“How To Source Your Private Label Product In China, Without Getting Screwed By Alibaba Suppliers.”
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Top Seven Sourcing Tips for Amazon FBA Businesses
Since moving to China in 2013, I’ve sourced over 1,000 products from hundreds of suppliers.
However, it’s not always been easy. That’s why over the last six years I’ve learned so much
Today, to help you avoid the mistakes I’ve made, I’m bringing you my Top Seven Sourcing Tips for Amazon FBA Businesses. These are simple yet immensely effective expert sourcing tips, designed to help you source all the way to success.
1. Always Use a Product Inquiry Sheet
If you’ve already started your Private Label Business and have been emailing suppliers on Alibaba, I bet you’re familiar with this situation:
You ask a supplier five simple questions. But two months later you’re still freefalling in a vicious circle of emails. And no, you’re first five questions have not been answered
It’s common. It used to happen to me all the time.
If you don’t communicate with Chinese suppliers properly, you will always end up going back and forth, never getting the answers you need. It’s a waste of your time, and stops you launching your product quickly, ahead of the competition
But this doesn’t need to be the case.
For more effective communication with your suppliers, stop sending endless emails and start using a Product Inquiry Sheet today.
What is a Product Inquiry Sheet?
A Product Inquiry Sheet is a simple document that lists all of your product requirements, and questions for potential suppliers in one place. It’s easy to read, professionaly and gets you the answers you need
If you’ve never used one before, or are looking to see how you can improve yours, sign up to my Free Online Class. I’ll send you my Product Inquiry Sheet template for free.
Realise the Potential of the Product Inquiry Sheet
To realise the full potential of the Product Inquiry Sheet, you need to make sure you’re using the right sourcing lingo and that you’re asking the right questions
Remember, Chinese culture is dramatically different to Western culture. This can make asking the right questions difficult.
To illustrate what you’re up against, I’ve recounted a recent experience
A Difference in Comminication
Running my own Private Label Business in Hong Kong, I often find myself working in coffee shops. As you will have guessed, to to this successfully, I need access to wifi.
Recently before sitting down to work in a coffee shop, I asked a Chinese waiter whether they had wifi. He confirmed that the cafe did, so I set up my laptop and tried to work. However, it wasn’t long before I discovered that while the cafe did have wifi, I couldn’t connect to the internet.
I asked the waiter again whether the shop had wifi. He said yes. I then told him that I was unable to connect to the internet and that it must be broken. He nodded, and told me that the wifi was broken
The important lesson here is that you need to be really specific when asking Chinese people questions.
Despite asking the waiter about the cafe’s wifi, and the waiter knowing that the wifi was broken, he didn’t think it was important to tell me everything.
It’s the same when you’re talking to suppliers. You need to make sure that if your product requires something specific, let’s say a customised Private Label Business branding, you don’t ask the supplier whether could do it. You need to ask them how they will do it and how much it will cost.
It’s difficult and I admit, even after living in China for six years, I don’t always ask the right questions.
Remember, if something doesn’t seem like it’s been explained properly, or your working on assumptions, it’s vital that you get them clarified.
2. Always Use The Right Sourcing Steps
When sourcing your first product, it’s easy to get carried away and to go with the first supplier that matches your criteria.
However, if you do this you will not get your sourcing right. And if you don’t get your sourcing right, it’s likely that your product will fail.
To get the sourcing right, you must always follow the right Sourcing Steps
Here is how I do it
- Get a lot of quotes. Five or ten quotes isn’t enough. To understand the market and what the most competitive prices are, you need to get at least twenty quotes. Remember, you can find very good quality products that are cheap, and very poor quality products that are bad, so get quotes from a wide range of suppliers.
- Get simple samples. Before ordering customised samples, order simple samples. This is the only way you can assess the quality of suppliers’ products. Don’t order lots of customised samples, simple samples are all you need to complete an initial quality check.
- Make your own supplier shortlist. Once you have quotes and simple samples from each supplier, make a supplier shortlist. This will help you develop of shortlist of four or five suppliers.
- Start negotiating on price. Once you have a shortlist, start negotiating with your chosen suppliers on price. You always need to negotiate with suppliers to get the best prices. You won’t without a negotiation. For more advice on how to negotiate with Alibaba suppliers check out my guide.
- Get customised samples. When you’ve found two or three promising suppliers, order and review their customised samples. Getting customised samples is a long process, which is much easier with a limited number of suppliers. However, it’s important to have more than one supplier that matches your criteria, in case you need a back up.
Find out more about how not to get screwed by suppliers on Alibaba here.
3. Change Your Mentality About Suppliers
There are plenty of horror stories about Chinese suppliers. If you’ve done your research, you may have developed a negative opinion about your potential partners.
However, many of them are incredibly reliable. More importantly, as your supplier they are your business partner, so it’s important that you develop a healthy relationship with them.
Don’t think of suppliers as your enemy, and avoid entering negotiations on a defensive footing. If you go into the relationship thinking that they will screw you over, it won’t work.
When discussing with suppliers, keep your tone friendly and don’t forget, a lot of the time they want to work with you. They also want you to succeed, because they want your repeat business.
4. China is Culturally different to the West
I’ve said it already, but don’t forget it; China is radically different to the West.
When you are working with a supplier, you need to remember that your contacts will not speak English as their first language, and that they are human and will sometimes make mistakes.
Now, this doesn’t mean that you should let critical mistakes go unpunished. However, if you are faced with a small mistake from a supplier, try not to get too annoyed. Instead praise what the supplier has done well and ask them to make a few changes to rectify what went wrong.
It’s not obvious, or always common knowledge, but Supplier’s Sales Representatives are normally from the Chinese countryside. They are also often very young, and have had dramatically different life experiences to you. Because of the way businesses function, they may not have even seen the product that you are sourcing, so don’t be too harsh to them
While it’s easy to get focussed on your product, a helpful and encouraging demeanor will normally get you better results that a confrontational attitude.
We all want a cheap product with a fast delivery, but sometimes it takes some patience to get there.
5. Get a Sourcing Agent
I’ve said this before and I’ll say it again, the most successful Amazon FBA Sellers work with Sourcing Agents.
To get the best prices and find the best suppliers with the least amount of effort, working with a local Sourcing Agent is the easiest way to do it
Suppliers always give better quotes to locals, they also find it easier to speak to someone in their own language. Most importantly, Sourcing Agents cost less to hire than they will save you. That means that you can pay them with the money you save and still make a bigger profit.
Top Tip: When ordering a lot of simple samples, Sourcing Agents can save you money by bundling all of your samples into one shipment. They can also clearly index the shipment’s contents, helping you review the products quickly and accurately.
6. Make Sure You Have A Backup Supplier
In life, sometimes things just don’t go to plan.
The same logic applies to your supplier.
You may have found the perfect supplier, but sometimes events happen that are completely out of your control that will put them out of business.
That’s why you need a back up plan.
Don’t let this put you off importing products from China, but recently the Chinese Government closed down over 10,000 Manufacturers overnight. There wasn’t any warning. It was because all of these factories did not meet new environmental regulations.
While it’s an unlikely situation, this could happen to one of your suppliers. So always make sure you have another supplier waiting in the wings and never pay for all of your product until it has shipped.
7. Quality Control Your Products before they Arrive
Even if you’ve already reviewed a customised sample from your supplier, make sure that you do a quality control on your final products. If you leave this until your products are shipped to you, or your Amazon Fulfillment Center, you must be prepared for the consequences
While it may seem like it’s easier to skip this process and just check the goods when they arrive, in my experience, one out of ten orders will not meet your requirements.
That’s why if you’re not living in China, it’s always best to get a third party quality control on the final products before they ship.
Think about it.
If you ordered pink water bottles but when they arrive at your door they’re green, what are you going to do?
Realistically, you’ve only got two options:
- Accept the products as they are and risk not selling them.
- Send the products back to China.
Neither option is ideal, and both will cost you money.
Shipping products back to China is not easy, and most of the time, suppliers will not rectify the mistake if they have recieved the full payment. It also takes a lot of tim
This means that your product will run out of stock, damaging the ranking of your listing, or in the worst case scenario, the competition will discover your product and get it to market before you
That’s why you should always make sure your products are checked before they are shipped to you.
If you are working with a local Sourcing Agent, get them to do it. If you aren’t, use a compnay like QIMA. It’s an investment that you won’t regret.
Start Sourcing Successfully
So, what do you think of my Seven Top Sourcing Tips? Have these worked for you
I always want to hear what other Amazon FBA Sellers have to say about their experiences when sourcing a reliable supplier.
Share the knowledge and let me know what you’ve found works when finding a reliable supplier in the comment section below.