Working With Chinese Suppliers For Your Private Label Products
How do you find the right Chinese supplier (or any country) to make your private label product to sell on Amazon? What are best practices to be aware of when connecting, negotiating and ordering from suppliers. We cover these topics and more in this week’s episode of The Amazon Seller Podcast.
Best Practices When Working With Chinese Suppliers
When using Alibaba.com, we recommend that you check the following search filters:
- Gold Supplier – We recommend that you always check the gold supplier box when searching for suppliers on Alibaba. Gold suppliers pay for that status on Alibaba and it gives some legitimacy to their business. Using a supplier that has been gold supplier for at least 3 – 5 years helps protect you from potential scam issues.
- Assessed Supplier/On-site Check – This means the supplier/manufacturer has been assessed and has documents showing that they have a central place of business. In the past, some companies would falsely claim a place of business. Assessed supplier filter criteria helps to avoid this issue.
- Trade Assurance – “Trade Assurance is a free service by Alibaba.com that’s designed to help create trust between buyers and suppliers. Trade Assurance helps buyers in the event of shipping and quality-related dispute.” This is a very good service to use, especially if it is your first time ordering from a supplier. This service basically holds your payment in escrow until the goods are completely as agreed upon. You can read more about Alibaba Trade Assurance here.
Getting Samples From Your Suppliers
We always recommend getting samples as soon as possible when you find a supplier for potential private label products. Samples are your way to determine if the product is going to meet your needs and if the supplier is worthy to work with. Many of the Amazon sellers who have had a negative experience ordering from Chinese suppliers either did not get samples, or did not get an inspection done on their products (which we talk about below). Even if you have worked with a supplier previously, we still recommend getting a sample for any new product orders. You can expect to pay anywhere from $25 – $125+ for samples. Most suppliers accept PayPal, and many reimburse the cost of samples if you end up placing an order with them.
Compare Several Chinese Suppliers If Possible
We recommend that you try to compare several suppliers if possible. Many sellers choose the first supplier that they contact, not realizing that the quality may be inferior to another manufacturer. One of the best ways to compare suppliers is to order samples from both of them and then compare product quality, communication time and delivery time. If a supplier doesn’t do a good job communicating and delivering the sample, then it is probably a good indication that they aren’t going to be good to work with.
Negotiating Techniques With Suppliers
We only covered a few of the many negotiation techniques you can use. One that we mention is trying to get a lower price by pitting the suppliers price against each other. “Another supplier is offering me this product a $xx.xx per unit, are you able to match that?”. You can also use this strategy to try to get a lower minimum order quantity when first ordering.
Getting Logos & Packaging Designs Made With Chinese Suppliers
Many sellers are confused on who makes the logo and packaging for their private label product. Most suppliers are able to work with designs to add them to your product and packaging, but typically you are going to need to provide them with the actual design. Websites like fiverr.com and 99designs.com are some starting places to look to get designs made. As a warning, neither of these websites are perfect and sometimes they can be frustrating to work with. Communicate with your supplier what they need from you to get logo and packaging made and the formats that they prefer.
Third Party Inspections
We highly recommend getting third party inspections done on your products. As mentioned above, one reason sellers have negative experiences with Chinese suppliers is because they do not get inspections on their products. This is the typical sequence of the inspection process:
- Inform your supplier you will be getting an inspection on products after production upfront. (This also acts as an additional quality control). Also negotiate with them what will happen if units do not pass inspection and who will pay for fixes.
- Reach out to a third party inspection company in China to work with. Average cost of third-party inspection services are $100 – $200. It also depends on how many units you get inspected.
- Choose whether you want to have a sample of the products inspected or the entirety of the units.
- The inspection company will travel to your suppliers location, inspect the units and provide you with a detailed report (sometimes 30+ pages of details!)
- If everything looks correct pay the rest of the deposit to your supplier. (Most of the time you will pay 30% upfront and then the remaining 70% after inspection passes).
Don’t miss the next episode of The Amazon Seller Podcast.