[00:00:00] Third party, Amazon sellers are being impacted with factories in China shutting down due to the spread of the Corona virus. Joining us now to discuss is Michael Michelini. He’s a partner at Alpha Rock Capital. And Mike, first of all, you sell a lot on Amazon, but we can’t detail exactly what it is. I understand cause it’s very competitive and you have a lot of trade secrets, but you have about 10 brands [00:00:23] On Amazon. What has business been like for you the last two weeks? Can you get what you need? Are you able to fill all the orders that are out there? So far we’re lucky. We, we stocked deep. It’s our strategy always, and we were prepared already for the Chinese New Year, so we had already stocked well before the, uh, the Chinese New Year has already shut down, but this extension of the Chinese New Year has really been a shocker to, [00:00:51] To us, as well as many. But for now, we’re, we’re mostly in stock for most of our top selling products. And Mike, if you could guess right now how much inventory you have, what your availability would be to acquire new inventory. And I, I guess, um, you know. A related question is what’s the climate like in China right now with folks going back to work? [00:01:11] Certainly here’s stateside the situation with respect to coronavirus has gotten a lot more serious and folks are a lot more alarmed. But, um, it seems perhaps that the virus related fears in China have stabilized, but I don’t know if that’s your feeling as well. Yeah, for sure. I think, of course, China’s all about business and getting things back to normal. [00:01:33] The, the government wants to ability, they’ve, uh, they made a huge you know, a lockdown of the, of the people leaving their homes, and now there’s this really big frustration to get business back to normal. So there’s this huge pressure from the suppliers and factories to get back to work. The factories have been reopening in late February, we’re hoping next week and March, things should be getting back to normal. [00:01:57] The biggest problem is not the factories reopening, it’s the workers getting back from their home towns, especially in there, the epicenter in Wuhan. A lot of people are concerned that they’ll be able to even get back to the factory. So the big concern is there’s always this turnover every Chinese New Year of new, new staff. [00:02:16] Hiring and old staff, not returning, but especially the huge turnover. Now with the backlog of orders, we’re really concerned, maybe quality problems or, or, uh, just, just a prioritizing of which supply, supply to make, uh, for which, which customer, which fact, which, uh, which buyer like us. Right. Hey, Mike, I understand that your family is, uh, stuck in China. [00:02:40] Is that the case? And is there anything you can share with us about that? Yeah, it’s been a, it’s both the business and a personal thing for me. I have a, a wife, I met while I was in China. I’m currently in Manila and my two children are with her family in North China. And they’ve, they’ve been there since the Chinese New Year. [00:03:01] I came down here for, for work, uh, with, with our investment company for Amazon and she stayed behind with her family. And then we had heard about the virus coming out. But it wasn’t made to be such a big deal before the Chinese new year, uh, in, in, uh, early January. So they’ve been on quarantine that at home with limited amount of time to go out to buy groceries. [00:03:25] And, uh, I, I do my daily call video call with them and, uh, everybody is [00:03:30] healthy at home, her parents, my wife, my children. But of course, it’s very, very nerve wracking time for all of us. So you certainly have a lot going on, on a personal level, and also work-wise here. I mean, best of luck to your family and getting reunited with them. [00:03:47] Overall, are you optimistic that you know you’re going to be back with your family, that business will be back to usual. Or, do you think that we have some more hiccups here along the way that will be felt, uh, as far over here as the United States? But this isn’t done yet, or you think we’ve turned the corner? [00:04:10] So I’m watching this closely, of course, as all of us are. It seems like we had said in this earlier in this interview, it seems like it’s spreading more overseas and is stabilizing in China. I think the biggest concern that we’re all watching is when the factories reopened and the work, work starts back in China, will it start to spread again? [00:04:33] That’s, I think probably what we’re going to start to notice next week once factories really get back to back to normal. And the hope is that it’s really contained and that things will be back to normal. We just got to hope that, uh, it’s always a balance of personal health and, and, uh, as well as business, right? [00:04:54] Business, we want to get back to normal, get products, shipping and selling. But of course we want. The, you know, even if they’re not our, our own staff, even the factories, staff, and well being, you know, we do want people to be healthy and, and safe. So it’s, it’s a tricky balance, but I think the biggest concern is, will the virus spread once factories start reopening in March? [00:05:16] I’m like, just real quick, before we let you go, are you going to change the way you do business from now on? Has this changed anything for you? So we, we, we are well diversified. So of course we have investors. We’ve been raising money to buy [00:05:30] brands on Amazon. We mentioned we have 10 brands. So we do have India suppliers. [00:05:35] We, we do have US. We buy in America as well and sell on Amazon US. Uh, we have other supply chain with the, with the trade. It’s been a rough year, honestly, with trade war last year. And then even there was a Hong Kong uprising, which caused some just, you know, disruption. And now this virus, it’s just been a really rough year for, for China supply chain. [00:05:56] So we’ve already been looking at diversify, but I think that this one, especially. It’s been more effective to make us as well as many others that we know in the industry to really look for diversification of supply chain outside of China. Uhm, Mike Michelini. Thank you so much for staying up – a partner at Alpha Rock Capital. [00:06:13] A great to get some time with you. Thanks for having me.