Chameleon Glass de Mexico : A new joint venture for Chameleon Glass.
Made in Mexico – For Mexico
Sometimes, life gives you Lemons. Turning Lemons into Lemonade is part of owning a 25 year old business and preparing it for the next 25 years.
While the few of us left manufacturing in the USA did not know for sure, we suspected that many of our competitors had moved operations to China and India because of their ability to discount their product, seemingly infinitely. ‘Loss leaders’ on specific products might be one thing, but, the ability to match ANY competitive product is only the domain of China or India. Then, as importers became more bold about their dealings, we learned that Grav, Hitman, Bio, Nectar Collector, Diamond and about 90% of the ‘industry’ were in fact importing finished goods, with branding, from China.
Without getting into explaining why this is not my personal choice (I have my reasons), and why it is so damning, my only request of these opportunists is this: Label it from where it is made and let the consumer decide. To date, none of these companies leave the Made in China sticker, that is attached to their product in China. It is removed once it is delivered to their warehouse in the US. With the advent of DHGate and Alibaba drop shipping direct from China, you would wonder why something needs to be promoted as ‘Shipped from Austin’. Not only is ‘Shipped from Austin’ an intentional misleading tag, it’s shipped from Austin because the Made in China stickers need to be removed. None of these companies want you to know where your glass pipe is made and they do everything in their power to shield that knowledge.
Our sales dwindled. In 2010, Chameleon Glass was a $5M manufacturer / distributor with 75 direct, citizen employees and another 30+ US based subcontractors. 2017 appears to be the first sub $1M sales year since 1995 and were hanging in there with 18 direct employees and 10 subcontractors. For those of you trying to assign a word to the decline, the description you are looking for is precipitous.
A year ago, after long discussions and long nights deciding how to survive, one of my advisors from college happened to check in on me and asked me a simple question. Did I think that the US was the only market? I paused, and said ‘Obviously not….’ but I had no interest in importing my work from some sweat shop in Tianjin. My prof responded; ‘Who said anything about importing’
The next day , Mexico decriminalized small amounts of cannabis.
I had already been exporting small amounts of glass to high end stores in Mexico, so I placed a few calls. I was on a plane to Mexico City in 2 weeks and sat down with a local legislator who gave me insight into future Cannabis plans into Mexico.
Unlike the US position regarding Cannabis, 2 of his differentiating points struck home. 1) Mexico views Cannabis progressively. Mexico WANTS cannabis for it’s citizens because of the overwhelming new scientific data that proves it’s medicinal applications. This is not true at the federal level and is only true in half the states .. at best. 2) Mexico is not fond of China. Back in the 90’s, Mexico was in the midst of an industrial revolution when China swept in almost overnight and caused economic distress not seen before in the country.
Because much of the economic woes in Mexico during this time were due to the dumping of cheap, second rate chinese product into US markets, Mexico has a different, not so amorous view of China. Unlike the US, Mexican tariffs on Chinese goods imported to Mexico give factories in Mexico an even playing field against China, as long as the goods manufactured in Mexico are not going North. And why would you want to bring product North when there is an enormous market to be in by engaging in SAFTA.
Yes, there are economies outside of the US; in South America, those markets serve roughly 420 Million people and in Central America (incl. Mexico) there are 168 Million people. As a comparison, the current US population is roughly 320 Million people. Many of the consumers in Mexico and South America are already aware of Chameleon Glass and other well regarded US based companies. I know this because stores from Mexico and SA regularly call for product, but, are put off by the relatively high cost of a US manufactured product. Sorry everybody, Hospitals, Schools, Roads, Sewers, Clean Water, Credible Electric grids and enforcement of basic human rights cost quite a bit of money.
We live here, so, these services are expected/taken for granted and taxes are assessed which cause products made in the USA to be significantly more expensive from the perspective of customers outside the US. If a product is made primarily by machines, companies can use financial tools to offset some of these costs, however, glass pipes are made by hand, which adds an exponentially steep barrier – Chinese labor averages US$91 per week. My average hourly labor rate is $600 per week (plus fun taxes like unemployment, disability, federal and state employment taxes etc etc). I hope most of you can understand the magnitude of this difference. Simply put, our standard of living is not experienced by much of the world outside of the United States, our standards cost money and disposable income outside of the US that can be spent on a glass pipe is a fraction of the US. I have to manufacture a product that people in those countries can afford and feel good about spending their hard earned cash on…sound like decisions you make everyday maybe?
Not to worry though, I have no intent of closing the Chameleon Glass facility in Phoenix or moving to Mexico (or anywhere else for that matter). As long as there is a market for Chameleon Glass in the US, I will make Chameleon Glass in the US. While the war has been savage, and, make no mistake, we are battered and bruised right now, beset by liars, thieves and opportunists on all sides, and yet, with the good graces of our supporters in the US, we’re still afloat where many have been sunk. I am blessed to still be able to write this to you.
Investing in domestic markets abroad is my philosophical response to the landslide of lazy opportunists who want to make a quick buck in the short run by stealing designs and having them made cheaply in China in an effort to put legit US businesses out of business. I can’t fight China, or the American business opportunists who utilize them, from the US alone. I have to be on the ground, in the battlezone fighting them from a ‘domestic’ position in that specific geographic market. Doing so is the way in which I can point the ship into the storm, work hard, tell the truth, and allow my customers in the US and abroad to make the decision about whether they should purchase a US crafted good in the US market, or a Mexican crafted good in the Mexican market, or a Canadian crafted good in Canada or a Chilean crafted good in South America.
Unlike 95% of my peers, I’ve never mislead my employees or my customers about what or who we are and I’m not starting now.