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11 Things You Must Know Before Your First China Sourcing

Reader:521
2019-04-23

 

FBA shipping

 

Let’s get into the details of FBA shipping

 

Many goods at Amazon are from China. Marketplaces, such as Alibaba, made it possible for these products to be accessible to multiple companies regardless of their size. Even smaller traders are thus able to get access to these cheap products. First timers on Amazon certainly would want to know how to source products from China to Amazon FBA and how to work with Chinese suppliers to get good to Amazon FBA sales.

 

These are the few very important things you must ensure for Chinese sourcing

 

Step 1: Check products to comply with your country standards

Before importing the products, check it beforehand. Is product safety fulfilled? Are there any patents prohibiting the sale? Often, Amazon dealers believe that the big suppliers in China automatically meet all legal requirements. But this is by no means so! Because suppliers do not have to check their articles on intellectual property or on existing patents by law. As long as they sell their products so, such matters do not concern them.

If something goes wrong with an import, the issuer is always responsible. If the goods are already in your country warehouse, there is no option but to destroy the entire inventory. To find out whether there are patent infringements, no expensive patent attorney is required.

It is more difficult with regard to testing for safety regulations, for example, electronic goods. A corresponding experience in the field is necessary for this purpose. Furthermore, the legal provisions differ according to the type of product and also to the country in which they are to be sold. The United States, for example, has other provisions than most countries. The supplier should, therefore, be asked for the corresponding certificates – experienced suppliers know which ones are required.

 

Step 2: Consider the period for the offered price

As a rule, the supplier will write in his offer “The price is valid for …. month.”. Thus, buyers have the certainty that the price will last for a certain period of time and only need to take account of exchange rate fluctuations. This is important, because during this time the raw material costs may increase. If the offer price is not fixed, this may mean a higher price for the Amazon dealer.

Logistics is a big cost factor in the trade – in some cases it is up to 50% of the costs for some products. One of the biggest mistakes made by new buyers and smaller traders is that they are aware of the purchase price, but not the cost of shipping, packaging, taxes and customs clearance. Often sellers go online on marketplaces like Alibaba, to buy their products. But Alibaba is open to everyone and every trader can buy products there openly. This may quickly lead the competitor to buy from the same vendor and undercut the price by one Euro on Amazon.

 

Step 3: Suppliers are not automatically trustworthy just because they market through Alibaba

Alibaba does not give any guarantee that the suppliers listed there are really reliable. Therefore, a verification process of the suppliers is necessary before the first order is issued. Because China is not an easily reachable destination for most countries and it is simply too expensive, just to fly to China to solve problems.

Is the provider real at all? In China, everyone can simply rent a room and shoot a few photos of foreign manufactures. In addition, it is not possible to have products reworked or returned if they do not correspond to the agreed quality.

 

Step 4: The manufacturer is not always the best supplier

It is often a common idea that it is better to buy goods from the manufacturer so that you can cut costs of middlemen and save margins. However, this can be a little difficult, especially for larger manufacturers. It may be better to work with intermediaries. A small-time Amazon seller might not get the required attention from the big manufacturers, in comparison to bigger sellers on Amazon.

This problem is avoided with a powerful agent or intermediary. The agent will be useful for the customer as he may have more knowledge and large know-how, which shipping and export concerns to be addressed and can provide appropriate contacts.

 

Step 5: Verify how the product was made

Those who want to sell on Amazon must know its manufacturers and suppliers exactly. Are there any engineers who make sure that the product really works? Who are the manufacturing team? In addition, the Amazon dealer should know exactly how the working of the product in order to distribute the work among his team members. It is, therefore, a good advice to personally test all the products because, in an emergency, the seller may have to completely disassemble it and fix it. Only in this way, it is possible to know which material was used and what is concealed inside.

Special care should be taken with electronic products, as defects and problems with the product can occur only after weeks or months and then lead to returns and/or claims for warranty service.

 

Step 6: Sending prototypes

When it comes to new products, sellers should always initially ask for prototypes or product samples. If this cannot be done, our advice is to hire a local supplier to build a model and to send the second to the Chinese supplier to produce more. This allows the prototype to be compared with the delivered product later. Especially in the case of products from China, you should always have a sample in your hand before a larger order and then decide objectively and emotionlessly whether it meets the expectations of potential customers on Amazon.

A tip on the edge: take these patterns to your friends and relatives and get their honest opinions as well. This can help you decide whether you want to buy the product in a larger style and save money.

 

Step 7: Compliance with your country standards should not be taken for granted

China’s definition of the standard might be different from your country standards. For example, if you want to have a good quality, the supplier has to explain exactly what he means by “quality“.

Again, the above pattern comes into play: Amazon dealers should send it to the manufacturer. However, transport costs must be taken into account. A DHL parcel with less than 16 Euro is still cheap. This does not affect the shipping of heavier items anymore. Also, one should be careful with possible copies of the branded deal. Not only the name but also the usage pattern is protected.

Ensure that you double check the brands and trademarks that are already registered with the Amazon Brand Registry Search. This can help you save a lot of time and efforts spent in reworking on removing the brand and patterns.

 

Step 8: Never pay for the entire goods in advance

Most Chinese suppliers do not accept payment via PayPal because it is simply too expensive for them. However, this payment method is suitable for a first sample order – even if the seven percent charges are borne by the buyer.

Most Chinese manufacturers and suppliers do not have so high-profit margins to carry such margins. It is safer to pay a small advance and pay the rest later. Also, 50/50 deals are not unusual here. Make sure that you add delivery charges on the purchase price of the goods and, if necessary apply customs duties as well.

 

Step 9: Use other sources for suppliers

Alibaba is not always the best source of suppliers. This marketplace says of itself that it is the leading platform for small and medium-sized businesses. This means big companies are not on Alibaba. Another source in this area, although not on such a wide range of products but still has on a similar level of acting is made-in-china.com. It is also worthwhile to take a look at the portal because the products offered here also move in price in a similar framework.

 

Step 10: Do not leave the shipment to the supplier

As already mentioned, the costs consist largely of the logistics. However, it is a mistake to believe that it is the simplest and fastest thing is to leave the shipment to the supplier. Most sellers make this mistake.

Our tip is exactly opposite: Never use the supplier’s shipping line – unless there is no other choice.

Instead, a carrier who is on his own side should be chosen, since this is the only way to ensure a certain control over the consignment. Sometimes, due to capacity problems, it is difficult to get a seat with the shipping companies or the airline, for example in the middle of the high season.

 

Step 11: The production of a new product requires time  (Sometimes a lot)

How long the production takes in China is also dependent on the product itself. For this, Amazon dealers simply have to keep in mind that for example, the development of the iPhone 7 lasted more than two years. Of course, this is not transferable to all commodities, but to a certain point. Four to six weeks production time (sometimes even 3 months) and the time for delivery and customs clearance also again may take at least four weeks.

All this should be taken into your Amazon strategic plan. Therefore, one should always take time to calculate all of this BEFORE the inventory in the Amazon Seller Central runs to zero, or below a critical amount.

 

 

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