The Game is Afoot

It’s easy to start working, keep your head down, and before you know it, weeks have passed and you’re not sure where the hell all that time went.  I’m coming up on the 1-month mark, here in Mexico, trying to get prepped for production, and even though I’ve been shooting for a May 15th completion date, I don’t think that’s gonna happen.  Not from a lack of trying, I assure you.

I’ve secured two different tanneries to produce my hides, and while they’re both fantastic, they’re both slow to respond, and even slower to get my product samples ready.  These guys are also two of the largest and best quality leather makers in the world, and when your day-to-day operations are producing, literally miles and miles, of leather for massive companies like Timberland, a little artisan shop like me takes back seat.  Plus, business in Mexico is all over the place, so I’ve had to sit and wait it out.  A lot.

Both companies are incredible, though, and make the very best of the best, and they both know it.  It’s kinda like dealing with a beautiful woman with an attitude at a bar.  All she’s going to do is sit there, and before long, someone is going to come over to her with a free drink.  She knows it’s going to happen, so she’s certainly not going to make an effort to walk over to the guy in the back, furiously sketching in his journal.  So, as in life, persistence is key.  Yeah, she might not be that interested in the little guy with the clever conversation, but as long as she eventually knows his name, that’s all that matters.

Tannery A is almost perfect.  It has the exact right colors, sheen, and style, but the past week of waiting for them to finish up their prototypes and get the samples was a bust.  They internally chose to focus more on the shoe market for their new line of leather, which means that the final product wound up being tumbled for FAR too long, resulting in a natural pebbled grain and a very soft pliability.  Perfect for shoes and clothing accents.  Terrible for bags.  However, we met up, talked it through and will hopefully be able to change up a few specs, dependent on my needs and get me the perfect stuff.  It also helps that they are a full dollar less per sq. ft. than Tannery B, which comes out to thousands of dollars in the end, and keeps me within budget while still having grade A material.

Tannery B is completely flaky, pushy and their sales agenda is very sketchy.  However, they have nearly everything I’m looking for right off the rack.  They’re also very expensive for what I’m looking for, and tiresome.  Plus, I’ve been playing it cool with them, and not certain if they’re interested in working with me, if I don’t do everything the way they want me to, which is a bit uncouth.

To understand Tannery B’s sketchy practices, you need to understand how NAFTA works, especially when it comes to moving goods over the border:  Standard business practices in the U.S. require you to first buy materials and pay sales tax.  Then you go to a manufaturer, and depending on the location, you pay sales tax again.  Then you sell your goods to a consumer, who again pays sales tax.  Then the business tallies up the profits and pays income tax.  Then, the business pays their employees, who also individually pay income tax.  So, as a business owner, trying to make your own rent, you wind up paying tax FIVE times.

NAFTA exists to help streamline the process and create a free market between the U.S., Canada, Mexico and Puerto Rico, by eliminating some of the expenses for small business owners, and encouraging economic relationships between countries.  In my case, I can buy directly from a tannery or other supplier, and fill out a NAFTA certificate of origin, stating that these goods are created in Mexico and headed for the American market.  In this case, I don’t pay sales tax, and can have all my supplies sent directly to the manufacturer.  Again, when I pay the manufacturer, I fill out another certificate, and again don’t have to pay sales tax.  The other benefit of this, is when my goods get to the border crossing, the customs agent can see that my stuff all originally came from Mexico, is headed to the U.S. for sale by a U.S. company, and there’s no import tax required (yet, there’s still a lot of bullshit customs fees that have to be paid, and most importers pay the officials a “gratuity” for their services – read, bribe – to prevent delay and additional fees piling up, such as warehousing, transfers, paperwork, etc.  It’s a fucking scam, for sure).

eMex is a internal program in Mexico that tries to circumvent a lot of the excess paperwork, and allows certified companies to bypass taxes, if their client is intending to export per NAFTA rules and regulations.  A lot of companies rely on it, because it also makes continuous business relationships run smoothly, especially when they have to extend lines of credit to each other.  Yet, here’s the rub – companies like Tannery B like working with their eMex buddies, because they tend to sway American groups to use the service because it’s a simpler, smoother process for the gringos.  What’s really happening is a whole lot of kickbacks and shenanigans.  If I were to choose Tannery B, and their manufacturer of choice, the first thing that happens is that the sales fella gets a cut for bringing them the business.  Sure, that’s a typical sales commission, but essentially, the tannery rep is double dipping into my pocket, and the manufacturer bumps my prices to cover it.

The second thing that happens, is that Tannery B sells the leather directly to the manufacturer.  In some cases, that could be beneficial to me, especially if I was buying on credit, had established customers that had pre-ordered my goods, and wanted to fast-track the whole process.  The down side of that, is that the maker keeps the leftover leather from each bag, and therefore is not mindful of waste.  Each of my bags requires about 14 sq. ft. of leather, and when I purchase hides, they average about 22 sq. ft. each.  With the leftover 8 ft. of material, I’m able to make wallets, belts, keychains and all the other bits and pieces for my line of goods – but not if the manufacturer buys the leather.  Instead, he charges me for 1 sheet per bag, and keeps the leftovers to make things for his own line of goods at no cost to him.  I’m essentially left out of the whole manufacturing process, and pay far more than what I’m getting.  (And, to top it off, if I take my designs in for production, and there are miscommunications or errors, the factory keeps the design and can reproduce it from my scraps, and sell it as their own.)

All of this is tough to navigate, and is a lot of extra work for me, but taking the time to do it right could save me tens of thousands of dollars in the end.  It’s also going to take a lot more time to get right than I had previously envisioned, and based on my own custom orders, might cause me to trim my color options from 4 to 3, if I have to custom order everything.  As it stands, right now, I’m looking to use both tanneries (barring transactional issues).  One to produce the “shells” of my goods, and the other to make the linings and interiors.  Again, that all depends on what happens with my samples and special orders.  For now, I still just have to wait.

In the meantime, even though it’s a little frustrating to have to wait and wait and wait, it’s maybe a good moment to pause and start focusing on all the other parts of the process.  Last week, I had spent most of the day out in the sun, walking for miles, trying to find my parts and pieces, and then worked all through the night to produce more for the bag prototype.  I woke up late the next day feeling like I had been binge drinking for a month.  Turns out, I was severely dehydrated and maybe got myself a little sun poisoning to boot.  I took the day off, watched Netflix and chilled out with a couple liters of water.  The next morning, I was back to my happy healthy self, and I even had enough time away from the problems I was facing with my designs, to come up with all of the best solutions I was searching for.  Sometimes it pays to take the damn day off.

At the same time, while waiting for supply to come through, I get to become a little more organized.  I’d completely skipped the gym since I got to MX, due to being so damn busy and trying to make everything happen instantly.  I’d run out to the nearest place to grab food when I was hungry, and it was most likely tacos or tortas that I’d slam down my gullet, then run back to the shop to keep working.  I’d wear the same clothes for days, hyper focused on the tasks at hand.  I recently found myself out on the street at 3am, trying to find something to eat, because I’d worked something like 14 straight hours before passing out and forgotten to eat since breakfast the day before.  Long story short – everywhere was closed and I went back to bed, cranky.

But now that the designs are ready for finalization (I meet with the design team at the manufacturer’s tomorrow a.m.), I’m back to normal mode.  I went to the grocery and picked up all the stuff I’d need to stay on my paleo diet, which is really hard to do down here, by the way.  I got a fan for my bedroom, because even at home in Indy, it’s so much better for good sleep to have a room fan.  I got into a gym and am powering through that “I took a month or so off from cardio, and now my heart is going to explode” phase.  (3 miles EVERY DAY on the elliptical until I’m back to doing it in under 24 minutes.)  Living here, in a state of total chaos, I’m finally getting back to my important sense of structure as best as I can, so that I can keep moving forward in BIG strides.