Michael Michelini – Do Detailed Market Research Before Creating a Product

Michael Michelini is an American social media, e-commerce, and SEO Specialist who has lived in China since 2007. He is a passionate business connector who helps companies do business in China as well as Chinese companies to work in overseas markets. Michael built Global From Asia, a cross-border e-commerce community, to help cross border business owners learn, network, make business partnerships, and grow global businesses. Most recently, he has joined as a partner at Alpha Rock Capital, which is an Amazon FBA investment company.   “Don’t get caught up in patents if you’re entrepreneur and investor. Of course, it’s important to have your IP, but I think the most important one is a brand trademark.” Michael Michelini   Worst investment ever Setting sail in China Michael moved to China in late 2007 with interest in living and doing business there. A few months later, he met a businessman, Andrew, who was all too willing to take him under his wing. Andrew was a sourcing agency and a product specialist who had been in China for 10 years already. He took Michael through the backstreets of China, and in the process, Michael got to learn all the insights of Chinese business. It’s in these backstreets that Michael got to know where the best deals happen, the inside scoop about manufacturing, who is who in business, and so much more information that helped him build on to his business plans. Forging a business partnership Andrew was impressed by Michael’s internet marketing skills and abilities. He had so many product ideas which he shared with Michael. One of the ideas that got Michael very excited about was a light-up, pour spout. This is a bottle top that you put on top of a vodka bottle or any kind of liquid, and when you pour, it lights up the stream of alcohol to the color of the LED. Michael was already selling bar supplies through his e-commerce business and had customers and distribution pipelines. Andrew would help engineer it, and together they would produce and market it from China. From an idea to a real product They embarked on the journey to get the product ready. First, they brought on a partner with a legal background. Then they found the guy who had a patent to the product idea but had never made a product. Hurdle after hurdle Getting the patent was the first hurdle. They spent so much time going back and forth without reaching a compromise. The patent owner wanted more money than Michael was willing to pay to transfer the patent. Eventually, after months of arguing, Michael put his foot down and told the patent owner to take his offer or forget the whole deal. He accepted the offer. The second hardball Michael faced was that his friend Andrew wanted him to use his friend’s factory. But he quoted an upfront fee of about $20,000 for the manufacturing of the product. This is not to make the product but just the setup fee. Michael asked around and got a few other factories that gave him  $3,000-$5,000 quotes for the same thing. So he refused to use Andrew’s friend’s factory, and Andrew was extremely mad with him. Being young and naive, Michael still kept Andrew in the deal. Michael went ahead and paid $5,000 to the factory that he chose and went ahead with the manufacturing. Marketing hard Michael started sending samples to his friends and business partners back in the US, who all got excited about the product. Everyone called it the million-dollar product. One of his friends got in touch with Bacardi, who loved the product and was interested in having exclusive rights in the US. The problems just won’t go away Michael ran into manufacturing issues with the production time taking forever. At one point, the LED wasn’t bright enough and had to source for LEDs from a different supplier. Bacardi kept asking for changes to make the product better. Then they insisted on buying the product at $1 per piece because they’d use it as a promotional item and offer it to its customers for free. All...