China 1.3

Hello again. This was a most fascinating meeting. It highlighted many areas where some of the manufacturers take things for granted and lose business.

Steve started by explaining how I had worked for five years to mend relationships between the companies and bring the manufacturer back to UPG as a regular supply partner. He then went further by explaining how we were focusing on the security market and how we would be starting to aggressively market our products into our niche in the market.

We then asked the representatives from the company with whom we have been working in both Taiwan and mainland China, whether they could speak for both operations. They told us that they did not have much knowledge of what was happening in their head office in Taiwan. So... point 1. If we needed to discuss the overall picture, why only send Shanghai representatives. It later turned out that the USA sales people were currently in Taiwan. If this meeting was so important, why not come to Shanghai to attend. It's only a short direct flight from Taipei airport. Our level of frustration was rising.

We then discussed problems of communications where we were not sure in which country the goods for us were being manufactured, to whom we should communicate and importantly, from where the goods were being shipped.

It was explained that because they moved some of our production from Shanghai to Taiwan, we were shipping half empty containers. If they combined our manufacturing in one country, we could ship full containers. Point 2. We had to explain that if our cost could be reduced by 10% to 15%, our sales would increase and they would end up getting more work. Go figger!

The next issue was that they shipped products in wrongly marked display boxes, a major QC error. Do we need to check every shipment prior to shipment to make sure this does not recur? Extra cost and frustration!

We tried to explain to them how we invest in a new product in samples, time, money, and marketing. We wanted them to assist where possible. We wanted some samples, for which we were willing to pay, but because these were not large production unites, they wanted us to pay considerably extra. I think we resolved the issue. It wasn't easy.

And so the meeting progressed for 3 1/2 hours.

In the end, we left them hopefully understanding that we have some excellent opportunities, but they need to "come to the party."...... or, Point 3, there are plenty other manufacturers who would love this business!

I could go on in more detail, but I am sure the overall impression comes through clearly.

Today is a semi-rest day with a social meeting with one of UPG's excellent battery manufacturers.

Good.... now to the gym for a short workout. I think I deserve it!