Episode Summary
In this Prime Talk Podcast video Sponsored by GETIDA – Refael Elbaz, the CEO of UNICARGO and a logistics wizard speaks about the challenges of the Covid-19 impacts on amazon logistics and what third-party Amazon sellers can do about it.
The new global Coronavirus pandemic has created challenges for everyone in business, but these challenges are particularly unique for Amazon sellers. Yoni Mazor from PrimeTalk discusses these and more in this first episode.
In today’s interview, PrimeTalk teams up with Refeal Elbaz, the founder, and CEO of Unicargo, a modern global freight forwarding solutions company built on a solid foundation of excellent customer service. Unicargo’s network stretches across all the continents with the main focus on East Asia as they provide improved and cost-effective shipping solutions to their customers.
Refeal Elbaz discusses the challenges of shipping your cargo during a global pandemic while some countries are in lockdown and some strategies you can use to keep your stock in play. He also offers advice to keep sellers motivated and focused on their businesses during these difficult times. If you are an Amazon seller and you’re wondering how to get your product moving to your customers, then this episode is for you!
Learn more about UNICARGO at https://www.unicargo.com/
Get more info about GETIDA’s Amazon FBA reimbursement solutions.
Find the full transcript below
Yoni Mazur 00:05
Hello everybody. Welcome to this episode of our discussions with professionals and today we’re having my dear friend and esteemed homeland colleague, homeland representative Refeal Elbaz or, as we say here in the streets, “Refile” Elbaz? Alright?
Refeal Elbaz 00:29
Hey guys. Hey Yoni.
Yoni Mazor 00:31
There’s two ways to say it, there’s the local way here, the domestic way in the US, and also the Israeli way. If there’s anybody from Israel watching, so we’re gonna say a few words in Hebrew. (Speaking Hebrew)
Yoni Mazor 00:55
We’re gonna go back to English. So Refeal is actually right now he’s in Israel. He’s in the Tel Aviv area, the center of Israel. He’s pretty much quarantined over there while I’m quarantined here in New Jersey, right next to New York City. So it’s transatlantic… It’s a global epidemic, this episode, and this video really highlights how this is a global pandemic that we’re all facing and struggling with. That being said, I want to introduce Refeal. With his company, what he does basically, he’s the CEO and founder of Unicargo. And Unicargo is really a global service for logistics, you know, they’re really on top of their game. I see them everywhere, helping you know, all the sellers community here in America and all across the world. They’re doing a phenomenal, phenomenal job. So I decided that it would be a good idea to have Refael come on board and basically kind of give clarity, a little bit of clarity, about the pending problems that are going on right now and what might be a few of the solutions for these problems. So, if you want to tell everybody about yourself, Refeal, this is your point before I’m gonna dive into the questions, so go ahead.
Refeal Elbaz 02:08
Yeah. All right. So thanks for the introduction. That’s pretty accurate. So we founded Unicargo back in 2015 and we established ourselves as a Dedicated Freight Forwarder to the e-commerce community, e-commerce sellers, e-commerce entrepreneurs, and companies. And basically, we deal with shipping, international shipping, from anywhere in the world to anywhere where Amazon and e-commerce business operates. Basically today we shipped from all of the Eastern Asian Asian countries to Amazon in the US, Amazon Canada, Amazon Australia, Amazon Japan, Amazon Dubai, and we ship a lot of goods from India. After the big crisis with China, a lot of people moved to shift production to India. So we have a lot of activity in India right now. We do warehousing, 3PL reverse logistics, customs compliance, import regulation help. So we deal with everything related to logistics for e-commerce businesses and companies. We work from the smaller sellers if you’re just starting, and we have those onboarding teams for, you know, smaller sellers and we work with one of the biggest sellers in the world as well. So we are accustomed to working with every type of business and that’s one of our advantages. Before the epidemic, we were over 60 employees around the world when we started. We are now, well we’re gonna talk about it a little bit, in this conversation because that’s what it’s all about. But we actually, we are expecting a major hit in revenue, in income, in revenue because of what’s going on. And we all just started to…everybody’s working from home by the way right now in our Israel office. The China office is working regularly. They got back to work back in February in China, but in Israel, we are all on lockdown. Everybody’s working from home. And we prefer ourselves, we prefer the company, me as a CEO, you as a CEO, you know what it’s like when you’re going to have, you’re going to expect that your revenue’s gonna cut by 50%. You have your fixed overheads, you have salaries, you have rent, you have, you know, all the bills and it’s a hectic situation, it’s crazy. But you know, it is what it is. That’s business, you know, business is dynamic and you got to be on your toes every single day. You know how it is. It is what it is. We are trying to find the opportunities in that, you know, difficult times and we gonna figure out we’re gonna go through it like everyone else. And I believe we’re going to come out even stronger, slimmer, more efficient, but we’re gonna go through it. There is no other way. There is no other way for it. You know there is no other way. You gotta get through…
Yoni Mazor 05:00
There’s no way but up at this point that things are so down, there’s no way but up just to kind of summarize Refeal’s point so far, if I got it right, really the specialty of him and Unicargo, his company, is just to keep it simple, it’s dealing with all the headaches, okay, all the headaches of moving inventory from point A to point B, doing it efficiently with a big element of cost reduction. But not only that, even though this is a specialty, they’re forced basically to also look internally into their operation, and how to cut even more costs and reduce the costs and their operation to stay lean, and thin during this time of crisis. So it’s fair to say that all of us are in this together, you know, all the service providers that are out there, along with Amazon community sellers. We’re all in the same boat in this point, we’re all struggling and all kind of feeling fearful or uncertain about the future. What’s it, what’s it going to hold? But in a very entrepreneur spirit way, we feel that it’s going to be okay, it’s gonna rise right up, you know, because things got pushed, so so down. Hopefully the only way back is up. We’re not sure exactly which trail it’s gonna be, but something’s going to open up. But I want to, with your permission, just jump into kind of the first question that I have, which is itching me and I guess many other sellers around is, you know, what’s your advice about what’s going on? What’s going on with Amazon’s restriction of sending FBA inbound shipments until April 5. So you know, it’s kind of new and relative is almost two weeks till this restriction is still an act. Hopefully, it’s gonna get lifted, but so far, what’s going on? And what do you think? What’s your advice for sellers?
Refeal Elbaz 06:42
Yeah, that’s, you know, one of the biggest questions today, out there and on all the forums, and we get it from clients as well, every single day, we get phone calls from clients, you know, what kind of solutions are out there? So basically, Amazon has put their restriction last week, end of last week. We all know it, we all heard it. It was hitting us very early in the morning Israel time, and it was like the middle of the night in the US. So we had a full day of getting phone calls from clients. And basically, the solutions you have, the options you have are basically, if you have cargo in production, and that’s one of the biggest challenges. We see people that had cargo in production, and they didn’t open their shipping plans. And now they cannot, they have produced, they can’t ship it to Amazon. Their only options are either…
Yoni Mazor 07:34
When you say cargo and production, I guess there are your terms, but basically, there’s a production going on in a factory overseas, it could be India, China, wherever it is. So it’s in production, but the cargo, meaning it’s the shipment attempt VA, hasn’t been set up yet.
Refeal Elbaz 07:47
Yeah, they didn’t create a shipping plan on the Seller Central. And now they can’t create the shipping plan. Now, their shipment, their products are going to be ready like in about a day, two days, that week, two weeks, and now they end up with a situation where they can’t ship it to Amazon. So their only option is either you ship it to a 3PL or right to an external warehouse in the States, or either you keep it in China, or right in China, the storage is basically free, some of the suppliers most of the suppliers will let it, let you, will hold the products for you, will hold your shipment there in their facility. If they don’t have the capacity, if they don’t have the space to keep it in their facility, just contact your freight forwarder. Freight forwarders know that in China, the storage is almost always free, we give our clients like two sometimes three months free storage in China because it doesn’t cost us anything. So, if you have the ability, if you have the length, or if you know you have enough stock in Amazon, you can keep it in China, that’s perfectly fine. Keep it to save money, you know, save money on storage, because storage, we see storage prices are hiking up, you know, going up very fast in the US because a lot of people are now requiring those storages because they can’t ship to Amazon, many of those goods are going to 3PLs and prices are going up. So if you’re looking to save some money, you can keep it in China. If you get out, if you really need stock, if you’re gonna get out of stock soon, and you really needed that production, that product that you produced in China. Your other option is you got to relist out your listing with FBM, you got to go “fulfill by merchant” in order to not go out of stock. And “fulfill by merchant”, if you are accustomed to FBA and you work with FBA all of those times, it takes a little bit to understand the FBM way, especially if you don’t live in the States. If you’re a foreign seller, you cannot ship those products to your home and then ship it from your home. Do your own FBM, that’s the easiest way. Obviously, if you’re a US-based seller, the best solution for you is to get those products to your house, keep it in your garage, keep it in your house, even in your room, whatever because you can’t really know. Even if you ship it to a 3PL, you can’t really know what’s going to happen tomorrow, those 3PLs might be shut down as well. Nobody really knows. Even if they are considered as an essential business, a 3PL and logistics companies in the US, they are also in Israel and in China as well, they are considered as essential businesses, essential facilities. So even in the case of a shutdown, they are supposed to be kept open. But in case somebody will get sick in that 3PL, it will have to shut down. So there is, again, this epidemic is, it’s crazy, because there’s huge uncertainty, even if you ship into 3PLs, start doing FBM, your listing is live again, the next day that 3PL can be shut down as well. So the best, if you’re a US-based seller, the best and most safest thing to do is ship those products to your home, if you can’t ship them to Amazon.
Yoni Mazor 11:04
But if you can ship it to a house, it kind of suggests two things: that you are not such a large seller or the products that you sell are on the smallest size of the weight and dimension category, so you can really, a few pallets you can store at home. So…
Refeal Elbaz 11:19
If you’re, even if you’re a bigger seller, and you have, you’re like, let’s say you have a container load, right, you have a full container, keep that in China, or send most of it to a 3PL in the States, send some of the products to your home, send one box, two box, three boxes, just to keep that listing alive in case of, you know, catastrophe where 3PLs are shut. Amazon won’t let you keep that stock and get the sale.
Yoni Mazor 11:43
I would actually add to your tip. So I think it’s good advice. So you know, you can break it apart saying you know, you ship your cargo into the US, you keep it in a 3PL, you know, third-party logistics provider, you ship a few units to your house for a contingency for emergency reserve. And then I would add to that maybe even a second 3PL, maybe in a different area, maybe in an area that’s not so affected. Like North Dakota, South Dakota, which those areas are not heavily populated, and hopefully the pandemic is not going to go ballistic over there as opposed to, compared to a heavily dense population like, you know, New York and California. That’s another you know, it’s all about your scale, your size, and your muscle, your ability to really restructure yourself in a way where you have a few walls of support. So if one of them gets second or third, yes..
Refeal Elbaz 12:32
If you can distribute between different 3PLs, that’ll be one of the best options, but it’s pricey. You gotta have instead of one shipment, you’re gonna have now two and three and four shipments, you know, the times like that, that might be very good advice, um, it might cost more, but you’ll get protected, your listing will be protected. And you’ll make sure you have products.
Yoni Mazor 12:56
Yes, yeah, the con, basically the pro is the benefits of being able to spread yourself in such a way will be that hopefully, you’ll continue running sales, your revenue is not going to drop or at least not gonna get heavily affected plus your best seller’s rank is going to hopefully stay, maybe even maintain, because if your competitors are running out, because they’re not set up for it, you know, you’re gonna get more traction, more and more sales. I know for myself, on I think it was around Friday, last week, I was helping a company to do over $200 million in sales a year. And I was, they never kind of did FBM, ‘fulfilled by merchant’, before. And they already worked with a few warehouses in the States, East Coast and West Coast. So these two warehouses were setting them both up for FBM mode. And, you know, I found it that you know, the big players already they’re structured in having…
Refeal Elbaz 13:46
Yeah, they have the infrastructure, they just need to start, to initiate the process, get you know, get a customized 3 pricing, 3PL pricing for FBM fulfilled by merchant are a bit different because you have stopped receiving. You gotta separate it by beans, and many different costs associated to working in that. Just make sure you understand your cost, you understand exactly how it’s gonna be, what it’s gonna cost if you’re likely to fulfill your order, do you know your last mile costs, make like a scenario to 3PL. Make a scenario of what it’s gonna cost you, make sure that that 3PL connects directly to your Amazon Seller Central to get the sales automatically. You don’t want to do things manually, it just, it won’t work, you know, even especially if you’re a bigger seller, you can’t work manually. You can’t work with 3PLs with doing things manual like you’re sending an Excel file of your orders. It’s got to be automated, they got to connect their WMS to your Amazon Seller Central.
Yoni Mazor 14:51
Yes. The company I was assisting, their 3PLs already have their own API connection, you know, with their warehouse management system. So you know they’re pretty much on top of their game, they’re ready to go. I think, you know, it’s very important that you take a simple Excel spreadsheet and say, “What is gonna be all these added costs for me to have a setup you know of a 3PL in my house, I mean, either outsource some of the units in my house and maybe even a second 3PL. What are gonna be the potential costs?” But then on the other side, say, you know what, what is going to be my potential damages, if 10% 20%, 30% of my revenue is going to get caught, how much less cash am I going to get, and how much less profit, or am I going to lose money because I’m not making enough sales and profit to cover my expenses? So you have to have that measurement, it’s a delicate balance. But if you see that you’re about to lose money, if you’re not going to back up your sales, so might as well spend a little bit more money even though it’s super hard right now, on a psychological level, because everybody’s hoarding their toilet paper, but also the other paper, it’s called cash. So, you know, you have to take a brave move and say, “You know what, even if I shell out all this cash to set up this infrastructure, that’s going to reward me because I’m not going to lose any sales, and I’m hopefully going to stay above water, either the break-even or even make money. And if everybody else falls, make a lot of money, it can even come the opportunity to momentum, I might even completely shift around.” So it’s something that to be done, you know, delicately and…
Refeal Elbaz 16:15
Another thing, another thing, as a business owner, you know, and an Amazon seller, doesn’t matter the size, even if you just, you know, doesn’t matter the size, or how many sales you have, if that’s your main income stream. And we’ve all heard of these, you know, a lot of Amazon sellers are getting hit hard now, because they are not essential. They sell clothing, they sell luxury goods, their sales all dropped, like, you know, those sales are dead.
Yoni Mazor 16:41
Just like Macy’s, Macy’s right now, and Kohl’s and all these department stores, are pretty much frozen, I would say that these categories on online are probably also close to for
Refeal Elbaz 16:51
As a business owner, you got to take your Excel file, you gotta make, you’ve got to prepare, what you’re gonna expect. You expect 80%, you know, cut the next in revenue, you got to make you got to prepare yourself, I know, it’s frightening. But the main thing is not to panic, if you panic, you get paralyzed, you might lose your business. And you might lose even more important things than that. You gotta react very fast, you gotta face the situation, and you got to act as an entrepreneur. Make sure you expect and you consider the worst-case scenario of how much or how bad, you’re going to get hit by this crisis and make adjustments. Make sure your expenses are right for what’s going to happen.
Yoni Mazor 17:39
You know, I would say that any business right now, online business, e-commerce business, probably most of the businesses that are out there, prepare your cash abilities to pay for your overhead for the next 90 days, you know, worst guess will be two weeks, 30 days, 60 days, but prepare yourself for the worst in terms of cash flow for the next 90 days. That being said, you know, in the United States we have the SBA administrator, basically, it’s a small business administration, where I think the federal government is gonna enable it to spread out a lot of loans out there, and it’s gonna be all government-backed. This is, you know, good news for Americans and US-based sellers. But, for example, in Israel or maybe other countries, what, do you know what they’re gonna do to secure funding at this point?
Refeal Elbaz 18:23
Well, in Israel, you either go to the bank, the government gives you shit, they haven’t released anything yet, the government, you know, help for small businesses and stuff. So they gotta pretty much take care of themselves, unfortunately. So banks are the only, you know, that’s the only way we can get capital these days in Israel. You know, we as a company, we also did the same I, you know, we have, with offices and everything, we have over $700,000 of overhead in a month, you know, before we just opened our eyes, 700k you know?
Yoni Mazor 19:03
Before you even drank a coffee, already $700,000 down?
Refeal Elbaz 19:07
Yeah, yeah. So, when I expect 60, and even, I gotta go for the worst-case scenario, I gotta prepare for the worst-case scenario not to get caught with my pants down. In Israel, we say, (speaking Hebrew). So, you got to take action in order to adjust your expenses to the income you’re gonna, you’re expecting. So if I expect 80% decrease in my income, I gotta make sure my expenses are aligned with that, you know. So and that’s…
Yoni Mazor 19:39
Either that, either that, you know, but if you think this whole situation hopefully will be temporary, and you don’t want to lose any talent, and really, people in your team which are really assets for you, you don’t want to lose them, then you’re gonna have to maybe take another risk, or some risk, and going out and getting some funding, you know, a loan. One year loan, two-year-long, three-year loan, you know, it is a gamble. So you can stretch the next 30, 60, 90 days, see what’s going on. If in 90 days, the whole world is really, you know, in the gutters, and it’s not going anywhere, then there’s really no choice for you to just release the best talent and the best assets that you have in your business. But if you believe in them, and you know your team or some of your team members are really an asset, you have to, you have to lead, you have to be a leader, you have to take a leadership position and, you know, take a risk for them, you know, get some funding for them and pass the storm together with them. And I’m pretty confident that if you do once we all do get out of this, you know, people who survived this together, you know, as your team will come out stronger than ever better. Yeah, well, and, you know, ready for years to come. And, you know, we’re giving their heart and soul for you, if you’re an entrepreneur, you know, experienced the same, experiencing the same kind of, you know, decisions that are tough decisions to make. So it’s tough..
Refeal Elbaz 20:49
It’s a very, very tough decision indeed. But again, every business, you know, is gonna adjust according to his, you know, according to his, the business needs and the activity forecast forecasts. Um, the biggest thing here is the uncertainty. You know, nobody knows. If they’re gonna tell you, hey, it’s gonna last for two months fine. You can get prepared, you’ll make it through. The biggest issue here is the uncertainty. Nobody really knows. You can estimate yeah, a month, between us, it won’t be a month, it will be much longer than a month. But you can estimate two, three months, four months, nobody can tell. Nobody can tell them. That’s where the big problem is.
Yoni Mazor 21:30
And today, they released the big news that the Olympics, they’re pushing it for a whole year, at least a year. They’re experiencing a $6 billion damages because of this, thee, you know, restructuring or rescheduling of this event, and I think it might be the first time in history, maybe I’m wrong, that you know, the Olympics is gonna not in an even year, it’s gonna be an odd year. So 2021. Usually, it’s, uh, you know, a zero, a four, a six, or eight. You know, it’s even numbers. So as you see, the historical impact of this pandemic, on global events, we also from our industry, you know, the big events that are supposed to be in March have been postponed until, you know, six months ahead, I guess the Prosper Show, you were supposed to be also coming to the States, visit us in via a keynote speaker in the prosper show that, you know, that’s pushed to August? I believe or around September?
Refeal Elbaz 22:15
End of August. Yeah.
Yoni Mazor 22:17
Yeah. So we really, I mean, there’s a lot of people praying out there. And now more than ever, I hope, you know, that the Lord, everybody’s Lord, whether you’re Jewish, Muslim, or Christian, or wherever you are, you know, God is listening to all the human prayers. So this really passes quickly. But tell me, you know, beyond what’s going on, I guess, you know, in your region, Europe and the Middle East and here in America, what’s going on with Asia in terms of production in overseas? Is it going back on track right now? Is it frozen?
Refeal Elbaz 22:52
So the good, the good thing is that China is getting back on its feet very fast. We actually did like a survey, we took 50 of our biggest clients, and we approached their suppliers, we approached the manufacturer. We finished that, like, a couple of days ago. We approached those suppliers and we started asking them questions like, when did they open their factory? How much capacity do they have now, production capacity? How many of their employees got back to work? And where do they forecast their you know, when are they going to get to 100 capacity, and the results were amazing. And I think in China is like 70-75% back on track now?
Yoni Mazor 22:35
Wow, that’s really good news.
Refeal Elbaz 22:37
But, we anticipated it will take them longer. But from what we see, the survey we did, most of the suppliers are open, like 90% of the factories are opened again. 90% of them are over 50% capacity. 90% of them are over 50% capacity. And like 60 or 70% of them are over 80% capacity, production capacity. Um, so as of today, it looks like everything is fine there. Again, it’s not back to business, like business as usual yet, but you can still contact suppliers, they’ll take their order, they’ll produce your products. No big, there is no big problems as we anticipated. There is no problem to produce in China right now. So that’s the good news. The bad news is that: US. That’s the bad news. Now it’s starting to hit you know, the US bad and we talked about it before we went live today. And that’s what scares us. That’s what scares me. The US is going to get hit very hard now.
Yoni Mazor 24:41
I mean, I think we’re in the heart of it right now out here with you know, it’s definitely a financial and economical hit all across. It’s a shock wave and the system, financial system, economical system, social system, it’s…we’re in the height or the heart of the shock wave. The frustrating thing is we don’t know how long the shockwave will continue: a few more weeks, a few more months. But I think that China is a good indicator for us to hold on to because, you know, if you’re saying that, you know, it’s not a full recovery, but you can clearly identify that there is a recovery, you know, and we’re like, maybe just a few weeks, after them, you know, when everything started, there was around December here started around March. So we’re, you know, we’re about what, eight…
Refeal Elbaz 25:26
Man, they finished it, they finished it in like 45 days, you know, from 45, 46 days from start to finish, they’d like, killed it, nailed it. But don’t forget, Chinese are very strict, you know, if the government says, you got to do this and that, everybody do this and that. And that’s on the contrary to Western culture. You know, in Israel, in the States as well, if the prime minister will say, “hey, nobody goes out”, everybody will go out. You know, they look at, it in Israel, they look at it as a day off. All the beaches are full, the parks are full, you know, people go out with the kids, they don’t give a shit. And that’s why we won’t be able to make it like the Chinese, unfortunately…
Yoni Mazor
