Moving Forward with your Product Idea: Finding a Supplier

How To Find a Supplier for Your Private Label Product

You have an incredible opportunity to build your own brand on sell it on the most powerful sales channel in the world; Amazon! Coming up with a product idea, or a private label product, is the first step towards building your own brand. You can get creative with your product idea or you can use the great amount of sales data available to you on Amazon already to get your idea. However, a product idea is not enough and you will need a manufacturer or supplier to help you mass produce and deliver your products to eager customers. Getting from A to Z is the key to a successful business and as soon as you’ve done your research and found a potential winner, it is time to contact a supplier.

Are they going be Local or International?

One of the first questions that I get asked from my students is if they can look for a supplier in the US or if they should look overseas (and typically that is going to be an Asian country). If you’re in the mainland United States, most potential sellers want to choose a local manufacturer or supplier because of the product quality and marketing appeal (not to mention ease of communications). While these are valid concerns and definitely something to consider, I there is one big reason why 90% of my branded products are produced in China: COST. The cost to build something i n China is still considerably cheaper compared to creating them here in America for many products, so if you are looking to be competitive, you are most likely going to end up looking at manufacturers located in China, India or Taiwan. There are some exceptions to this, of course. Some niches do very well with the “Made in USA” branding and it may be important for your target audience to get a US made product. Potential liability is another factor, and so I typically recommend that topicals and indigestible be US made (if you decide to venture down that path at all).


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Start Searching

Most suppliers can be searched online now and signing a deal with them has never been easier. Sites like ThomasNet, MFG and Kompass are among the few where you can find USA-based distributors, while Asian distributors mostly set themselves up at Alibaba, IndiaMart and Ali Express. Still not all distributors are found on the web.
Alibaba is the largest and most well known source and is where I personally start most of my searches. There are a number of checks that you can perform on the Alibaba site to help find a trustworthy supplier. I only will work with gold suppliers that have at least 2 – 3 years as a gold supplier on the Alibaba website. You can also filter your search results by assessed suppliers to only see those suppliers who have gone through the steps to be assessed by a 3rd party and provide more information.

There are those who are still doing the business in the old fashioned way (which may open up some opportunities) and you can find them in the North American Industry Classification System or NAICS. Specific keywords used in Google search may also lead you to suppliers such as “wholesale” or “wholesaler” or “dropshipping distributors” etc.

 

Request a Quote 

Once you’ve found a supplier who can potentially meet your product needs and you have completed all the necessary requirements to start your business, then it’s time to get a quote on production price and the minimum order quantity (MOQ). From here you narrow down your supplier search based on price and whether or not the pricing is worth the quality of the products they produce. I always try to communicate with a supplier through some kind of chat system (Skype or right on the website seems to work the best).

Finally, if you’re contacting a supplier from overseas, keep in mind that in many cases, they may be using translating programs to translate your email as well as their reply. Keeping your messages/emails short, concise, well formatted and spelling error free will not only help the manufacturer but it will ultimately provide you with better replies and answers. I highly recommend that you reiterate your specifications numerous times for your supplier to ensure that you are getting what you ask for. It is typical for your representative to tell you that they completely understand what you are saying, but to not truly grasp what you are asking for. This is no fault on their part, as there are obvious language barriers and the fact that they are trying to keep you happy as a customer. Clarifying your needs several times is always a good idea.

 

Also, when asking your questions, it’s best to number your questions, so that they can easily reply to each number, keeping the questions and communication clean and organized.

Here is an example of the first communication that I might send to a supplier:

Hi,

My name is Andy and I am from XYZ company.

I am interested in placing an order for ‘Desired item Name’. I just have a few questions beforehand:

1. What is your MOQ for this item?

2. What is your cost per unit if I were to order ‘5,000 – 10,000’ units*? (You don’t have to commit to a large order, but it is good to see

3. What are your payment terms for new customers?

I would also like to order a sample of ‘Desired item Name’ to verify quality. Can you please send me the cost for the sample, including shipping to:

Andy Slamans

10 main st

Hershey, PA

17055

Thank you,

Andy

 

The End of Amazon Hijackers?

The End Of Amazon Hijackers?

If you are a private label seller, you have likely experienced a “hijacker” come onto your listing at one time or another and completely throw you off.

 

There is nothing quite as frustrating as seeing another seller on a listing that you created selling a product that is obviously not your authentic private label product.

Unfortunaetly, there isn’t really a whole lot you can do about it…

That is, you couldn’t really do anything about it before.

Request Approval

I was incredibly surprised this morning when someone who I wholesale some of my private label products to was unable to get their items listed.

This isn’t for a restricted category, so what gives?

They sent me the following screen shots to confirm their troubles:

14125589_10209476073406024_7757706503225731637_o

 

 

Amazon was telling them that they needed to request approval to sell under this listing? WOW!

I basically now have the same authority over my listings as the big brand-name guys do.

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Now, only those sellers who I give permission to are able to list under my brand name products..

Goodbye hijackers!

 

 

 

 

 

 

How Did I Do This?

So, how was I able to get my brand listing locked up like this? My best guess is that it is becuase I am enrolled in the Amazon Brand Registry program. My private labels products are registered in the Amazon Brand Registry which tells Amazon that I am either the brand owener or an authorized distributor for my brand items.

Up until now, brand registry didn’t have a super big impact…

But now.. this is HUGE!

How Do I Go Through The Amazon Brand Registry Process?

If you want the fast and easy route to brand registry, you can check out the following that helps with this process: EasyBrandRegistry.com

If you want to try to go through the process yourself, check out this article that I wrote about Brand Registry here:Understanding Amazon Brand Registry


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What Does This Mean for Retail Arbitrage and Online Arbitrage?

Honestly, I don’t know.

I don’t think the sky is falling, and I don’t think you should panic..

However, If Amazon is rolling this feature out to everyone who is brand registered, then it may mean that many brand owners will also lock up their brand on Amazon.

I’m sure this won’t happen all at once.. and I’m sure not all brands will do it..

But, it may be something to watch out for.

My advice would be to definitely diversify your inventory acquiring methods.. whether all these changes take place or not. Learning wholesale and private label are great ways to do this because then you are either the brand owner for your products or an authorized seller.

 

If you want to find out more about private label, make sure you check out my private label training series here.

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How To Go Through The Amazon Brand Registry Process

What’s The Easy Way To Complete Amazon Brand Registry?

Below you will find information explaining what the Amazon Brand Registry process is and how to complete it. As a warning, going through the Amazon Brand Registry application process can be kind of a pain and waste of time. If you want a shortcut through the Amazon Brand Registry process and realize that time is money for your business, check out how we can get you registered the easy way!

Easy Brand Registry Service

Amazon Brand Registry: What is it?

Amazon Brand Registry is a great way for brand owners to establish control over their product listing on Amazon.com. In order to go through the Amazon Brand Registry process, you must be a seller who manufacturers your own branded products.

Manufacturers can enroll their brand in the Amazon Brand Registry and register themselves as the brand owner. The goal of Amazon Brand Registry is to make it easier for sellers to manage their own brands and list their products on Amazon.

Just because you created a listing on Amazon doesn’t necessarily mean that you are going to have total control over that product listing forever – even if it is your own brand! However, the Amazon Brand Registry does give manufacturers more control over a listing by allowing them to make automatic changes to a detail page. What if you don’t get enrolled in the Amazon Brand Registry program? Well, your changes may not take place as quickly as you would like or you may even have to prove to Amazon that you are a manufacturer of your own product!

What Does Amazon Brand Registry Do?

Amazon states that the following are benefits of getting approved for Amazon Brand Registry:

  1.  Influence the product detail information for your branded products:
    As the registered brand owner, you will have increased influence in editing the information on product detail pages for your registered branded products, which then helps you to specify the correct titles, details, images, and other attributes for your branded products.
  2. List products without UPCs or EANs:
    Registering your brand enables you to specify an alternative key attribute that you can use to list your branded products instead of a standard product ID.

Does Amazon Brand Registry Prevent “Amazon Hijackers”

No. One of the things that enrolling your brand in the Amazon Brand Registry program does not do is prevent other Amazon sellers from listing products under your brand’s Amazon listing page (or “hijack” your listing). Other sellers are allowed to list on your listing as long as they are actually selling your exact branded product. If they are not, then you need to go through the proper steps to try to remove them from selling unauthorized or counterfeit products.

Who Can Enroll in Amazon Brand Registry?

The following sellers may apply to enroll in the Brand Registry and register as the brand owner (according to Amazon):

  • Manufacturers or brand owners
  • Distributors, resellers and other individuals or companies who have the written authorization from the manufacturer or brand owner to manage a brand’s content on Amazon.

The following categories are currently not eligible for the Brand Registry:

  • Books, Music, Videos, and DVDs (BMVD).
  • Products in the Entertainment Collectibles and Sports Collectibles categories.

What Do I Need To Apply For Amazon Brand Registry?

To complete an application with the brand registry, you will need the following items:

  1. An image of your product packaging with branding visible on the packaging.
  2. An image of a product with your branding visible on the product itself.
  3. Link to an active website that displays your brand or products.
  4. An email address that coordinates with your brand name (cannot be a gmail or yahoo address).

The application for Amazon Brand Registry is actually really short and fairly easy to fill out. The harder part is getting your pictures approved, which we will look at further in a minute. Below you can see a screenshot of the first page of the application process:

amazon brand registry apply

Let’s break down each of these section:

  1. Your contact name can be your name or your brand’s name – pretty straight forward
  2. Your contact email needs to be associated with your brand and cannot be a Gmail or Yahoo email address. For example: YourName@YourBrand.com
  3. Best contact number. In our experience, they typically do not call for Brand Registry information, but there is a chance that they could.
  4. A website with your brand information on it. Amazon must be able to connect you with the website, so they may ask you to have information such as your phone number and email clearly visible on the website.
  5. Your brand name exactly as shown on your product packaging.

Don’t I Need A UPC Code To Sell On Amazon?

Actually, you don’t necessarily need a UPC code if you go through the Amazon Brand Registry for your product and select an alternative key attribute. On the second page of the Brand Registry application, you will be asked what category your product falls under and what the key attribute should be. Your choices for key attributes are the following:

  • Manufacturer Part Number
  • Model Number
  • EAN
  • Catalog Number
  • JAN
  • UPC

*Note, available attributes depend on the product category. See here which attributes are available for each category.

Which Key Attribute Should I Choose For Amazon Brand Registry?

This may depend on whether you are the manufacturer of the brand that you are trying to register or an authorized reseller.
If you are the manufacturer/brand owner and trying to avoid needing to spend money on an expensive GS1 UPC code, then we recommend that you try to use a manufacturer part number or model number as your key attribute. The nice thing about choosing either of these attributes is that it is pretty easy to assign a product a part number or model number. It also means that you do not need to enter a UPC code into Amazon when you are creating a new product listing page on Amazon.
If you are not the brand owner then you are probably not worried about having to purchase UPC codes for the products in the brand so you can go ahead and choose whichever key attribute seems easiest to identify.

If you select UPC as your key attribute, you may need to answer the following questions via email (if asked) with “yes” answers.

• That you or the companies that you are an authorized distributor for own every single one of your UPCs on the products you are selling
• That you or the companies that you are an authorized distributor for will never reuse your UPC number again
• And that you or the companies that you are an authorized distributor for will never need to upload an item that will NOT have a UPC

The following guidelines about key attributes is given by Amazon:

  • A good key attribute is unique to the product and never changes. It should be easily discoverable by your distributors and customers on your packaging, on your website, or in your catalog.
  • Ensure that the value for your key attribute is unique for all your products. If it is not unique, your products will not be registered in the Brand Registry; you will receive error messages when you create or update your products on Amazon, or you may not be able to list your products.

I Keep Getting Denied For Amazon Brand Registry

The following are some common reasons for being denied and ways to troubleshoot the issues:

  • Picture appears to be digitally altered. This is arguably the most challenging part of the Amazon Brand Registry process. Amazon is pretty picky about the images clearly showing the brand logo that you are trying to get approved for. Not only that, but because so many people have tried to simply photoshop their brand’s logo onto their product photo, they are highly suspicious that you have done the same. The best way to deal with this is to take a picture of you holding your product in your hand (or your supplier/manufacturer’s hand holding the product). If they see you holding the product in your hand they are much less likely to think the brand logo is faked.
  • Cannot clearly associate your website with your brand. Your website must have you brand’s information on it and it must clearly be linked with your Amazon seller account. The best way to do this is to have a phone number or email associated with your Amazon account directly on the website that you provide them.
  • Email address is not connected to your brand. Amazon does not want to see a Gmail or Yahoo email address for your brand – you can use alternative email domains out there or use a custom email domain for your brand.

I Was Approved For Amazon Brand Registry! Now How Do I Get My Products Listed?

Once you are approved in Amazon Brand Registry, you must do the following with each listing:

  • Use the unique key attribute value that you selected in the application for your brand
  • Put your brand name at the start of your Amazon product listing title capitalized and spelled exactly as it was approved

You must put the brand name at the start of your product title for it to register. For example, if you were the brand owner of LEGO’s, one of your listings may look like this:
“LEGO Funhouse Set 10234”
If you titled your listing like this however, “Funhouse LEGO Set 10234”, your listing would not conform to the Brand Registry standards.

How Do I get My Existing Listings Enrolled In Amazon Brand Registry?

If you are approved for Brand Registry your product listings that have the brand name and select key attributes in their listing will automatically be added to the Amazon Brand Registry. if they do not get automatically added, you may need to move the brand name to the start of the listing title, ensure it is spelled and capitalized correctly and check to see if the unique key attribute selected for your brand is also associated with the specific listing.

Amazon Brand Registry: What Is A GCID?

Once you are approved for Amazon Brand Registry, all SKUs/listings for that brand will be assigned a unique GCID (Global Catalog Identified) code. The GCID is a 16-character long code that is alphnumeric without spaces or hyphens. The Code will look something like this: 5DSF5156SDF8441V.

A GCID is not the same as your product ASIN and should never change for your product.

How Do I Check If My Product Has A GCID?

The GCIDgcid will be automatically created for any of your products/listings that are correctly formatted for the Amazon Brand Registry. To view your GCID codes for each product you can do the following:

Open Seller Central > Go To Reports> Business Reports > Brand Performance

Amazon Brand Registry: Is There An Easier Way?

Yes! Skip the hassle of trying to get your brand registered on Amazon and let us get you on the fast-track through the Amazon Brand Registry process – quick and easy. Click below for more details.

Get Your Brand Approved Fast!

easy brand registry logo

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Smart Amazon Buying

[mlw_quizmaster quiz=2]

Now that you have taken the checklist above, you should have a better feel if you are ready to buy a product or not.  If you received 0 – 2 points, make sure that you read the information below to get a better understanding of the various factors involved with a purchase.  3 – 6 points received? You are on the right track!  Brush up on those areas that you may be leaving out of your search criteria. Did you receive a score of 7? Awesome! Comment at the end of this article for ideas or additional factors that you like to consider when you are purchasing an item.

  1.  Have you looked at the Amazon Best Seller Rank (BSR) of the item?

If you answered no to this question STOP WHAT YOU ARE DOING! One of the biggest mistakes that new Amazon sellers make is ignoring the sales rank of a product.  The best seller rank of an item, in simple terms, helps you understand how quickly an item is selling (it gets more complicated than that, as you will see throughout the article).  Amazon has been kind enough to provide the best seller rank of items that basically tells you how well a product is selling – so use this information to your advantage!  I can’t tell you how many new sellers that I have worked with that stock their inventory full of items that are going to take a very long time to sell.  For those sellers who are looking to compound their available assets, investing in slow moving product can hurt what you have to work with!  So, if you are new, you are probably asking “where can I find an items best seller rank?”.  Good question!  You can find an items rank on Amazon.com by going to a product’s page and then scrolling down to the Product Details section (see below).

Amazon best seller rank lookup

Amazon app best seller rankThe rank shown in the picture above and underlined in red is what we are looking for.  This example product was ranked 725 at the time the picture was taken. If you are using the Amazon Seller App, you can find the product’s rank simply by scanning or typing in the product information.  When searched for, the rank will appear below the product name – as shown in this screen shot to the left.  The LEGO Classic Medium Creative Brick Box I scanned showed up as rank 20 – at that particular moment!  Which leads me into my next point..

  • Have you determined the normal range for the items best seller rank?

So, we have determined that it is important to look at the rank of an item before purchasing it; however, it is equally important to understand what this rank truly means.  Firstly, it is essential to understand that an item’s “rank” is simply a rank at a point in time, or a snapshot.  Amazon checks all of the items on Amazon.com and updates the ranks hourly throughout the day.  Because of this, an item’s rank is constantly shifting depending on how frequently it is being sold.    That being said, the rank of an item can be “outside of its normal range” if it very recently had a sale, which can trick you into thinking that an item is more popular than it really is.  

All that is a little background information to get us to our question about the “normal range” for the best seller rank.  Using the normal, or average, rank range is much more useful in telling us how quickly a product is selling over time.  Amazon doesn’t provide us with the average ranks of items, so that is where we get some extra help from these tools:

If you answered no to this question it might be because you have never heard of them! All 3 of these tools track data on Amazon, such as the price and rank of an item over time.  They each serve a similar purpose but they each also have some unique features.  I suggest looking at each of them to determine which style you prefer.  I generally prefer the Keepa extension for Chrome that conveniently provides a graph right on an Amazon product listing page.  

keepa graph

  • The green line in this chart is the rank of the item.
  • The blue/purple line is the price that 3rd party sellers like you and me are listing the product at
  • The yellow shaded area is the price that Amazon is selling the item at
  •  Because there are many moving parts to this graph, click here for a detailed explanation on how to read the graph in its entirety.

You can see that the green rank line fluctuates up and down constantly and was as high as 4,000 and as low as within the top 100 at some point during the last 3 months.  There appears to be stronger demand for this product when Amazon is in stock – the price also tends to be lower.  When Amazon goes out of stock (the middle of the graph) the rank fluctuated much more wildly between 500 and 4,000.   The “average” rank for this item over the last 3 months appears to be around 2,000, which may give you a better indication of what kind of sales volume you can expect when selling this product.  But wait! Knowing the average sales rank is not enough – you need to know what a “good” rank even is.

  • Have you looked at the category the item is in to determine if the average rank is considered good for that category?

Is a “good” rank the same number for every category on Amazon? Simply put, NO! Many sellers make the mistake of thinking that an item ranked 1,000 in home & kitchen is going to sell at the same rate as an item ranked 1,000 in baby.  The reason this is wrong, is because each category has a different number of listings that are all being compared against each other.  You can click here to download a sales rank chart that shows the total number of listings and top percentages in each category.  

Amazon Sales Rank Chart PDF Download

It is generally a good idea to stay within the top 2% average rank for a category, and the top 1% if you want to move the product relatively quickly.  There are some exceptions to this that factor into the “other variables” section of the article.  You can also use the Jungle Scout sales estimator to estimate the number of sales a product listing will sell at a particular rank.

  • Have you considered other variables? Seasonal items, hard-to-find items, if Amazon is a seller but currently out of stock?

Before you determine if an item has a “good” or “bad” rank, it is important to consider other factors. Some items sell much faster during certain times of the year – such as toys during the fourth quarter.  A toy with an average rank of 100,000 is likely going to sell quicker in early December than a toy ranked 100,000 in June.  Although it varies greatly from item to item, many people would say that a particular toy rank can sell 5 – 10+x faster in the fourth quarter than the other 3 quarters of the year.  Similarly, an item that is hard to find might have a “bad” rank only because there are not many offers on Amazon or the price is very high.  We will get into this in more detail when we discuss your ROI/Profit Margin requirements. An items rank will typically fall if Amazon was a seller and has gone out of stock. 

  • Have you looked at the competition?

Many Amazon customers don’t understand that a listing can have multiple sellers on it – don’t make that same mistake! The number of sellers on a listing can potentially have a big impact on your sales velocity.  Let’s take 2 item with an average rank of 5,000 for example, item A & B.  Item A has 10 sellers on the listing and item B has 100 sellers on it.  If all the sellers were selling the item via Fulfilled By Amazon (FBA) and at the exact same price, there is a good chance that item A would sell 10x’s faster than item B.  That is a simple way to look at it, of course, because usually not all sellers have their product listed for the same price.  You can typically discount those sellers who have their item listed for a much higher price.  In general, if there are a small number of sellers on a listing you can afford a higher rank.

  • Does the ROI/Profit Margin meet your requirements?

ROI – Return on Investment, measures the amount of return on an investment relative to the initial cost.  In simple terms, ROI helps you determine if the sale was worth it! To calculate your ROI, use the following formula:

Revenue – Your cost of the investment

Your cost of the Investment

Let’s look at a quick, hypothetical example.  You spend $10 on a product, sell it for $20, and receive $15 after Amazon fees and any other costs.  That means that your revenue is $15 .  So to calculate your ROI, you would compute the following: ($15 – $10) / $10.  Your ROI on that buy was 50%!

Now, unfortunately, I cannot tell you what your ROI goal should be – you have to decide that. Different business models call for different ROI’s. Are you going to run your Amazon business like Nordstrom’s Lord & Taylor and require a high ROI, or do you like the J.C . Penney approach of accepting a lower ROI in return for more sales.  Your business can be be anywhere in between, the important thing is that you are considering your ROI, profit margin, and other important metrics when analyzing your Amazon sales.  Selling on Amazon is fun, but it is a business after all, and it important to think of it as one.

     * Don’t forget the fees involved with selling an item on Amazon.  Check out the Understanding Amazon Fees article to learn how to accurately determine an item’s costs.

  • Have you considered how this is going to impact your cash flow?

“Cash is king”.  Ever hear someone say that before? It is a good saying to remember when it comes to selling on Amazon.  According to some studies, up to 90% of small businesses fail due to poor cash management.  Don’t make that same mistake.  I have a bachelor’s degree in finance and spent time as a licensed financial advisor.  One thing I learned from being in the finance world is that most people do not like to look at the hard numbers when it comes to both personal finances and business finances. When you are considering whether an item is worth purchasing, it is crucial that you stop and think how it will impact your cash flow.

When you are trying to determine how “deep” (the quantity of an item you should purchase) you should go on a product, not only should you consider all of the information above, but you should ask yourself what would happen if you did not sell the item(s).  Even if you can buy 20, 50, 100 of an item and receive a good ROI, it may not be worth it if you are left with $0 while you are waiting for the items to sell. Are there other purchases that you are going to be missing out while your out of cash?  It’s also important that you set aside funds that can be used for supplies, unexpected expenses, and taxes.

In conclusion

It takes work and practice! Even after considering all these factors, the decision of whether or not to purchase an item is one that all Amazon sellers struggle with at some level.  The important thing is that you start selling.   Something, anything! Make the proper analysis of an item and get it listed on Amazon – you will be surprised how quickly things can sell when you make smart buying decisions.

International Shipping

Shipping Overview, Search Tactics for Your Arsenal and Q&A from Andy slamans on Vimeo.

International Shipping: Top Tactics for Smooth Sailing

Shipping is a major pain for consumers and businesses alike – nobody enjoys dealing with it. International shipping is no exception. When you’re new to private labeling and having your first product shipped from overseas, you’re probably adding stress on top of everything else.

Today we’re going to talk about shipping internationally so we can take some of that stress off your mind. Going in prepared will make shipping across the ocean a much less daunting task!

In this post, I’ll use the term “seller” to refer to the manufacturer of your product, and “buyer” when referring to you.

 

Incoterms

 Incoterms is the most common place to find shipping terms and definitions – it’s the Bible of the shipping world. It’s an awesome resource to keep on hand for whenever you’re unsure about something to do with shipping.

Incoterms are supposed to be followed by everyone, but there can be some ambiguity across cultures, and different manufacturers may have different interpretations. So if you’re ever unsure of what a term means or if you feel that the seller is using a term in a different way, ask for clarification.

For an introduction to Incoterms, check out Incoterms for Dummies – a very useful and entertaining article.

https://learn.flexport.com/incoterms-for-dummies/

It’s important to remember that Incoterms don’t only cover how something is shipped, but also who takes on the risk and responsibility.

 

ExWorks and Free-On-Board

Two common things you’ll see in Incoterms are EXW (or ExWorks) and FOB (or free-on-board). These terms are to describe who bears the risk and responsibility for shipping items.

EXW means that the seller is only responsible for ensuring that the goods are available at their premises. The buyer bears the full cost and risk of moving the goods from those premises to the final destination, which I considered to be “at the door.” The seller will make the goods available and prep them for you, but they’ll just sit there at the seller’s building until you arrange for them to be picked up and shipped to you.

FOB means that the seller is responsible for getting the goods on-board the ship and clearing them for export. After that, the buyer is responsible for all the costs and risks of loss or damage. So, for example: when you see FOB Shanghai, fill in the name of the port, and they’ll bring the goods to that port and clear them for shipment. Then you take over from there.

If you’re shipping EXW, a good company to use is Flexport. With them, you can arrange a door-to-door shipment – they’ll pick up the goods on the seller’s doorstep and drop it off at yours. And you’ll know up-front how much it’s going to cost, so you don’t have to worry about surprise charges or invoices. Make sure to ask how your goods will be packaged when they arrive – size, weight, type of box, etc.

Flexport also has a great blog for learning more about international shipping. You can check it out here: https://learn.flexport.com.

And remember: when in doubt, clarify! If you’re ever unsure of who is responsible for which pickups and what costs, just ask.

 

Modes of Transportation

There are two main modes of transportation:

 

  • Express Air, which is my favorite to use. It’s very easy to work with and it doesn’t require a customs agent to get involved. In my experience, this is also the fastest way to receive goods from overseas and most couriers will provide expedited service for an additional fee.

 

  • Air Cargo, also called air freight. This is also an air transport, but it’s not expedited and there’s no option to do so. This method isn’t used as often since it’s airport-to-airport transportation – this means that you’ll need to work with a customs agent and get clearances and approvals. If you decide to ship this way, make sure that you contact a customers agent before you arrange the shipment.

 

Finding A Customs Agent

A common question is when to contact a customs agent or a freight forwarder. The best time to do this is after you’ve located a product and negotiated with the seller, but before you complete the purchase and pay for them. This gives you an idea of the cost and lets you prepare for any problems that may arise.

An exception to this is if you’re sourcing a product that may have special importing requirements. A good example of this are wooden products, which need to be put in a warehouse for a certain number of days to ensure there are no bugs in the items. If you have a product like this, then you’ll want to contact an agent earlier in the process – they may even tell you to abandoned the idea altogether, which you’ll definitely want to know before you’ve paid!

Finding an agent is as easy as using Google: just do a simple search for “customs broker in (city).” You can also check out the Customs And Border Patrol Customs Broker Locator using your local city or shipping port: http://www.cbp.gov/trade/basic-import-export.

If you use Flexport, they’ll handle both customs and freight forwarding. Otherwise, ask your customs agent if they work with someone. Many of them have freight forwarders that they like to work with.

 

Booking The Shipment

When it’s time to book your shipment, start by asking the seller for the lead time on your product. If it’s about 1-2 weeks, then go ahead and book your shipment before it goes into production. If the lead time is longer, then wait until it gets closer before you book. If you’re not sure what to do, contact your customers agent and ask them whether you should book or wait.

When it comes to air and sea freight, shipping prices can fluctuate wildly – your agent may advise you to hold off on booking a shipment if they expect the prices to drop soon. They can also advise you on whether you should ship by air or sea. If you ship by sea, you can sometimes save up to 70% on shipping, but it will take much longer for your goods to arrive – usually up to a month. Air shipments are much faster – usually taking about a week to arrive – but also more expensive.

So if you’re sourcing a time-sensitive or seasonal product, you’ll want to look at air freight. If you’re not in a hurry, sea freight may be right for you. If you’re unsure of which method is right for you, your schedule, and your budget, then ask your customs agent for help.

 

Summary

 Hopefully this blog post gave you an idea of what to expect when shipping your products from overseas. Internationally shipping and freight may seem overwhelming at first, but with experience and good preparation, you can make shipping your product to sell on Amazon as easy as ordering a product you want from Amazon!

How to Negotiate

How To Negotiate With Chinese Suppliers

 

Negotiation is an important skill to learn if you want to be successful when you private label products on Amazon. Getting a good price on a product can be a make-or-break factor in your business, so you have to know how to work with your supplier on getting a good deal.

If you’re sourcing your product from Alibaba, you’re probably going to be working with a Chinese supplier. Negotiating with a supplier in China is not the same as you would try to talk down a salesman on a car. The business culture in China is very different than in the United States. Understanding and working with this culture is the key to successfully negotiating the best deal on your product.

 

Trust & Relationships

Trust is the most important part of doing business in China. Whether it’s a contractual agreement or a simple handshake, suppliers in China will expect you to follow through on what you promise to do. In the United States, it’s common to tell someone, “Hey, I’ll give you a call tomorrow!” and forget to actually do so. Saying something like that in China is the same thing as making a promise to that person: if you say you’re going to call someone the next day, do you absolute best to honor that promise.

The Chinese emphasis on trust in business relationships is because they are looking for long-term relationships rather than one-time deals. The thousands of units you want to buy from them is just a byproduct to them. They want to learn more about who you are, what you believe, and how trustworthy you are so they can do more and more business with you in the future. And that all takes time.

In the United States, we’re used to doing whatever it takes to get to our end goal. We want to solve problems, knock things off our to-do lists, and get stuff done. It’s very different in China. Of you want to get the best prices on your products, you need to prepare for a longer and more drawn out negotiation process than you’re used to. It may feel like your supplier is wasting your time, but they’re not: they’re focusing on the big picture and just want to feel comfortable working with you.

So try to get to know your supplier. Ask them about Chinese New Year. Find out where their company is and ask them about their city. Make it a personal relationship without probing too much. Be kind and make sure that if you say you’re going to do something, you do it.

 

Compromise & Cooperation

Chinese culture is based on collectivism: the goals of the group are more important than the goals of an individual. If a farmer has a tractor and nobody else in the village does, the farmer will share his tractor with the other farmers of the village. There’s a lot loyalty within the community and between each person.

 

In the United States, we’re usually very competitive – we’re all about winning. So we’re trying to end up on top of every situation. In China, they’re more interested in making deals where everybody wins. It’s much more based on cooperation instead of competition.

 

Part of this is due to Confucius teaching about respecting the others. Chinese suppliers take pride in their work and they’ll try to please you however they can. They expect for you to do the same so you can both reach a mutually beneficial agreement.

 

This means they’re not as upfront as we’d like them to be sometimes. Saying ‘no’ seems rude to them, so a ‘yes’ may not always mean they’re in agreement with you. A ‘yes’ from them means that they acknowledge what you said – whether or not they agree with it. Don’t treat a ‘yes’ like you would in the U.S. You’ll want to clarify by asking the question again in another way. Recap what they said and ask them if that’s what they intended to say.

 

For those of us in the States, this can seem confusing or frustrating – maybe even like we’re being fooled. Just remember that they’re trying to treat you with respect and to avoid upsetting you. They take a very layered approach in China. Answers can depend on context, how you ask the question, and the words you choose when you ask. You can get different answers to the same question, so make sure to clarify their responses. It’s all about working with them on the deal – they’re looking out for your best interest, and you need to look out for theirs.

 

Summary: Patience is the Key

All of this may sound like your negotiations will take a long time, and that’s probably right! You have to switch mindsets from the sprint to the marathon: you’re in it for the long-haul, not to just nail a deal and leave. Over time, as you get to know your rep better, the process will get much more efficient.

 

Chinese culture is about harmony and cooperation. Be patient with your supplier, focus on long-term relationships, and you’ll find a lot of success.

 

Practical Tips

 

  • Ask few questions per conversation. Asking more than 2-3 questions at a time to a non-native English speaker can be confusing or overwhelming to them, which may complicate the answer you receive.
  • Use simple English and write as if you’re speaking with a 3rd to 5th grader. Again, English is not their first language, so using smaller words will make communicating much easier.
  • Don’t use slang. Most suppliers won’t know what you’re talking about when you call something “wicked cool” – they may think you mean it’s evil and cold.
  • Try to talk slowly and clearly. Comprehend a language that’s not native to them is hard enough, let alone one that’s coming at them too fast.
  • Build up a personal relationship, but do so gradually. Start with things like where they went to school (university) and how they began working for their company. Remember that age is not a rude subject for them to ask you in their culture. Avoid asking about religion. 96% of people in China aren’t religious, so you don’t want to be preachy.

Private Labeling: Does Creating a Brand New Product Make Sense?

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In my private label courses, I always tell my members not to prototype or create new products. I’ll have students come to me with a great product idea that they want to invent, but they don’t understand just how much work is involved. It’s an incredibly complicated and difficult process that beginners should not be trying to take on.

To understand exactly how difficult it is to manufacture new products, I’m going to describe some of the steps involved in going from product idea to invention to sales.

Step 1: Getting a drawing made

When you contact a manufacturer to make a new product for you, they’re going to need a document that describes the exact specifications of the product you want them to make. You can’t just draw a stapler on a napkin with your ketchup at McDonald’s. You’ll need something with incredible attention to details.

So first you’ll need to find someone who can take the idea in your head and put it to paper – preferably someone who has done concept art for products before. Then you need to take the work from that artist and bring it to another artist: one who can turn the concept art into a computer-aided design, called a CAD drawing. This is the digital version that the manufacturer will use to create your prototype, so the specifications in the design need to be precise.

These two concept designs – the concept art and the CAD drawing – will likely put you back thousands of dollars right at the start, and you still won’t have a product to show for it.

Step 2: Filing a patent application

Whenever you create a new product, you’re going to need to protect yourself and your product from theft. This involves working with a lawyer to draft an application for a patent. I’m sure most of us know how expensive it is to even sneeze inside an lawyer’s office, so getting this application prepared and filed is going to increase your starting costs even more. Aside from buying your lawyer’s new car, you’ll also have to pay an application fee. These fees can range from anywhere between $140 to $18,000 depending on the type of product you’re making.

Patent applications are a time consuming process too, which means you’re going to have an even longer wait to see a return on your large investment. And you still won’t have a proof of concept for your product.

Step 3: Prototyping and testing your product

Once you give your manufacturer your CAD drawing, they’ll be able to make a prototype for you to play around with. Usually they’ll use something like styrofoam to let you figure out the shape and feel of the product. You’ll also have to work through numerous test versions of the product to work out minor details – which adds more even more time and cost to the project.

But what if the manufacturer doesn’t have the equipment necessary to make your product? This is likely to happen with a new product. Manufacturers go through a process called “tooling”, where they make the molds and equipment needed to make your custom design.

If you have a simple product, this can be as “low” as $10,000. If your product is more complex, tooling costs will increase quickly.

If you’re working with a manufacturer in China, this process will be even slower since you’re sending prototypes and feedback back and forth overseas.

Step 4: Creating your packaging

Once your product is ready you’ll have to design and create your packaging, and this is a much more important step than you may realize. A benefit of private labeling an existing product is that the demand for it already exists and people are already looking for it. You don’t have those advantages with a brand new product. You’re going to have to get people’s attention.

If you want your new product to stand out, you need really good presentation and really good packaging. You want your product to catch someone’s eye and make them say “I want that!” Preferably out loud in a crowded place where other people will notice it too. You need to fight for every bit of attention you can get.

This all means that, aside from the normal costs of packaging, you’ll have to get another artist involved who has experiencing in package design and can make something really stunning for you – which continues to add to your starting costs.

Packaging and presentation is everything when you’re the new kid on the block – or, rather, the new product on the shelf.

Step 5: Promoting your product

Even if you have the greatest product ever made, you still need a platform for people to find it and buy it. If you’re selling your product through your own website, you’ll have to hire a company that can generate search traffic and promotion for your page, which can cost thousands of dollars per month. The old saying of “if you build it, they will come” isn’t always true – you need to pay to make people aware that it even exists.

Thankfully there are sites like Amazon that make this much easier than it used to be, but you’ll still have an uphill battle ahead of you. If you private label an existing product, people will already be searching for it on Amazon. With a brand new product on the market, you’ll have no starting traffic to generate sales, and you’ll have to work even harder to get traffic flowing to your product listing.

Step 6: Getting in stores

Lastly, what if you want to get your product in retail stores? That’s a challenge that can take years to accomplish. Major retailers won’t give you the time of day unless you’re already selling in substantial volume. And before they’ll put your product on their shelves, you’ll need to be 100% sure that all of your ducks are in a row. If you forget to trademark your product or renew a legal filing, they’ll drop out of the deal right away. It’s too much of a headache for them to pull your product from their shelves because you’re in the middle of a lawsuit over your trademark.

This is assuming that you can even get in contact with a retailer like Walmart or Target in the first place. If your product is selling really well on its own, they may be willing to approach you first. But in the time it takes for that to happen, you could have launched several private label products providing multiple streams of revenue.

Estimating Costs

So how much does it cost to launch a brand new product from invention to sales? It will vary depending on the type of product you’re making, but expect to pay at least $15,000 or $20,000 minimum just to create your product – that doesn’t include post-creation expenses.

I’m not saying it’s cheap to get started in private labeling, but when you compare the costs of the two versus the difficulties involved in inventing a new product, private labeling just makes more sense: you can pick a product you know is selling and get it launched much quicker for much less than you can with a custom product.