Episode #118: Why You Should Manufacture Your Toy Products in India with Joshua Punin
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Wondering if there are any manufacturing options for you that are outside of China? More and more toy makers, toy creators, and even toy companies want to expand their manufacturing resources beyond China, but they don’t know where to start. Major toy companies and retailers have announced goals to move 30%-60% of their manufacturing of toy products out of China by 2023. And where will they move them? Likely India. India is an emerging country for manufacturing in general, but especially is a current hotspot for toys, in part thanks to today’s guest.
Today on the podcast, I chat with Joshua Punin, the owner of Source 4 India. He and his business partner created this manufacturing resource for toy and game companies in the beginning of the pandemic by partnering with India based factories and educating them on the needs of the toy industry. His company is bringing new manufacturing opportunities to the toy industry and helping alleviate stresses and limitations of focusing manufacturing efforts on China alone. Joshua connects both small toy creators and large toy companies to factories in India that can help manufacture their toy or game ideas.
Find out how he has helped factories shift from car parts to toys and the surprising origin story of Source For India. You will also learn more about current and future manufacturing capabilities in the region, the benefits and major differences between working with factories in India VS Chinese factories, and why Wal-Mart’s website listed a directive to move 30% of their manufacturing to India by 2027. If you’re looking for new options to manufacture your toy products, today’s episode is a must listen.
EPISODE CLIFF NOTES
Learn about the policy changes that inspired Joshua and his business partner to consider creating toy manufacturing opportunities in India. [24:08]
Find out just how much sweat it took to create amazing relationships with Indian manufacturers while working from home during the pandemic [28:13]
Learn how many Indian toy factories Joshua is currently working with [30:30]
Find out the current limitations for Indian toy manufacturing, what India is doing really well, and what it will be doing even better in a year or two [31:18]
Learn how manufacturing in India can be more cost-effective [36:38]
Find out how communications with Indian toy factories compare to China [38:28]
Learn how long it may take to develop a toy with an Indian factory [43:02]
Find out which major toy brands are already manufacturing in India [50:22]
Learn about policy changes in 2022 that may make toy sourcing in India even easier [52:29]
Find out why you should toss out your preconceived notions about India [56:50]
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This episode is brought to you by www.thetoycoach.com
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[00:00:00] Azhelle Wade: You are listening to making it in the toy industry episode number 118.
[00:00:05]
[00:00:18] Azhelle Wade: Hey, there toy people Azhelle Wade here and welcome back to another episode of the toy coach podcast, making it in the, toy industry. This is a weekly podcast brought to you by thetoycoach.com. Today's guest on the podcast is Joshua Punin Who is the owner of source for India? Is that a correct?
[00:00:38] Joshua Punin: Correct.
[00:00:39] Azhelle Wade: Owner of source for India. And honestly, Joshua, I've gotta say, I don't remember how I found you now because I've literally been trying to get you on the show for like six months, maybe longer. I think it was linkedIn. I don't remember what post I saw you on. What article I saw you on, but I remember reaching out to my, media manager and saying, we need to get this guy on the podcast and we've gotta talk about sourcing outside of China, like other options for sourcing. So I'm so excited to have you on the show today. Welcome Joshua.
[00:01:07] Joshua Punin: Thank you, Azhelle. It's a, pleasure and thank you so much for having me on here today. I think one of the reasons maybe it came up somewhere along the lines of LinkedIn or somewhere was There was an article done by Jacqueline VG who I've known for some time for many years and we worked together and yeah, I think that's how we kind of got the rhythm flowing on the India story, earlier last year. So thank you for your patience. And I'm really happy to be here today.
[00:01:31] Azhelle Wade: Yeah, this is a time where we have to be flexible <laugh> cuz like things change in an instant, but let me give a quick background on Josh. Working in the international toy industry for 16 years based out of Sydney, Australia. Josh has an extensive experience as an international sales director with a demonstrated history of working in the consumer children's toy industry strategically for 16 years, representing some of the largest toy brands in the world also has the largest agents. See in the Asia Pacific region, do you've worked with well known brands, such as peppa pig, mGAs, lOL zuzu, pets, and as well as many other established brands across the, Asia pacific region and pan india.
[00:02:14] So in 2005, Josh started traveling and working throughout the Indian toy market to build numerous toy companies position in the market today. And that's what I wanna talk about because so many listeners of this podcast, students of toy creators academy are interested in hearing more about manufacturing outside of china. And since that's not MySpace civic area of expertise, I thought why not bring an expert on the show? So. Welcome again, Josh, would you please give us a little bit of a background? Just, I, I wanna hear almost how your story started before the toy industry, and then we can get into the toy industry. If that sounds, good to you.
[00:02:51] Joshua Punin: Yeah, that sounds good. I'll I'll try be as brief as I can. On that side of it. So, Finished university, I studied a bachelor of business. in Sydney I then looked at getting into the marketing side of of the business. So I ended up joining Microsoft early on in my career in Sydney in a marketing role. From a junior. And then I was able to move into a, kind of a minor product manager role. And from then I was looking to stay in tech in those days, Microsoft liked you to go out, get a job somewhere else and come back later as a senior. So they gave you that experience and then were able to push you along and say, why don't you go work with a partner?
[00:03:23] So I, I went out there. Thought about it. And then just lo and behold, there was an opportunity that came up in the toy business through a very close family member and said, look. There's an interesting opportunity for you. Why don't you try the toys out? And if it doesn't work, you can go back into your marketing. position in a tech, in a tech company. I said, you know what sounds interesting? It's toys. I always love toys as a kid who didn't lots of star wars at home for memories there, millennium Falcon. In my bedroom up until the age of at least 12 years old. So I thought, okay, if it doesn't work out, I'll go back and then.
[00:03:54] Basically I was thrown into the deep end, internationally. I had no idea what I was doing. I basically was put on a plane, to go out and, go to a few trade fairs, early on. And then I was exposed to a lot of toy companies early on in my early twenties. And I was introduced to people that playmates at the time, which were famous turtles, ninja turtles. And then I was introduced to. MGA very early on. And I was introduced to, companies like character options and vivid. And I mean, this goes on and I was able to then sort we tap into different markets across Asia. And I was jumping around to countries like Korea and Japan and, and China and India very early on.
[00:04:33] And that's how I was exposed to markets and I was very fortunate to be able to forge some wonderful relationships with a lot of business partners in Asia. And I could see the, the shift very early on, and where it could go, especially India. I could see early on in 2005, 2006, when I was there, that this is the, this is the beginning. This is when you your somewhere and, and say to yourself in 15 to 20 years, it's gonna be interesting. Let's see where this goes. You could, you could smell it in the air. And so. 16 years later, the penny had dropped almost 14 years later.
[00:05:05] The penny had dropped and said, it's time to look outside the box. It's time to look around ourselves and see what other options are there in this world. And, one thing that I think, India's, very different in comparison to the other parts of Asia Southeast Asia is I don't think it's great in marketing itself. I don't think it's a great promoter of itself. And i, and I say it in the nicest way. and I think, unfortunately there's a lot of misconceptions and only from my learning, my experience, my learning early on, I could see those, differences. I'm sorry. I actually maybe deviated from the first question. So my apologies have I've gone into a tangent.
[00:05:43] Azhelle Wade: It's okay. It's an interesting tangent. I'm with you. I'm enjoying the tangent. go.
[00:05:48] Joshua Punin: Okay. Okay. So India very early on a lot of small businesses out there playing in the toy business, and, compared to Southeast Asia, we have established companies in Japan and Korea and taiwan. was very different. It was, although it wasn't mature back then, it was still much more mature than India was. And there was only a handful of companies in India that knew what to do with a, a international brand. And it was very, very difficult to get started. and I'll use an example when I was very all in early on in my career, I went to Korea at the age of 24. I had maybe one or two customers to meet.
[00:06:21] And I was put in a position where I had these, these brands that were not that famous back then, like moose moose was not that famous back in 2005, 2006. It wasn't that recognized, especially in, in Asia. I mean, no one had any idea where Asia's dominated by the Japanese brands, primarily And I'm sitting around working with, with these Korean businessmen, to forge deals with through direct response TV, because direct response TV and Korea was very big. back in those days versus traditional, distribution through the retail channels. And I was sitting with these guys trying to come up with strategies.
[00:06:53] How do we launch a new brand and new product? So already early on, I was exposed to being able to push angles in different ways. there was very different to the traditional European model of show, a product to a distribution partner in a country, And then run with it. had that from day one, I was exposed to a very unusual place, a very unusual custom base, a very unusual, a cultural taste in product that was not as exposed to Western products and say, okay, how do I then take these, I, these products that may or may not mean anything in the west at this point, because some of the brands were fairly new and then make them work.
[00:07:27] And then you try use that formula elsewhere and try to replicate that formula in other countries. And I as I was going. it doesn't work. What works in one country in korea does not work in Japan. And what works in Japan does not work in Taiwan or doesn't work in China. You know, I was in China very early on in 2005 with a very few brands on the shelf or Western brands on the shelf. And a lot of them were knockoffs. When I went to car four, in shanghai, I'll never forget I'm and a wall of toys. And, and I think when I was looking at it, I think one or two of them had a, an actual, real brand on the shelf versus I don't mean a knockoff.
[00:08:05] I mean, just a, what I mean is that it's an inspired brand of a transformer or a, another well known product, but it wasn't called transformers. India was the same in many ways. So I guess. I was given a playground, but It was a very different place to being thrown into Europe and playing with, because there you are completely unknown. Who's this guy from sydney, Australia, who has no idea about this market. And you're telling me you got a toy that you think my market's gonna like, I mean, let's, let's be real.
[00:08:32] Azhelle Wade: Right. So what year was this happening?
[00:08:35] Joshua Punin: I started in 2005, so It took me a long time. It Took me many years, you know, a lot of knocking, a lot of building, a lot of grit. To get some runs on the board. You know, it was only until about 2000, maybe two years later after I started, I was getting some good traction in some markets.
[00:08:51] Azhelle Wade: So let's talk, let's talk de we gotta break this down. We had break this way down for my, for my peoples here. So when, when you're talking, when you were saying you started in 2005, what did a typical day look like for you? What were you trying to, what were your goals you were trying to solve? Who were you working for? What, what were you doing?
[00:09:09] Joshua Punin: Okay. So at that time we had a portfolio in our agency of about 30 companies.
[00:09:13] Azhelle Wade: And what agency was this?
[00:09:15] Joshua Punin: So at the time this agency was made up, in is in Sydney. that company had about 30 companies in a portfolio. And those of those 30 companies, you had companies like moose, you had companies like morrison entertainment, corinthian, vivid. I mean, we had a lot of companies stomach, some exist today. Some don't exist today. that's the nature of the toy business. And with those, with those agents, with those pro, with those products and those brands, they meant some things in Europe. They meant something maybe in some of them in Australia or New Zealand, some in the us. But they meant absolutely nothing in Asia because Asia was untouched. It was untapped. It was unknown. It was Josh, should go in a plane and let's see if we can make these things work because these markets didn't exist.
[00:09:58] Azhelle Wade: And when you say, let's see if you can make these things work, you are saying, let's see if you can sell these product into these Asian markets.
[00:10:05] Joshua Punin: Absolutely. So how did I find customers? How did I look for people? What did I do day to day? That's the, how did it just fall from the sky? The sky? No, no one called me and said, Hey, Josh, I'm sitting in soul. I've heard about you. You're a nice guy in Sydney, mind you before Facebook and Instagram, that existed. Right. And we got your number somewhere, the yellow pages. And we called you, I wish I used to dream. that that might happen. So, you know, I would dream that that would happen. But how would happen was that I might have got a reference to a company.
[00:10:34] And when I was visiting korea, I might have had two customers and that customer might have been introduced by somebody else. at the time or they might have looked at something else. So I tapped into that, but when I was in Korea, I was able to go through the stores, go through the shops, speak to people, look at the brands, look at the importers, look at who was, who was doing what? and you know, you start to then run the field and you start to make your calls and send your emails.
[00:10:58] And you, you start doing your blast outs. you start getting on the phone. Hustling, you know, how do we get through to this guy, this company? How do we get? Because I knew talking to the staff in these companies were not gonna get me anywhere. I needed to talk to the English speaking staff. That was the decision maker at the end of the day. In some cases, for example, I'll use Bandi Japan, we all know Bandai Japan is a very large
[00:11:18] Azhelle Wade: Mm-hmm
[00:11:19] Joshua Punin: Bandi Japan took me three years. To get in touch with the right person from when I started. So when I started in 2005, it took me three years until the guy in Bandi Japan was willing to have an open conversation with me. And then we forwarded a great relationship. Once we connected, I think afterwards, and we had, we had, some commonalities and it just took time. in, in asia. it's all about building relationships. It's not about the business today. It's about what's gonna happen in 1, 2, 3, 4, 5, 10 years from now that if we, can hold hands together initially and see where things take us. And even if it doesn't work out. Now, it might work out in the future. So it's a very long term view. It's about understanding what their needs are.
[00:11:54] Not what I'm trying to push down their way. You know, it's not about me, it's about them. And once I understood them, then I was able to get it. And then you have to imagine, I have to explain this to the us company. And the european company who have expectations, and then they need to understand it's this product that you sold 3 million pieces for in in the UK. Guess what? It's not gonna work. It's not gonna sell. It's gonna change. We've gotta change the color, the packaging, the name, you know, it's going from a duck to a Platypus. I use an example, the product suddenly the way it looks on the shelf in, in the us or in UK It's gonna look completely different and that's, if you get support
[00:12:30] Azhelle Wade: mm-hmm <affirmative>.
[00:12:31] Joshua Punin: and the strange thing is sometimes, and I'll, this is an example of, of the, to industry. We think we have a winner, we have a wonderful product. It's working everywhere else. People are talking about it everywhere. And the company in Japan or Korea in Taiwan, or even india might say, you know what? We don't like that product, but we like the one next to it. other one you can't give away and you D know why, but they want that one. They wanna talk about that product that nobody wants to talk about might even be shelved. And that's a it's you just can't pick it.
[00:12:57] Azhelle Wade: I in those early years, did you identify any similarities in the types of products that The asian market would select like size, similarities, colors, the way the product was communicated in the packaging or the features that it had.
[00:13:09] Joshua Punin: Yes, I did. I picked up pretty quickly. I knew watching the trade and looking at the market and I walked a lot of retail because you've gotta walk retail in every market to understand what's going on on the ground. So after looking at an understanding and speaking to the guys and learning, I realized that when it comes to markets like. The Asia Pacific region, and I'm not talking so much Philippines and Singapore and Southeast asia, I'm talking north Asia right now. It's gotta have a novelty factor. It's gotta have a, wow. There's gotta be that magic moment in a product. It's gotta be something that be marketed.
[00:13:39] And if a customer looks at it and goes, ah, I, it. That's interesting. that's got a wow factor to it. so one of the most successful products I had very early on, was a product from moose, called magic sand. This is very on now. We all know magic sand became a very common property even today. You know, there's lots of versions of magic sand that exist, but this was the first time that we've actually promoted magic sand in the water in Korea, where had all these incredible colors and it was magical.
[00:14:02] We had this product that you could go and mold this sand in the water and then take it out. And it was dry. It was magical. And so. For that market, as I use that as an example, it made sense because it was novel, it was very unique and you could market it really well and have that before and after. And so that would be a prime example of how it would be successful in those markets, a product that was my pinup. That was how I could model the rest of it going forward after that, because for that product, we must have sold two to 3 million worth of product, which is a very big deal.
[00:14:35] Azhelle Wade: Wow. Yeah.
[00:14:35] Joshua Punin: So, I gotta say I made a lot of money for these companies over the years in Asia and they never expected any of this at the time. It was only years later the expectations for Asia very early on, they didn't know what to expect, cuz it was all unknown territory. All these guys and companies we are talking to, they could have come from uSS because didn't make any difference.
[00:14:54] Azhelle Wade: So now let's say, I don't know, let's fast forward to maybe like 2010. What was happening at that point? was it still green? Like where, where were you at? In 2010.
[00:15:03] Joshua Punin: 2010. was definitely peaking. Asia was really taking.
[00:15:09] Azhelle Wade: Okay.
[00:15:09] Joshua Punin: What things were firing off everywhere. Korea was huge. Japan was building Japan, suddenly being an insular market, started opening up to Western brands more and more. They were open to talking about brands. You know, we had a I launched a product in Japan called spray art. years ago and actually it was phenomenal, with a company called Sega Japan. we had done, you know, huge numbers for them. And then we had. Zuzu pets that year in 2009, 2010. if you Remember zuzu pets. we, you know, mega deals.
[00:15:35] I mean, there was a lot flying at that point. There were a lot of great products, a lot of great novelty and a lot of open mindness in 2010 to new. the world had shut down a bit in 2008 with the gFC , everyone clamped down. Everybody was a bit more, cautious. But in 2010, the doors opened up again and things were roaring up. And I think that was really, it was interesting. You picked out 2010, because I think if I look back now, it was a peak peak period for the, for for us as a business as well.
[00:16:02] Azhelle Wade: Oh, interesting. I did it cuz it was five years beyond your 2005 start, but I wanna do another five years. So let's go to 2015.
[00:16:10] Joshua Punin: All right. 20 15, 20 15. Oh, That was a big year. Had My
[00:16:14] Azhelle Wade: Wow. It seems like you're having a lot of big gear.
[00:16:16] Joshua Punin: Yeah. Yeah. That was a big year for other reasons. But 2015. Generally speaking, it was plateauing a little bit in 2015, that took 10, so 10 years. And we, we get, we got to a comfortable level. We knew what the, we could start forecasting accurately. we could start. at this point, working was this source for India began when in source for India has been a labor of love, for some time and I'll get to that. I'll get to.
[00:16:41] Azhelle Wade: Okay. Okay. Not yet.
[00:16:42] Joshua Punin: but, but but not yet, but in 2015, the agency business had come to a position where we could start actually, Really forecasting. We've had a very strong base of customers in a lot of countries and relationships are very strong and we can get things done pretty quickly. we can work out whether we have something or we don't have something very fast rather than 10 years earlier. We're still trying to gauge the market, understand what's going on. It's more mature Asia's become more mature and more accepting.
[00:17:09] And I was traveling a lot, you know, I was, you know, I would've been traveling two, three weeks at a time, sometimes across multiple countries besides going to trade fairs. And so I could meet a lot of customers and do a lot of deals, with people and expose 'em to a lot of products. And that's the best way, better than any trade fair, actually. So I think that, I think 2015 was starting to get to a point where. You know, we're getting comfortable and, we, can explain to companies where we see things going, where we see brands and products are going in.
[00:17:35] Azhelle Wade: You cuz you have a.
[00:17:36] Joshua Punin: And they can believe. And that can yes, of course, of course finally, after all those years they can, if I say something and then, and then what happens is you start getting very conservative because if you start, you know, overselling things, you know, expecting build. So now you've gotta manage that too, and you've gotta be realistic. not over promise either. And that's a very important part of the business and we've gotta be realistic.
[00:17:54] Azhelle Wade: mm-hmm <affirmative> so, okay. So we're now let's jump to 2020. <laugh> when the whole world shut down. And I think, I, I just would love to hear, like, what was happening for you because, first it was the pandemic and factory shut down, but then when everything reopened, it was a shipping container crisis, which I'm assuming for you was almost like the trigger to probably elevate people, looking into India or other options to manufacture. So what, like, yeah. Walk us through what happened <affirmative>.
[00:18:21] Joshua Punin: So asia. And I'll say this to today. Asia's gotta be one of the two areas, Asia and Latin america to the two worst hit regions. in terms of business, bottom line, just, just business activity compared to the west. And. I come back from new York toy fair and I can see things are shutting down. You see all the conservatism kicking in. Everybody goes, you know, into that protective mode and in Asia rather than throwing money and spending money. It's the opposite. it's conserving. we've gotta eat.
[00:18:49] We've gotta have a roofer over our head. And then funny enough, prior to COVID I reopened a conversation with a colleague of mine about India and he's actually he's my business partner today. And, you know, we've been in touch now for 16 years. Ever since I started. And we started talking and he said, Josh, you know, we gotta get talking about India again. And I agree with you. I said, think it's looking like it's time. I think we should start having those conversations. I think it's time to start looking at opportunities.
[00:19:12] And the reason being is not primarily because of alternative manufacturing, it was because the Indian government had changed the rules around the tariffs and the duties of importing goods into India. It went to 66%. from. about I think 20%. Wow. Oh, Okay. <laugh>. So it's pretty major. And suddenly india, one of the biggest toy markets for us just collapsed and that was already the writing on the wall was already in 19 was coming. And so that was already, the conversations had started flying at that point.
[00:19:46] Azhelle Wade: Wait, I'm sorry. Why did that news make you say you talk about India again? <laugh>
[00:19:51] Joshua Punin: Yes.
[00:19:52] Azhelle Wade: Why, why why would a higher tariff rate encourage you to do that? Explain.
[00:19:57] Joshua Punin: Because we couldn't import toys, They couldn't import toys into India anymore. It wasn't viable. It wasn't.
[00:20:03] Azhelle Wade: Yeah. So why would you go after that?
[00:20:05] Joshua Punin: Because the next move was, we need to make the toys in india and we need to supply the market domestic. We need to, we need to make, we need to look outside the box. So Now the door, the conversations opened up.
[00:20:20] Azhelle Wade: oh, so you weren't thinking about, oh, I get it. You weren't thinking about like the manufacturing to export. It was like, they couldn't literally how, I mean, that was one part.
[00:20:28] Joshua Punin: There was the, there was already pride. That's forget COVID for a minute. This was already is like, so there was before and after that was the marriage of this. And so. The conversation was about how do we service this wonderful market without losing the opportunity and then COVID hit. And then the conversation went from that to, we need to look out of, we need to look at options, other companies, because we know what we can do in India. So the penny had dropped had dropped twice. And I've been talking about India for years. I mean, it was not an overnight conversation. This has been an ongoing discussion about one day. We'll get to a point where we can manufacture in India.
[00:21:04] We can make India the next hub of China it's coming. we used to talk about this all the time. So this was not a, a new topic. It's just that you need those moments. You need those defining changes to make the moves to inspire everybody to think outside the box. And there were two reasons. That still exist. And so that conversation prior to COVID and then suddenly COVID hit, like you said, March hit the world was changing. We were all panicking, And I got on the phone to my, colleague over in India and I said, I said to him, listen, we need to address this. Now. We know there are issues out of China.
[00:21:41] There are gonna be more issues outta china. We know we need to be able to provide opportunities to supply goods into India as well. We need to look at both sides of it because it's very, very real. And I can sense talking to a lot of the companies I know in the Europe and the us, they wanna look outside the box. They're ready. They weren't ready a year ago or two years ago, but they're ready to talk. They're ready to listen. Forget talking. They're ready to listen.
[00:22:05] Azhelle Wade: Right. right.
[00:22:06] Joshua Punin: And so. we decided let's start talking to companies. We are familiar with in India. let's start discussing what we can produce. Let's start looking at the options there. So we, started going through every single company we knew in India.
[00:22:21] Azhelle Wade: Wait. I just realized that you did all of this remotely because before we started this interview, you told me you haven't traveled in two years.
[00:22:28] Joshua Punin: That's right.
[00:22:29] Azhelle Wade: Wow. Okay. That's cool. Look at
[00:22:32] Joshua Punin: Yeah, this was, talking about not sleeping and not eating and not doing anything else. That's what it was. All of that. And above and, you know, locking yourself up in a room. It reminds me actually of a documentary. Sorry. I'm on a tangent. It's a very good documentary about Dr. Dr. the, the, the, the head phones it was sold. There was a very famous. beats and the, I forgot his name is very famous producer. He did the deal. Who's the guy responsible for doing the deal with the beats and he locked himself in the bathroom there and he didn't come out for days or weeks when he was doing the, the, the deals.
[00:23:02] For the beat, you know, there was, it was part of the documentary and I felt like I was the same. I was locked in a room and I was not going anywhere until I was getting these agreements done. making sure we can find the right. Companies manufacturers. in India to produce for us because I had to explain what our expectations were. And so we were going through it and we, we, and remember they were also lockdown in India. So we were all in a position where we couldn't leave or go. And we were on calls going through videos and through images. And we were going through technicalities of what we can, we can and can produce.
[00:23:31] And not every factory is from the toy industry. And we can get to that later, but you know, they're from automobile industry. They're from spare parts industry. They're from the furniture industry. So we are creating while we're doing this, we're also curating factories into coming to the fold And educating them. So there's there's those who are around, which are a handful. And then there's those who we need on board to leverage from their expertise. So this was not like someone walking to China and saying, okay, let's just get a couple of factories and, and show what they make. This is from scratch.
[00:24:00] Azhelle Wade: No. Yeah, this is, I, you know, this is like probably like the eighties in China. Right.
[00:24:06] Joshua Punin: This is, yeah, this is except I can't run around on a plane from Bangalore to, to mumbai, to deli, to Pune, to chenai and do it. I've gotta do it through, you know, and thank goodness I've got my my business partner who's an amazing man, 30 year veteran of the industry David Sage, who I work with hand in hand and, you know, we just. based in shanghai, he lives in Shanghai, in India, he's based there. And as I said, we've known each other for forever and, was a great trust and, and mutual respect for each other. And we just made this happen. And we we've now, today, I think we have, I don't know, we must have over 30 factories. we're working with in India today in many different areas of expertise that can produce, a lot of different types of products and different materials.
[00:24:49] Azhelle Wade: Oh, that's fantastic. So I have to stop you right now because I know what my listeners are thinking. They're saying what. Josh, You've got all that set up. How do I get in touch with your company source for India? How do I start manufacturing in India? like, are there MOQ limits? Like what if I'm a startup? What, what do I tell, tell us more, Josh. How, do, how do we?
[00:25:10] Joshua Punin: All right. Okay. This is great question. I'll, try, explain as succinctly as I can. India's not China. I'm gonna be, be honest. It's not China. Okay. And I'm not gonna pretend it is because when I say that, I don't mean we can't produce everything they produce. It's the efficiency. Okay. so efficiencies are the learning block and we are getting better and the factories are getting better every day. The engineers are amazing. The, the teams are amazing. The in-house QA QC, even our own internal QA QC is fantastic in our company. and there are some things that we can do, but what Indias are not set up yet, four are doing the small runs.
[00:25:47] Azhelle Wade: Hmm.
[00:25:48] Joshua Punin: Okay. Now we could do a plush in terms of soft goods, we could do the small runs.
[00:25:53] Azhelle Wade: And define small runs 501,002,000.
[00:25:56] Joshua Punin: 500,000. Yeah, I think 500 a thousand. I think that is where India's not ready for. We still. in the game for getting the commitments where we're onboarding factories, where we've gotta get sizable volumes through where we need to, build up, you know, the economies of scale. Which we are doing. Okay. And that's where we are with India. doesn't mean we won't in the next two years or because a lot's happened in the last 12 months and it could be in another at 12 months, we could say jail, you know, it's looking damn good. What do you wanna make? What are your, what are your, what do your What do your listeners wanna make?
[00:26:31] Because I'm, I'm hope we're ready. We're ready to, to hold their hand. and this process. Is handholding, not only for the factory on our side, it's handholding for the customer. And we are there the entire way from beginning to end and we run the fees of. We listen to everybody and we don't push anything that we cannot do or feel comfortable doing. We are very transparent that way, because if we are not, we're gonna have a lot of disappointed people. And we don't want that. We want India to be a great experience for companies that it, that are coming on board.
[00:27:05] Azhelle Wade: So it's, it's not set up for big runs, but small runs for plush. And you said one other material is, is feasible.
[00:27:12] Joshua Punin: Plus is feasible for small runs. We could do, in terms of plastics and wood, wood wooden products. We have amazing partners in wood and we've explored India extensively. We've got amazing companies that can produce wooden product. and you know, again, they're, they're able to do the smaller runs as well. capable of, of, meeting the requirements, for the European and, and us standards, which are very important. And I think in terms of the plastics and general toy, let's called a mass market toy.
[00:27:41] Azhelle Wade: Hmm.
[00:27:41] Joshua Punin: we need to do the runs. We need.
[00:27:43] Azhelle Wade: What? 25,000, like what are we talking?
[00:27:46] Joshua Punin: 5,000? Yeah.
[00:27:47] Azhelle Wade: Oh 5,000.
[00:27:49] Joshua Punin: Yeah, 5,000 or 10,000. but you know, we're talking about mul not one skew. It would have to be one, you know, an assortment. So let's say there's a range and there's five different skews in an assortment. we'd have to do 20,000. Let's say to make it feasible. 20,000
[00:28:04] Azhelle Wade: <affirmative> mm-hmm <affirmative> I'm also wondering, like, what's your annual expectation? Like what are factories looking at annually to get from these toy opportunities?
[00:28:14] Joshua Punin: Yes. volume wise dollar wise.
[00:28:15] Azhelle Wade: Volume wise?
[00:28:16] Joshua Punin: I think 50,000 pieces plus on an item is where you'd probably be at a comfort level. I think that's where it makes sense. I'm talking general plastics. it doesn't mean we can't do the smaller runs. It just means that they're gonna be maybe not as cost effective.
[00:28:30] Azhelle Wade: Right.
[00:28:30] Joshua Punin: if I say that you not a cost effective, also, you look at the freight rates now, the way it's the way it's looking.
[00:28:35] Azhelle Wade: So yeah, I wanna get into a comparison conversation if we can. So, so yeah, let's talk a little bit about freight rates comparative to China. what, what can you share?
[00:28:44] Joshua Punin: Yeah, I can share a couple of examples. You know, it's very dynamic at the moment today. You make a phone call to a free company. It's x price tomorrow. It's another price. It could be changing hours.
[00:28:52] Azhelle Wade: Like, as it's being loaded onto the ship, <laugh> like, oh, it's actually gone up $5,000. Like what?
[00:28:58] Joshua Punin: I've heard stories like, listen, I've heard stories like that. I've heard some pretty bad ones. you so I, in terms of going to the west coast and us, or going to Europe we're faster. And we're we're gonna be a bit more cost effective. there's been variances going back five months ago. There's probably a 30 to 40% variance in the shipping. I'd say, you know, about that period
[00:29:18] Azhelle Wade: it was really bad. Okay.
[00:29:20] Joshua Punin: yeah, it was really bad. So that exactly. so so it was, it was around that range were definitely lower in terms of, China. but It depends on the freight forwarder. It depends on the day. Generally speaking, it's if I, if you ask me what's better. Yes. From India, it's more cost effective. And then we need to look at the net outcome at the end of the day. Landed on terms of, are we competitive even though India may or may not be, expensive, cheap as China, what is the net outcome when it lands?
[00:29:46] Azhelle Wade: Let's define, landed.
[00:29:48] Joshua Punin: Okay. Landed means, fob b.
[00:29:51] Azhelle Wade: Freight on board.
[00:29:52] Joshua Punin: Freedom board.
[00:29:53] Azhelle Wade: Gotta define, define it. All. Everything.
[00:29:56] Joshua Punin: Yeah. Def yes, everything. And then, and then obviously, clearance of customs, in the desired port of choice, whether it's hamburg or whether it's Manchester, wherever it might be. is how We measure. We should measure India, not measured by the fob price from the factory, or the x works price, but measured by the landed price, because that is where we are making a difference. That is where it is going to be more interesting also to europe it's faster, it's.
[00:30:23] Azhelle Wade: I was gonna ask that next, like, yeah, what's the speed look like? Okay. How much?
[00:30:26] Joshua Punin: The middle east. Well, 20 days, I think 21 days, to some parts of Europe, I think it's considerably quicker. You know, I think it's, it's considerably quicker to China from, from China. especially when you need goods in time, you know, when you're looking to get replenished from it and remember, now everybody wants to replenish rather than loading up their inventory. So now we've got these. Runs that are happening more continuously. Whereas Europe used to plan one year ahead or, or X amount. it's becoming more on demand. which is much tougher. It's much tougher, you know, especially with the with the time difference and the delay. So I think there's that play as well, whereas the proximity and the, the distance and the, time, know, I think there's a factor there to be considered when it comes to Europe and middle east, obviously as well.
[00:31:06] Azhelle Wade: And what about just like the speed of, like product development, also the speed of communication, like I mean, have you worked with manufacturers in China, like doing this whole process as well? Cause I know you were doing sales and distribution. Primarily.
[00:31:19] Joshua Punin: I was I've I've actually manufactured good. My over the years I've got, I've got involved and manufactured some products on my own over the years.
[00:31:25] Azhelle Wade: Okay.
[00:31:25] Joshua Punin: China. So.
[00:31:26] Azhelle Wade: How would you compare the communications. Cuz some people just might be so afraid of it and feel like, oh my gosh, it's like a whole other way of speaking and dealing with people. I don't even know how to do. Like what, how do you feel that the communications are? Do they vary or different or is it.
[00:31:41] Joshua Punin: It's a great, great question. And. I'll say this to you, 25% of the population of India speaks English.
[00:31:47] Azhelle Wade: Yeah. <laugh>
[00:31:49] Joshua Punin: Right. Versus 5% in China.
[00:31:51] Azhelle Wade: Yeah. I feel like most versus 5%.
[00:31:53] Joshua Punin: Yes, that's the, that's the stats. That's. whether it's accurate or not. That's the stats. that's the stats. I think. It might be skewed. I think india's got higher. I think English speaking is higher in India. I think it's probably more like 40, 50% and I'm expecting China would be probably probably around the 25%, but I'm going off the stats that the stats that on record that I can find, is language is a huge factor communication. So how is communication? Communication is fantastic, If from from actual communication in terms of, requirements and in terms of what people want, there's an education process. So whatever you make in china doesn't necessarily mean it's made in India right now, which means you need to take that step further and explain to them, what are you doing? You're gonna have to give a lot more detail, a lot more detail to the companies.
[00:32:41] Azhelle Wade: Give us an example.
[00:32:42] Joshua Punin: Okay. I wanna produce a collectible figure. Firstly, that collectible figure might be made of a certain tPR or tPE material.
[00:32:49] Azhelle Wade: Mm-hmm <affirmative>
[00:32:50] Joshua Punin: And you've gotta feel, you might have a feel where it's a squishiness now, how do I get that squishiness? I can measure the density. But. What's the true feeling of it. The true feeling is a formula. Now the formula of how it's put together, how do I get that formula? Now? doesn't mean the factory in China's gonna say by the way, thanks so much. I understand you would like to move to India or your manufacturing. We're happy to be of service. What would you like us to help you with Right. We unfortunately don't get that. We are not getting that. So, and that understand that and that's a reality of the situation. So we need to dig deep. we need to do a lot more crosschecking. We need to do some more testing. We need to get examples. We need samples. We need information. I need data. I need need spec sheets. I need it's much information you can possibly give me. And even then it's still not enough.
[00:33:35] Azhelle Wade: Right. <laugh>
[00:33:38] Joshua Punin: But I'm I'm obviously, I'm.
[00:33:40] Azhelle Wade: Cheeky.
[00:33:40] Joshua Punin: Embellishing that yeah. Cheeky. In what I'm saying, but, but we get there, you know, if you've got patients, if you've got the resolve in patience and that's why we are there to fast track it, that's why we're there as that conduit to make it work, to be the manufacturing, know, consultant, agent, whatever you wanna call it managing on the ground with you holding the hand of the manufacturer and explain to them our experience. We understand how things work. So we accelerate that, that's why.
[00:34:06] We can help companies who want to transition to manufacturing in India, because we can give that extra, that service, that ability to provide what they need to make it happen. And we can cut through what we can and can't do. So if a company says, I wanna produce this in India, I'll say to them straight away, look love to do it for you. Not there yet, Or, yeah, absolutely. These are our options. Let's explore them So we, everything is produced in China cannot be produced in, in India today. It doesn't, it doesn't exist that way.
[00:34:32] Azhelle Wade: But let's say somebody has like a wooden toy product. pretty simple. and say it took them. I don't know. Let's say it took them like eight months to develop in China. Would you say they could probably develop it in the same timeframe or should they just add on an extra, like four months or two months to start from scratch and develop it in india? Just to give people an idea of, if you wanna make this move pat, on a little bit of extra time.
[00:34:53] Joshua Punin: I think always at extra time, I think extra time is, is, is always needed, development. but in this scenario, I think eight months, nine months is very realistic. In terms of development. And that's what we are seeing in terms of projects.
[00:35:08] Azhelle Wade: And how complex are the projects like low complexity, like no mechanisms or high complexity, it's a doll with feature and you.
[00:35:14] Joshua Punin: I've gone from simple to complex it's, maybe varies three months could be three month variation. If it's very complex, maybe the 12 month project. It was very complex, which I've just, we're just completing now. We've, we've been involved in a, in a huge project in India that I think is gonna make a lot of news in the next few months. Yeah. Yeah. I think that's gonna be really interesting to talk about and very exciting, but that's been a the huge undertaking. So I think complex probably 12 months, we've turned around stuff in about four months on some simpler projects as well. so it can vary. It just, I think it varies. It varies on the manufacturer. Some manufacturers we're working with in India are very experienced in certain areas. And so we can turn around the prototyping and sampling very quickly, compared to maybe another manufacturer.
[00:35:55] Who's still learning the ropes in a category who's growing, who's able to do it, but it's taking a bit longer because there's a bit of an education process with them. So this depends on which product you're making and which factories, cuz there are multiple categories we can work in and there are some that are much more experienced than others doesn't mean they're any less, effective. But they're just, they need that push and education to make it work. Because the client wants to look at alternative manufacturing because now they're open because they need it because they're interested in it. and. Just to throw a comment in here about manufacturing and sourcing. I dunno if you're familiar with Walmart, that have a mandate actually on their corporate mandate on their website that states that 30% of their sourcing should come from india by 2027.
[00:36:37] Azhelle Wade: I did not. I did not see that.
[00:36:39] Joshua Punin: You can actually google it. You'll see. There's a mandate. And I think it's like 10 billion a year until 20, 27 or some, a huge figure, in terms of their interest. I mean, there's Vietnam, there's Mexico, but India is definitely the one there touting as, as where it's quite important for them to have those building blocks, not just in toys, but obviously every category under the sun.
[00:36:59] Azhelle Wade: So tell only if somebody really wants to work with source for India, say they're a small, independent toy maker? Can they afford your services? Like, is it gonna add an astronomical amount to the, to their manufacturing cost to be working with you?
[00:37:12] Joshua Punin: Absolutely not. We are very transparent the way we work. Every client's got a different process and a different a d we, you know, we weigh it up. It's, it's not one size fits all. And we are open to working with anybody and everybody that wants to manufacture India, not just in toys, but other categories as well. we are very, very receptive and we'd love to talk to people we're educating, you know, is my, the first six months of when we started was educating companies. And why India? Forget about making India. It's why, where is India at?
[00:37:41] Azhelle Wade: But we'll do it right now. Why, why india tell us right now, Josh.
[00:37:44] Joshua Punin: Why? Okay. All right. Why India? India's got, the largest youth workforce in the world. there are tax breaks and incentives for manufacturers across india, which means we have capacity to, grow a manufacturing base and scale up very quickly, both in space and also labor force, skill, labor, and, low skill labor. Both sides of it. We have no tax on exports. there are, six regions in India where we can produce products that are close to the ports. that means we don't have a very large cost base of transport modes to the ports. So we have the infrastructure ready in bill. We don't have new year. We don't have a lot of the holidays.
[00:38:24] Azhelle Wade: They don't take vacations.
[00:38:26] Joshua Punin: They don't take the, the future is closed down for two, three days at best during the course
[00:38:30] Azhelle Wade: It's terrible.
[00:38:32] Joshua Punin: You know, so we you know everybody has their holidays, but they don't go as long.
[00:38:36] Azhelle Wade: Okay.
[00:38:37] Joshua Punin: So, you know, we have more time. but We have more time to manufacture during the course of the year. Okay. which is a big, you know, which is a big, which is a big factor.
[00:38:44] Azhelle Wade: Don't know. I can hear like toy designers across the us, like groaning. Like that's my one break. <laugh> like, that's my one break in the year Josh.
[00:38:52] Joshua Punin: Not no breaks in it. We have no breaks that we keep going day and night. Doesn't stop at source for India. And then we also have, I mentioned to you freight rates and proximity that we have, and, the labor cost in India is one third. toys are played with from the early days to the end. it's an industry where it requires a skill to make, products that look great. And that's where China still has that efficiency and will always be a place, you know, remember when talking about alternative and additional money manufacturing, we're not talking about replacing manufacturing. Okay. Let's be very clear. this is about companies diversifying. then we can do the testing. Like the big factor in India is before, how do we do testing?
[00:39:30] Azhelle Wade: I was gonna go there next. I was gonna go there next. Like people are probably listening, worried, like, yeah. But what happens about toy safety tests? Just general tests before I get into Walmart, before I get into all those big box retailers, and they're like we can't do that in India. Can we, Josh?
[00:39:43] Joshua Punin: Absolutely. we've got Intertech, we've got BV. We've got sGS, you know, we can test whatever you like, so if we are able to export to, some major companies, which we're gonna be doing in 2022 into the us and into Europe into Australia, into, some parts of the middle east, we have to meet all those requirements. for domestics, one thing, which is a massive market exports another, you need to meet them both.
[00:40:05] Azhelle Wade: This is fantastic. I am so excited for not only my listeners, but also the students of toy creators academy, because I have a feeling I'm gonna be connecting with you and, and connecting them with you more actively in years to come. Because I I, I, yeah, I, I know they would love to too. anything else, any, I feel like any other areas that maybe you are thinking that we didn't really touch on, that you would love to share or anything coming up for the Indian market that you'd love to share?
[00:40:31] Joshua Punin: Yeah. a couple of things firstly, there's gonna be some free trade agreements on the cards, between India and some major countries in 2022. I think that's gonna make a difference, an impact having this free. Yes, there's gonna be some free trade agreements completed in 2022. and I think that's gonna be a huge, benefactor for both, know, the countries that that importing from India and also for India itself. So I think that's a big, big change. know, india's got a lot of red tape in bureaucracy and I think that's all gonna start changing, fairly soon with these fDAs that are, that are, coming.
[00:40:59] So I think that's very exciting. Also think that, we are going to be able to, navigate more categories outside of, Traditional toys as well in India, with a lot of, factories in India that are moving away from auto automobile parts. but into other other categories when, I mean toy, like, I mean, sporting goods. So other categories that are beyond just regular toys. And I think, you know, we need to be able to provide solutions to a lot of markets, there's very typical manufacturing in one or two countries. That exist and that don't exist in India. I mean, an example, is helmets, bike, helmets, are not really produced that much in india.
[00:41:34] motor bike helmets are, but actually you know, bike helmets So that's a huge opportunity. I see for global markets in, in 2022. and I also think that once we open up travel, this is a big thing. Once we open up the traveling and we can start moving around, which is soon, and I think the world will open up and start seeing india and visiting and, and I would welcome, companies that want to go visit India and see what they're doing in the factories and how they're doing it and are open to working with companies like ourself and the factories, and to educate, you know, there's a lot of education that needs to take place. and We'll also see factories in China.
[00:42:07] I think also interested to take part in India because of the domestic market. They wanna also achieve success in the domestic market. So it's not just closed. They wanna forge relationships. We've seen it in technology as well. There's been some for relationships with manufacturers, with mobile phone companies. and then you've got the semiconductor chips, which I think will, will make a play in where the government's now gonna pour in billions of dollars to, to, spearhead, a semiconductor facility and to, to account for hopefully, hopefully 10% of the world's fabs, 2025 or 2026.
[00:42:35] Where they can make a play in that, in the fabrication of, of, semiconductor wafers. I think that's gonna be a big thing where we can become more self-sufficient for electronics. So electronics will be a big game changer in India as well in the coming years where everything could completed locally. And my, my last point Azhelle that a lot of the people ask a question to us all the time. Do you have the supply chain in India? can we source everything.
[00:42:57] Azhelle Wade: So that was what I, I was gonna ask next, like raw materials. cuz everyone's like, yeah, we wanna move outside of china, but all the raw materials are in China. Like, yeah. Okay. Go.
[00:43:06] Joshua Punin: I would say majority of the time, yes. A lot of the resins and plastics and wood and componentries electronic componentry. Lot can be done and is being done in india. But there are going to be things that we can't do. Like I see chips. it's from Taiwan, it's from China, you know, certain fabrics. Synthetic fabrics we need from Taiwan or China. so there are things that we're going to need support still, and that may or may not change. And there's nothing wrong with that because, you know, we talked about a, a shipping cost difference.
[00:43:35] If you, and sometimes sourcing the material through a third party, works out cheaper than in-house anyway. So you really, you can you'll that there's a lot of moving parts, but if we can supply most of the things on the ground within India, we're doing really, really, well. And we're finding that we can, and we are, and we will do it this year, for many products, particularly some more high tech products too. I think that's where those, but then again, as I said, there's also inefficiencies, so it's not like it's, An absolute replacement.
[00:44:04] But it's definitely capable of doing a lot and a lot more what most people think. Because whatever thought they have on india or stigma might have with India, throw it out the window and rethink India. It's not what you think. And that's to everybody who's listening because there's still, unfortunately, a lot of old thought of the past of India of 10 years ago, 15 or 20 years ago. Okay. That is not the case today. New business, bone owners, new families taking over factories, educated groups outside of India that are coming back to take efficiency. Some outside inward. It's a different story today.
[00:44:38] Azhelle Wade: Oh, so good. Thank you. Thank you, Josh. I think we're gonna have a lot of people calling source ver India after this interview.
[00:44:45] Joshua Punin: I'd love to just talk about India. And as I said, happy to talk about it and, and we're open to, you know, anytime we'd like me to talk about india, I'd be happy to do so I'm almost feel like I'm a spokesman, I'm all not from India. I feel like I've I've
[00:44:57] Azhelle Wade: I know the way you were talking. Yeah. The way you were talking. I was like, did he convert? Like, does he have like a dual citizenship? I don't know. <laugh>
[00:45:05] Joshua Punin: Well, actually I will say one the, I do have roots in India.
[00:45:09] Azhelle Wade: Oh.
[00:45:09] Joshua Punin: But I'm rough. Yes,
[00:45:10] Azhelle Wade: Okay.
[00:45:11] Joshua Punin: I do. So that's another story for another
[00:45:13] Azhelle Wade: Another time. Thank you so much for being here today, Josh. That was a lot of fun.
[00:45:17] Joshua Punin: I'm so happy. And thank you so much for having me on, I'm really privileged to have the time to talk to you and also to reach out to your listeners. And I look forward to keeping in touch.
[00:45:26] Azhelle Wade: Yes, me too. Take care.
[00:45:27] Joshua Punin: Okay. You too. Bye-bye.
[00:45:29] Azhelle Wade: Well there, you have it toy people. My interview with Joshua Putin of source for India. I hope that this episode inspired you to look outside of China for manufacturing. If you haven't already, and as Joshua. We're not looking to replace those options in China entirely, but rather expand our opportunities and expand our bandwidth and capabilities to produce goods for various opportunities around the globe. The biggest takeaway , for me from this episode is that there are major retailers and toy companies out there that have public goals to move 30 to 60% of their manufacturing of their toy products out of China and to someplace else.
[00:46:19] Some of which have already specified India as the place they plan to move them to. Now, Joshua invited you to reach out to him, whether you are a small toy creator or a large toy company, because he may be able to potentially help you find a new manufacturing partner. If you enjoy today's episode, or if you just love this podcast in general and you haven't left a review yet. What are you waiting for? I love seeing your reviews come through. I get an email notification. Whenever a new one is posted. It means the world to me and keeps me motivated to come back again and again, bringing you valuable content from my personal experience or the experiences of my guests.
[00:47:06] Before we sign off today, I've got to give a major winner, a listener, shout out to toy craters academy, alumni and current FedEx, small business grant finalist, Misty, the creator. For purpose kids. And the global kid is in doll line. Now Misty launched this product before she was in toy craters academy, but we did work together one on one to help refine the product message and branding. Missy is truly a mission driven toy creator who used her time in toy craters academy as an accelerator. And she used that time to refine and really start marketing her toy brand like a boss. This story creator has done the work And because of that, she is a finalist in the FedEx small business grant contest, but now she needs your help to take it all the way.
[00:48:03] So if you want to help Misty reach her toy dreams, head over to Instagram, go to at, for purpose kids. that is Misty's Instagram profile. In the bio of that profile. You will see a link where you can vote for the for-purpose kids line to win this grant and you can vote every day. So I want you to vote every day and help Misty reach her goals. Okay. As always, thank you so much for showing up here with me today. I know there are a ton of podcasts out there, so it means the world to me that you tune into this one until next week. I'll see you later. Toy people.
[00:48:42]
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