10 Importing Myths – from China
In this episode we discuss 10 Importing Myths. Myths about getting your products made, produced overseas, in China typically, and brought over to sell on Amazon. If you don’t know the truth about these importing myths, you might get burned. Here’s how to avoid mishaps when it comes to getting your products to market.
Importing from China can be a challenging thing to tackle. The Amazon seller marketplace is growing, and we have noticed that importing myths are on the rise. There are fears associated with myths and it’s primarily because what we don’t know, we become afraid of. So we are here to debunk those importing myths so that you can feel at ease importing your next Private Label!
Myth #1 – The Chinese Government will send an inspector to the port and will block your Private Label goods if they are below a certain quality standard.
The misconception regarding this myth is because there actually are times the government may come to the factory. However, they are not looking for the same things we are looking for. For example, one factory indicated to us that there will be a slow down in the manufacturing of a product because of a recent injury at the plant. This was an issue of safety with glassware products.
So the government may get involved when they have safety concerns, or environmental concerns. But, the quality standards of your product will not be called into questions. Quality standards are the responsibility of the Private Label seller who is working with the manufacturer. Sellers must ensure their product is properly produced. We do recommend a third-party inspector to handle all of your quality assurance needs.
On the US side, our Government is concerned with proper certifications and clearances for regulations according to FDA standards. Our government also wants to make sure to avoid potential liability on a harmful product.
Myth #2 – All companies that are listed on Alibaba or that are exhibiting at Trade Shows are manufacturers.
When you are on Alibaba, a lot of times people think that everyone listed on Alibaba are manufacturers. What is true is that 50% of companies are actually trading companies, which isn’t necessarily a bad thing.
We believe that trading companies may have better connections and be able to get lower prices than we could. Their communication abilities are also better than some manufacturers. We like to think of trading companies as the ones who can give us great service. They will know which factories are the best ones to work with. They can help us navigate the ins and outs of manufacturing and quality issues as well. What it really comes down to is the quality of the product, the margin that you have on that product and the communication ability that you can gain from the trading company.
If you look on the Alibaba site, there are descriptions that tell you whether you are dealing with a trading company or a manufacturer. The next clue you can look for is if the company takes a while to get back to you on a price. Trading companies are negotiating on your behalf, whereas the manufacturer will get back to you sooner. The best way to find out also, is to ask them outright. You may not get a straight answer, but it is OK to ask to know who they are.
We have also discovered that the manufacturer may play a small role in the trading company–so it may not be an either, or. For example, the manufacturer may make a certain part of the product. But then they will partner with the trading company to import another part of the product. They will do this in order to create a bundle or a kit to sell to you.
Myth #3 – The supplier we contacted told us that they were ISO 9001 certified by SGS and they work for Disney. That must mean we are safe to buy those products and sell them on Amazon.
Assuming that what the supplier is telling you is true, Disney owns the license so they may be getting products made by someone who has a license for Disney. The license owner can then go to a factory and produce a product that is Disney-owned. But that does not give anyone else the right, who doesn’t own that license to make that product. The factory may show you samples they have made, such as Disney’s licensed products. And it is very possible that they have made those products. But those products were made for a license holder so it doesn’t give you the right to sell those products unless you own the license.
Our advice to you is to not even consider buying products at all that are brand named on Alibaba or AliExpress. Just because it is on the site doesn’t mean it is a good idea to sell that item. The whole idea behind Private Label is to develop and sell your own brand.
Myth #4 – You don’t always need a sample. If the manufacturer says you can trust them, then a sample is unnecessary.
Every time that you order a product, you want to get a sample. You want to get a measuring tape out to measure it. Make sure you feel the product, and make sure that you fall in love with that sample. One member in our course experienced this with a sales representative who insisted that a picture of the product would be enough rather than sending a sample. Most likely, the harder the sales rep is trying to convince you that you don’t need one, probably means that you do. So don’t let them talk you out of it.
It is simple to order a sample. DHL Express and FedEx Express can get you a sample sent in 1 week. Sometimes a manufacturer will insist that they have their own QC (Quality Controller) so you won’t need to inspect the product yourself. You need to be aware that getting a sample means slowing down the process for the company getting paid because they want a fast turnaround. Pausing production to send you a sample might be a concern for them. However, you will lose money if the product is not good quality. So do not pay full price for your product if you haven’t inspected it.
Myth #5 – All we need is a good factory to act as our partner. They will see that their interest is to give us high quality at low prices.
This is a myth, but it doesn’t have to be. We have had experiences with great factories who have delivered top-notch products every single time. Not only that, but these factories see us as partners and want to make a long-term investment with us. Why? Because it benefits them to grow their company as much as we want to grow ours.
However, this is not typical so you should not go into a relationship with a factory expecting a partnership of some kind. The factory may work with you on an order, but then if they lose you as a customer, they may not care about you down the road. If you run into quality issues, a factory may make excuses and may not even offer to reimburse you for losses.
Myth #6 – All we need is a good [sourcing] agent who will find good suppliers and then follow up on our orders.
The advice we will give you regarding sourcing agents is this:
- Get into the practice of contacting the manufacturer or the trading company yourself. That is the business model that we practice. Just in case the agent ends a relationship with you, you can still contact the manufacturer regarding your products.
- If you have to use a sourcing agent, do it only occasionally. This might be the case if you are having difficulty with finding a product.
- It is difficult to know, when you use a sourcing agent, whether that agent is charging more per piece than what the actual cost should be. So you may end up paying more per piece.
- The communicatiorn can be a little more labor intensive, because the agent has to go to the manufacturer, then the manufacture has to communicate back to the agent before it gets back to you again.
Myth #7 – Most companies that export from China are middle men and once we find a company that offers lower prices, it means we have found the manufacturer.
Just because the price is lower it doesn’t mean it is the manufacturer. It can be a trading agent, which, again as we have shared already, is not a bad thing.
Myth #8 – We need to buy from factories, because it will allow us to save more money.
Our recommendation is to look around and ask upfront who they are. Buying from the manufacturer is not a necessity and you may develop a better relationship with a trading company.
Myth #9 – We can buy anything directly from China. It is like a supermarket!
This is very far from true. While Alibaba does seem to carry anything you can image, there are some products you are not going to find on Alibaba. Some products on Alibaba have manufacturers in Australia or India. So you may not find what you are looking for in China or all on Alibaba. This is when you want to reach out to a sourcing agent to get you in contact with companies in Pakistan or India. Trade shows will also help you find those companies that you are looking to begin with private label. Even some US companies will help you private label your brand. It might also be beneficial to contact a factory that makes similar items that you are looking for to see if they would produce an item for you.
Myth #10 – Chinese factories already work for European and American customers, so they already know the safety standards, packaging requirements and regulations. It means we can trust them, right?
This is absolutely false. The responsibility for packaging, shipping, etc. is 100% the responsibility of the importer, which is YOU. The safety standards are your responsibility. Using a customs agent is essential. Particularly with health/nutrition products and supplements, a customs agent allows you to avoid the FDA violations and will get you the correct certificate.
So there you have it! These 10 Importing Myths that we promised to debunk them for you, so hopefully you no can feel more confident with the importing process. Knowing about these 10 Private Label Importing Myths will definitely give you an edge and make you more knowledgeable as you begin to become more strategic with your Private Label business.
You can learn more about importing strategies and tips by attending our Amazing Freedom Private Label Retreat. We have 5 spots left!! October 6-9, 2017 in Orlando, FL.
And if you haven’t yet, please join our Amazing Freedom – Amazon Sellers Facebook Group and join an ever growing wonderful group of sellers just like you!