manufacturing right now is being ran by people that are right about to retire or post-retirement. So new, scary take on projects that you're going to grow a client over the next five, six years, they're just not interested in it. Um, and there's really not a, a youth coming into the industry. I mean, every, every event I go to, I am the youngest person in the building, uh, by 20 years. It's that there's, so you're kind of, there's still a lot of grit there. Amazingly enough, the, like the Thomas guides, it hasn't gotten easier to find manufacturers. They, they, none of them have gotten better or not none of them, but the greater majority haven't gotten better at marketing. I acquire most of my companies nowadays and you'll get a website that was put together in 1999 and they haven't touched it since. It was a glamour purchase. They put it up. It at least shows the phone number to call. But it is still an industry that in the U.S. that it is harder to find the right manufacturer.
- Speaker #1
What's up, everybody? Your good old buddies, Norm and Kevin here. And I've got an Amazon creative team that I want to introduce you to.
- Speaker #2
That's right, Kevin. It's called the House of AMZ. And it's the leading provider in combining marketing and branding with laser focus on Amazon.
- Speaker #1
Hey, Norm, they do a lot of really cool stuff if you haven't seen what they do, like full listing graphics, premium A-plus content, storefront design, branding, photography, renderings, packaging design. and a whole lot of other stuff that Amazon sellers need.
- Speaker #2
Yeah, and guess what? They have nine years active in this space. So you can skip the guesswork, trust the experts. There's no fees. There's no retainers. You pay per project.
- Speaker #1
So if you want to take your product to the next level, check out House of AMZ. That's houseofamz.com. House of AMZ.
- Speaker #2
I wonder why... Somebody hasn't just taken it under their wing and developed a really good directory. And you're right. It's really tough to find a great manufacturer here because you can't find them.
- Speaker #1
Trade shows are probably like going to trade shows or something is the only real way. Google who makes this in the USA and hope and pray that 1999 site shows up and they're still in business. Yeah.
- Speaker #0
Well, and trade shows are great for it. I mean, there's a billion dollar idea in somebody creating Alibaba of the U.S. It's because that's how so many people are finding their manufacturers for China. But it's I mean, it just doesn't exist in the U.S. It's it's hard. It's it's an antiquated industry in its on its marketing side.
- Speaker #2
Yeah. You ask most people about manufacturing in the U.S. They say it's dead or it just smells funny.
- Speaker #0
you know it's it but it's still there you just have to look in certain categories some is just non-existent yeah so the us can beat pretty much any country nowadays unless the product has a couple issues extraordinarily high labor that cannot be done by a machine, which machines are getting better and better by the day. I mean, we're implementing vision systems that are accurate to 0.003 of a millimeter, but takes like painting little metal soldiers. You can't do that in the US yet. It's too labor intensive. Things that have massive environmental impacts, the US actually protects its land. A lot of the- countries that we're competing with they will throw acid in the ground and there's just no there's really no place for a lot of those highly highly contaminating um businesses in the us yet and then the last one is things that just don't have the infrastructure in place um one of the the us is extraordinarily large and our manufacturers are everywhere uh so to get a highly complex item you've got to go to five or six different manufacturing companies get somebody to do the final uh assembly all that we kind of counteract counteracted that because we own all the factors of production we'll put a client through one company but they're actually touching all of our plants so that you when products left the us they were entirely made of sheet metal or entirely made of plastic if you go to a store nowadays and try to find a product that is made out of one process it's almost zero so that's a redevelopment that's going on right now is being able to get american manufacturing to match where products have moved in the last 20 years because like in china you have these hubs of like if you're making a certain type of thing there's a city that specializes in that type of thing and
- Speaker #1
so all this stuff like you just said five or six different things they're all kind of geographically close to each other But here it's all spread out all over the place. You might have a guy in North Carolina and you need the guy in California. You need the other thing from Michigan or something. And yeah.
- Speaker #2
So this is an example that happened where you just have to think a little bit differently. It's just materials. So we had a project that we were working on where they were bringing in some wood products with sort of a rough sandpaper adhesive. on the top of it, but they were all doing it by hand. And we brought it back to the States and we did complete automation. So it was able to be built automatically and much more precise. And we saved 30%. Then my partner, he took it and he had it done with resin. And it did another, I think it was another 30% on top of that. But just by being innovative,
- Speaker #0
yeah there are ways that you can work with u.s manufacturers that can out compete uh any china product yeah and with like us because because we have that breadth of manufacturing one of the issues if you go to somebody who's got a hammer everything has to be a nail and being able to innovate on hey just tell me what the goal of this product is to pull off can we swap resins can we Can we do this? Can we do that? How can we redevelop? And in the last 10, 15 years, just like everything else in the world, computers and automation and AI and all of that has come such a long way that you can really get a lot more done in kind of those focused redevelopments of products to get them to work the best in the U.S.
- Speaker #1
What about natural, what about resources? I mean, China has... some of the almost all the natural resources that you need in manufacturing we have quite a bit too but still there's a lot of stuff that has to come from other places um is that the case uh or are we strong on like certain areas like steel and weak in other areas like uh i don't know some sort of ingredient or
- Speaker #0
something so the us is the number one petroleum uh country in the world so right plastics we we we can win on Um, steel, we have ridiculously strong infrastructure and because most steel is steel, aluminum, all that, the bulk of what's being consumed nowadays is actually recycled. So the bulk of our steel is old washing machines that are re refined in the U S um, and, and things like that. So really you don't only when you're getting into specialty, uh, like if you need cobalt, the U S doesn't, uh, they think they just found a section, but. If you're doing like battery tech and all that kind of stuff and those kind of rare earth style things, that gets harder. But for the basis, the U.S.'s infrastructure for material sourcing is… it's incredibly strong.
- Speaker #2
So Kevin and I sell a lot on Amazon and you know, there's this focus on made in America. Do you find that to come at a premium cost? Can you charge more for having made in America?
- Speaker #0
No, I mean, there, there is a subset of consumers that, that they will pay a premium for it. But what it does is it will make the difference in the purchase. So if you're a dollar and they're a dollar, you will win that battle almost every time if you're made in America.
- Speaker #2
Perceived value.
- Speaker #0
Yeah.
- Speaker #1
And patriotism.
- Speaker #0
And patriotism. And there is a huge feeling that goes along with it. But the reality is you're not going to be able to get 30% more with the average consumer. Because times are tight for consumers. So they are going to be looking for the best perceived deal.
- Speaker #1
I just know, Norm, if it says Maine, Canada, I want a 30% discount.
- Speaker #2
Don't get me started.
- Speaker #1
What about nearshoring? I mean, you have all these Mexican, I'm sorry, Chinese. factories coming in and along the borders uh putting in uh factories and stuff that are chinese manufactured and chinese run and some of in some cases are even coming into the koreans are coming into the u.s and setting up chip manufacturing uh stuff what
- Speaker #0
are your thoughts and what's what's going on in regards to that and how does that affect things so i mean that's been going on for a long time uh it does affect things the reality is those facilities are usually you incredibly inefficient um they're the we actually we um have some stuff that gets made down in juarez mexico i've got a plant in el paso and we we trade it up uh for some heavy hand work style stuff um it's one of those things that it keeps on going back and forth take a company like general motors they'll say that they're pushing a bunch of mexico they go down to mexico while it's cheaper labor and it's functionally on paper looks like it's gonna be good then they come back and go wait but the American plant is still producing way more profit for us so you see it trade back and forth it is something that we keep an eye on but the with the onset of automation getting so cheap and so incredibly powerful things like that are it not what why pay the extra freight why not why have it be that extra headache So it really is just a balancing back and forth of what is the trend this week.
- Speaker #1
And now a 25% duty. What do you think is, forget your political association, whether you like one party or another, but what do you think is the ultimate, what's going to ultimately happen as a result of what Trump has done with imposing the 25% on China, I'm sorry, on Canada and Mexico, and then adding additional? 20 to the 25 that's already on most products coming out of china do you is that just do you just see that as just a bunch of political negotiation stuff or is that really dramatically going to affect the manufacturing of stuff in the us to receive even more coming here or what
- Speaker #0
are your thoughts on the end result of what's going on here so and i've been talking with my teams and my customers about this a lot there's two different time windows you have to look at In the 12-month span, this is going to be the wild, wild west. Nobody knows where it's going. Everyone's trying to predict it. Do I think the Mexico-Canada tariffs are going to stick long-term? No. The Chinese tariff, because of geopolitical issues and, frankly, wanting to get money not going to that country, I think they are going to hold those. And I don't think they're going to pull back. And, frankly— China's starting to consume enough products internally that I think the Chinese don't have to fight it as hard as they would have, say, 10 years ago. If you go out to 18 months, 19 months, what I think you're going to start seeing, especially on big blue chip companies, is they needed a reason to make a decision where the next plants were going. And a plant, so like when we start working on a part number, for big multi-million unit 10-year contracts and stuff. That part number is in development for five or six years. If you've got a tariff threat sitting there, even if it's only for 12 months, that is enough to push a blue chip plant to go, you know what? We're going to go into Indiana. It was half a dozen here, six of the other. And we're actively watching them do it. Where it's, you know what? Let's not play risk here. We've got four years of this administration. that plant's going to open right about this time it's too risky for us to do it so i think you're going to see a large set of part numbers that are part numbers and plants that are going to open in the us in the next four or five years um and then you go a longer time period this same calculus is going to happen then again um and there what a lot of people don't realize is a lot of big blue chips their manufacturing plants are frankly disposable. They build these plants up to run this engine or this transmission, and then they'll shut that plant down and build the next one next to it or a couple hours away where they're seeing it. One of the big ones that will change this is a lot of companies are doing a lot more regional manufacturing. So if you know you sell a lot of trucks in the South, the truck plant is uh the truck plant is now in four locations in the south where you're okay i've got my i've got this product set makes a lot of sense on the east coast in the us and as those go they're a lot harder to move because they're now cutting that delivery time and the freight so low they can't rebound from that it's that it'll hurt the balance sheets too
- Speaker #1
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- Speaker #1
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- Speaker #2
It'll be interesting to see what happens with the auto industry. I'm in Canada and just 18 kilometers away from me is a big Honda plant. They just announced Honda, I guess, heading down to the States. I don't know if it'll affect the plant or not. You know, Canadians, US is our biggest market. But what I'm afraid of. is the inflation side like when you start bringing in 25 tariffs or you know additional tariffs on china i wonder what that's going to do um and i guess nobody's going to know like if you listen to the people marketing this uh it is a marketing question you know where does this where does this go uh down you know uh down the line somebody's got to pay for it you
- Speaker #1
I see some companies saying that they're just going to absorb it, and then other companies are going to have to raise pricing. It depends on, I think, the case-by-case basis.
- Speaker #0
Yeah. I mean, for every big win, there's going to be a big loss. And that's where the next 12 months is just going to be a roller coaster. You have no, you're not going to see it. You're not going to see it in any instant period. Most products, big, big blue chip products, the vendors like us, we've already agreed to pricing. So if we get an increase, I'm going to have to battle 18 months to the final consumer to get my price increase. So it's not going to be an instant thing. On things like Amazon where that lead time is shorter, I think you're going to see it more because people are importing the products every single day. But on a lot of the items you see at a store, that pricing has been locked and it's going to be locked for a long time. So. it'll come down to whether or not the retailers or the dealers start trying to take advantage of the situation. But the cost to produce isn't changing to the OEMs.
- Speaker #1
It seems like there's a shift now from in the 60s and 70s and 80s, we went to globalization. And that's when China really, China wasn't the world's factory until the late 80s, early 90s. And when that really started was Taiwan before that and a few other places. but they really, they put, they... made a concerted effort to actually do it and we have this whole globalization where they basically became the world's factories and a lot of people or a lot of countries are backing off on that and they're going more nationalistic now and you look at the us with semiconductors they're freaking out because all the top stuff is in in taiwan primarily and they're like well shoot what if china takes over taiwan then we're screwed on all these nvidia chips and all this stuff so we better go build uh factories in the u.s and biden put in some incentives and like here in austin there's a 30 billion dollar samsung plant being built uh in huddo just north of austin right now and there's several others around the us are you seeing that in under other industries too where people are like we got a cya and i and get some some of this stuff so that we're not 90 dependent on the world we're 50 50 or
- Speaker #0
70 30 or something like that yeah i every single group that we talk to i mean i i I'll tell you on election night, I had Chinese companies calling me asking to take part numbers. As it became clear what direction it was going, my phone starts ringing because even other countries are like, shoot, we need to have some of our parts being made there too, so we stabilize it. The one big thing, and you brought up that China built the world's factory. This isn't a new thing. The best way to become a world power, is to be the number one manufacturing country in the world. If you look what we really did to Britain and Europe as the US, when we launched our industrial revolution and we started making everything they were buying, all of a sudden we were in charge. And if you look through history, as that's happened, world powers were created on the back of making products. And I think people...
- Speaker #1
That's a good point.
- Speaker #0
I think people are starting to realize that a little bit and they're like, ooh, for political reasons, we need to have a strong manufacturing sector.
- Speaker #1
Yeah, that's a really good point. If you look back, now that I think about that, even the British Empire was built on shipmaking and the ability to actually do that. And you look at some of these others, you look at the Roman Empire was built on, it wasn't necessarily the same type of products that we have today, but it was built on. technology and information and education and all all that kind of stuff and the us is the leader in that and even look at like apple it says uh what's it say designed in cupertino manufactured in china or something like that so they're still emphasizing that that aspect but um what about like the labor cost here i mean that you have to balance this is another political thing with immigration a lot of the immigrants they come to this country are willing to work for the lower rates because that's still better than what they got back in the U S. And a lot of times that's who's working, whether it's the fields in California or it's the, the, some of these manufacturing plants and there's going to be a change in that are, are the regular American people willing to go into a factory and do this, or is it going to become all a figure robots and not robotics? That's going to be doing all this stuff. Where, where do you see that going?
- Speaker #0
It's, I mean, Automation is going to, it has changed the game. When people think about American manufacturing, unless they live it, their mind always goes to like a greasy place with downtrodden workers and it's just a horrible environment. I don't know if you've ever seen the drone footage Tesla did of their new plant. It's crystal white floors. There's machinery everywhere. There's robotics everywhere. So the people running those machines, they're paid more. They really are. But they're getting an effective return on investment for that labor drastically higher than anywhere else in the world. so and Because a lot of stuff is moving to the US, a lot of people fear automation. Oh, that's going to take away jobs. No, it's actually increasing jobs because what it's done is it's lowered our cost to manufacture enough to be able to take part numbers back from other countries. So no matter how great your automation is, and Elon ran into this with Tesla, he automated, their goal was everything. And they ended up actually taking offline, I think it was like 60% of the robotics because you can't automate everything. Humans are incredibly important. I don't care what anybody's doing with AI at this point. There's something about getting a couple people in a room that is a completely different way of solving issues and getting things through. So it's a falsity to believe that because cheaper labor is coming in anywhere. He brought up like in the fields. I live on a ranch and that's kind of world that I'm very near and dear to. Do you know who the number one autonomous vehicle company is in the world? John Deere.
- Speaker #1
Yeah, John Deere, the tractors.
- Speaker #0
They're leaps and bounds ahead of everybody else. But the difference is they're selling a million dollar piece of equipment so they can put much better sensors and algorithms than you could into a consumer car. But all of that is being automated. Every single time. And frankly, you it's just changing. The factory work has changed drastically.
- Speaker #1
Well, you hear that in the news, like the Tesla giga plant in Austin, when that was granted the land and some of the tax abatements and stuff. He was going to forget the exact number is going to bring 10,000 jobs or 12,000 jobs or whatever. And they've gone through a series of layoffs. So now it's like, I don't know what the number is, but 3000 people working out there. No plans to get to those numbers are promised because of the automation. and so the argument on the from the other side is like uh he's a liar and a fraud and a theft and this and that and the other well and he's just doing good business well and not even that is i don't think anybody predicted how fast automation would be changing um and how well it would be implemented i i we're looking at um some robotic uh systems right now that
- Speaker #0
the robots actually have full vision cameras on them and they're going in and grabbing uh it's a 150 pound part and putting it into a machine for us, which is currently being done by a human, which is incredibly taxing on their body. And what that has ended up creating is now I can actually put vision on the robot. So the parts don't even have to be in the right spot. It's accurate down to three microns and it's finding the stuff. If you, if you would have asked for a system like that five years ago, you're talking quarter million to a million dollars. I found one of those cameras on eBay for $8,500 yesterday.
- Speaker #1
Have you seen the figure demo? It's on YouTube. It just came out, I think, last week. They got two robots next to a refrigerator. So there's a refrigerator to the left of one robot and another robot, and to the right of the other robot is a drawer, like a pantry drawer kind of thing. And they put two baskets in front of each robot with apples and eggs and milk and different things. The robots actually, each one of them took turns and they picked something out of the basket or even out of the other one's basket, like an apple. Oh, apple turned around, looked at it like you say with his vision. Oh, the apple goes over here in the pantry drawer. Another one picks up the milk, looks at it. Oh, this one goes into the refrigerator. It opens the refrigerator door and actually knows it goes on the top shelf because that's where it fits. It won't fit in the other two shelves down below. It was amazing where this is going. And you just imagine taking And that.
- Speaker #2
basic concept and applying it to manufacturing what you can do it's mind-boggling yeah it's it's the car battle today you know if you take a look at the robots well what you had with dodge chrysler and all those car manufacturers you're going to find with the robots i don't know who's going to win it i haven't seen it they're not sophisticated enough but every house is going to have it one two, three, and it'll come down to the old Sony beta.
- Speaker #0
or um uh beta yeah yeah exactly vhs betamax yeah yeah it's and the other part of that is is what it's creating is a lot more high paid jobs So this is the part that a lot of people aren't discussing because people like the inflammatory side of it is, oh, look at all these low wage jobs. And they're I mean, Apple has been begging for this for years. The U.S. does not have enough industrial manufacturing engineers. They simply do not. Those are very, very good paying jobs. When Apple was going to build their iPhone plant or their display plant. in Wisconsin. It was going to add a ton of jobs. Apple had mapped it out. It was cheaper for them to produce it in the US than it was in China. Foxconn was in on it. The government granted all sorts of concessions for it. It was great. They hit a snag that they needed people to be in that plant and run it. And there simply were not enough American citizens that had gone into that industry. And Foxconn's like, the only thing we can do is bring our Chinese employees and have them run the industrial engineering side of it. And then, of course, because of all the subsidies, everyone's like, wait, wait, all the good jobs are going to somebody else? No, no, no. So there's a huge opportunity in it right now. And we're seeing it where our Illinois plant, they work with the local high schools. And we were just talking about last week throwing robotics into the high school. to just start having these kids learn how the industrial side of it works, because these are really, really solid jobs and the market's moving incredibly fast in the robotics. And the cost of it is just, it's just going through the floor and getting intelligent people that understand the manufacturing process, but also the new tech that's available that, I mean, if I, if I were to have kids right now, I'd be like, Hey, this is a really, really good place for you to be.
- Speaker #2
Or be a plumber. I mean, now a quick word from our sponsor, LaVonta. Hey, Kevin, tell us a little bit about it.
- Speaker #1
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- Speaker #2
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- Speaker #1
Yeah, it's the dirty jobs. It's the piano movers, the plumbers. That's where a lot of these people are going to lose jobs. Those are going to become more valuable because like you said, when you're the youngest guy in the room at a lot of these conventions, the same thing is happening now where it's the guys who are repairing telephone lines, they're aging out, they're retiring and stuff. And you see stuff where now they're using Ray-Ban metaglasses. And so some young whippersnapper is in the field and he puts on the glasses and he's trying to figure out the wires and he doesn't know the old man that's retired and making a little side money sitting on his lazy chair.
- Speaker #0
sees him tells him no you need to change the red one with the green one and uh look behind over here that's where you got to do and you're seeing that kind of stuff uh happening too now yeah it's i mean the the speed that tech is infiltrating manufacturing is unbelievable um and and all all dirty jobs to begin with and the other part of it is it's making it safe so it a lot of those jobs the reason why you you didn't want to do them uh was because they're hard on your body i i mean i i brought up that 150 pound part yeah loading that thing all day long i mean first off you you drop that part and now you're gonna get yourself hurt but now if you've got something that's assisting you so all you're using is your human intelligence to get it to get the thing done i mean it's a whole different world than it was even 10 years ago.
- Speaker #2
I like the leverage. with the safety. So I come from a manufacturing background. My father owned many manufacturing facilities and the accidents that you'd hear about either in the industry or in the different plants. It would be nothing because they were molding shoe components. For people that were there, inevitably, you'd cut your tips of your thumbs off. My dad did. Beam presses where my friend cut both of his thumbs off just because he wasn't paying attention. So that's not going to happen anymore. So these machines that I see happening, not only the automation is going to happen, the safety is going to be happening. but also over time we touched on it before you spend a lot more money but the roi that you get over time is going to be a lot better than what you have right now you like we think about cheap labor that's going to outperform those machines are going to outperform what
- Speaker #0
you have to pay now yeah and i mean the reality is is those machines are getting so much cheaper so quickly yeah and it's i i mean just like everything else. the, When the product comes out originally, it's like, oh, nobody will be able to use it. It's too expensive. And you get teams and teams of people figuring out how do we make it more efficient? How do we get the tech to work smoother? And we're watching it in real time. And the safety is a huge component of it. We've got a lot of machines nowadays that have scanners scanning every millisecond, laser scanning the whole area. And it's changing the speed that the machines are running at. depending how close humans are getting to dangerous points.
- Speaker #1
You said earlier with your ranch, with John Deere, I think I read something recently where John Deere, whatever their sales, it's in way into the billions. They're becoming, they're more of an IT company now than they are a tractor manufacturing company.
- Speaker #0
Yeah, I mean, there's a reason why their largest shareholder is Bill Gates. It's that they are... They are known for putting out a absolutely wonderful product. And they are known now for, we're going to be on the cutting edge. And Deere's been there their whole time. I mean, they invented the steel plow. So that's what put their name on the market. They've always been a very progressive group at looking at innovation, innovation, innovation. and It just so happens you can only make a tractor so much better nowadays. I mean, they kind of got it down. Now it's can we make them do the job and take people out of the fields, take pesticides away. They're using scanning to individually laser burn weeds instead of putting pesticides on the ground. That's the cutting edge of it now.
- Speaker #2
That's safety again. I live in a farm town. And a friend of mine, his brother, caught in a combine, cut his arm off. Another one, 19-year-old kid, killed this summer because he got caught in the combine. And so, I mean, these farm accidents, the safer we go, the more advanced we get with these machines. These sensors are going to help with safety, especially in farming. Yeah,
- Speaker #0
it's a huge push. and kind of circling back on that. cheap labor the trend is moving away where you don't want cheap labor running a million dollar machine you yeah you you you're gonna want somebody that i mean we're starting to see a lot more apprenticeship programs in manufacturing um because the schooling system has told a bunch of kids for 30 years only the degenerates go into manufacturing um and all of a sudden it's like no We, we're looking for very bright people because the, that space is completely different than it was 10 years ago or 15 years ago, 30 years ago.
- Speaker #1
Yeah. You look at the, I mean, a lot of people think, think about AI or quantum computing that's coming and they think about, oh, this is pretty cool. I can rewrite my emails or redo this and do that. But the biggest impact these new technology is going to have are I think on medicine and a lot of people will say on supply chain and manufacturing. And a lot of people don't realize they can't get their head around, well, how is AI going to affect anything on manufacturing or supply chain? And that's where a lot of the big things are. You're going to have agents, especially this is the year of agents. And you're going to start seeing more and more agents coming online in the next several years and getting more and more sophisticated. Where you're going to be as a back to this Amazon seller, I'm sourcing something instead of sourcing it from China. I'm going to say it's going to you're going to have an agent that goes out and sees what the opportunity is in the market. but based on a whole number of criteria, you have another agent that goes, see, what can we make this for? And it's going to go talk to the Thomas directory of AI or whatever and say, oh, this factory in Dallas, Texas can make it or this one in China can make it. If we put this twist on it, here's how we do it. Here's the 3D rendering. So there's everything already done. You don't have to have a person involved. Just have someone sign off for it and then go see what the cost of manufacturing is. Come back and a human at the top approves it. And you're going to have this whole system where you're going to be able to go to market on products way faster than you did. And... Print-on-demand has been around for a long time, and it's still a lot of people just think of it as a print-on-demand, a little printer in your house making your iPhone case. But there's people here in Austin, there's companies making entire houses print-on-demand. And there's big machinery that a lot of people don't realize exists. And you're going to be able to go to market faster and more efficiently and optimize supply chain dramatically because the AI can analyze all the stuff. What are you seeing on, uh, what do you think is coming on, on that side of things?
- Speaker #0
So I will wholeheartedly say I was one of those people. Uh, if you would have six, nine months ago, I was looking at AI and I'm like, yeah, I don't know where we could ever use this in our plants. Um, it doesn't make any sense in manufacturing yet. It's not there yet. Um, I had one of my executives call me the other day. He goes, you need to see something I just saw. And I'm like, okay so i take the call and he gets on and we're meeting with this team they're ai specialists and we we use erp and manufacturing systems but the problem is a lot of what we do is very very strict especially in the automotive space and as we're sitting there we're like hey we need an erp uh that is designed to fit this exact process that we do and you know we're just gonna be quoted He puts it into one of the AI processors. He codes it in three minutes, and we had a launched product the next day. And in that plant, if we increase our cycle time by half a second, we could actually start losing money on that part. So now they're having AI go through and figure out, okay, we now have the predictive analysis of when that tooling is going to go. Can we now take that tooling? and stop at one cycle before, put the next one in. And it's learning all of this based on seconds. And we're fully embracing now because we didn't realize how pervasive that was going to be and how quickly it was until somebody smarter than us was like, no, let me show you what I can do with this. And it's, I were. Another one of our groups, the amount of resin used in something. We were developing out products, kitchen utensils. And we were able to tell an AI to design the kitchen utensils. And we had teams of regular 3D designers working on it. And we started screwing around like, hey, design me five kitchenware lines. And it needs to be this much plastic or less. And then all of a sudden, it's spitting out. design after design and we're like, oh, this is going to be dangerous. You just did what teams were doing for months.
- Speaker #1
Yeah, it's amazing where this is going. So you're a believer now. You're a convert.
- Speaker #0
I am a whole believer. I was never so happy to be proven wrong.
- Speaker #2
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- Speaker #1
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- Speaker #1
Right now is one of the best times to get started with Stack Influence. You can sign up at stackinfluence.com or click the link in this video down in the description or notes below and mention Misfits, that's M-I-S-F-I-T-S, to get 10% off your first campaign. Stackinfluence.com. You talked about vertical integration with what you're doing. I mean, you said you own a lot of the factories or you buy a lot of the factories. How important is that to control that whole supply chain up and down? Because a lot of people don't do that. They're waiting on somebody else or they can't integrate them fully. How important is that? And what do you find in the efficiencies there?
- Speaker #0
We felt it was incredibly important. And part of it kind of goes back to your earlier comment that a lot of American manufacturers tell you where to stick it when you try to sit and work. We got sick of that game. And so a product is probably going to have three to five processes in it now. And if any one of the companies that's involved decides to be a jerk, he ruins it for you. So we feel it's been incredibly important for us to really be integrated. And even with our clients be heavily integrated because it just takes the finger pointing away. Like we play in a world of tight, of tight tolerances all the time. Well, if my part is... at the upper end of the tolerance and the other person's part is the lower end of the tolerance and the others is at the lower all of a sudden even though everybody made the right part they still don't fit together correctly and the what what ends up happening is everybody's finger pointing going well i'm right you're wrong well that doesn't do anything for the end client the client is the part to work correctly so when we're just arguing with ourselves it gets a lot further because there's one singular vision um and we've gone even as far as We make a brand of hangers that's exploding. Really, really cool product. We teamed up with the founder of it. He was pushing into all that stuff. Well, our injection molding plant is injection molding his hanger. We're processing his Amazon shipments. We're processing all of his Walmart and Target and all their retail stuff because I have a full retail team because we've worked with Walmart from… 30 years at that plant. So we actually just came to him with a, you sell it, we will take care of everything else. And he called me about a month ago. He goes, that was a godsend. He goes, I'm not having to route package it. And we're like, yeah, it's just easier that way. Let us take our internal knowledge bases and just get you as close to market as possible. Instead of trying to figure out three PLs, trying to figure out this, it's just too messy.
- Speaker #1
So you may only manufacture something when someone comes to you with an idea and you guys figure it out. Or you actually have a team on your side. That's like, you know, some of these Chinese factories where they just come up with ideas and then go try to find someone to white label or private label it. Or what's your which way do you work on that?
- Speaker #0
Both. A lot of the private label stuff or we've got significant amount of SKUs of our private label stuff in Walmart. So we're making it, it is Walmart branded. Our team designed it, our team pushed it forward, of course, with the end consumer giving feedback. And then we've got some stuff, people just hand it to us and say, make this. And about 30% of the time, someone will just hand us a part and say, make this, and we'll turn back to them and go, I can make this, or I can make these three adjustments, and you'll get more of what you were trying to get out of it. And we're doing that even with in the automotive space. Big blue chip automotive manufacturer comes in, goes, we designed this part like great, but we have a way to make it better for manufacturing. Will you look at our ideas? And sometimes our ideas they like and sometimes they go, no, we designed it this way, leave it that way. So it's we operate on both sides of that. We've got certain companies of ours. that are very, very OEM focused where they just make what they're told. And then we've got another group that if you need more of that, hey, let's take you through all this or you need, or we're developing white label products, that group focuses on it and then sends it out to the other plants.
- Speaker #2
So I want to talk about what we discussed at Marketing Masters. That was a couple of weeks ago. And I find it amazing. how you grow, how you expand your M&A. You know, you're just, you're constantly looking and finding new companies, executing and getting it out there. You have a three-person team, you, your brother, and I forget the other person.
- Speaker #0
We actually, we have a four-person team. We've got me and my brother. One of our partners is our general counsel. And another partner heads up branding and imaging stuff. Our companies are ran with those four people.
- Speaker #1
So that's the question. So we'll have e-commerce people listening and they're focusing on just one thing, which isn't a bad thing. How are you going out there and expanding to all these different manufacturing facilities and acquiring them?
- Speaker #0
So we... We divvy up the work. My brother bird dogs all of our dudes. We've got very strict criteria. When the market has a lot available, which right now it does not, he will be looking at 100, 150 companies a month. Of those, he'll put four or five on my desk. We will go through them and go, okay, this makes sense. We acquire about four or five a year, or we did four or five last year. And we're looking for very strong teams inside the company that understand their product very, very well, because that takes your management time from the holding company level drastically down. We're looking for, a lot of it's about the passion of the people. We operate in a lot of small towns because frankly, what we've learned is a lot of people in small towns, that company is drastically more important to them. It becomes part of their soul because there's not a ton of options in the area. So their passion for making it successful is drastically higher. And if you get passionate people that actually care about what they're doing, the organization and management of them is so much smoother. than trying to jam work down people's throats.
- Speaker #1
And the other key point that you told me, and I don't know if this is for everyone, but most of the acquisitions, you're really not paying anything up front. Is that correct?
- Speaker #0
No, yeah. We will put equity in a deal sometimes, but realistically, our structure, we do it as leveraged buyouts. So- Manufacturing companies have a lot of assets and we will go leverage those assets to purchase the company. And we do it all on short notes. Usually three to five years is our longest note and pay off the company in three to five years and then it's healthy.
- Speaker #1
So you use their own money to finance the deal? Yes.
- Speaker #0
Um, it's. it works it works when we are small towns norm these are small towns yeah but yeah it works and it takes finding the right deal i mean there's there are there have been companies we really want it um but it didn't make sense for us to do it or there have been um we also we avoid certain industries um like we we avoid the defense industry because defense industry makes a fortune three out of five years and they lose a fortune two out of five years and you it's too it's too risky um and we don't like those peaks and valleys um because it's always you always feel like a genius when you uh catch them on the up but when you catch them at the top of the peak and and you learn on the back side you don't feel as smart so it's we we are we try to focus like we had a group Give us a chip plant. It was an organ. It was a profitable plant. We've made a promise that we're e-softing 100% of our company to the employees. So they wanted to be part of the team. And my brother and I actually said no to it because the chip industry was so volatile. It was so fast moving. It didn't feel like the right move for us. So we just didn't make the move.
- Speaker #2
Hey, Kevin King and Norm Farrar here. If you've been enjoying this episode of Marketing Misfits, thanks for listening this far. Continue listening. We've got some more valuable stuff coming up. Be sure to hit that subscribe button if you're listening to this on your favorite podcast player, or if you're watching this on YouTube or Spotify, make sure you subscribe to our channel because you don't want to miss a single episode of the Marketing Misfits. Have you subscribed yet, Norm?
- Speaker #1
Well, this is an old guy alert. Should I subscribe to my own podcast?
- Speaker #2
Yeah, but what if you forget to show up one time? It's just me on here. You're not going to know what I say.
- Speaker #1
I'll buy you a beard and you can sit in my chair too. And we'll just, you can go back and forth with one another.
- Speaker #0
Yikes!
- Speaker #1
But... That being said, don't forget to subscribe, share it. Oh, and if you really like this content, somewhere up there, there's a banner. Click on it and you'll go to another episode of the Marketing Misfits.
- Speaker #2
Make sure you don't miss a single episode because you don't want to be like Norm. You're going to have a good time. You're coming with your wife to Iceland. Yes, we're very much looking forward to it. Yeah, she's speaking at Elevate 360, but she told me the other day, y'all are coming out a couple of days early, be it BDSS, for the last couple of days of that. And I've got to make sure I introduce you to Pattern is going to be there, the number one seller in the world on Amazon, $1 billion in sales. Very cool. I had them on my other podcast. It hasn't come out yet, but they're masters. I mean, extreme masters of supply chain management and optimization. And they're doing a lot of cool stuff. And I think the two of you, put you two together. The COO is coming. I think there could be some magic happen between the two of you guys. And that Iceland trip might turn into a lot of zeros after for you guys.
- Speaker #0
uh so that that i just can see it right now yeah we're super stoked um and the the events look awesome that that when mary and i were talking like you know what it's just always a great group of people to be around why don't we get there a couple days early rub
- Speaker #2
off on on just just just surrounding yourself with just people doing cool things yeah it's going to be cool be a different experience in market masters but it's a whole different type of event and whole different style but
- Speaker #0
uh you'll get to see another side of what we do but it's just as cool but in a different way so don't forget your assless chaps it has been explained to me many times if they're not assless they're just leather pants exactly
- Speaker #1
that's right uh all right jason uh we're coming to the end of the podcast and at the end of every podcast we ask our misfit if they know a misfit
- Speaker #0
Yeah. A really good friend of mine, he's the world expert on sleep and his name is Michael Bruce. And I think you guys absolutely love him.
- Speaker #1
Fantastic. Yeah, that'll be a good one. You were telling me a little bit about him at Marketing Masters.
- Speaker #2
Market Masters.
- Speaker #1
That's it. Well, BDSS, BDSM.
- Speaker #2
So if people want to reach out or learn more about you, or maybe they go to manufacture something, how would they go about doing that, Jason?
- Speaker #0
Best way is my LinkedIn, I can share the link, or our website is mrca.net, and you can get to all of our different groups from there. Reach out to us. And we run on pure transparency. So even if somebody listening is a manufacturer and just wants to pick our brain, we share pretty much everything with everybody. We figured out that that just builds kind of a better community around us. And so any, any time I need to any place.
- Speaker #1
All right. So I'm going to remove you. We'll get right back to you, but thanks so much for being on. This was great. Love talking manufacturer.
- Speaker #2
Thanks, Jason.
- Speaker #1
All right.
- Speaker #2
Those guys are crushing it. Four of them doing all that kind of stuff. That's a very smart business. Very smart business.
- Speaker #1
Exactly. Exactly.
- Speaker #2
Just imagine if Papa Farrar had access to the technology and the systems and stuff back when he was going. You wouldn't be doing this podcast. You'd be living on Farrar Island somewhere in the Caribbean.
- Speaker #1
Yeah, I could just imagine.
- Speaker #2
Drinking cigars every night and drinking Coke Zeros.
- Speaker #1
I do that now. Oh, man. So this was really interesting. You know, not so much about marketing, but yeah, marketing, manufacturing.
- Speaker #2
Yeah. It all plays together.
- Speaker #1
Absolutely. All right, Mr. King. Why don't you close this out?
- Speaker #2
Yeah, we do this. Y'all listening, we do this every Tuesday. So if you just found this podcast, go back. We've got 50-some-odd episodes of just amazing stuff from email marketing to domains to funnels to just all kinds of crazy, cool stuff. So check whether you're on YouTube right now. Go and look. in the library of videos and see see what might interest you if you're listening to this on spotify or apple there's a lot of uh episodes go in there and flag a few download them for your next plane ride uh and be sure to share if you found this interesting this episode interesting you set that share button and share it with some people that are manufacturing maybe you know someone that's looking for a factory and say hey i heard this guy jason uh you might want to check it out go ahead and hit that share button and remember every tuesday is a brand new episode comes out so if you want to follow us uh you can always find out the latest at marketing misfits dot i got this right now because it's colombian dot co marketing business dot co not dot com norm every time i type dot com i see some uh some swanky stuff um some other guy with a beard or something i'm like what the heck is this um marketing misfits dot co That's where you go.
- Speaker #1
All right, sir. Well, we will see everybody next Tuesday.
- Speaker #2
That's right.
- Speaker #1
See you later, Mr. King.
- Speaker #2
Ciao. Peace.
