“How To Source Your Private Label Product In China, Without Getting Screwed By Alibaba Suppliers.”
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My Chinese Supplier HACK for Amazon FBA – A True Story
Today I’m sharing a personal story about how I started my Amazon FBA business and the hack that made it a success.
If you’re struggling to launch your Private Label Business, I hope you’re inspired by my story.
Amazon FBA Selling is difficult. However, if you’re brave enough to use creative new techniques, apply expert advice and dedicate yourself to your business, you too can succeed when importing products from China.
How It Started
These days, I’m proof that you can own and operate a successful Private Label Business. Over the last three years I’ve shipped over 1,000 products and I’ve proved to myself, my friends and my family that Amazon FBA Selling can be an incredibly lucrative business.
However, I’d be lying if I claimed this has always been the case.
My journey started in 2013, when I moved from Germany to China.
I relocated to start an internship, which quickly became a job at a big corporate business.
Initially, I enjoyed it. It was incredible to be able to experience Chinese culture uninhibited, with the luxury of a steady income.
But the veneer of life in the corporate world quickly wore off, and I began to resent the life I was leading
I hated the commute.
I couldn’t stand how my boss dictated how I should work.
Most of all, I felt like I was sacrificing my potential for someone else.
I worked long hours, didn’t see my girlfriend as much as I wanted to, and all to make someone else rich.
It wasn’t the life I wanted
I’m sure a lot of you have experienced the same feelings. That you’re trapped in your job and have no control over your destiny.
So I quit.
No Money. No Prospects
I didn’t quit my job without a plan. But even with a plan I was unprepared for what happened.
Over the first two years I set up a range of companies in China, but success eluded me
Eventually, after a number of failed ventures I found myself broke.
I spent a long time living on my savings and investing money that I wasn’t making back.
I was working long and unsustainable hours yet I wasn’t even able to take my girlfriend out, because I didn’t have the money or the time. My parents were also becoming increasingly annoyed that I’d quit my job
At the lowest point I was almost $250,000 in debt
It was a really bad situation.
I thought I’d lost my way, but then I started to get somewhere.
Over a two month period, I kicked off my Amazon FBA Business
With a lot of work I found the perfect product, then spent two months trying to find the perfect supplier to match.
Finding the right supplier was where the problems started.
I found myself contacting suppliers and engaging in endless email exchanges, where they would only come back to me with limited answers, making it impossible for me to assess whether they were the right people to make my products.
Even worse, potential suppliers were returning quotes for products I’d never ordered, and I received boxes of samples that looked nothing like the pictures I’d been sent.
It was a nightmare.
But I persevered and eventually found a supplier that met all of my requirements. It was at just the right time because I was running out of money
I thought my problems were solved. But I was wrong.
An Email at 2:00AM
I remember the night that everything went wrong.
I was sitting at my computer at 2:00 AM, while my girlfriend slept in the other room.
My inbox pinged with a new message.
Immediately I started to sweat, my stomach twisted, and I was overcome with the feeling of failure.
What caused it?
My supplier had updated their quote.
The message read that because I’d customised my product so much, the costs of manufacturing it had increased substantially.
The price per unit went up, as did the minimum order quantity.
I knew I couldn’t afford the increase.
As my savings were nearly out, I also knew that I didn’t have time to find another supplier
Finally, I was going to have to face the music. I’d have to go back to my job.
Dejected, I left my computer and went to bed.
Waking up the next day though, I felt less defeated.
I knew that I still wanted to make my Amazon FBA Business work
To take control of the situation, I called up my mentor, the guy who’d got me into Amazon FBA Selling in the first place
I was frustrated, but I swallowed my pride and asked him for his advice. I explained the challenges I was facing, and how I didn’t understand how he’d managed to source over a million products, when I couldn’t even source one
He then revealed to me his most important lesson:
Successful Amazon FBA Sellers don’t source their own products.
No, his success was built through employing Sourcing Agents, who went out and found his products, collated hundreds of quotes and samples on his behalf and negotiated directly with factories for him.
I was shocked and if I’m honest, very sceptical.
At this stage, having spent a significant portion of my savings, how would I be able to hire freelancers to find products for me?
More importantly, how was this going to change anything? Surely I could speak to a factory or a trading agency just as well as an Agent could.
He assured me that as long as I found the right Agent, I’d be able to trust them. More, that they could achieve local prices, which even though I spoke Mandarin, I would never be able to achieve
He was right. I soon discovered that my reservations about Sourcing Agents were completely misplaced.
Finding My Sourcing Agent
Trying to help, my mentor organised a meeting between me and a Sourcing Agent. While I still had reservations, I was willing to try anything, so I agreed to meet them.
Nancy was great from the outset.
I spent an hour telling her about my product, the changes I wanted to make and what I could afford.
It surprised me, but her first reaction was blunt. She told me that I’d never be able to get the product customisations I wanted for the price I could afford.
In the first ten minutes of our meeting, I learned that the product that I’d been chasing for the last two months was completely unrealistic.
She then spent the rest of our meeting explaining how I could adapt the logo, the packaging and make a few tweaks to the product, which would make it into something that I could afford, and customers would still want.
Then she offered to get some quotes, request some samples and draw up a list of potential suppliers for me. I didn’t have anything to lose, so I agreed.
Three days later, Nancy sent me a list of suppliers with quotes.
The quotes were so good I thought something was wrong.
But only a week later, Nancy brought me samples from the suppliers to review and I was reassured that they were good quality.
Nancy then met with a lot of the suppliers, gave me her honest (and informed) opinion about whether they were reliable or not, and created a top five list for me.
She made the process easy, arranged a quality control, negotiated with the factory and when things went wrong at the factory, she solved the issues for me.
Since then, Nancy has been my secret for getting the best prices.
Paying Your Sourcing Agent
The only reason I wasn’t worried about money at this stage was because I learned something very important about how Sourcing Agents work.
Sourcing Agents work on commission.
That means you only pay their fee after they’ve sourced your product for you.
As they are able to get local prices, they can achieve price reductions of 20% to 30%, which shies in comparison to their standard fee of just 5%.
That means that when you use a good Sourcing Agent, you can actually make money, because you will recover at least 15% of the costs you would have otherwise spent.
It’s also a great use of your time, because with just an hour long meeting, you can achieve better results than you are to in 40 hours sourcing on your own.
By saving so much time, I’ve managed to source more products, cheaper and faster than ever.
You Need a Good Sourcing Agent
Since working with a Sourcing Agent, my Private Label Business has gone from strength to strength.
That’s why I recommend that all Amazon FBA Sellers try working with a Sourcing Agent at least once.
Forget your assumptions about Agents, they’re some of the easiest people to work with and it’s the reason my business has succeeded
Find out exactly how to find the best Sourcing Agents, by singing up for my free web training class, where I share everything I’ve learned over the last six years.
A Sourcing Agent is what made my Private Label Business, but how about yours? Are you more of a do it yourself kind of person, or do you want to try out a Sourcing Agent yourself
Let me know in the comments below! I’d be really interested to know your experiences.