You’re Walking Knee High in Money, You Just Need to Learn How to Bend Over and Pick it Up.
If you just finished the last blog, then you’re probably thinking…
“How rude it that, title a blog one thing, get to the most interesting spot and then end a blog!”
Who were those two men, what did they want? Is she going to prison finally? Did they find out about the fake visa? It’s like the feeling you have at the end of Money Heist Season 1 while you’re waiting for Season 2 to start. It feels like forever! So I’ll spare you the torture and continue on with the “How I went into business in Russia in the early 90s” side of the story.
Who were the two men? One, the Mayor of the City of Khabarovsk, and two, Vladimir Markolov, the man with the walrus mustache and my future business partner. What did they want with me? They needed food, the country had just broken open, it was now a free market society, and the only imported product they had was Orange Fanta and Snickers, so they needed my help?
Do I have an international business degree? NO! Do I know anything about international trade? NO! Did I major in Psychology because it was easy and my father was a phycologist? YES! Why me? You’re not going to believe this, but I was the only foreigner in the whole Russian Far East other than some missionaries and the Russians didn’t like missionaries. So that left me.
Side note — as a child I was raised without ever hearing the word “no”. I know this sounds hard, but it was important to my father and my mother, bless her heart, had to try and make this work. For example, I’m shopping with my mom at the store, I want a candy bar, instead of saying “no” to me, my mother says “yes you can, which of these items in the cart would you like to put back? The milk, the chicken? Which one?” I now see that my choice of candy bar will cost everyone in the family something, so now I don’t want the candy bar. Another example, “Dad, I want a Redline bike”, he replies, “ok, you know our rule, you earn half the money and I’ll pay the other half.” It gets a little tougher when I want to stay out until 1 am, that’s more of an “ok honey, just know you’ll be grounded for 2 weeks as our curfew is 11 pm”, but it still wasn’t a “no” it was a choice.
Maybe because of my upbringing, maybe my personality, maybe because I’d already overcome the fake visa thing and the travelling under another person’s passport thing, that I thought, “sure, I can do this, how hard could it be?”
Oh, it’s hard, it’s so damn hard. The international freight world, combined with the banking and financial world, it’s a lot. No to mention the corruption. The Russians knew business and the way they did business, which was a hand shake. Millions of dollars were exchanged by a handshake, if you needed to hide tricky words in a contract to get around being a good businessmen, than they didn’t want your business. They wanted you to put out your hand, look them in the eye and give them your word, then live by that. A Russian’s word and their hand shake is worth everything to them, if you lose this, you can never do business again. Russians taught me this first. Never lie, never lose your name. With this simple rule, I began to do business which was a phone call to my mom that went a little like this..
- Hi Mom, I need to open a business.
- Hi hun, what kind of business?
- An international trade business.
- Ok, what will we be trading or doing?
- We need to buy food for Russia.
- Ok, how much food?
- Let’s start with 5 containers of cheese, 8 containers of meat, 2 containers of sweets and some other things.
long pause here
- OK, do you have a company name?
I love my MOM!! Love her, she built this business with me, went through long hours and living hell, but she built this thing. She called freight forwarders, bankers, tax accounts, lawyers, she figured it all out with me and most of the time for me. I couldn’t email anyone yet, I could write her through the computer and call occasionally, but she was all on her own to figure it out as we went, and we did. I called the company “APEX” as I read once that it’s good to call your company something that starts with “A” because people rarely make it past “C” in the yellow pages. That is a great example of my business knowledge at that time.
You can read more about the business side in this blog, but this part of the story is more about how I got started. So while mom is over there in the USA setting up companies, I’m trying to find sellers of products in the USA, Australia, Japan, South Korea and Europe. Due to inflation and the ruble fluctuating so much, everything seemed so expensive, but we needed food. I got into the chicken leg frenzy with everyone else and started buy container after container of chicken legs. Russians liked the leg because the meat is darker and tastes better to them, plus they use the bone for chicken broth.
Prior to Russia buying all the chicken legs, in the USA market, the breast use to be more expensive part of the chicken for US consumers, but with the new demand of the Russian market, the leg/thigh was now in higher demand then the breast, and it became less expensive in the USA. A side political note here, even though this is called the “Bush Leg Era”, Bill Clinton owns most of the chicken industry in Arkansas and all the chicken from the USA going to Russia came from Arkansas. Went a few rounds with Al Gore and some of the shifty trade practices that organization does, but that would be a whole other vent session.
The real fun began when we opened “EMA” Eldvee, Mitsar, Apex, our first store, which later grew to 5 stores. We were importing all these items, and we needed a store to sell them through. This is where I actually had some strengths and could contribute, as I had been a shopper for a long time and I knew our US store system a little.
Problem #1 — the theft barriers as I call them, as you can see in this picture below, everything is behind a counter and the person behind the counter has to grab the item and then ring it up. Anyway, the old system is that you remember what you want to buy, walk over to a small cashier booth, tell the lady want you want, she prints some numbers on a receipt, then you go back over to the counter and pick up your cheese, they rip your paper a little, then grab your cookies and they rip your paper a little more. Crazy system and I hated it. So I wanted a smoother system.
What if the person behind the barrier was your personal shopper, they would walk with you, grab everything you needed and then take the bag to the cashier who would ring you up? Great idea, problem solved right? WRONG! The bag is the problem — the accountants can’t figure out who is paying for the bag. They are using abacuses and they want me to explain this :)
Because of their accounting system, the bag had to be paid separately, I showed them this example:
Let’s say we take 1 can of corn and we add the cost of the bag to the can of corn, so now the corn that cost 30 rubles will cost 32 rubles to cover the cost of the 2 ruble bag, but wait, what if we put 2 cans of corn in the bag, now we’ve made back the cost of the bag half way because there are two cans in the bag. Now if we get 4 to 10 items in that bag, you can see how we’ve paid for it.
Still NO!!! It took some really good conquac and a lot more demonstrations until we understood each other, but we got there.
Problem #2 — lunch break! Everyone goes to lunch at the same time, it was left over from the Soviet thing, so from 2–3 or 4 om, everyone is at lunch, including the people that work in the stores. This doesn’t make sense, people want to shop and buy stuff on their lunch break. So I wrote of a rotational lunch break so that we could stay open at lunch. I was hated by all the staff at our store. Now this one was hard for me and it is not a win, win for everyone. The women that worked together would all bring something for lunch to share with each other, they would sit for an hour and gossip. This was more than a lunch to them, this was a way of life, so taking that was hard. I let Mr. Walrus mustache take this one, to which he said…
“We’re staying open at lunch, you don’t like it, there is a line of 500 women that would gladly take your spot”
Very much the Russian way. I offered a weekly evening party to the women so that they could still hang out after work once a week. That was a good idea until we had lines around the corner at lunch time and we decided to stay open 24 hours, I made a new rotating lunch schedule and shift schedule.
Our business is booming, we are literally walking knee high in money and we know how to pick it up. My partners now want to go to the US and look at other options, maybe look at manufacturing and other things. This trip is where my psychology degree paid off.
Mind you, when the Russian system came down, no one in Russia knew what the outside world was like, they thought everyone was like them. As they saw our movies they thought that Las Vegas was a made up studio, similar to how they show a beach, in a studio, the actors didn’t actually go there. I understood how different the world had become and I admired that they just went to work without complaining or looking back. Now we’re in Seattle, they are overwhelmed by the amount of choices and everything is confusing to them.
To make it easier for them, when it came to food, I merely asked if they wanted beef, chicken, fish or pork. I would then order the rest of the food, because still in Russia, you didn’t really get a choice of what you wanted at restaurants so I knew this would be difficult for them. I got their clothes dry cleaned, I took them on the back roads when possible to avoid the massiveness of the freeways. I helped them find things for their wives, their children and their friend. I explained business models to them like car washes, dry cleaning and others. Other women I have met over the years and told this story to sometimes replied with, “You shouldn’t have done that, you’re not their servant, they shouldn’t treat you this way just because you’re a woman”. To which I replied, “They treated me with the utmost respect, they taught me, they protected me and I was their equal, I did for them, what I would for any human being, I treated them kindly.”
Costco was an experience, picking pallets, tasting and sampling stuff. Back in the day you could pull a container right up to the back door of Costco in Seattle, load it with pallets and ship it out. As we started to load containers, we often hit the weight limit, but not the volume limit. I suggested that we fill the rest of the container with Tampons and sanitary napkins. The color of red that my partners faces turned when I said this was colorful. They coughed under their hand and muttered some words, but they weren’t going to buy these items. Feeling bad for all the woman of Russia and that damn cotton pad thing, I bought these items and filled every container I could with them.
When our containers arrived in Khabarovsk, I grabbed my sanitary items and put them in the window of our store. Within 20 minutes, they were gone, by the end of the day all of my tampons and pads I purchased were gone which brought my partners to my office.
“Tasha, um, um, you know those items you bought for women?” I didn’t reply, just shook my head, as I wanted them to suffer and actually say the word Tampon. “Do you think you could get some more of those things?”, to which I replied, “Yes, how much would you like?” They looked back and forth at each other, then said, “Maybe 7 rail cars.”
A rail car is 3 containers, so this is like 21 containers. I became the largest importer of tampons and pads into Russia out of Germany. The company there gave me great terms, great prices and they were fast.
I continued to play with ideas at my stores just for fun. The Russians are brilliant at math, but they also like free stuff (my accountants hate it) so I would put 1 roll of toilet paper in the left side of the store window for 10 rubles and in the right side window I would but 4 rolls in with a sign that read “Buy 3, get 1 free for 45 rubles”. Now obviously this makes the TP more expensive 45/4=11.25 rubles each. But that didn’t stop them, they bought all the free toilet paper.
I also quickly found out that Russians don’t like the taste of root beer at all or cinnamon bears, candy should be sweet and nothing else. My apartment was filled with extra candy that the Russians didn’t like, but the missionaries were more than happy to take. Due to their teeth not being the best, any soft candy like a gummy bear or worm was the best.
I did exchanges with unhappy customers, paid for it myself, to keep the accountants off me. Most people cried when I exchanged their goods, but I knew they would tell the whole neighborhood, thus people wouldn’t be afraid to try new things. I had a lot of fun trying all sorts of things, but my ultimate victory was the raffle tickets.
Now I’m reading books, learning my trade, selling boat loads, like 25,000 MT of sugar, timber, fish, chicken, etc. I want to increase sales at my stores due to other stores starting to sell similar items or buying our items and selling them at their stores.
I decide that every time someone purchase 500 rubles or more they get a raffle ticket which enters them in to win a variety of prizes. However they must be present the day of the raffle in Lenin Square to win. I take this idea to my partners and they are like, “Great, let’s do this, then the banker’s wife can win, and the police chief can get something”. What? No! I need a grandma to win or some local person. They all look at me like I’m crazy, only the elite win stuff. Now the debate begins.
I agree to buy all the prizes, the TV, the Fridge, Microwave, as long as I get all the profits from the sales of hot dogs, ice creams and drinks that day. My partners think I’m an idiot to give away gifts and things to normal people, but I’m stubborn and I want this, so we do it. I sell tickets at my store, word spreads through my staff that it’s not rigged, that you CAN actually win.
We had half a million people show up the day of the raffle, I sold out of every hot dog, ice cream, drink, you name it. I made 20 times more on these items than what I spent on the prizes. Old people from the village won, young couples won, it was the best feeling ever. The next day we had a line around the corner of people wanting to buy 500 rubles worth of anything so they could get a raffle ticket. We continued the tradition for 2 more years, having 3 to 4 drawings a year and we never rigged the winnings, but we did get smarter and had companies donate the goods for advertising.
EMA was a three partner team, we all reinvested and we all played our part, one day Mr. Walrus mustache was asked to build a bank for a very important business man in town, most likely someone that had loaned him money early on, so he needed to take his 33% and invest it into a 5 year build. Money wasn’t rotating, our buying power decreased and we started buying local like everyone else. I had moved onto real estate and other things in Vladivostok, living between the two cities when EMA finally closed.
