Caption: Kevin Rohrer ’82, left, and HouseHaunters founder Brian Kelly ’83 visit a short-listed factory in Guangdong, China.
Creating a scene has always come naturally to Brian Kelly ’83. The New Jersey T-bird wins awards most years from his local Halloween festival for transforming his family, himself or his home into something unexpected.
But what hasn’t been so easy for the former software salesman is finding ways to turn his budding costume and seasonal home décor company, HouseHaunters, into a viable business — that is, until recently.
“I’ve been doing HouseHaunters for three years now, but doing it right for only one year,” Kelly said.
The big game changer for the rookie entrepreneur was moving manufacturing to China. With the help of Hong Kong-based T-bird Kevin Rohrer ’82, Kelly short-listed factories, visited with their teams and eventually identified the one that would manufacture his designs.
“It was eye-opening,” Kelly said. “It showed me why the whole world manufactures in Asia.”
Kelly slashed his production costs and now sees profitability a season or two away, but not before jumping over a few hurdles.
“Quality is a challenge when manufacturing in China,” Kelly said. “You can’t just say, ‘Give me a gorilla mask,’ because that wastes time, money and goodwill.”
Kelly’s flagship costume — a gorilla that appears to be carrying the wearer inside a bamboo cage — was quite complicated and required detailed negotiation. Starting with accurate prototypes and maintaining constant quality control were keys to success.
“If you give them a prototype with a mistake in it, they will reproduce your error,” Kelly said. “Nothing beats face-to-face meetings to inspect production samples.”
As Kelly continues designing new costumes, looking for distributors and streamlining his supply chain, he credits Thunderbird with giving him the confidence to go overseas and access to a competent alumni network he continues to count on.
“Working with T-birds provides a level of trust that is key when manufacturing something 8,000 miles away,” he said.
Brian Kelly ’83 shares his top 10 lessons learned from manufacturing in China:
1. Control inventory. Only manufacture what you’ve already got sold. Excess inventory is a waste for small businesses that need to conserve cash.
2. Be a sponge. Pick the brains of everyone you meet. Walk trade shows domestically and overseas. Talk to exhibitors. Remember, business travelers found stretching their legs in the back of jets to and from Hong Kong are often well-informed and eager to share.
3. Visit your factories. Collect managers’ cards with both English and Chinese characters. Get to know their concerns. Who are their large customers and what are their key shipping dates that you will need to work around? Only after probing did Kelly discover that Chinese utilities had imposed power outages three days a week in the middle of his factory’s busy season. Two biggies: Cost increases after they’ve already bid on your job, and workers who don’t return after the Chinese New Year.
4. Fail fast. Kelly builds prototypes of many new costumes to show at preview events in November. Only a small portion of these get developed for buyers to see in January.
5. Invest in good prototypes. Factory managers want to touch and measure actual prototypes. Prototypes communicate across all languages and provide proof of your intention.
6. Learn from competitors. You have more in common with them than you do with your customers.
7. Avoid the $900 rookie’s phone bill. Turn your mobile phone off when arriving in Hong Kong or mainland China. Then buy a simple $39 cell phone and $25 prepaid card with a dual SIM card. Only use Skype when calling home.
8. Schedule strategically. Optimize your visit to Hong Kong/China by scheduling it around a trade show.
9. Be patient. Understand that this is a marathon, not a sprint.
10. Use the network. Contact fellow T-Birds in Hong Kong and China.