The Jay Kim Show #62: Megan Cox (Transcript)
Jay: Hi, Megan. How are you doing?
Megan: Thanks, Jay. Thanks for having me. I’ve very happy to be here.
Jay: Great. For the audience watching in from around the globe, maybe you could give us a little introduction, a quick intro. Who is Megan Cox? And what do you do for a living?
Megan: Sure. As Jay said, my name’s Megan. I am a 2014 graduate of MIT, and after I graduated MIT, I decided to move to China. I moved here by myself. That sounds crazy, but I’ve been here for three years now. I have my own beauty brand, Amalie. And when I moved to China, I found factories here on the ground, I work directly with them for my packaging. And from there, I started doing consulting, set up a consulting firm, Genie Supply, where I help other beauty entrepreneurs get started in China as well.
Jay: Very nice. So this is pretty exciting to me. It sounds like you were an entrepreneur, had this tendency inside of you for a while. Was your decision to move to China-based off of basically the business and your desire to really research on the ground the supply side of your business based in China? Is that why you moved here?
Megan: Yeah. It was a little bit stronger than that. I started my beauty brand, Amalie, when I was in college. It was the year before I graduated, the summer before I graduated. And I had a lot of packaging issues. I worked so hard to get all of these customers. And then my packaging was just was not working halfway through the product. It would just stop working. This happened in two different versions with two different factories. So it was kind of a last-ditch effort. I just told my customers, “I’m just going to go to China and figure this out myself, and I’m going to blog about it the whole way, and you guys are going to be involved in the process. But I promise you that I’m committed to solving this issue.” And then I never really left.
Jay: Wow. That’s awesome. How did you come up with your business in college?
Megan: I was cheerleading and dancing, and I used to get eyelash extensions because I was performing all the time. I was like, I’m just going to get the extensions and keep them on, but they ended up destroying my natural lashes. So I wanted to regrow my lashes, and when I looked at products in the market — and being the nerd I am, I always looked at the research in the MIT database — I saw this big gap. And I decided to take that research which was already done by scientists — published, peer-reviewed — then commercialize it, and turn it into a product.
So my first product was called Wink, and it helps regrow lost eyebrows and eyelashes.
Jay: That’s pretty interesting. I think my wife would like your product because she’s always like… It’s actually quite popular here, the eyelash extension stuff. But she always rips them out after like two days, because she’s like, “I can’t deal with it.”
Megan: That’s exactly what I did. And you waste all that money. And then it destroys your natural lashes, so you’re in a worse position than you started in a lot of ways. So, yeah. I can send you some. I’m just across the border.
Jay: Yeah, right. That’s awesome. So it was actually kind of solving a personal pain point, and you decided to be an entrepreneur and figure out a solution for it. So after you graduated from college, that business was running to the point where you were generating enough revenue to survive off that business?
Megan: Yeah. I would say after my first year, I was doing over six figures, so it was enough for me to live on. And I made a lot of mistakes along the way. So it was enough for me to live on, be self-funded, and make all those mistakes, and keep going.
Jay: That’s awesome. Originally, you sourced your product directly from China, or was it elsewhere and then you kind of stumbled upon Chinese suppliers? How did that work?
Megan: I had to get the packaging from China. So Wink is housed in this aluminum tube that you twist to get the liquid to come out. I made the formulation in the states myself in the beginning. And then I had to get the packaging here because there weren’t any factories in the US. I had to go to China.
Jay: Tell me a little bit about the workflow. You had the solution yourself that you created in the states. And then you would ship your solution to China and get a package?
Megan: Oh, no. No, no, no. What I did… In the beginning, I was like, I have no idea where to start. So I started on Alibaba, like everybody. This seems like, oh gee, though. This was five years ago. I finally found a factory that — I think it was an agency. They were willing to offload 500 units. So I got them screen printed and shipped to me. I did have to buy — I don’t know — 5,000 or 10,000 boxes, though. No one would do less. And then I made the liquid, and I filled the bottles by hand. You only have to follow good manufacturing practices in the States, so it really wasn’t an issue. You download the manual from the FDA, read it, and follow it.
Jay: At this point, you already had proof of concept? Is that why you were comfortable with getting 10,000 or whatever units shipped over? Or were you just rolling the dice and saying, “I’m going to figure it out. I might end up with 10,000 empty packages sitting in my room”?
Megan: No, I had no idea. It was just like, “I need a box,” because you need somewhere to put the ingredient list according to FDA standards. I had a set amount of money. I had $1,800 to incorporate and get my first product out. And then I spent all of it, and I had all these leftover boxes, but I didn’t care. It didn’t matter. I was happy to have the product, and then it was a challenge for me to sell it. But then that first few were actually really easy, and I ended up reordering within two months.
Jay: And was your experience dealing with Alibaba…how was that? Was there a bit of a learning curve to go up there? I feel like if I was in the States trying to do the same thing, I wouldn’t even know where to start, and that’s crazy because I’ve been living in Asia and Hong Kong, and Alibaba is like… Everyone talks about it. But how did you even start that?
Megan: I don’t even know how I found Alibaba because I hadn’t heard anyone talking about it. But I really spent the entire summer talking to suppliers and just begging them. But everyone just said 10,000. 10,000 is the MOQ, for sure, in cosmetics. 10,000, 10,000, 10,000, and then finally someone was like, “Okay, 500.” I feel like I was sending my money into the void. I had no idea what was going to happen. I was like, “I don’t know if this is going to work, but let’s [inaudible 7:29].”
I really don’t feel like I ever mastered working with suppliers until I finally came here. It’s still always a learning process. You’re always learning new things, and there’s all kinds of tips and tricks, I guess. And I switched suppliers every batch the first five batches of packaging. I couldn’t find a stable supplier.
Jay: I’m still nervous myself. I don’t speak Chinese. I don’t know… Do you speak Chinese?
Megan: I speak Mandarin.
Jay: You do. Okay. So I guess that does help to a certain degree. I feel like if I were to embark on that, I would just get ripped off. I would probably get an empty box of nothing. Like, see you later. But that kind of leads me down a little bit further in your story. You said, I’m going to pick up and figure out this thing for myself, so I’m going to just move over to China. So tell me about that experience. Before I hit record, I don’t you that I’ve been in Hong Kong for 12 years now. I moving here in 2005, and it was completely different back then. And I imagine they must be a little easier to move as a foreigner, but I’m still very curious, because most of my peers are similar to me because I met them when I first moved over here. So I’m very interested to hear what your experience was like moving halfway around the world to China.
Megan: It was nuts. It was insane. Before this, for internships in school, I had lived in Boston, Miami, and L.A. And every one of them I felt was somewhat of a culture shock because I grew up in the Midwest. But then when I came to China, it was an entirely different world. I don’t feel like I was able to even… I came here with really high ambitions, like I’m going to find a factory. I’m going to do this. I’m going to do that. And I did make it work, but I still don’t feel like I even had a grip on ordering my own food and taking care of my needs here for at least a year. It was just such a steep learning curve.
Jay: Were your parents okay with that? “I’m leaving. I’m going to China.”
Megan: Yeah. They don’t have a lot of say. They were just kind of like, “Okay, honey.”
Jay: So tell me. So you landed, and you basically were targeting the find those package suppliers for your business. That was the main mission. Right?
Jay: So what led you to not get back on that return flight?
Megan: There was no return flight, first of all. It’s was like, I’m staying here until I figure this out. And I will be completely honest, now that it’s almost three years behind me. I had no freaking clue what I was doing. Whenever I arrived, I was like, I have no game plan. I don’t know what I’m going to do. But this was all a very big…I don’t want to say “show,” but it was, for my customers. Because I just wanted to show them I’m dedicated to solving this problem. And I did. But I had to go to Alibaba to find those manufacturers, and then just have them all send samples to me and tested all the samples and then started going to their factories in person. Once I got through the samples that were total crap, then I would go see the better factories and see their operations and discuss some of the finer details with them.
And then I sent packaging directly to my customers’ homes, to ten of them that had been with me since the beginning. I sent them the packaging with some surveys and then aggregated all of the data and chose a supplier from there.
Jay: Wow. So you actually got feedback from your customers.
Megan: Yeah, I really did.
Jay: You really have their best interest at heart. That’s amazing. So, again, after you figured out what the best packaging was, you could have just hopped on a plane and come back. But instead, you decided to stay here. Why did you decide that?
Megan: There was just too much here to see and do. And everything was moving so quickly. I’d just never seen anything like that in the states before. Buildings would go up in weeks, insanely big buildings. And it just felt like everything was moving so quickly, I felt that I had to be a part of it. I didn’t know what that meant yet, especially because the formulations for all my products were made in the US, and I really didn’t have a clue what I was doing. And at that point, my Mandarin was laughable. It probably still is laughable to most people, but it was really bad at that point. But I just felt like I had to stay. I felt like there was more for me to do here and that I wasn’t done. China was just way too interesting for me to give up at that point.
Jay: Yeah. You’re brave. Even myself, I wasn’t brave. I came to Hong Kong because I was too scared to go straight into China, and Hong Kong is an easy place for Americans to come in because everyone speaks English and whatnot. That’s actually a very fascinating story. Do you have someone stateside that’s helping you with your operations there?
Megan: Yeah. I have two employees there that help me.
Jay: The do you also have a team based in Shenzhen as well?
Megan: I have an assistant here, but that’s it.
Jay: So that was basically your product line. And then you said you also have since, some sort of consulting business for people that were like you before you moved over that need help. Right?
Megan: Right. A few of my contacts has been reading my blogs, and they just said, “Hey, can you do that for me? I need someone in China that can go check the packaging for me or negotiate something.” Someone said, “I can’t get their product made anywhere in the world. There’s a wait list that’s two years long. Do you know anybody?”
So it just started very organically like that. The last five clients that I’ve sign on, though, were just complete strangers that found me. So now it’s starting to evolve into a real consulting business outside of my own contacts.
Jay: Are they US-based?
Megan: Yeah. Mostly US.
Jay: And it’s all your niche, down to cosmetics.
Megan: Yeah. Right.
Jay: Do you feel like, now that you’ve been there for a couple of years, within that niche, you kind of have a good idea of who the reliable suppliers are and that sort of thing? Do you think you have it pretty mapped out? You have a good grasp on it?
Megan: With certain products. I had to build that network from the ground up. And I my own line doesn’t include all of the products that I manufacture for. So there were still some things that I had to learn and still some new contacts that I had to make. But now I feel like I have a really tight circle, and those are the only people I work with. And it moves very, very smoothly. But in the beginning, it was a lot of legwork.
Jay: To build up that network. You didn’t have any friends or anything, contacts there initially?
Jay: That’s so brave. Even when I moved over here, I had high school friends that lived in Hong Kong, and that made it super easy for me to come over. If you could share with the audience, what were some of the biggest challenges that you faced when you first got there? Obviously, you learned Mandarin as soon as you arrived. Are you taking classes, or you were?
Megan: I had a private tutor for three months before I got here. And then since then, because I’m by myself, I really didn’t have a choice, and humans are extremely adaptable. So things moved pretty smoothly. I have books. I have audio tapes. But at this point, I do have Chinese friends, so that’s the only way we have to communicate.
Jay: That helps. You can also read and write as well?
Megan: My writing is better than my reading. If there’s an extra stroke, I’m really not going to catch it. Sometimes I’ll be reading things out loud, and people are like, “What are you doing?” Because I will completely miss a word or two in a sentence. So my writing is way better than my reading because of [inaudible 16:15].
Jay: What other challenges did you face being a business woman in China or just doing business in general as a westerner? It’s funny because when I came over here, my challenge was… I don’t speak Chinese, but my challenge was that everyone assumed I spoke Chinese because I look Asian. I’m Korean. So I used to tell all my western friends, you guys are lucky because they automatically assume you don’t speak. So they just think that I’m an idiot that can’t speak.
Jay: Any other challenges that you’ve faced moving over there, setting up your business in general that you could, now, three years later looking back, to you could have avoided knowing what you know now? If there’s any people in the audience that are perhaps as brave as you, thinking about trying to make a move, if there’s any tips of advice that you could give.
Megan: I would say that if you’re trying to decide where to spend your time best, in terms of if you were going to do business in China, learning about Chinese culture is way more important than learning the Chinese language because culture is extremely important here. Period. It rules daily life. It rules business, and it runs deep. But also, even if you can speak Mandarin, most people here can speak more than one dialect of Chinese. So in business, they’re going to circumvent you, and there’s just no way around that. If you can speak Mandarin, they’ll speak Cantonese. If you can speak Cantonese, they’re going to speak [inaudible 18:02]. If you can speak [inaudible 18:03], they’re going to speak Hakka.
So I would say, if you’re going to spend your time doing something, then that would be learning about Chinese culture.
Jay: That’s pretty interesting, and it’s not something that people would… People would automatically assume that language is the first thing and the most important thing for you to master. But it does make sense what you’re saying. People can speak multiple dialects, or they’ll just cut you out of the conversation altogether. That’s pretty interesting.
Can you tell me a little bit about the trends that you’re seeing in your space, in your niche, within China. You must have gone over there, and without really knowing what cosmetics is like in China, how different is it from what you’re seeing back at home, and what are the trends that you see shaping up right now?
Megan: I would say, just from a global perspective, the fact that celebrity is becoming something that’s much smaller, in much smaller packages, is making it so that people… Everyone wants to make their own brand, and they want to do so on a small scale. So when you look at the traditional factory model, they want you to order 10,000 of something. And that doesn’t work. That doesn’t make room for entrepreneurs in the market. It doesn’t make room for all these micro-brands that are coming out — Instagram celebrities, YouTubes celebrities. These people also want to make their own brands, and they want to monetize that.
What I’ve found is I have found other young people in China that know this, and they see this. And they’re moving toward smaller and smaller quantities and being able to do things in smaller and smaller packages. We can charge a lot more money to do that, but there is definitely a big market for that right now. And that’s just moving from that traditional large-scale model down to something smaller.
For example, 10,000 units is usually the minimum for anything in terms of lip-gloss, liquid lipsticks, that type of thing, which is very popular right now in the US. In the US, you might be able to make 25,000 units per color. In China, it might be 10,000 units per color. But for my clients, I can get you 100 units per color. And that’s just something that I have been able to do with my network here because I’ve found like-minded people — usually younger 30-something Chinese who own factories here.
Jay: Oh, wow. That’s actually quite a… From an entrepreneur’s standpoint, that’s very helpful to run your proof-of-concept, minimum viable product. You push that out in a small quantity. You don’t have to do this longer up-front investment of 10,000 units. And you can basically see if it works or not and limit your downside. So I can see that as being quite helpful.
Do you sell any of your products into China?
Megan: No. There is involuntary animal testing, if you want to sell a cosmetic product in China. So any time that a US customer even catches a whiff of that, they’ll just drop your brand. There’s a very popular blog in the US — there’s a lot — but there’s a very, very popular one. It just alerts people whenever brands are no longer cruelty-free because they’re selling in China. So this is a really big deal.
Jay: Oh, wow. That’s something I’ve never even heard of. So anyone that sells cosmetics… Wait. So if you sell cosmetics into China, then they automatically can… Wait. They can test it on animals? I’m confused.
Megan: Yeah. The CFDA. The Chinese FDA, they force you to do involuntary — meaning they’ll do it. They will do animal testing with your products if you want to enter the Chinese market. So the only way around that is… I’m not sure.
Jay: What are they testing for? Testing for toxins?
Megan: No. All the animal testing has to do with allergic reactions and what percentage of people are going to have allergic reactions. You can google it. You’re going say, “Why did you make me google that?” They test things on bunnies, dogs, cats, rats…
Jay: Which sounds ridiculous coming from China, because I feel like the standards that we have in the States are much higher.
Megan: Yeah, I know.
Jay: So why do they have to test them on animals? But I guess I could see why it’s a big outrage for groups like PETA or whatever, similar groups. Interesting. One of the other things that I wanted to ask you about, which is something that I just recently learned more about, is the who KOL scene, Key Opinion Leader and these micro-celebrities. Are you on Chinese social media a lot?
Megan: I’m on Yizhibo. It’s Weibo’s live video. So I have an account there. I do makeup tutorials. But otherwise, I’m not super plugged in to the Chinese social media.
Jay: I was just curious because when you were mentioned Instagram and influencers and that sort of thing, I know that in China, the KOL scene is getting bigger and bigger where these little micro celebrities could really help propel someone’s brand within China, obviously. It doesn’t really affect you. But I was just curious if you had seen anything or noticed anything thing there.
Let’s talk about what you’re working on for the future. You obviously have your product line. You have your consultancy business. Do you have anything exciting planned for the next six months to a year? It’s China. Things move very fast there. A lot of things could change.
Megan: Wow, that’s tough. With my own line, I’m launching a new product in two weeks on September first, so that’s new for me. And then in terms of consulting, I actually am looking at opening up a lab stateside to do some of the smaller batch things because, while we can do them here in China, it’s starting to make more sense to do some of that in the US and keep some of it here. Obviously, the packaging and the screen printing all has to be done here. But that’s something that I’m looking at doing in the future too. There’s a lot of reasons for that.
Jay: When you’re shipping your stuff back and forth, have you found any economical shippers or service providers to handle that sort of thing? Your product is constantly being shipped halfway around the world. Right? So how do you…?
Megan: Yeah. That’s why I’m thinking of opening a lab in the states because, for the smaller packages, especially if you’re just doing custom samples in the beginning, if you’re sending samples back and forth for the US, they’ll rack up $500 and $600 bills just on shipping alone. And that’s a lot for them to waste. They could be paying then instead. Right?
Jay: That’s right. That’s very true.
Megan: But I did find them an economical shipper on AliExpress, I think, recently. And I just sent a package yesterday for like $128 RMB to the US, and it’s normally $50 or $60. And that’s — I don’t know — $18, $19.
Jay: Yeah. That’s really good.
Megan: So I’m finding cheaper and cheaper ways to get there.
Jay: I think it’s just a matter of time before you find the best solution. Listen, Megan, it’s really good connecting with you. Thanks for coming on and sharing your story. I think it’s fascinating. Before we look to wrap up, is there any last words of advice for someone that may be like you, an entrepreneur that wants to actually move to China and get in there and do some business and kind of get boots on the ground? Based on the last three years that you’ve been there and what you’ve seen and learned, what piece of advice could you leave to our audience?
Megan: I would say if you’re thinking about it, definitely just do it. Just dive in headfirst and do it. And when you’re here, do everything that you can to meet people and keep getting out there and meeting people. It’s really easy to just want to stay in your apartment and feel comfortable, but it’s great to just go out there every single day and keep trying as hard as you can to network and meet more people because that’s the only way that you’re going to keep moving.
Jay: Absolutely. I think, as daunting as it is, what you put into it is what you’ll get back out of it. It’s definitely one of those things. Great. Thanks a lot. Can you tell us where our audience can follow you, find you, connect with you and learn a little bit more about your products and your consulting service.
Megan: Sure. My beauty line is called Amalie. You can find us at AmalieBeauty.com. For any consulting questions, you can find me at GenieSupply.com, or you can email directly Megan@GenieSupply.com.
Jay: Do you run a blog? I know you’re pretty active on Quora, which is where I’ve read most of your stuff. That’s why… It’s really fascinating because I love the underground, just you documenting your journey. Those stories are really fun and entertaining. Do you write on a blog as well, or is it mostly on Quora?
Megan: Mostly on Quora. I have my own beauty blog too because most of our visitors come from organic search, so I get pretty busy. I just use Quora for all of my China stories, all my boots on the ground stories.
Jay: Those are the really fun ones to read. Alright, Megan. Thanks again. We really appreciate it. Best of luck in China.
Megan: Thank you. Thanks for having me.
Jay: Alright. Take care.
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