An interview with Mr. Yordan Spasov, CEO at Labex Trade
If you are interested in distributing the electrolarynges of Labex please fill out the contact form on the New Distributors FAQ page
The subtitles of the video webinar as text
Hello everyone, my name is Stanislav Minev and in this webinar series, we are going to talk about a very interesting company from Bulgaria called Labex Trade.
I am right here with the CEO and Founder Mr. Yordan Spasov
Hello, nice to meet you.
And today we are going to discuss their distribution network and they are about to expand in different markets. So if you by any chance are interested in generating a new business, this video might be of interest to you.
Right now we will start with a little introduction and we will talk about the story, how this company came to be, what are they offering, what problems are they solving and I am going to pass the word right now to Mr. Spasov for him to introduce himself.
Can you share a little bit about yourself?
Actually, Labex Trade is a new company. Established 5 years ago. Brand new.
It's not the first company I own. It's the fifth one.
I had other businesses in SEO marketing and industry automation. And the last one, the previous one was an advertising agency.
So diverse background.
Yeah, about 30 years of experience in the business. 29.
So the goal to create this company was to create a really working business scheme. All my background, all my experience to put in one place and build a company from zero and create a middle-range company with a good structure
Good people in the right places.
And it's like raising a child.
Yes, it is always like that, you start something and you see it grow.
The difference is that a child will rise even if you don't care about it.
Not the same with business.
A Business will die.
That is true
So I found this market electrolarynges absolutely unexpected. I am going to show it while you are talking. This is one of the top products, it's called Inspiration.
It's an electrolarynx without analog worldwide because it allows the patients to have intonation in their speech.
So the goal of the company is to create a new product.
We designed it. All these products, all our product line, from scratch, from zero,
and to give the laryngectomee options they currently don't have.
So when we entered this market, the last development of electrolarynges was made by Siemens in 2002, which was about 15 years ago.
This is a small market, not easy to enter, a niche market, yes, because every country has different rules. It's a regulated market. Regulated markets are almost everywhere in the world.
Now we sell in 24 countries. We opened markets in Argentina, Russia, in Kazakhstan lastly. And of course, we are working on opening a market in Brazil and the United States. Not yet ready because of the registration
So the company is very specialized. How many products are in the product range
The product range is just 4 products, 4 units - 4 electrolarynges.
But I think our product range is very balanced and everyone can pick the right unit for themselves.
Yes, because we have very simple to use devices.
Base models Digital and Comfort, these are the base devices.
This is Comfort, which has two buttons. Absolutely easy to use the device. Simple to use, reliable, shock-resistant, water-resistant devices. Most of the patients don't want to have options.
I was surprised, but it is a fact.
The other one we created was the first in the world, an electrolarynx that lasts more than 4 hours within one single battery charge.
We were the first to offer 24 hours of speech time and a big capacity integrated cell with USB charging.
Good looking devices definitely
We want to be like Apple, to have fans.
And I think they work very well because it is possible to improve everything. And we can do it.
So now our product line is very balanced. Distributors can decide depending on their current market and order if they want cheaper devices if they want base devices. If they want a device with many options order our flagmen, but they can decide.
So the company is based in Bulgaria, right?
Yes, established in Bulgaria, we work in Bulgaria, 80% of all parts we make in Bulgaria, very close area, about 100 miles away.
Of course some parts we order in China for example batteries, because in Europe no one produces Li-Ion batteries
And it's not a problem, we found related companies, we checked the quality.
Now our batteries are LG-based, the cells are LG. This is the same producer that produces for LG and Samsung. Very high quality and high capacity batteries.
So everything we pick is only the best. We don't like to compromise.
Ok and right now as I understand you would like to expand and find new distributors in different markets.
Of course, every business has to grow.
In the current situation, we understand very well that we can grow only by enlarging the number of distributors in the countries we sell in.
The fact is that this 2020 year we have 20%, maybe we will have 25% growth.
The situation is not very easy for distributors, the world is locked and sales are not so good, but we have 20% more than last year
Which I think is very well, because I see many companies that actually maybe will not survive.
It's a very hard situation now, but I believe the situation has some benefits we can use. For example, I think the distributors,
for distributors we are speaking with right now, distributors will be more open and interested in negotiation remotely with video conversations.
We have no exhibitions to meet.
No chance. So they do not have this chance too.
So this is a chance to create actually very quick connections and very reliable connections and to grow even quicker than in the previous situation when we had to prepare a month for an exhibition. To go there, physically exhibit.
These are expensive exhibitions definitely.
And we can't attend more than 8 exhibitions per year. Now we can find distributors and sign a contract in 1 week. We didn't have this previously.
So what is the path? Let's for instance play a little play here. If a new distributor contacts you or finds this information about your products, and your company, what are the steps they need to take? What is the path from the beginning of the negotiation to signing a contract for distribution?
These are casual steps actually, we have CRM software, and we have all these steps already. We are ready to offer and quote and everything is absolutely automated.
They can quote you, they can come, ask for a quote?
Yes, basically they need to know what the products are, so we send them pdf brochures. If they are interested in the price list, conditions. We have two types of dealer contracts, in case they are interested in going further.
We send them samples to be able to get familiar, maybe to check with the patients, to check with the doctors. Now we have a similar situation with our second distributor in India. They need to check, they need to make sure what we produce is really good quality, well-working devices.
They try to harm, break down, to kill the devices in all possible manners.
Hopefully, they fail. No, they don't fail, they don't fail. And some distributors send us videos. And the devise works. And our goal is to offer end-users the benefits.
You know because this is a niche market actually this is a benefit for the business.
Huge companies do not enter these markets. They have the power to do it very quickly. To copy, to produce, everything. But it's a niche market and they can't afford themselves time and money they need for research and development. And the calculations are not good for big companies.
So what we are looking for is to find not the biggest distribution sets, but to find a smaller company that wants to be aggressive in the market and offer good quality, good prices and good products, and perfect support.
Can we talk a little bit about the support?
What is the after-purchase support that distributors and customers have,
and what is the competitive advantage? What is the business model?
First of all, tell us that we have ISO 9001:2015 quality management system. And inside this system, we have risk management and post-sales risk analysis. Everything is integrated into this system and I can share some points about this system because it is huge.
First of all, we can offer support to end-users if they connect directly to our website. If they face some issues, they can find our videos on the internet, or website. To help them how to change the volume, the pitch, how to adjust, and how to reset factory defaults. And how to manage the devices.
Second, if they send us an email regardless if it is end-users or distributors, we have а department that will answer all these questions. So the first point is we can offer specific support for our end users.
We are absolutely sure of the quality of our products. So there are a few, maybe 5 or 8 points that we regularly receive as questions and they are mostly some kinds of misunderstanding of how to operate the units. So we have answers that will help clear the questions.
For the distributors, we can offer an immediate exchange in case something is wrong with the device. They provide us just with a video that shows the serial number of the device. Everything is marked. We have an ERP system too so we can check the production date, production version, and version of everything.
We need just a video to show the serial number and the problem. So this is the second option to support because when we see the videos we can determine exactly what the problem is. Mostly we just have to give some advice to solve the problem, but if they have a real problem with the device without the warranty period, we just exchange it for brand new. And we have in the distributor contract a point on how this can be done, it's a procedure.
So the distributor can exchange the unit immediately with another one from his stock.
What is the warranty for the end-user?
Basically for the distributors, we offer a bit extended warranty, about 26 months but it's not exactly. We want our distributors to feel very confident and very relaxed with our products.
So if they have some issue, some problems, any sort of problems, we will stand and we will solve. So regardless, because there is about a month from the date of production to the date of sale, a month or two, could be more. So we can grant a warranty to end-users regardless of the distributors.
So we were talking about the warranty, which is two years and it is a bit extended for the distributors, 26 months. Is there a way for the end-user to get after-warranty support or an extended warranty?
We are obligated to support our units for five years. In most countries, the government pays some reimbursement fees and this reimbursement fee is once per 5 years. So we are obligated to support all our products regardless of production date and production version for 5 years. But next to second-year warranty repair and it should cost some small money.
But everything do distributors get when you send them the terms?
Yes. We have another very interesting option, I just remembered.
If we have a user that uses our device for more than two years and finds maybe too much dust in the device, maybe something like this. We can offer our current end users to obtain a new device at discounted prices because they already have one device and we want to offer them a 20% discount on the retail price.
So just have to send us some video to show that they really have our unit, not just a copy, some serial number from somewhere. Including this is in our CRM system, so we can check if everything is right.
Sometimes they just break the unit, physically. Like a smartphone, sometimes you drop it. So repair of this broken unit actually is to create a new one. And there is no reason to put old parts in a new body and assemble them and send the serial numbers, there is no reason.
And we have a patient that used one for 4 years and they broke it and decided just to buy a new one with a warranty, a full 2 years warranty. Everything is clear, they just use these options.
So do you have any specific target markets, countries that you are looking for more distributors is there some type of focus
that right now you want to attract more distributors or are there new countries that you would like to enter?
Yes, we decided that we have to divide work into some areas and I mentioned that we have two sorts of dealer contracts.
One is the regular dealer contract; the dealer buys products and sends them to us when they need repair.
But the second one is for only selected distributors. We want to create an Asia support center; in South America, in North America.
We have already repair centers in St.Petersburg, Russia, and for Europe of course it will be here in Bulgaria, yes, in the facility.
These distributors receive additional discounts. And these will be sort of partners of our company. So if something in this area needs to be supported, in any kind of support they will support it locally.
So what is required in order to open such a repair center, is there some specific extra requirements compared to the regular distributors or?
The base of everything in business is trust.
These are partners that already are very familiar with our product, they sell for years and we can check what kind of issues we have had with the distributors. There are many very good companies and it is a pleasure to work with.
But there are the other ones that want to get a bit more, a bit more, a bit more... This is not good if this is our distributor. We can't trust that sort of company.
We support them, of course, we support our end users and we want to grant our brand. That it is really a high-quality brand.
But we can trust and give additional options only to companies we really trust. That you have already have worked together for some time, established a good relationship. Good relations, absolute trust, no problems. These are just good companies.
So this was an introduction to the answer Now we want to extend our network in Asia.
Asia? So the focus is there?
Right now focus is there, because we did everything about registration in Russia We already have a network of distributors in Russia.
But we are just waiting for the registration to complete the procedure with the government, the Ministry of Health of Russia. To receive official permission to sell. And nothing more can be done there. We know the companies that will represent. They know our product, so Ukraine, Russia, and Kazakhstan are ready from our side.
So now the focus is, that we have a partner in Indonesia, so we are going to extend the network in Asia now and in South America.
Ok, so any specifics in Asia, like countries that you can list?
We only have a distributor agreement in
Vietnam, Malaysia, Philippines, Hong Kong, Singapore, India, and China.
We sold, we had another partner in the past and our flagman was resold in Japan and in South Korea too, which is very interesting.
Which is very hard to sell there. Yes, the volumes in both countries, Japan and in South Korea are not big yet. But the fact is we are there, we are registered and we sell.
So there is room to grow for extra distributors in those countries?
We do not offer exclusive rights to anyone worldwide.
So if we have a distributor that works very well and we have some requests in this area, we just forward them to our distributor. But it is not good for the sales, for growing sales if there is one exclusive distributor in one country.
Thus we create competition and if this is the right company we picked, so we will go to this market. Ok, so it is a non-exclusive distributor deal. No exclusive distribution worldwide.
So there is room even in the countries that you listed for extra distributors to join the network?
Yes, let's say in different cities that you are not represented there. Of course, these are different companies, they have different contacts and different customers. There is plenty of room to sell. Not only one company.
It is interesting to note that in our distributor agreement, we ask and we need our distributors to do not sell at prices that are lower than the prices on our website labertrade.com Because they receive very good prices, about half, maybe less than half of the retail price and they could compete
our direct sales very easy.
So that's why we ask them, if they want to sell, this should not be at a price lower than our official price.
They cannot undersell?
Alright, so what is the future of Labex? What is in the plans, what's cooking?
Wow, the future is very good I think. The company is in point 2 from the diagram of the rise in the company, so we have a good product, we have good cash flow now.
Good team? Good experts?
Absolutely! Perfect team. Everyone on our team enjoys his job. That is important actually.
Yes, it's important.
I believe that the people could be more effective if they are happy working here. So yes, we have a very good team. And that's one of my pleasures.
The company, company is in a position that now it can rise quickly. We have enough cash flow to pay for expansion. We have good products. We have a good production facility that can extend production two or three times very easily. The capacity of the production, yes. Because all the procedures inside of ISO are very clear and very detailed and we will not face any quality issues extending the volumes of production.
So the company is actually quite attractive. Actually, the company is very attractive to investors right now.
Are you looking for investors?
We don't need money, we have. We have a similar problem to Apple.
Too much cash flow?
No, no, it's not too much. They are not too much never. But we don't need money to extend. And we are looking for partners worldwide, we are looking for good, reliable person with good networks. But it's not mandatory, it's not so important.
You are not in a rush to just go and find whoever, but you prefer to find the right people?
Yes, now we are working to position our website labextrade.com in Bulgaria, in English, in Russia on the first page of Google and Yandex, it will take about two months maybe to complete.
We have experts on board. So I think online sales will rise significantly.
The distributor's network extends much more quickly than last year because our brand is more and more familiar, and recognized right now. Yes, and recommended because of its good quality and reliable products. It's really hard to break our product.
In business, if you solve one problem in a quality way usually, people come to take the solution. Yes, and the goal was, because it's a niche market, it's not easy to take a share in this niche market, but the idea was to create something very good for the end-users. And these users will
go to distributors asking do you haveLabex?
And this is a good position when distributors find us, contact us, and can we have a contract?
So just to make sure they can go to your website labextrade.com or labextrade.ru put an inquiry there, from the contacts form and Yes, they contact the way they like. If they want, they can call us, they can write us an email, and can fill out the contact form. Whatever. Everything is possible.
So right now the office here works in GMT +2 timezone?
Just so international people can know. This is Sofia time, Bulgaria.
We have a lot of time and yes, on the website they will see there is a form and they will see we are not working right now, content will be very soon, yes. So every channel to connect is open and handled, we support them.
And it's not a problem to find us.
In conclusion, because we are almost half an hour into this presentation, any last words for the potential distributors that are thinking if they should come work with you if they should contact you for work, what can you say to motivate them to do so or not to do so?
Yes, if distributors want to have a reliable partner, a really reliable partner, and to sell quality stuff and top quality products, items, electrolarynxes, they are welcome.
We can offer them very good conditions, very clear support, very clear.
And we can work together just to earn money together.
Before we finish I would like to take just a few minutes and just go over each device. Its possibilities, its strengths
Yes, there is another news, may I?
We are going to extend our website with all the consumables that a laryngectomee needs.
Apart from the devices, you are going to have additional products?
Yes, like just for sales, we are not the producer of these, but stoma covers, bath/shower shields, and everything they could use in everyday life.
Yes, we want to be able, they can contact us, they can order everything they need, they could need relating.
So it will be maybe in one, two months will be completed with negotiations.
It's not ready yet, but we are working on it.
For 2021 hopefully?
You will start offering additional items. Yes, this is just to cover all the possible things they could need.
So I think the basic device right now is the DIGITAL, right?
This is Digital, this is our base model. This device is a digital device, like every device in our product range. It has only one speech button.
We have to put the battery inside. With one charge of the battery, you can speak for 4 hours of speech time. This is enough for some patients for 3 days depending on the frequency and depending on the volume they use and depending on preferences.
But this is a device that is perfect for the price-oriented markets because it's the cheaper one in our product line. It's good enough for everyday use.
Can be used without hassles. The adjustments right from the keyboard, every user can change the pitch and the volume of the tone.
It's only one tone. One speech button. And on the youtube channel, do you have videos of how the settings are done?
We have videos on how to change the settings, how to update the settings, and of course, we have in every device options to return to factory default values. If there is some result that users don't like, they can always return it. And there is no limit to how many times you can change the volume.
And it comes with a charger for two batteries?
Yes, it's an intelligent charger station for two batteries.
And in the set, there is everything the patient could use, the device, two batteries, rechargeable batteries intelligent charger station, lanyard, work card, and user manual here.
So everything that the user can need to start speaking right now. All the devices are ready to use. Just ready to use. Plug the battery and start using it.
So it's a plug-and-play device, you get it, you put the battery in, and immediately start.
They are absolutely ready to use.
Ok, let's go on to the second one.
This was the Labex Digital,
now we go to the Labex Comfort.
Very similar, very similar.
What is different about this one?
Put the battery.
It's a very similar device to the Digital. The news is that we have two speech buttons with different tones and volumes and pitches for every button.
They can be adjusted everything. Everything is adjustable.
4 hours speech time. It's a bit more expensive unit.
Actually, this device covers the functionality of 80% of the competitor devices. And this is the base device yet.
So, of course, we have very heavy boxes for delivery. Nothing could break during the delivery. Everything is nicely protected.
Yes. Absolutely protected during the transportations.
It's in a foam, everything in separate compartments.
And a magnet to close the top.
I will not need batteries anymore, because the new two models have integrated batteries.
So now we are going to the upper segment, right?
This is the Harmony.
This is the Harmony device. Well, I think it looks very well.
There are very special, well-designed buttons. Just buttons, but we played a lot with them to have this very good and soft tactile sensation. Of course, you can check the battery level. Now it's green, because more than 50%.
So this has an integrated Li-Ion battery compared to the previous ones?
Yes, all this panel is a big lithium battery inside so this device can work. 30 hours speech time.
Yes, speech time. 30 hours clear speech time.
Alright, which means around a week?
Yes, a week or more. Could be two weeks or three. Yes, patients use a lot of devices, some less.
But it's enough time too.
And of course, they can check the battery, if the battery goes yellow, it will be less than 50% yellow, and next, it goes green, and next, it goes red when the battery goes very close to the end, there is an additional sign.
So they will not be surprised and stay without a voice, will not be surprised. There is a USB charger, like an Android connector micro USB-b type.
We have a good charger inside the box, and we have cable, so they don't need to buy anything outside of the box. The charger is a very high-quality quick charger. The full capacity can be charged in 2.5 hours with our charger.
So 2.5 hours and next two weeks speak without charging.
So 2.5 A charger.
Yes. Everything is integrated, it's an On/Off switch.
Even if you don't switch it Off, it's not a problem, because the device will enter sleep mode for 2 seconds after you stop using it. Look now, 1, 2 and the device is sleeping already.
And it will not drain the battery?
No. Not at all. Yes, and that's why we have so long time, such a long speech time.
Yes, it's a crazy amount.
And we were the first that decided to use this.
In the beginning, even the patients told us no, not necessary. And now they love it.
So now let's talk about the flagman.
Basically, the functionality of this model Harmony is similar to the function of Comfort. But it looks much better and we have good buttons and a great speech time.
And now let's go to the flagman.
Yes, our flagman is what we wanted to create and give the patients.
Most of the patients told us that they feel not so happy, because they do not have the ability to change their intonation.
They speak in a flat tone, a bit like a robot. And they couldn't express emotion.
Yes. And they need to express emotion.
That's why we created this unit that name is Inspiration.
We have a touch slider here. We have a touch start/stop from the top. Depending on the mode of operation.
We have everything to speak like a usual electrolarynx or changing the intonation during the speech.
Changing the intonation while you speak?
While speaking, yes.
Yes, it's a brand new idea.
We have and are constantly preparing videos to show how real people speak with this device on youtube, you can check there, our LABEX channel on youtube.
And this is the device that does not have an analog worldwide.
So this is the flagship?
There is one unit that can change intonation, but intonation there started from low and go somewhere and return to low with every start/stop.
This is not the case here.
We will start and change with no problem.
Different modes of operations
Something is, let's say dynamic tone,
we have dynamic volume
And different modes of operation, you can see in the different modes how they operate in videos and in user manuals, of course.
But this is our flagman and you will be surprised that our devices are not expensive.
Regardless of all the options we have, the retail price is not high. It's not high. It's not zero, of course. But these are not expensive devices.
So just call us and check what we did.
We are proud of what we did. And happy.
As a recap, this is labextrade.com You should check them out.
They also have a Russian website, labextrade.ru
Is there another website?
No, labextrade.com will be in Spanish and
Ok, so two more languages coming up on the website.
So they can address different speaking audiences
And in my career in business development and as somebody who does video for a living
I really find this company interesting!
My personal take is that if you are
looking for a reliable producer
for a very specific targeted niche market
definitely check out Labex, check out
their website labextrade.com
get in touch and see if you can
create more business together
and hopefully a long-lasting relation
in the long-term.
Thank you very much, it is a pleasure.
And good luck to all of our viewers
and hopefully to generating more
distribution channels for Labex
and vice versa.