Gloveland is my name for the wild west market of medical exam gloves needed to help slow the spread of the deadly Covid-19 virus. It is one of the nastiest and most difficult markets for buyers and sellers I have ever been involved in, and I love it! Why? Because I relish the challenge of outperforming in difficult markets for my clients. Different strokes for different folks.
One of my rules prior to entering a market is to have a clearly defined edge. Never assume one is smarter than the market. In the case of the glove market, call it dumb luck, Seagate Global has a powerful edge, which we came to recognize when friends far and wide started asking us to help them secure gloves in Malaysia.
Over ten years ago, as part of Seagate Global’s South East Asia expansion, we opened a trading company in Kuala Lumpur. We were told that Malaysia is an extremely difficult country to gain inside acceptance to, but once you are in, you are treated like family, with access others will rarely enjoy, no matter how much money they bring to the table. Hard for Americans to understand, but Malaysia is about more than just money, creating a large cultural gap.
That early advice turned out to be true. It has not been easy, but I am stubborn. We made many mistakes and learned many lessons, some the hard way. We learned how to handle all the problems that many neophytes to Malaysia’s glove market are now reporting. We are trusted by what I affectionately call the “glove mafia,” and know how to identify and protect from the, how to say, uh, less savory characters in the market. Not 100%. But say 90%. Those are powerful edges in Gloveland.
Building on Seagate’s edges in Gloveland, as well as our international network, Seagate Global Trading Sdn Bhd has devised a new strategy to help buyers obtain the nitrile gloves they desperately need.
A bit of background. Most US buyers want to buy gloves “OTG,” or on the ground in the US. Why? OTG US gloves do not require the buyer to venture to a foreign country such as Malaysia where 70% of the medical gloves are produced. All the complexity of going to the factory or wholesaler in Malaysia, verifying the gloves, arranging logistics to get the gloves to the US, and expense of financing the gloves for the four week ocean trip are taken care of.
Yes, there is an expense for that. Gloves purchased OTG US can sell for 50% or more than FOB Malaysia. But for many buyers, getting gloves OTG US is worth the extra cost, and many have no other alternative.
However, the reality in Gloveland today is that OTG US gloves are becoming scarcer and scarcer. Most gloves produced never make it to the US. China and others are buying everything, even before they are produced, and many are waiting at the ports with billions of ready cash to buy whatever they can as they come off the boats as supply is fixed and demand is skyrocketing.
At the same time, Buyers still continue to act as if they are in control and demand this and that chasing OTG US gloves. Too late. Gloves gone. Losing strategy.
For buyers that still want to purchase OTG US gloves instead of allowing Seagate to find gloves OTG Malaysia, or secure factory production runs for them FOB Malaysia (the cheapest alternative), Seagate has come up with the “Seagate Global Hybrid Strategy.” The program is hybrid in that it avoids the problems of FOB Malaysia while providing the benefits of OTG US. It also sometimes results in significantly lower prices than waiting for the gloves to clear customs. The other big benefit is that no money changes hands prior to inspection in the US. Proof of Product! Nirvana in Gloveland.
The Seagate Global Hybrid Strategy identifies (primarily through our contacts in Malaysia) glove shipments to the US for sale and assists buyers to obtain the right to purchase the gloves before they clear US customs and are inspected by SGS and the Buyer. Payment is made only after customs clearance and inspection. The Buyer beats the OTG US mob. Kinda like going to the front of the line for a popular ride at Disneyland, but here you may actually pay less rather than more for the E-ticket.
Here is the SOP (standard operating procedure) for the Seagate Global Hybrid Program.
1. Seagate Global identifies a seller that has, or will have in the near future, gloves on the way to the US for sale, and is willing to commit to sell them prior to the shipment hitting the US. (Thus, the seller bears all the risk and expense of sourcing, purchasing, loading, shipping, insuring, and financing the gloves, as well as giving up the upside price potential. They do so to lock in their profit and quickly move on to more transactions while the market is hot, leaving still substantial profit for those operating inside the US, a whole different strategy than buying FOB and delivering to the US.)
2. Buyer issues an NCNDA (non-compete non-disclosure agreement).
3. Buyer issues a Letter of Appointment to Seagate Global to act as its Buyer’s Agent.
4. Buyer fills out seller AML/KYC/proof of funds form.
5. Buyer issues a Purchase Order.
6. Seller accepts Buyer’s offer.
7. Seller provides Buyer Bill of Lading.
8. Seller provides Buyer SGS report.
9. Seller provides Buyer GPS tracking for the shipment (if available).
10. Buyer and Seller negotiate terms of payment. EG, escrow account or letter of credit. (Note: Buyer has made no financial commitment prior to receiving proof of product, a key sticking point in most glove transactions.)
11. Seller clears goods through customs.
12. Buyer/SGS inspection at the US port.
13. Once the inspection of the gloves is completed to the Buyer’s satisfaction, payment is made as agreed, and title of the gloves passes from the Seller to the Buyer.
Contact us. We can help. We have a number of offers available for the Seagate Global Hybrid Glove Program right now. Will Lawton Jr. is your initial point of contact. Email him at firstname.lastname@example.org. Visit us at www.SeaGloves.com. Let us help you navigate Gloveland and play our part to put Covid-19 in the history books!