American Consequences - May 2020

out of the country, or anything else that a sticky-fingered customs guy might dream up. Also, boxes of face masks are stolen along the way by anyone looking to make a quick buck on a valuable commodity.

behind him – with a solid record of making good on his promises – was a promising partner. You’d think that James would be imitating Uncle Scrooge swan diving into

a gold coin vault with all the money he’s making. Even if profits were only a few cents per mask, those pennies on hundreds of millions of masks should add up fast.

At the airport in Shenzhen – and other cities in China – lines to get the goods onto the plane can be days long. “They’re backed up with dozens of planes on the tarmac, full of PPE, hand sanitizer, you name it,” James said. Cargo planes

“Even if everything is perfect, we have problems,” James said.

At the beginning, James viewed the face-mask business as a big marketing exercise for the company, and wasn’t looking to earn a profit. But in order to not lose money, he has now built in a respectable margin – well within global price-gouging laws of around 20% – because challenges are like flies on honey when there are big sums involved, James explained to me. And those difficulties cut into profits fast. “Even if everything is perfect, we have problems,” James said. Before spending a dime, his team on the ground needs to be sure that the plant they’re buying from can deliver. Even if he has a contract in place, there’s always the chance that someone shows up at the factory gate, big cash in hand, and bigfoots James’ order. Getting goods through customs in China is a trial. The rules are “changing every day” – what forms are required to get a shipment

are even bumping into each other as they jockey for position on the tarmac. And once the masks are finally in the air, you can’t stop being paranoid. “We had a shipment stopover in Chicago to refuel on the way to Canada, and some of the shipment disappeared,” James said. Now his company is moving up the value chain, by making branded face masks and hand sanitizer. “We never planned on getting into this business... lightning strikes only once for a startup like mine,” he told me. James is in a good line of business... and it looks like demand won’t be dropping off anytime soon.


May 2020

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