Daniel Fine | Crain's

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Daniel Fine

Background:  

Glass-U is a custom folding sunglasses company.    

The Mistake:

Sunglasses are actually a medical device, because of the UV protections. I didn’t know that when we got started, so we were sourcing our product internationally—the product came in and went through customs. Our manufacturers told us that once the product shipped, they should get to us in a week. It was about 12,000-piece order. They landed in the states and got held in customs for three months.

Finally, they cleared customs but little did we know, the FDA came and held them for another seven months. So we think we are starting a business and then a year passes by with the product not only being held—but we're getting charged while they're holding it because we are taking up space in the holding facility. And we are being charged minimums in our distribution center.

So, all of this cash is just being flushed down the toilet—there is literally no hope, no end in sight. The product finally got released. Because our product is fully-folding sunglasses, there is another hinge in the middle of the nose bridge. After we sold a couple of hundred pieces, we realized that they were all snapping. That's 12,000 pairs and you can't do anything with it because our brand name is on the product.

It was my freshman year of college and we're sitting there with about $40,000 in costs.

 

Know what the barriers may be on the front end.

The Lesson:

Understand what you're getting into and the rules around things before you delve in. Know what the barriers may be on the front end. That doesn’t mean don’t try and go for it, but do a little more research—which frankly, I thought I had done but was clearly very wrong.

Also, people will try and cheat you. The reality is: people are going to try to get the best possible margin that they can. What we came to learn was: politely show that you feel disrespected without burning a relationship. The factory gave a sample that wasn’t the same sample that they were going to produce. They thought they could get away with making a less expensive product. So, we changed our terms with the factory—we had to receive the merchandise before we paid for it.

Follow Daniel Fine on Twitter at @danielfine.