A Different Kind of Girl Friend Experience (GFE) Part 2, The Art of the Deal…Thai Style
The enterprise started off quite smoothly. With the four of them networking and going to swap meets, malls, factory outlets and other places they found excellent and reliable sources of Levi’s throughout California and the western United States
and were able to warehouse a lot of good quality inventory. The next part of the project was to get the merchandise to Thailand, which previously Bas or Kritsana had done by taking bags with them as excess baggage on a cheap flight from Los Angeles
to BKK, which could be found for as little as $600 back then. This worked out pretty well for them as it enabled one of them to stay behind and continue to find more jeans while the other went to distribute the jeans in BKK. But it never generated
a lot of volume and therefore not a lot of revenue either. However, they decided that Bas would courier the first test shipment of 5 bags containing 250 jeans. The total up-front cost was about $9800 including flight and baggage fees and the gross
was expected to be $15,000 for a net of $5,200. This was just over half of the $10,000 allowed for the transit of cash into the US and Bas would be back in a week so they could quickly convert the cash-flow into more merchandise.
Bas arrived back on schedule but a bit lighter in the wallet than expected. He brought back about $4,000…$1,200 short. His explanation was inscrutably Thai and yet signaled the start of the inevitable and developing trend that should have caused seriously loud warning bells to go off in Steve’s head. Bas had paid $100 “sin-bohn” for each of the bags to get through “customs”, another $50 per bag to get out of the airport and another few hundred dollars for a blow-out night for some of the wholesale buyers in BKK. But more ominously he announced the introduction of another player into the equation: a Thai man called Khun Eddie. He seemed to be a major “fixer” who was able to press all the right buttons to open all the right doors…for the right price. Steve noticed that neither Chanida nor Kritsana seemed at all surprised by the news, almost as though they were expecting it. He pressed Bas for more information about this new player and how essential he was for the business, to which Bas replied “For big business need big man. Khun Eddie big man.” At this Kritsana started to talk in Thai to Chanida, but all Steve could understand was the occasional “farang”, and plenty of polite “ka” responses from Chanida, often accompanied by deferential nods and strained smiles. So Steve guessed they were talking about him, but he really didn’t know what the rest of the exchange was all about, although his lingering feeling was that they knew or knew of Khun Eddie already. Being quite skeptical and perhaps even a little suspicious Steve asked why the need for Khun Eddie hadn’t been mentioned earlier and what his role was going to cost. Bas replied with an attempted reassurance: “It no problem, Khun Eddie good man and make good business so he not espensive.” Steve pressed the issue and asked how much of the special “expenses” had been paid to Khun Eddie. There was a barely perceptible furtive glance between Bas and Chanida before Bas repeated “It no problem”, and then continued with “Khun Eddie no charge this time. Next times maybe.” Steve was about to demand more explanation when Chanida sidled up to him, placating him with a reassuring: “Pee Steve, it ok, kha. We talk about it later. Now we celebrate our first business together”. Feeling her physical and personal warmth diverted his attention from the probing but Steve made a mental note to pursue this questioning about Khun Eddie some more…and what the heck did “Pee” mean anyway?
The fast turn-over of the money and profit made Steve rationalize the issue with Khun Eddie by figuring that they just needed to hustle a bit more to secure more merchandise to cover the additional expense, and if he really was as good a fixer as claimed they’d probably benefit from having him smooth the lines and open up new distribution channels for them. But Steve still wondered at what ultimate cost. It seemed like this was a subject they simply would not confront and it irked his super-rational personality so much that he really wanted to get to the bottom of it right away. As he reflected on the recent conversation he realized it had echoes of earlier exchanges with Chanida and other Thai people, who seemed so perfectly deferential and disarmingly polite and yet so damned aloof and inaccessible at times, infuriatingly inscrutable and like a rarified harmonic of his stoic and well-bred English habits. With his strong class consciousness he innately responded to the subtle markers of social order, but yearned to break out of his ingrained constraints and conservative take on life. It was beginning to dawn on him that this enterprise was not merely a money-maker but a way to expose himself to life-changing experiences and adventures. After all, he was now part of what was essentially a smuggling ring.
Although he did not yet know it, part of his concerns about his partners were their expressions of “kreeng jai”* They felt it for Khun Eddie, and they, especially Chanida, also felt it towards Steve as she was emotionally attached to him and also he was older than all of them, had a successful career, advanced education, nice home, late model Mercedes and evidently was quite successful. [“Kreeng jai” is that uniquely Thai “heart” (“jai”) expression that means “awe heart” or in the author’s limited understanding and crude expression, “fearful respect”. See footnote for more explanation.]
Business rapidly picked up as they networked and found new sources of jeans, while their Thai connections demanded additional goods such as Polo and Champion branded shirts and t-shirts. It was so busy it became impractical for Bas to travel to Thailand, and in any case Khun Eddie was indeed the consummate fixer and took care of the distribution of the goods while arranging for trusted “couriers” to bring back the cash to allow them to buy more merchandise, so they needed another way to ship. Meantime Steve discovered that Khun Eddie operated a messenger service in Los Angeles and Bangkok and had a network of Thai operatives throughout the region, so he really was a “big man”. And so it was no surprise that Khun Eddie introduced them to Khun Pat who was a shipper specializing in personal items and services. He agreed to handle their next shipment of at least 20 bags or at least 1,000 pairs of jeans, for $150 per bag from the check-in desk at LAX to the baggage claim carousel at Don Muang in BKK. So the next morning at 8:30am they arrived at Korean Air at LAX with 20 over-stuffed black duffel bags and $3,000 cash. Steve expected to see some Thai people milling around but he was totally unprepared for the huge array of neatly stacked and ordered black duffels identical to the ones they now dragged out of their van. There must have been 80-100 bags in front of the check-in desk, and this was just the first flight of the day. As soon as they added their bags to the stack they realized there was a serious problem: the colorful strands of yarn on the straps were barely visible and made finding their bags in the mass of others very difficult. Fortunately Bas had a roll of silver duct tape in the van, so they taped around each bag and the silver stripe not only lent the bags a sporty look but made them quite easily identifiable. Steve was quite taken aback by the volume of bags and marveled at the extent of the “underground economy” that they represented. Khun Pat had an “arrangement” with Korean Air that enabled him to ship up to 100 bags four times per week for an average of $125 per bag, which meant he was pulling in up to $10,000 cash per week one-way. He made the trip at least once a week so he could arrange for shipment of Thai goods back to the US, and of course that netted him additional income although mostly those return trips were above-board transactions with legitimate bills of lading that would clear US Customs.
Meantime Khun Eddie took care of receiving and distribution in BKK and his cut had reduced their margins by about 20%, so they decided that even though they were making a very tidy paper profit that if they couldn’t raise prices they’d have to increase margins. That meant moving up the distribution channel from wholesale and taking a retail position by opening at least one store in BKK. And that meant creating a limited company in Thailand, which somehow Khun Eddie took care of and in which he became a 20% partner, at the expense of 7.5% from Chanida and Steve (which reduced their share from 24.5% to 17% each), plus 5% each from Bas and Kritsana. This was getting way bigger and more complicated than Steve had anticipated, but certainly it was exposing him to some of the new experiences and excitement he had craved. And he had a paper profit of close to $15,000 in less than 7 months with about $5,000 of that in cash to cover over half of his initial investment. As is so typical when the money starts to flow it was convenient to overlook or ignore aspects of the business that normally would have made Steve at least cringe, if not cash out and move on.
Therefore it was no big surprise that setting up the Thai company required 1,000,000 baht ($40,000) capitalization and Steve was asked for his 17% portion of the total, which equaled $6,800. But he hadn’t quite lost all his business acumen so instead of putting up the cash he proposed that the US business operation should fund the requirement, and after some discussion they agreed on 50% which meant he had to come up with $3,400 cash. With all the documents drawn up, couriered to LA, signed and returned they leased a double space on the second floor of the indoor “swap-meet” mall in BKK called Mahboonkrong.
Meantime Steve’s relationship with Chanida had changed and from his perspective it had noticeably cooled. That was partly understandable as they had less time to spend with each other since Steve was still doing his regular job as well as handling his end of the business in the evenings and weekends. But he noticed it especially when they were together with Bas and Kritsana or their other Thai contacts and at these times she was much more business-like and it seemed that she had emotionally distanced herself from Steve. Also, their intimate times with each other seemed altogether furtive and somehow illicit, as though they were adulterers instead of merely lovers. Chanida wanted to focus on the business and so Steve resolved to do so as well and then later revisit the emotional aspects of their relationship.
That shift in focus was also driven by the escalating demands of the business, especially with the need to supply a steady stream of merchandise to their new retail outlet, while at the same time continuing to keep their wholesale channel wide open. One of the new aspects of the business was orders for special or specific goods. They had cultivated this opportunity by creating a catalog and displaying samples in the store and it had developed into a significant part of the business. So it was not surprising when a rush order came in for 250 brand new 501’s that had to be in BKK within 5 days. The surprising parts were the deadline and that they had to be in larger waist sizes (30-34) and longer lengths (to 34) than the typical orders for the Thai locals. Presumably these were for bigger-bodied Thais or regular sized farangs. While it was no problem at all to find the jeans, it was going to be a real hassle to get them delivered on time as the last delivery of the week with Khun Pat was the next day and they couldn’t get their shipment ready in time.
They debated passing on the deal, but as it was a rush special order the margin was about 20% better than usual and so the lure of a big profit made them get creative. Actually, Steve got creative…and maybe a little cavalier: he volunteered to make the delivery himself. It was Wednesday and he figured if they could get the order ready by Friday he could take a night flight that would get him into BKK on Sunday morning, and that would just squeak inside the deadline. He had plenty of vacation time and he could take a couple of days off the next week and get back to LA in the middle of the week. That all sounded fine except for the biggest logistical hurdle of all…getting through Thai Customs. The problem was that Khun Pat wouldn’t be there to smooth things over, and nor would Khun Eddie as he was in Singapore and not due back until Monday.
But Steve wanted to show his partners that he could excel at handling this kind of problem so he reached out to an old personal contact for some help. Some years before he had worked with a Thai lady called Khun Matinee. They had some special connections in that they both had gone to private boarding school in England and therefore were part of the “old-boy” network that spans the globe. The uniquely beneficial aspect of their friendship was that Khun Matinee was very definitely “hi-so” and had family connections throughout the government and upper echelons. As a young girl growing up in Chiang Mai she had danced for the Queen Mother and when her Grandfather had died a few years earlier the then Prime Minister and his entourage had attended the burial/cremation ceremony. Conveniently, Khun Matinee was living in the family compound in BKK, but the real ace was that her uncle was the chief of Police in the Don Muang district and therefore also the head of Security at the airport. So Steve called her and explained the situation, and with a little persuasion, helped by reminding her that the $10,000 Cartier watch on her wrist was there largely due to Steve’s support of her at times flakey and absent-minded habits in a sales contest that she had won, he arranged for she and the Chief to meet him between Immigration and Customs in Don Muang airport.
* The author has not found a better explanation of “kreeng jai” than Christopher G. Moore’s pragmatic and yet lyrical definition in his truly indispensable and remarkable book “Heart Talk”. We believe that this guide book of the Thai heart and mind is essential reading for anyone who wants to begin to understand and enjoy inter-personal relationships with Thai people. The following is an extract from the section on “kreeng jai”: “There are few jai phrases more difficult to translate and explain. And there may be no other heart phrase more important than “awe heart”, which is the heart of hearts of the Thai culture and class system. The phrase reflects a rich brew of feelings and emotions – a mingling of reverence, respect, deference, homage and fear – which every Thai person feels towards someone who is their senior, boss, teacher, mother and father, or those in powerful positions such as a high-ranking police officer. Anyone who is perceived to be a member of a higher social class is owed kreeng jai. In practice, a person with “awe heart” would be inhibited from questioning or criticizing such a person. “Awe heart” also includes social decorum so that children are thought to be well raised when they know who and when to kreeng jai…This definition merely touches the surface of “awe heart,” which is in part the creation of social theater but is also seen by many Thais as essential to the consideration every person should show to each other. Viewed as another way of showing how to be considerate in social context makes this essential jai phrase more accessible and understandable to foreigners.” Copyright © 1992, 1998, 2006 Christopher G. Moore.