 Aloha, this is Rob Hack with another edition of Exporting from Hawaii. I'm thrilled today to have with us in the studio here Aaron Lau from Simply Wood Studios and Lau Lau Woodworks. They make these fantastic pens that I have here in front of me and we'll be talking about the pens in a lot more detail. But first of all, welcome. Thank you for being here. Thanks for having me. And I'm excited to talk about your exporting activities. First, let's just talk about the history of you and Lau Lau Woodworks and Simply Wood Studios. So, how did you start woodworking in the first place? I was interested in woodworking when I was a kid. When my grandfather used to babysit me, he used to let me hammer nails and sand his little projects at home. I was always interested in working with wood and then when I was growing up and I was an intermediate in high school, I used to build skateboard rounds. I used to be a big skateboarder that used to love skateboarding. Great. And then how did you, at what point did you merge the woodworking with the pen making? That was a huge progression where I used to be a financial planner and I wanted to take up another hobby. So I bought all this woodworking equipment and I thought, oh, I want to make furniture. So I bought all this woodworking equipment, about $5,000 worth. And when I started making the furniture, I realized how expensive the wood is here and there's no way I could actually make some money doing this. So then I started making co-op boxes and I didn't like how exact everything had to be. And then I saw a two-page article on how to make a pen, though I just taught myself after that. Well, that's really interesting. When you say wood was expensive here, you mean importing wood from the mainland or wherever. Any kind of original co-op wood, local wood is still expensive. Even if we're bringing in a mahogany or pine, getting that wood is still expensive as well. So when did the pen making actually start? When did Lala Woodworks begin operation? So I first made my pen in, the first pen I made was 2002. And then I was just kind of doing it as a hobby. And then I started doing it as a business maybe about 2003, 2004 part time. I started doing some craft fairs here and there. Wow. And explain for our listeners, what is the difference between Lala Woodworks and Simply Wood Studios? So Lala Woodworks came about because that's just my production and wholesale. And then I really got interested in doing retail. So I created Simply Wood Studios as a retail company in 2008. So we have three retail stores in and around Waikiki. Where are they exactly? So our first store is on Kapuhulu. It's right across from Leonard's Bakery. I opened that store 11 years ago and then we have two other stores. One in the Royal Hawaiian Center by the Cheesecake Factory. And then another one in the Ilikai Hotel Lobby by Cinnamon's Restaurant. Which one do you consider the flagship store? Is there a main one that always has stock of product or they all do? Well Royal Hawaiian we have to be open 12 hours a day or seven days a week. But as far as stock, each store has a little bit of a difference in inventory. So at Kapuhulu where my workshop is, we have a lot of woodwork. And then in the Ilikai we have mostly art. So two dimensional art, prints and things like that. And then in our Royal Hawaiian store we have a good mix of both. But it's geared more towards carry takeaways for tourists. So it's not going to be larger items. But just to be clear, the wood that's there that isn't pens or the woodworking in the art, that's not your art. No. So we are actually, in Simply Wood Studios we only sell stuff like art and gifts made in Hawaii. Well that's great. Nothing's imported. So I have over 90 different artists in three stores. So that's great. What's the mix of those roughly 90 artists? What's the mix of Oahu based versus Neighbor Island based? Oh I don't know the mix. I mean I have a lot of Neighbor Island. I say most of the woodworkers are here locally because I don't have to ship the product from other islands here. But for the most part, I would say 50% of the artists are from Oahu. That's great. And most of the art is Hawaii themed art, I would assume? No, not necessarily. Okay. Not necessarily. There's artists that do more contemporary things. However, like for instance the woodwork itself, you can have a contemporary box or a contemporary bowl but it's made out of local wood. But a lot of the two-dimensional art, yes, those are Hawaii themed. So let's get back to the pens because I just love these pens. Roughly 17 years ago you made your first pen. Then approximately when did you have your first export? Probably about 2003-2004 I tried to export. I went on a trip to Japan and what I did was I just went door-to-door to stores to see if they would be willing to sell a koa wood pen. That was a big bust. But that's when I fell in love with Japan, that was my first trip to Japan. And then what happened was after doing the craffiers for quite a while and kind of getting a following, a lot of Japanese were going to those craffiers. And then they started picking me up in Japanese magazines and things like that. Bloggers and what have you? Well, they didn't have blogging back then, right? So it was purely published Japanese magazines. And then they started to pick us up and then I opened my first retail outlet which was a kiosk in Wardware House. It was right in the middle of the parking lot and I set up a lathe outside of the kiosk where I would actually make the pens there. And the Japanese would come there and more Japanese magazines picked me up. And that's when I started realizing the Japanese market was going to be a big market for me. They do love writing instruments. They do. There's no question about it. They do. Pens, pencils and fountain pens. I think a lot of people don't understand in the U.S. market that many of the pens that we buy at the store such as Pilot and Zebra and what have you all originated in Japan. Not all of them are. Not all of them are. Yeah. They're really fantastic. I think Japan quietly leads the pen market globally but people don't really realize that. And just as stationary in general. Japanese love stationary. That's really fantastic. Okay. We'll take a break right now and we'll be back in a minute and we'll continue with Aaron Lau talking about selling these fantastic pens in overseas markets. Hello, I'm Dave Stevens, host of the Cyber Underground. This is where we discuss everything that relates to computers that's just going to scare you out of your mind. So come join us every week here on thinktecawaii.com, 1 p.m. on Friday afternoons. And then you can go see all our episodes on YouTube. Just look up the Cyber Underground on YouTube. All our shows will show up and please follow us. We're always giving you current relevant information to protect you. Keep an eye safe. Aloha. Aloha. I'm Yukari Kunisue, the host of Konnichiwa Hawaii, Japanese talk show on thinktecawaii. Konnichiwa Hawaii is all Japanese broadcast show and is streamed live on thinktec at 2 p.m. every other Monday. Thank you so much for watching our show. We look forward to seeing you then. I'm Yukari Kunisue. Mahalo. Aloha. Rob Hack back on exporting from Hawaii today with Aaron Lau from Lala Woodworks and Simply Wood Studios. Before the break, we were talking about Japan specifically and the pens and the relatively cheaper pens that everybody buys, that everybody can get them at Sam's Club or Costco, at the ballpark, Fisher or what have you, those ballpoint pens and the gel inks and what have you. Those largely come from Japan and now you're exporting these premium pens back to Japan which I think is great. Yeah. Koa wood inlaid pens. So when did the Japanese market learn about koa? You know from what we saw when I first started making the pens, the Japanese didn't know much about koa wood. They thought it was pretty but they had no idea what was curly koa, what was a premium wood, what was nice koa. And then, I don't know the year but right around when Jake Shimabukuro became popular in Japan and the Japanese started to really like ukuleles and then they started to know or learn more about koa wood through knowing what ukuleles are made out of. And then they became more sophisticated in knowing what koa wood was nice. At first the Japanese were buying the cheapest koa you can find because the Japanese didn't like a lot of figure in the wood. They liked their wood looking clean. But now demand not only in Japan but worldwide, koa has become its own brand and it's become a huge export for Hawaii and now there's a huge difference in price point between curly koa and the cheaper koa because now everybody knows what's expensive and what's the good wood. So when you're selling in Japan now, I've seen you at trade shows and what have you. Are trade shows important for your business? Trade shows are very important for my business. It's way more efficient than trying to go door to door like it did in my first trip to Japan. And when you're selling at a trade show, are you generally after wholesale accounts or are you selling at individuals? So I'm at the trade show in Japan that I see you all the time. That's primarily a wholesale trade show. That's Tokyo International? Tokyo International. Are there others that you do? Not yet. I do do the Hong Q show which is actually the department store which is a direct to consumer store show. But it's extremely important and I've learned so much just from talking to other businesses that go up with me to the trade shows and talking to all the people coming from all around the country to that show. I've never learned a lot. And as you know, being based out here in the middle of the Pacific Ocean and shipping product around the world is not cheap or easy. Do you have that problem with pens if somebody orders one pen from you? Shipping is cost prohibitive when it comes to just selling direct to a customer because you're looking at at least $25 shipping one pen to Japan or even to Canada and Australia which are another big export for me. But shipping in general out of the US is just expensive. When does it become more cost effective? What level of shipment is it? 20 pens or 100 pens or where does it become more reasonable? It's more reasonable when not necessarily a certain price point or a certain quantity but just to ship in general to one location with multiple pens at one time because shipping domestically in Japan is actually really cheap. Yeah, it is. And shipping domestically in Canada is very cheap. So do you generally sell or send from USPS flat rate box or are you using a shipping? USPS flat rate for me has been the most efficient and we can print out the label and the custom forms and then just ship that out straight to where the destination is going. You have Yamato and stuff like that for Japan but that's a little more time consuming for me. Right, the paperwork mostly. Paperwork mostly and stuff like that but the cost shipping with USPS is actually pretty good. A typical wholesale order from Japan would be how many pens roughly? The quantity I'd say maybe the dollar amount would be 800 to $1,200 worth of pens which would come out to maybe about 12 to 15 pens in general. That would ship in a medium flat rate to a large flat rate box. And do you feel like your customer base in Japan do you have a feeling are they Tokyo centric or are they all over Japan? Oh, I have customers all over Japan. Yeah, because we have three stores in Waikiki we're able to see where our pens sell or who our customer base is. That's the whole benefit of selling retail. Let's hone in on that for a second. Who are the customers then from Japan? Are they men or are they women or are they young or are they old? The great thing about my pens is there's no specific demographic as to who likes the pens. I can have a parent buy a pencil, a $145 pencil for their high school student son. I've had a lot of older people buy fountain pens or pencils. There's no real demographic as far as a specific demographic as far as who likes pens. Do you find that customers are buying these for themselves or are they buying them as gifts? Primarily? Can we zoom in on this a little bit? I love this. Primarily, the pens are bought by people that are buying for themselves because pens are very subjective. But I do get a lot of omiyage or gifts, especially for weddings and stuff like that, wedding gifts. So the couples will buy a bunch of pens for their fathers and mothers and stuff like that. That makes perfect sense. That's great. Would you sell a kit like different sizes, for example? You had mentioned to me, which was a bit surprising to me, but it makes perfect sense that women tend to like the bigger pens because it easily fits their hand. The cultures are different. With Western cultures, Canadians and Australians and the mainland US, they like fatter pens. When it comes to Japan, they always gravitate towards the thinner pen, and I have to have them test out the fatter pen to show them which one is more comfortable. Because generally speaking, fatter pens are more comfortable to hold. When it comes to men and women, it doesn't matter on the size of the pen. It's really the color that's more gender specific. Really? So do women gravitate towards this? Yes, and Japanese like pastels. So pinks, turquoises, things like that, they love. Westerners, a different market. It's amazing how each culture is different. So when you're exporting, you want to retail as much as possible from your business to the consumer to see what you want to export to a particular country. So the wood is koa, and then what is the inlay? So this one right here, this is actually pink coral with resin. So it's reconstituted pink coral. This one here is reconstituted turquoise. These here are actually surfboard resin. That's a polyester resin that we use to glass surfboards with. Those are really, really cool. And then all of my pens are actually chemical and UV protected. So the koa wood will not fade or change color. So when a customer, particularly a Japanese customer sees that in the store, is there signage in Japanese that explains this as surfboard? I do have a lot of signage in Japanese, and I just got my friend Toby just translated for Korean. Oh, that's great. Because I'm getting a lot of Korean customers now. That's great. And you mentioned off camera that Koreans are just now learning about the quality of koa. Yeah, it's just amazing. So I've been selling a lot of pens now to Korean visitors. And I asked them, do you know what koa wood is? And now over the past, I'd say just this year or maybe since December, a lot of them are nodding and saying they know what koa wood is. And I don't know how that's happening. I would think that a Japanese tourist, or any tourist, but really from Japan because the Japanese market really loves surfing, that if they knew that that was reconstituted surfboard material that... Well, it's not actually reconstituted surfboard, but it's the same material. So I say surfboard or jushi, and they know. That's neat. That would close the deal right there no matter what the price was. Are there his and hers sets? Have you ever sold them? I do. I've made his and hers sets. I make pencil sets. I make letter opener sets. The Japanese love letter openers. So I do make letter opener sets. Now, how many different models of pens and pencils are you selling now? They primarily range anywhere from 78 different styles. Sometimes I'll do a limited run of 500 of one, a new particular style. And then I'll introduce another style. Are the limited runs more expensive? No. Here's a classic fountain pen design. And you said fountain pens are still very popular. They're actually more popular now than they were before because all the younger generation, particularly the Westerners, they are thinking that fountain pens are retro. That makes sense. So what's happening now, the pens are more popular than ever because now the younger generation are now getting back into journaling and they're now getting back into writing cards to each other. And everybody so used to having an iPad or a phone or a laptop. Now with a pen, they can show their own individuality or the uniqueness, particularly because Koa pens and my pens are all different. Oh, each one is very unique. I mean, it has its own signature built in. What can you tell us briefly about the different models? So this is one of my limited editions. This one's a little more expensive because the hardware and everything like that is actually very expensive to make. But this is a premium Koa where you have that three-dimensional look to the wood. These pens, this is a fountain and roller ball. These are actually stone. These are reconstituted stone. These are all ball points here. And all of my pens are standard refills. So you'll find the refill anywhere, Afghanistan, India, Hong Kong. I've sent my pens all over the world and nobody has come back to me saying they can't find a refill. What do you consider the flagship product right now? What are you selling the most of? Primarily ball points, but fountain pens have picked up dramatically. How about in Japan? Is that true also? In Japan, it's primarily the thinner ball points and pencils. And the pencils, are they available in different widths of the lead? I have two different widths of the lead, 0.07 and 0.05. Okay, great. Back to school time or for college, I could imagine these would be considered really good. Or graduation present? Graduation. So right now coming up from the middle of April through the middle of June or end of June is my second busiest time of the year. So in the US, we have Mother's Day and Father's Day. And in Japan we have Golden Week and then graduation. I'm glad to hear you're cognizant of the Japanese holidays because I think a lot of our companies here in Hawaii who are trying to export to Japan or other countries are not paying attention to the holiday schedule in those countries. It's really, like I said, it's really beneficial for me to have my three retail stores. Because we have the Japanese customers coming to me and I personally talk to them or my salespeople personally talk to these Japanese customers. That way I can go to my wholesale accounts in Japan or the stores that want to sell my pens and I say, hey look, the Japanese people love these pens in Hawaii and now it's beneficial for them to get it in Japan. So in the Japanese market there's no exclusive agent. Anybody can buy from you wholesale. I do have some agents like Inosaka and stuff like that. But that's primarily because the company does not have an English speaking person. And the street price in Japan, retail price. It's usually 20% more than what the retail price would be here in Hawaii. And is that largely based on shipping costs? Shipping costs and if there is any customs charges, yes. But primarily shipping costs. Have you run into any customs issues in the years you've been doing this in Japan? No, we actually just had one issue just come up recently with a large order. It was held up in customs. I don't know what the reason was, but it got released like a month and a half later. It took a while to get to them. And no explanation of what it was? No, because it was only Japanese so I couldn't really tell. I think it's because, well, this is processed wood, right? Meaning you've done work on it. It's not raw wood. I think if you were doing raw wood shipments to Japan. You can't ship that to Japan or you can't ship raw wood to Australia or Canada. And now you said you're selling more in Canada and Australia. Is that also fueled by Canadian and Australian tourists who come here first? Yes, yes. Primarily I always try and see what the retail market is looking like when they're coming here. And the great thing about Australians and Canadians is they love wood right off the bat. So that's their culture. It's the same thing with the US people in Hawaii and in general love wood. And that's why the wood pens are so popular. And since Koa is only found in Hawaii, it's a perfect keepsake for them to take back home. That's great. Do you find that most Australians, Canadians, or even American tourists, do they understand Koa? Do they know what Koa is? Yes, they do. Yeah, if they've been here once or twice, they'll know what Koa wood is. And it's kind of a double-edged sword where Koa has become its own brand. Where you can go to these hardware stores and you can get quote-unquote Koa flooring even though it's probably not Koa. Koa is only found in Hawaii. So all these companies are marketing their wood as Koa wood because a lot of people associate Koa with Hawaii and it's premier and it's expensive pricing. So we have to, as suppliers from Hawaii, we need to watch out for that company of Koa. One of our biggest problems right now in Hawaii as far as exporting wood is the local woodworkers can't get it now. Let me talk about this, but all the wood is just being cut and thrown into containers and not being milled in Hawaii and not being lumbered in Hawaii. And the problem with that is the Hawaii local woodworkers can't get the wood itself. It's being shipped to China, California, Japan for veneering and lumbering and we can't get it. All right, difficult problem. We'll work on that. That wraps up another episode of Exporting from Hawaii. I'd like to thank very much our guest today, Aaron Lau from Simply Wood Studios and Lau Lau Woodworks for bringing some of his fantastic pens that I highly recommend and explaining to us some of his exploits in exporting, particularly to Japan. So thank you very much for being here. And we'll see you again in two weeks from Exporting from Hawaii.