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Zero To Hero: Building a Brand Series – Moving Forward From Amazon

Zero To Hero: Building a Brand Series

 Moving Forward From Amazon

ecommerce

In the previous blog post, Manuel went over some great strategy and techniques on how you can pitch your products to retailers and wholesalers across the world.

Today’s blog post marks the final blog post of this great series. This post will be all about thinking forward and expanding your business into other areas.

Expand Into The Other Amazon Global Markets

AmazonFBA

Amazon is still the number one E-commerce marketplace in the world, and it will be for a long time. Although we believe that Amazon has some disadvantages for sellers who wish to have complete control over their business, you should always list your product there. Currently the markets which we recommend expanding to, are:

  • Amazon EU(UK & Germany should be a priority).
  • Amazon Japan

These marketplaces have a much lower volume than their US counterpart, however, the traffic and sales are increasing year-on-year and Amazon has been investing heavily to attract buyers & sellers to their marketplaces outside the US.

Expand Into Other E-Commerce Marketplaces 

There are a number of ECommerce marketplaces that allow you to list your products, some also have a similar fulfillment service like Amazon FBA. While not all ECommerce marketplaces are ideal(some have very low sales volume), this will allow you to increase your brand visibility and target markets which your competition is unlikely to target.

In my opinion, the marketplaces that make the most sense to register a seller account are:

  • Walmart & JET
  • Newegg
  • Sears
  • Ebay
  • Rakuten

Focus On Growing Your Online Store

eCommercestore

Having your own ECommerce store is the only to have complete control over your brand & pricing. One of the things I like about having an ECommerce store is that I have complete freedom when it comes to:

  • Creating special offers/giveaways.
  • Store Design & Branding
  • Customized Packaging
  • Control over Customer Service & Experience

However, the best thing about having your own store is that it’s a challenge! While Amazon definitely needs some mastering – all the buyer traffic is already there! With your own store you need to spend an enormous amount of time dedicated to bringing traffic to your website.

While this requires a lot of hard work and testing, in my opinion, it’s more rewarding and it can be scaled significantly once you have a working formula

Outsourcing

We feel this step is the most important part of any business. A successful business is a scaleable business. While you should always retain control over the key tasks of your business, it is important to delegate tasks, especially those tasks that are time consuming or you have no expertise in.

With the rise of freelancing and outsourcing websites, it is very easy to find very skilled freelancers or companies for your business. In my opinion, these are the tasks that you should definitely outsource: 

Importing

  • Product & Packaging Design
  • Product Inspection
  • Logistics(Freight Forwarder, Warehousing etc)
  • Product Sourcing

Business

  • Legal & Accounting
  • Social Media Marketing
  • Company Branding
  • Graphic Design

Of course, what tasks you outsource depends entirely on you, however, if you want to scale your business and achieve freedom, you need to delegate tasks.

Conclusion

This blog post concludes our Zero To Hero: Building a Brand series, we hope that this series proved helpful in your efforts to build a truly successful and global brand.

Building a brand takes a lot of effort, however with the right strategy in place, you will have a company that has great products and its loved by its customers.

We would appreciate any feedback you have on this series and if there is anything we can help you with, kindly leave a comment below.

All the best & happy selling,

Duncan & Manuel

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Zero To Hero: Building a Brand Series – Branding your Product

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Zero To Hero: Building a Brand Series – Branding your Product

In this blog post I’ll talk about packagings and branding on your product.  I’ll give you a brief overview on why photography, packaging and marketing materials are so important when building a brand. 

Product Photography (taking your own vs hiring a professional)

Why are great product pictures important? When people come to your website or Amazon listing the first thing they do is to look at your pictures. The customer bases his immediate buying decision on your photos. 

It seems so obvious but yet I see so many listings with very poor product photography. Even if the product itself is great a poor picture can decrease your conversion immensely. 

Let’s take a look at two examples:

I look for a wooden cutting board on Amazon and I find a few listings. The well performing listings (even if not the best product) have great listings.

Take a look at this photo:

food-kitchen-cutting-board-cooking

And now take a look at this photo of a listing that is performing poorly. 

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This product is actually equally good and the seller even stresses out FSC certification (sustainably harvested wood). Me personally I wood rather buy the FSC certified product but the picture is turning me off. 

My suggestions is if you are not a professional photographer then please hire someone to take photos for you. 

Yes, great photos may cost you a bit of money but it is a one time investment and it will pay itself off. Also while sometimes Photoshop can be used for retouching, adding shades and effects I do not recommend using Photoshop to edit your product picture into an environment. It just looks cheap. 

Custom Packaging – standing out from your competition

I’ve posted about custom packaging in a previous blog post (http://importdojo.com/best-packaging-practice-how-to-create-a-great-private-label-packaging/) which I think is a comprehensive guide. Have a look and get some ideas there. 

The point is to think outside the box and reflect the product on the packaging. E.g. the Nike Air packaging or Cigars in a wooden box that reflect a humidor. 

Shipping Boxes 

Make sure that you use enough carton strength when shipping your products. The unit packaging needs to be at least 26ECT (Edge Crush Test) – see above blog post. 

Until your product reaches your customer there are many hands involved that handle your packaging. So you’ll want a sturdy and compact packaging. 

Use thick carton (32ECT minimum) for export cartons and add a sticker that says “Fragile – handle with care”. No matter if the product inside is fragile or not, this will improve chances your cartons are handled more delicately by the courier or logistics company. 

Screen Shot 2017-02-23 at 11.41.37 AM

Insert Cards & Marketing Materials

Add insert cards as simple as the below one where you can ask your customers to leave a review or also sign up on your website so that you can collect email addresses. 

Screen Shot 2017-02-27 at 12.04.18 PM

Also include Instruction Manuals (if applicable). Even if your product is self-explanatory some customers appreciate a guide on how to use a product. You can even add some tips or reference another product of your’s that will make the customer come back. For example if I sell my French Press I also add: “in the unfortunate case that you break your glass, we have a replacement glass available on Amazon”. Another example would be to reference a spare part that is only available trough you. Or something along that line.

Conclusion

Having great photos is essential to show the visual aspect of your products. Great photos will help you sell your product, especially on Amazon where customers often look at the photos to determine if they should make the purchase.

If you don’t use external marketing methods such as YouTube videos to showcase the features of the product, chances are that great photos are your only way of attracting customers to your brand. 

When it comes to selling products, most sellers only focus on the product itself. A lot of people don’t realize that the product packaging is also a part of your product. This applies especially if you rely heavily on marketing or want to expand into retail and wholesaling.

Look at YouTube for example, a lot of product review channels put a lot of focus on a brand’s packaging. What this means is that good packaging will help you sell more of your product.

Another thing to note is that great packaging can also help you get more positive feedback or reviews on Amazon. These days online shoppers purchase a lot of products at any given time, by making sure that your packaging wows the customer, they are more likely to remember your brand and comment positively on the experience.

Great brands put a lot of effort in making their products look good, and so should you! With proper product branding you will help attract more customers and gain more confidence in your brand.

I hope this post was useful. Please feel free to comment or share :)

All the best and happy sourcing,

Manuel

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Zero To Hero: Building a Brand Series – Social Media & eCommerce

Zero To Hero: Building a Brand Series

Social Media & E-Commerce3

In last week’s blog post we had a brief introduction on E-commerce and the key steps you should take to create your own sales channel. Another way to create a powerful sales channel is through Social Media.

Social Media is essential to get your target audience to find your brand and connect with influential figures in your niche. In the past few years, social media has become the number one medium for promotion and businesses who want to achieve long term success need to have a social media strategy in place.

Why Having a Social Media Presence is Important

We often hear how social media is powerful and important for brands around the world. The main reasons why social media is the platform of choice is:

  • Advertising conversions are higher than other forms of promotions such as traditional PPC, offline marketing and television.
  • People spend a lot of time on social media so it’s very easy to find your target audience.
  • Social Media provides a lot of data on demographics and behaviours which if used right it can scale up your business significantly.
  • Drive Huge Amounts of Traffic To Your Website & Amazon Listing.
  • Connect with your customers on a personal level and find out their concerns or needs in your category.

A Look at Social Media Platforms

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Facebook

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Facebook is without a doubt the most popular social network to use. Although having(and growing) your own Facebook page is essential for your brand, the advantage Facebook has over other platforms is an affordable and converting advertising platform.

Initially, the best strategy to use Facebook Advertising is to find your target audience. No other advertising platform in the world allows you to segment your audience by:

  • Gender
  • Income
  • Country
  • State/Province
  • Interests
  • Age

When launching a new brand, my strategy is to have a budget of $5 a day maximum to find my target audience, that way, when the time comes to launch my product, I know already who to target. Facebook also allows you to target audiences who liked a particular page, so if you have a fitness brand and want to target female audiences aged 18-25 who like Nike, Adidas & Under Armour; you can do that with FB Ads.

What this allows is to have better converting Ads and more clicks to your sponsored posts. One suggestion I can give is to not direct the audience to your Amazon listing(unless you have a lot of positive reviews), but instead to your website/landing page to collect email addresses.

We will talk in more detail about Facebook Advertising in the coming weeks, however, as a business in 2017 and beyond, you need to be on Facebook – it’s where your target market hangs out most of the time so take advantage of it!

Instagram

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Instagram is the platform of choice if you want to showcase your products, brand and your story. The visual aspect of Instagram allows you to truly differentiate yourself from your competitors. Since Instagram is owned by Facebook, you can use their advertising platform to also target Instagram users.

What I really like about Instagram though, is the ability to connect with authority in your niche and even larger brands. This makes it the perfect social media platform alongside YouTube to gain massive exposure for your brand.

However, the downside of Instagram is that you only have one clickable link in your whole profile – The Bio. This makes it very hard to direct audiences to click the link, for this reason, although Instagram can be used to drive sales, the main use of the platform is to gain exposure.

Twitter

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Twitter is one of the top social media networks, however, their follower base has been declining in recent years so in my opinion, other social media platforms are much better. Twitter works best for announcements or to give news regarding your brand or products.

I would still suggest you to have a Twitter account though, not only it works great for some niches such as fitness, yoga and cosmetics; but also because as a brand you need to be everywhere! The more places you are, being social media platforms, marketplaces or countries, the better.

So while in some cases twitter can work great, it’s not an ideal platform for Ecommerce sellers.

Snapchat

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Out of all the most popular social media platforms, snapchat is the newest one. However, they are quickly gaining a large following(particularly amongst younger audiences) and they are set to go public soon. Snapchat is a video-based application that allows you for to share videos which are only available for a limited amount of time.

This is a great app if you want to make quick promotional videos or even use it to make instruction-based videos on your products. However, unlike most social media platforms, Snapchat only applies to certain categories.

Nonetheless, if your market is mostly younger audiences, you need to use the app as it’s quickly becoming the number 1 social media platform amongst the younger generation.

YouTube

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YouTube is by far the best social media platform for exposure and driving insane amounts of traffic to your website or Amazon listing. With the introduction of their Video Advertising Platform, you can quickly gain enough exposure or even go viral. It’s not uncommon for unknown brands to go viral and get massive sales via YouTube. Video based ads convert much better also, however, at $0.20 a click, it can become quite expensive.

The power of YouTube relies in a pool of YouTubers from all kinds of niches, in fact, if you can find influencers or brand ambassadors willing to make an unboxing review or How-To-Guides for your product, you will get more sales than any other method, such as PPC or FB Ads.

The major tips I can give regarding YouTube are:

  • If you’re starting your own channel, your videos must be very well made.
  • Focus on providing value and showcasing your brand.
  • If sponsoring other videos, make sure that your products are of a higher quality. Packaging, inserts and the product itself need to look professional.
  • With thousands of videos uploaded every minute on YouTube, your videos can easily get lost, have a keyword strategy in place and leverage other social media networks to get views.

If used right, YouTube can be the single platform that elevates your brand from a small business to a well-known brand loved by its audiences. Unless you have enough video making or editing experience, I wouldn’t suggest you make YouTube videos yourself(as a brand), instead, outsource the whole process or even better, leverage the audience of other YouTubers.

Pinterest

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Pinterest is a social media platform that very different from the rest. It focuses mainly on images where they are structured using pins and boards. What makes Pinterest unique is that the platform has a majority of women followers, so if your brand or products are aimed at this demographic, you need to focus your marketing efforts on Pinterest.

Pinterest, unlike Instagram, has clickable images, so every image you put in the platform can be directed to your website or Amazon listing. This becomes really powerful when your follower base get bigger as it can help increase conversions.

Social Media & E-Commerce

Social media and E-Commerce are a perfect match for each other! No other platform gives you the ability to showcase your products in front of thousands of potential buyers. When it comes to promoting your products on social media, you need to focus on these points:

  • Show what your brand is about(your brand story). People are more willing to buy from brands they can connect with.
  • Run Giveaways, Polls and Promotions frequently. These will not only boost sales but it will also give you some great data about your customer base and buying habits.
  • Show unique features about your products and great looking pictures will attract more followers.
  • Use social media to provide great customer service. Check your inboxes frequently and reply to comments you get on your posts.

However, the most powerful way to gain followers and exposure to your brand via social media is by advertising. Facebook and YouTube provide the best converting advertising platforms and give you a lot of data about your customer behaviour.

Amazon PPC can get very expensive after a while and social media is another great way to drive traffic. It is recommended to not drive traffic directly to your Amazon listing via social media advertising, but instead, use the following strategy:

  1. Set-Up your Facebook/Instagram/Youtube Ads targeting your ideal audience.
  2. Links should point to your website or Ecommerce store.
  3. Have a landing page and an offer to get email subscribers.
  4. Provide customers the option to either buy from your website or Amazon itself. 

By driving traffic to your website you have the ability to collect email subscribers. Email subscribers allow you to:

  • Pitch offers during holiday seasons or when you experience slow sales.
  • Connect with your customers to build a relationship with your brand.
  • Send an email blast when launching new products so you not only get some sales, but also some traffic to your listings.

Conclusion

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Social Media Marketing can be a great asset to have for your business. No other tool comes close when it comes to connecting with your target audiences and getting exposure for your brand. Keep in mind that social media is a slow process and not every platform will suit your brand.

We recommend focusing your efforts on 2 or 3 social media platforms and outsource the rest to a virtual assistant.

In next week’s blog post we will discuss Inventory Management, FBA Prep and Storage. Amazon has been constantly increasing their fees so it makes sense to look for alternative options to store part or all of your inventory.

We hope this short guide prove helpful and as always, if you have any questions, kindly leave a comment below.

All the best and happy selling,

Duncan

http://importdojo.com/importdojo-masterclass/

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Zero to Hero: Build a Brand series – Overseas manufacturing guide

I’ve probably written about this topic for as long as the blog is up (March 2015) but I’d like to give you a summary of the most important parts of manufacturing overseas in this blog series on how to build a brand.  

WARNING – LONG POST :)

So here goes: 

Guide on Manufacturing Overseas

There are a lot of statistics I could give you but I wouldn’t know where to begin. I want to break down China and its manufacturing in a few sentences.

Believe it or not, China is still the biggest production site by far. While there are several countries in the vicinity, such as Vietnam, Thailand, and Bangladesh, they simply do not have the infrastructure that China does. Imagine you need sanitary items, furniture, household appliances, insurance, and a smart phone. You walk into a Wal-Mart. You can find practically anything you need in there and that’s within 10,000 square feet. That pretty much sums up China’s infrastructure. 

Factory A provides plastic and tooling, Factory B provides packaging, Factory C provides raw material and components, and Factory D assembles everything. They are all within a stone’s throw away from each other. 

Most of the factory bosses are related to each other. They set up a perfect system within their “community.”

I’ll give you an example, and I am not kidding you, 95% of the world’s supply of electrical multi-sockets comes from a small town in Cixi near Ningbo/Shanghai. When I say “small” I actually mean small for China. 

There are over 1.4 million people in this town. When you step into “Ningbo Kaifeng” (World largest factory for electrical multisockets) you are overwhelmed. And when you step outside of the building you see five competitors across the street. All the factory bosses are related to each other. And down the street they can find everything they need – factories that make packaging, tooling, plastic, steel, and so on.

The Chinese are so effective in terms of production and infrastructure that some first world countries could really learn a lot.

The big retailers figured out a long time ago that nearly every large corporation, retailer, discounter, or online shop has a buying office somewhere in China/Hong Kong. I know this because I have been in the industry for over 17 years. When you walk into a factory and look at the production line you see cartons of goods with famous names on them. Whether it is a fan from Home Depot, an audio speaker from Target, or a ceramic pot from Bed, Bath, & Beyond, they were all made in China. Most products are made in specific areas.

Here are a few examples:

  • Guangdong province (South of China): Electronics of any kind, especially consumer and household, toys
  • Zhejiang province (Shanghai area): DIY products, tools, metal and fabrics, lighting
  • Hebei province (Beijing area): Textiles, coal, steel, iron, engineering, chemicals, power, ceramics and food

These are the main areas for production. However, nowadays production is also shifting inland to take advantage of lower labor and production costs.

Certification

First things first. You need to understand that certifications are based on directives and legislations. So for example the GPSD in Europe (General Product Safety Directive Legislation) or the CPSC for the US (Consumer Products Safety Commission) says that a product needs to meet certain standards and need to be safe in general to import or bring to the market. Simple right? Unfortunately not. The GPSD has tons of directives under its belt such as the CE, RoHS, REACH directive). Which means that for each product or category there are further sub-categories that have directives which tell you exactly what your product needs to meet. Wait a minute, what exactly are you saying? I can’t read all this technical jargon…. 

Ever went onto Google to look what your product needs to meet under which directive? Found a site and then there’s a 200 page PDF that tells you in technical mumbo jumbo what the directive is about and after reading that you still don’t know what to do? Well this is where a lot of people struggle (I am actually working on a course as of writing this that will take the guesswork out and make you understand what you need to know)

So which certificates do I need and do I need them all? 

Yes and No

The good news first. No you do not have to have all tests and certificates done by third party laboratories (both the US and Europe). What would suffice in (almost) all cases would be a declaration of conformity. Wow really? Yes, and here is the “however”. If you trust your suppliers blindly that all raw materials are free of hazardous chemicals, comply with electromagnetic compatibility (electronics for example) or meet certain other standards then that would be very foolish. If your supplier can’t provide any certification and claims that he complies with everything you ask for thats a huge red flag. I also understand that you don’t want to invest in any certification not knowing if it will sell. And this is the most important part where you as a entrepreneur and business person need to come to a decision. A) Is my product potentially dangerous (can it explode??). B) Is my product relatively simple and can’t harm anyone (e.g. leather wallet)? Once you’ve figured out what you need for your product you need to evaluate what should be invested. Lets take an example. For the sake of it lets look at a simple and a complicated product. 

Simple product:

Solar powered garden light for 1.2$. Comes with nothing but a few cables, some plastic and a solar cell. Simple right? Technically I have to meet the following: LVD (EMC), ROHS, REACH & CE in general for Europe. Now if I were to test all of these the costs would amount to roughly 2000USD with a very cheap Chinese laboratory. If it was TUV or SGS the costs would be triple that. Now what if I am going to order 1,000 pieces and my testing costs would already cost more? That doesn’t make sense. In this case I suggest to get self declaration of the above regulations and save yourself these costs. Obviously you’d still want your supplier to declare that he can fulfil those requirements so look for suppliers who already deal with customers in the country you want to import to and have a good reputation or can back up their claim that the item is compliant with raw material certificates for example (from the raw material supplier). 

Complicated product:

Small Electric fan heater 5.9$. Comes also with a few cables, some plastic, a plug and a PCB. Simple right? No. You see, I need to plug this product into the socket (230Volts plus) and the potential dangers are very high. If the unit tips over or a child puts a cover on top, the entire unit can burn up (and the house with it). Also here technically I have to meet the following: LVD (EMC), ROHS, REACH & CE in general for Europe. Ideally I will also want a GS mark for Germany because this is a product consumers want to have with GS. On top of that I want abnormal testing from TUV for example. Abnormal testing means they would test what happens if you cover the unit with a blanket or if it tips over that the unit switches off automatically. A good supplier knows that there needs to be a tip over switch installed and overheating fuse included. This abnormal test alone costs 4-5,000USD. A GS mark costs somewhere in the same vicinity (2-4000US$). The other tests (LVD, RoHS, REACH & CE) are roughly 2,000USD. Now we are looking at 10-12,000USD investment costs. Would I do all these testings before purchasing? Yes, 1000%. I do not want to risk my business or anyone else’s life because I wanted cheap. You may say ok but I don’t have that kind of money. Then you need to find a supplier who either has these certificates already or is willing to invest the money for you. If you can’t find one then its simple – the product is not for you and your budget. You can still go for it without all the testing and certifications but I think we are on the same page here that that would be a very foolish decision in case anything happens.  

Now I can’t go into hundreds of products or case studies here, that just isn’t possible. But I think you see my point. First I need to evaluate if the trouble is worth it and if I even want to deal with complicated products. 

If the answer is yes then the strategy is pretty clear I think – test and get certificates. If you don’t dare to sell these risky (but profitable) products go the easy way and pick simple products or walk away. 

Products & components to avoid when starting 

Some items really don’t make sense to import (together with the antidumping rate items). These items are usually license-required items, large items or items that are manufactured in a low-income country near you. 

China is getting some competition from a few countries, not only because of labor costs but also due to government import restrictions (antidumping fees for example).

Products that are difficult for importing:

  • Anything related to gas
  • Cars
  • Supplements
  • Foods, drinks
  • Animals
  • Guns, weaponry
  • Hazardous material
  • and more

For the above items you would need to obtain proper licenses first and this can be quite difficult. So the above might not be your first choice of import. 

Contracts & Tooling Guide 

A lot of people are concerned when they produce their own design in China that the supplier will copy it and sell to other sellers.

First I would like to point out that in my nearly 12 years in China I have had almost only good experiences with suppliers even with my own designs and exclusivity agreements.

Let’s look at your options and what it actually means to have NDA’s or Exclusivity Agreements in China and how likely it is to enforce it or hold up in a court.

Lets look at the terminology first and what they mean:

NDA’s

Whats an NDA and when do you use it?

An NDA or Non-Disclosure Agreement is used when you have your own product design and want that developed by a factory in China. You basically agree with the factory that they are not allowed to disclose, share or produce your design (or even ideas) with any other customer or supplier. Neither local or overseas. In most cases if you have your own design a tooling is likely need to be made. The first step you take before you send any designs to a factory is to ask them to sign the NDA.

Tooling

To produce your design it is very likely that the factory needs to make a mould or tooling for you. With this tooling – parts of your product will be manufactured and eventually assembled into the final product.

(Categories like Textile or Food do not need tooling). Toolings are often included in the price quoted to you when you hand over your design. However you can also opt to pay for the tooling if you want to own the tooling as well.

Toolings can go anywhere from 1,000-30,000+USD depending on the size of the product. Yes, things can get pretty expensive.

Can I move my own tooling to a secure location?

Toolings are usually very large and heavy as they are made out of die-cast in most cases. Moving them requires quite some logistics.

So if you are unsure that your supplier is going to use them for other customers you should move them to a secure location (e.g. a rented warehouse). This can easily cost a few hundred US$.

And every time you would place an order this tooling needs to be moved to the factory and after production back to the warehouse. An expensive enterprise.

So having said all that if you feel you need to have your tooling secure somewhere else you should not work with this factory in the first place.

So whats the best way to go about having your own designs & tooling?

Two scenarios:

  • You are just starting out and have no factory contacts whatsoever.

My tip is to work with a sourcing agent  that can help you find reliable and trustworthy factories.

Don’t go onto Alibaba and randomly look for factories that could make your product. You don’t know them, they don’t know you and are unlikely to help you anyway.

Even if they tell you: “no problem, we can make it for you” they are likely to copy your product or sell the idea to other sellers the minute you place an order.

Just the other day a reader of mine told me he found a trading company on Alibaba for his design and placed an order of 300 pieces.

When he got contacted by the actual factory about labels and other things they needed from him he found out that the trading company placed a total of 500 pieces with that factory.

They ordered an additional 200 pieces (without the knowledge of the client & even with the clients logo) for themselves probably to sell it on Aliexpress or even Amazon themselves.

  • You’ve been placing orders in China for a while.

Work with the factory of your trust. Even if the product you are now looking to manufacture doesn’t fit into their assortment. Factories have a large network and contacts with other factories.

Ask them to help you source a factory that can make your product whom they trust. I’d he happy to pay a few cents more for this type of help if it means I get connected to someone trustworthy.

Ideally your existing factory can help you manufacture your new design.

Mutual Exclusivity Agreement

Let say you find a product on Alibaba or at the shows and you want to buy this product exclusively to sell on Amazon. Suppliers are likely not to give you a Exclusivity Agreement if you don’t purchase high quantities from them or if you haven’t had any previous business with them. FBA sellers are in general very small customers for factories. The 1000 pieces (if even) you & I are going to want to place as a trial order cause more trouble to the factory than you could imagine. Setting up production and purchasing raw material for only a 1000 pieces is an expensive endeavour for factories. Most raw material suppliers have MOQ’s of 5000 pieces (per raw material) and up. So getting the material for 1000 pieces can be quite expensive. While some factories may have stock left of material or might agree to purchase the larger quantity from the raw material supplier in order to produce your order it is unlikely to happen in reality. Having said that you could approach things a little different to get your exclusivity:

You could ask the supplier to sign exclusivity agreements for 6 months. Meaning you could agree on a quantity that you will place within those 6 months and if you don’t reach the quantity the contract will be voided.

Which will give you the time to figure out if the product is selling and the supplier on the other hand isn’t forced to sign a deal for a long time.

After this period of 6 months the contract/agreement can be reviewed and extended for a longer period. Even if the supplier does not agree to an extension you have at least a head start of 6 months on other sellers.

Validity of agreements & contracts:

In the FB groups I often see question like: “How are those agreements going to hold up and what are your chances of winning an NDA dispute in China if you find out your supplier has betrayed you?”

Well to be honest the chances are slim. Does it help to have an agreement in Chinese? No. Even if you hire an expensive lawyer in China and win the case by the time you resolve the issue your expenses will have ballooned into thousands of $.

So unless you have a patent it isn’t even worth it pursuing a law suit.

You will also have difficulties finding out if your supplier actually used your tooling for another client. An un-trustworthy supplier will find many ways to wiggle himself out of the situation.

For example he could claim a disgruntled engineer of the company left the factory and took the designs to the next factory he started to work for. You won’t be able to proof him differently.

So whats the point of having an agreement at all and whats best approach?

To ask a supplier to sign an agreement or NDA shows that you mean serious business and they will take you and your project more seriously. If he doesn’t agree to it in the first place move on to the next supplier.

Work with a supplier whom you trust and have worked with for many months/years already. You will still need to have agreements in place with that supplier but the understanding is entirely different.

If you work with a supplier and you let him know he can grow his business with you over the years he will honour your agreement. The contract is more or less a formality.

Either place orders with a factory for ODM (products off the rack) in the beginning and eventually propose your ideas and designs after you worked with them for a while or hire a Sourcing Agent who can help you get you in touch with trustworthy factories.

For example in my case study I actually got exclusivity for my product (for an initial 1000 pieces order).

And the supplier honoured it. How do I know that? As you know my case study is public and people who join the course can see contacts of my supplier within the course.

After I launched my product and case study only a few days went by and my supplier contacted me to tell me that he had received quotation requests from 2 different US sellers already. Those 2 people wanted to copy my process (they even used my email templates and quotation forms that I offer in my course). The supplier refused to offer my product to those 2 guys. Thats not to say that they can’t go anywhere else but at least I know I have a reliable and trustworthy supplier.

So its all about finding the right supplier and develop a relationship with him. You will want to have agreements in place even after a long relationship but again, thats just really formality and if you found a trustworthy supplier they will honour agreements and in 95% of the cases help you if you have to claim money for example (defect or returned goods).

The point I want to get across to you is not to worry too much about getting copied in China if you approach things professionally.

Getting copied will happen eventually because either:

  • Another factory copies/modifies the designs because they have seen it on Amazon.
  • Your competitor copies your product or modifies it.
  • Your approach was unprofessional.

Take the head-start that you have with your product and move on. Thats how this business is.

And remember the above goes only for your own designs. It is a different story if you are buying products off the rack maybe with small modifications from a supplier that you found on Alibaba for example. In these cases it doesn’t make much sense to have NDA’s or Exclusivity Agreements because it is not your design in the first place. It belongs to the supplier. However if you make significant modifications and are able to place larger orders it makes sense to have agreements.

Choosing a supplier

Most people start out on Alibaba because they cannot come to China. While I do recommend to come to China it doesn’t make sense if you are just starting out. If you are starting out, head over here to my Alibaba screencast which helps on choosing a supplier:  http://importdojo.com/alibaba-hacks/

Ordering samples & how to test each sample effectively

I ll cover three topics about sample management:

  • Sample costs
  • Communication
  • Supervision

Sample costs

Once you have settled on a supplier for your new product it is time to purchase a sample. Most suppliers will charge you for sending a sample. There is usually no way around this unless you have worked with the supplier for a longer time.

Even for me, being here and dealing with suppliers on a daily basis I can’t guarantee that I don’t have to pay for a sample.

Here are some Insider tips to “try” to get a sample for free.

  • Introduce yourself as an assistant of a large company. Suppliers tend to smell money when a large company is interested and are more likely to give away samples for free.
  • State that if the sample is OK you will place a large order
  • State that you have especially chosen this supplier to be your exclusive supplier for this product and he has the chance now to do business with you.
  • Ask him to put the sample cost on top of the official order that may follow if the sample is what you are looking for.
  • State that it is company policy that you/your company don’t pay for samples and if he wishes to do business he should agree to your sample terms.
  • Split the costs. Offer to pay for either the samples or the freight costs.

If none of these work I recommend you to agree with the supplier to deduct the sample costs from the official (larger) order. At least this way you save the sample costs if you decide to order from this particular supplier.

Be wary of sample costs in general

On one occasion I was sourcing for a textile accessory. The item itself can be made for approx 2 USD.

I screened around 10 suppliers and eventually narrowed my selection down to 5 suppliers. They were all in a similar price range.

When it came down to ordering samples one of the suppliers (who was also the most expensive) asked me for a sample fee of 100 USD to be transferred to his bank account. That didn’t make sense. I immediately knew it must be a trading company with no factory background.

They probably outsource the work to a factory because they have no own facilities. Eliminate suppliers that have high sample costs right in the beginning.

Samples are usually 10-50% more expensive than the originally quoted price. It is a common practice to charge more for samples, as many of the samples need to be handmade for the customer, especially if you have some sort of modification request.

Another reason why samples are usually more expensive than the quoted price is that they want to see if you are serious & sincere about placing a larger order later.

I can tell you that from my own experience as a manufacturer. I get about 5 sample requests per week and all of them want it for free. If a buyer is not willing to pay for a sample I won’t send it to him because I will be thinking he just wants to get a sample and there will be no follow up order.

Sometimes suppliers have stock of their items. If you do not need to have any modifications done, or you just want to check the quality before asking for more, request a sample they have in stock. If they have stock, they usually charge the regular (MOQ) price.

Communication

In my 12 years living and working in China I have learned to communicate with Chinese suppliers in different ways compared to communicating with Western companies.

What is being said or promised on the phone/chat or email is not always being followed by the factory or the supplier. Often you will find that something you said or agreed on is being done completely different.

For example you ordered a sample of a certain product in a certain color & quantity but what you receive is completely different from what you asked/paid for.

Unfortunately the chain of command in factories is not always direct. So when your sales contact gives your sample order to his sample or engineering team there may be 2 or 3 people in between.

In between often some information gets lost. So eventually the person responsible for making your sample will receive different instructions that deviate from your original briefing. Often there will be no meetings held on projects from clients (like we are used to in the western world), but rather a quick email to another person that has not fully understood what you actually want or need.

Often there will be no message or notification that your project may be urgent or requires special attention. That might be a simple instruction, for example telling the sample team to make the sample with a US plug or adapter. No one has told the sample team and common sense is unfortunately not requested when being a worker in the factory.

Which brings us to:

Supervision

I can’t stress enough how important it is to supervise & monitor your order/samples or other projects that you have with your supplier. Westerners work differently. We are more detailed and we expect people to have the same common sense that most of us have. Information will get lost. You need to plan for it.

After each discussion on the phone/chat or email you should follow up with written and agreed on-points. Try to think of everything for the supplier and make it as easy as possible for him to follow up & complete your instructions. Give him a “goodie” at the end of the email to advise him of the potential to be working with you.

For example (content in BLUE are my notes for you):

Hi Tony,

Thanks for the talk just now. I would like to summarize the discussed points:

– Sample to be sent to ……. (your address)

– Sample needs to be in working mode. A non-working sample is not accepted, as the sample will undergo quality tests by my third party laboratory. (this part doesn’t need to be true but he will think twice before sending you a sample in poor condition)

– Sample needs to have a US plug (attach him a picture of a US plug-make it easy for him)

– Please make sure the sample is tested on your side before being sent out.

– Please attach your model number & supplier name-tag to the sample as I am getting many samples and would like to know who sent which sample. (this way you will not lose reference of which supplier made your sample if you order from more than one)

– Make sure you mention “samples of no commercial value” to the Sample Invoice (in order to avoid customs tax on samples at your destination).

– Etc.

Please give me a written confirmation of all discussed points and your understanding.

If the sample works out well and everything is as it is agreed on, expect an order of… pcs.

Best,

…..

Here a few more tips on communication & supervision with your supplier:

  • Give deadlines to suppliers that you both agreed on.
  • Set yourself reminders on your smart phone/computer that will help you to remind your supplier.
  • Make simple sketches & drawings of your requests if the supplier misunderstands you.
  • Have him confirm each step of your modification or request
  • Keep emails clear and with bullet points to make your requests stand out

Once you have a feeling on what you need to pay attention to it gets a lot easier and your sample orders in China will be a lot smoother.

Inspections

I’ve been saying this forever and I still see people shipping their products from China without inspecting their products by professionals but my recommendation is never ever ship without inspecting your goods. 

Especially not if you ship directly to Amazon. If there’s a problem it’s too late to re-work the goods (in most cases) or ship back to China. 

There are several third-party inspection companies in Asia. Some of the big names are: Buereau Veritas, TUV-SUD, TUV-RHEINLAND, and AsiaInspection  (which I personally use) to name a few. The first three are usually expensive but also very thorough. AsiaInspection is a simple and cost efficient service that should work in the beginning for you. Register on their website and simply create an order with them. You can fill out all the details or even better ask your supplier to send them a sample.

Simple steps: You ask your supplier for a date when you can send an inspector (usually around 70-80% of the finished production), you book the inspection online and the Inspector will go to the factory on the arranged date. 

Once the inspection is completed they will send you an inspection report. Based on this report you can either:

  • Release the shipment to the supplier
  • Ask the supplier to re-work the goods according to your agreed terms and fix problems found during the inspection

Only when you are entirely satisfied should you release the shipment. In most cases there will be minor findings, such as scratches, dents, or packaging issues. If this doesn’t bother you then release. If there are major problems like faulty wires or wrong colours, ask your supplier to re-work the goods.

Trust me, he will re-work, as he is still waiting to get the full payment. Remember, NEVER pay everything up front. Once everything is as it should be you can give your logistics provider the order to pick up the goods and send them to the port.

You are of course entitled to skip this process, but it is highly recommended, especially for first-timers and for order amounts above 1,000USD.

Pheeww that was a long post but I hope that this serves as a refreshment or reminder on what to pay attention to :)

Next week in our blog series we’ll talk about eCommerce, what channels exist, how to build an audience, social media following and more so stay tuned :)

If you enjoyed this post please comment or share on your social media :)

All the best and happy sourcing,

Manuel

http://importdojo.com/importdojo-masterclass/

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Zero to Hero: Build a Brand Series – Product Analysis & Innovation Part 1

Zero To Hero: Building A Brand Series Product Analysis & Innovation

In the previous weeks, we went over Business Banking & Incorporation – where we explored different strategies on how to legally and financially enhance your business. As a way to start 2017, today’s blog post will be focusing on Product Innovation.

The ultimate goal for any business is to be sustainable in the long term. To achieve this, you need to have a Unique Selling Point(USP) that differentiates your business from the competition. This mini guide and case study is meant to get you to think outside the box in terms of product selection and launch cool & innovative products.

In terms of Private Label products, sellers normally follow one of these options:

  1. General items with unique logo and packaging.
  2. Completely unique product.
  3. Improvement over existing products.

Importing general items used to be profitable, but it’s not sustainable in the long term! When choosing products, you need to think from the Amazon customers’ point of view. How would you feel(as a customer), if you’re searching for a particular product, and find something like this:

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This is a very bad approach as the only way to differentiate between each product is:

  • Listing
  • Photos
  • Price

Price is the most obvious one, so more often than not, it becomes a race to the bottom. This is not what we want as a brand. By creating something that the market wants & improving upon it, you will have control over your brand. This is also an asset if you plan on selling to retailers in the future – Retailers love unique, branded and in demand products!

Today’s case study involves picking an existing product and completely breaking down each aspect of it and try to improve it.

Note: This is only an example and the strategy should be applied for your product of choice.

The Product

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For this case study I picked an Interactive Dog Toy Ball. Let’s have a quick overview of the product.

  • Number 1 Best Seller in Dog Toy Balls
  • 4,432 reviews
  • 2 Variations
  • Multiple Colors

Based on the initial data, these numbers may seem prohibitive, however:

  • Multiple reviews indicate the product is popular
  • Variations show demand for different sizes and colours

All that needs to be done is analysing the product carefully and see if we can improve it. So let’s go ahead with our product analysis.

Product Listing

 

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Surprisingly, the listing for this product is very lacking. As seen in the above image I have pointed out the 3 main features I find lacking:

  • Poor Images & Very Bland – A product with this popularity/demand should have higher quality pictures.
  • Bullet Points – The bullet points are too short and don’t describe the product features in detail.
  • Listing Title – This, in my opinion, is the most lacking part. The title is not Keyword Optimized and they have the words “Colors May Vary”. As a customer viewing the listing, the question I ask is:  What colors are available for this product? Which color will I receive??

Product Description

 

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The seller has Enhanced Brand Content/A+ Content, however, they are not taking full advantage of it. The description is short and the pictures show only the packaging instead of highlighting the product’s features. Furthermore, they included a picture of another of their products!

The description should be a keyword rich, informative section where you provide features and details to the customer.

Reviews

Moving on with the product analysis, it’s time to check the reviews – The item is a best seller after all! Reviews of customers are extremely important, more so after the Amazon Review change where all the giveaway reviews have been removed. Let’s see what the reviews tell us about the product:

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The most notable aspect is that 24% of 4,430 reviews(1063 reviews) are 3 stars or lower. This already shows me that the product can be improved upon, but let’s look at the positive reviews first.

Positive Reviews

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Looking at some of the positive reviews, I picked up these features customer like:

  • Fun Toy and most dogs love it.
  • Adjustable difficulty of the item makes it accessible to any dog.
  • A lot of the reviews suggest customers bought 1 or more. This is a very good sign.
  • The product makes their dog exercise more.

Positive reviews are an important aspect, as they tell you what customers LOVE about the product. If you are innovating or improving an existing product, you have to know what customers like about your competitors.

Negative Reviews

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Looking at the negative reviews throughout the listing, I have noticed a common theme:

  • Cheap material – most dogs break it easily.
  • Dangerous – Some dogs have risked choking because it comes apart easily.
  • Boring – some dogs found the toy to be boring, this suggests that the toy is only ideal for particular breeds.
  • Functionality – Some customers found that the treats don’t come out properly.

When looking at negative reviews, focus on a common theme – if many customers complain about a particular feature, this can be improved!

External Research

 

After focusing on the listing, it’s time to search if there’s demand outside of Amazon USA. Remember, the goal is to build a lasting and global brand, so you need to expand your research further. I will look at this particular product and see how it performs:

Google Trends

When launching a product, it’s easy to only focus on that particular product. However, the goal is to see if there’s demand in the category. I made a Google Trends search for the keywords “Dog Treat Toys” and “Dog Toy Balls” to see if there’s any demand throughout the year for this product.

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As seen above, the demand for the product is fairly steady all year round with some months experiencing high demand. This is good news as it shows that this product is not seasonal and their is interest in this niche.

Non-US Amazon

The idea is always to first launch a new product in the US market(higher demand) and expand into other countries. As you can see below, I have made a search for this product in the Spanish, UK, France, Germany, Italian & Japanese Amazon marketplaces. Although this product is listed in all marketplaces – not a single review can be found. This can mean:

  • No demand for the product outside the US – Highly unlikely considering the category(Pet Supplies).
  • The seller main focus is only the US, so releasing a better product in the other marketplaces would give you an advantage.

Amazon DE

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Amazon UK

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Amazon Japan

 

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Re-Cap

Based on the initial analysis, my conclusions are:

Positive

  • Quality is an issue – We can make a better product.
  • Material is low-quality hard plastic and therefore we can improve the material quality or use a different material.
  • Certifications – No certifications are mentioned in the listing, by obtaining certifications we can make the product better.
  • Photos – Higher quality photos.
  • Listing – Better product descriptions & bullet points.
  • Variations – Include colors in the listing & offer 2-3 colors.
  • Packaging – With some effort we can make a better packaging.

Negatives

  • The product is extremely popular and therefore hard to get the #1 spot.
  • Large amount of reviews – However, 24% are 3 star or lower, so a better product can outperform it.

Warning: If going this route, it is extremely important to check if any products you take inspiration from don’t have a patent associated with them. The idea is to have a brand with unique products – So be unique!

What’s Next?

Once you have made significant research about a particular product. You need to make any improvements come to life. The way to do this is by either:

  • Hiring a product designer to design a completely new product based on the feedback you give them.
  • Sourcing a factory that produces similar products and see if they can make the requested changes.

I recommend hiring a product designer as they can completely experiment with different designs and you would get a unique product for your brand. When you’re happy with the result, you pass on the design to the chosen factory and a mold + sample is made.

A Note About Product Research

We are all familiar with product research tools such as Jungle Scout or Unicorn Smasher. While these tools are great, they shouldn’t be used to exactly tell you which products you pick, BUT to discover hidden gems within the marketplace & monitor sales volume. The best way to truly build a lasting brand is to:

  • Build a brand around a category/niche you’re passionate about. If you have a strong passion/interest towards a particular niche, you know what the market wants.
  • If you already have a product in a category, focus on building a list & interact with potential customers via social media. Once you build trust with your customer base, they will often tell you what products they love/want.
  • Release products which are both unique and better than the competition.

Moving Forward

Once you release a new product on the market it’s best to release other products related to the brand. This is done to:

  1. Cover many sub-niches in one category.
  2. Show expertise in your niche
  3. Build trust with your target market(if you consistently release great and innovative products)

Good places to look for new products related to your item are:

“Frequently Bought Together” section

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As you can see with our product from the case study, Amazon is already showing you an item that is frequently bought by customers. 

“Customers Who Bought This Item Also Bought” section

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Same as above, Amazon gives you all the data you need to make your research easier for your next products.

“Sponsored Products Related To This Item” section

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This is very important as it shows PPC activity surrounding a category. If other sellers are spending money promoting their products, then, there is interest in the market. As you can see below, Amazon is showing a lot of products.

Category Magazines

Magazines(both online and offline) are a good source of inspiration. These publications only cater to an audience actively interested in the category so they can greatly help you. Understanding the market and your potential customers will help you gain authority within your niche.

Forums

Forums are a great source because audiences discuss topics related to a particular niche. Which is very helpful because:

  1. You can get inspiration for blog posts
  2. You can segment your audience( Gender – Age – Household Income etc)
  3. Advertising – Forums have advertising sections, see what type of brands and products are advertised and do your research on that.

Tradeshows & Exhibitions

This is by far the best way to source new products. Trade shows are a great way to see trending & upcoming products and find potential suppliers. Manuel will talk about this in more detail as he has a lot of experience in this field.

Reminder: Always do your research before investing time and money into a product – Your customers and business will thank you later!

Conclusion

I hope this mini case study was helpful and hopefully it can serve as an inspiration for new products in 2017. Moving forward, the next blog posts will be written both by Manuel & myself and will focus on Sourcing, Manufacturing & Certifications. These topics have been widely covered by Manuel, however, we have some great information on how to apply them to build a brand.

We hope you had a great holiday season and both myself & Manuel wish you a Happy New Year! If you have any questions regarding this blog post, kindly leave a comment below.

All the best & happy selling,

Duncan

http://importdojo.com/importdojo-masterclass/

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Zero to Hero: Build a Brand Series – Business Incorporation 101 – Part 1

Zero To Hero: Building a Brand

Business Incorporation 101 – Part 1

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Over the past few weeks we went over the basics of building a brand. One thing all major(and minor) brands have in common, is that they are protected from a legal perspective. Having a good business structure will give a lot of benefits moving forward. Although the initial set up process can seem overwhelming and expensive, it doesn’t have to be. Nowadays, there are many countries where you can incorporate remotely that provide a lot features, benefits and most importantly in a financially secure jurisdiction. 

In the next part of the series we will guide you through everything regarding business incorporation and banking – including some helpful tips on where to incorporate your business.

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P.S. This guide is only meant as a resource. While a lot of research has gone into proving helpful and accurate information – We are not lawyers. Before incorporating your business, especially in countries outside of yours, always consult with a qualified professional specialized in international laws & taxation.

Why Incorporate? 

Many new business owners and online sellers alike often ask if they should incorporate their business before selling online or do it once they are established and have capital. This all depends on what type of business you run, in our case, what products you’re importing. If you’re importing products of high-risk liability such as:

  • Electronics or Electrical Appliances
  • Toys & Baby products – and any products used by children ages 3-10
  • Supplements
  • Cosmetics & Beauty Products
  • Food & Drinks

These are all products that need certifications and in some cases lab testing done. If you’re importing as a Private Label(and not an established brand), a corporate structure will offer you an extra layer of protection. 

Furthermore, having your business incorporated has numerous advantages which are helpful especially later on when your business grows larger. Some of the benefits include:

Personal Asset Protection

It is very important early on to separate personal assets and business assets. Aside from the initial stage where you have to fund your business, you should immediately get a business account for your transaction. This is crucial not only because some banks won’t allow you to use your personal account for business, but more importantly, having your personal assets separate, will protect you in the unfortunate event your business is liable for damages.

A business corporate structure, such as a Limited Company, will protect your personal assets. This is the main reason what makes incorporation attractive.

Transferable Ownership

In the event of an exit, company shares or members can be transferred. Making it very easy and attractive if you want to sell your company in the future. This is true if you have a Corporation structure, where you own 51% or more of the company, shares can be easily sold or transferred to the new owner.

Tax Benefits

Depending on the structure and country of incorporation, you might find out that you owe less taxes than self-employed/sole proprietorship. This is due to numerous tax cuts and deductibles offered to business owners. If you qualify, your tax bill can be reduced greatly, as always, consult with a law firm specialized in business incorporation or your CPA on what tax cuts are available in your country or state.

Important: This shouldn’t be confused with tax evasion and it’s by no means condoned. Tax avoidance is allowed only in accordance with the tax laws of the country of incorporation. For this reason, if incorporating in a country different than the one you’re resident in, consult with the tax authorities before proceeding with incorporation. 

Separate Credit Rating

Your company will have it’s own credit rating and it won’t be affected if your personal credit score is not good. Keeping a good credit score for you business will give you a lot of benefits, these include:

  • Increased overdraft facilities
  • Higher Credit Card Limits
  • Bank Account Upgrades
  • Dedicated Financial Advisor(depends on the bank and account history)
  • Reduced or No Account Fees

Having a good history will make your company investor-friendly as investors or potential buyers want a company with few debts or liabilities. 

Retirement Plans and Payroll

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Having your own company will allow you to create private retirement plans for you and your employees. Depending on the bank, business accounts have payroll management in their system. This will be very helpful if you plan on having employees or contractors.

Disadvantages of Incorporation

Unfortunately, while there are a lot of benefits to business incorporation, this comes with it cons. This is true to small business owners and people with limited capital. Some of the disadvantages are:

A Lot of Paperwork

Registering and maintaining a business comes with a ton of paperwork and filing. This can be very confusing if you’re new or if this is your first company. Each country has it’s own laws and if you’re selling globally, you have to comply with each country.

This can be quite overwhelming, but unfortunately it must be done. To make things easier, have your CPA or lawyer take care of your company filing – that way you have no risk of incurring fines.

Fees! Fees! Fees!

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With tons of paperwork, comes tons of fees. Between registration fees, yearly licences, taxes and CPA fees; your outgoing expenses might increase. Maintaining a corporation can become expensive and shouldn’t be done without capital.

Limited companies are popular because the fees are lower and have less filing requirements than corporations. This is the structure that works best for new sellers and those in e-commerce in particular.

Liability Is Not Guaranteed

While incorporating your business may protect your personal assets, you may still be liable in some cases. Only a Corporation fully protects the personal assets of the shareholders. If you import products with high-liability, it’s best to consult with a lawyer on which structure is suitable.

USA Incorporation

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There is a common misconception amongst people outside the USA that incorporating your business in the US is expensive and complicated. Furthermore, in some cases, if you’re importing in the US, you need to have a US company or subsidiary. Some dropshippers in the US will also refuse to work with you unless you have:

  • Reseller Licence
  • Employer Identification Number 

US LLC State Registration

It is recommended to start off with an LLC if you choose to incorporate. For US non-residents the 3 best states to incorporate are:

Delaware

Delaware State is the most popular place for foreigners who wish to incorporate in the US. However, Delaware is better suited for those wishing to form either an S-Corp or C-Corp.

  • State Filing Fee: $200
  • Certificate of Formation: $90
  • Annual Fees: $300 Alternative Entity Tax by June 1 + State Filing Fees $200 = $500

Nevada

Home to the popular Las Vegas, Nevada is one of the best states to file an LLC, with it’s very attractive tax rates and ease of filing. Besides the yearly fees, there are no other requirements to follow.

 

  • State Filing Fee: $75
  • Annual Fees: Business Licence $200 + Annual List $150 = $350

Wyoming

Wyoming is the cheapest state of the 3 for LLC costs. It offers all the benefits of states like Nevada and formation shouldn’t take longer than a few business days. Foreigners wishing to incorporate in Wyoming, must have a registered agent notifying the state in writing.

  • State Filing Fee: $100
  • Annual Fees: $100

In all three states you require a Registered Agent. A registered agent is a person or service that acts on your behalf in the state of incorporation. They would receive any letters/paperwork and notify you when paperwork and annual fees are due. Services normally start at around 49$/year and it’s required by law to have a representative in the state of incorporation.

Employer Identification Number

The EIN, is the tax identification for your business. This will be the number used to conduct business inside the US and for importing/exporting goods.

 If you’re a US resident or you’re a non-resident, wishing to get an EIN, the process is quite simple, and you can either get the EIN by applying online, phone or by mail. If you’re a US non-resident with a US LLC/Corporation, you will need a responsible party to get the EIN.

To get the EIN you need to fill out Form SS4 and send it to the IRS. Getting an EIN is very simple and fast – the whole process shouldn’t take more than 15-30 minutes and is free of charge.

Getting a Bank Account

If you’re not a US resident, this is the biggest issue you will face. It is extremely difficult and rare to get a US bank account(business or personal) without being physically present. In some cases, there are companies that offer the service of opening a bank account remotely, however, they are expensive. You can also consult with your CPA or lawyer and see if they can open an account for you.

To open a business account in the US, you need:

  • Passport
  • EIN & Company Registration Documents
  • Business Licence
  • Articles of Organization – This is a list of all the members in the company, you should get the documents when you register the company.
  • Operation Agreement

Keep in mind that every bank is different and requires different documentation. If you’re a non-resident, inquire beforehand on what documents are needed.

Virtual Address

You need an official business address, this is needed to receive company mail and to register for services & marketplaces. A virtual address will notify, forward and even scan your mail – There are numerous companies offering these services for as little as $90/year.

Phone Number

If you’re registering a US LLC as a United States Non-Resident, you need a US phone number. This is will be required by all businesses(including banks) and marketplaces you will deal with.

The easiest and best option is to simply get a Skype number, it is fairly cheap with low call rates. If you’re based in the US, it is recommended to get a business phone number. 

Conclusion

This has been a brief introduction on business incorporation. In the upcoming weeks we will explore Offshore Company Registration – including the best countries where you can incorporate, and business banking. Hopefully, after reading this guide, the incorporation process has become easier to understand.

If you want us to include a particular topic regarding business incorporation or if you have any questions on the subject, please leave a comment below.

All the best & Happy Selling,

Duncan

http://importdojo.com/importdojo-masterclass/

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From Zero To Hero Post 1 – Branding done right

Branding Done Right

Last week we introduced you to our overview of the Zero to Hero blog series. In today’s blog post, we will cover the areas you need to focus in building your brand from the start. The phrase “Build a Brand” gets thrown around often and most people know that having a brand is essential, by implementing these features, you are guaranteed to have a good foundation to build a global brand.

Before I get into this first blog post I wanted to give you an overview of whats coming and what the main milestones are in this series. Some of those topics are super exciting so make sure to share this blog post and stay with us until the end of the project

PROJECT OVERVIEW

Building a Brand    

❏ The importance of building an Ecommerce brand

❏ Choosing a brand name & why it’s crucial for long term success

❏ Creating a Logo

❏ Choosing a slogan that fits the brand

❏ Creating a story behind your brand

❏ Brand Design 101: Brand colours, fonts & mood/voice. Consistency is key.

Business Incorporation   

❏ Why incorporating is essential for your business )

❏ Where to incorporate. Pros and cons of each + which one is better for e-commerce.

❏ Currency accounts / Comparison of each & why it’s essential to not lose money in exchange rates.

Choosing a Product  

❏ Product Research Guide

❏ Industry Research & Demographics 

❏ Competition Analysis

❏ Identifying flaws in competitor’s products & making your product better.

❏ Private Label vs Own Design and why being unique is better.

Manufacturing  

❏ Complete Guide on Manufacturing Overseas

❏ Certification

❏ Materials & components to avoid when starting

❏ Contracts – Protecting your brand 

❏ Choosing a supplier

❏ Ordering samples & how to test each sample effectively

❏ Product Design Guide

❏ Mould Process Guide

E-Commerce    

❏ Why having your own website from day 1 is essential for your brand

❏ A look at Ecommerce platforms & what do they offer. Which one we recommend for beginners.

❏ Building you store

❏ Email Marketing & Building a List      

❏ E-commerce SEO and how to drive traffic 

❏ PPC Overview

❏ E-commerce blogging

❏ Why good product descriptions is key to success

Social Media Marketing   

❏ Setting up Social Media

❏ Gaining Exposure

❏ Social Media Marketing

❏ Connecting with Authority in your niche

Inventory Storage   

❏ Fulfillment Centres – What they are and why they are essential for your growth

❏ List of fulfillment centres

❏ Fulfillment centres vs FBA 

Branding your Product      

❏ Product Photography

❏ Custom Packaging – standing out from your competition

❏ Shipping Boxes

❏ Insert Cards & Marketing Materials

❏ Customer Service & Experience

AMAZON 

▪ A guide on using sellers central platform effectively.

▪ Amazon Sponsored Products – A guide to PPC and how to optimize your listing based on Amazon ppc Results

▪ Customer Service – How to handle different customer issues and respond effectively.

▪ Amazon Deal Guide – Lightning Deals – Prime Day – Black Friday Deals. How to apply and maximising profits during deals. We will also explore how to run deals outside of Amazon to your listing.

▪ Amazon Vine and Giveaway Program – An explanation and overview if it’s effective for your business.

Retail & Wholesaling  

❏ Finding retailers & distributors in your niche

❏ Create a catalogue

❏ Contacting retailers

Going Forward 

❏ Expanding to other countries

❏ Maximising other sales channels

❏ Creating a product line

❏ Exhibitions & Tradeshows 

❏ Outsourcing

Now let’s go into today’s post.

 

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The Key Areas To Building a Brand

Choosing a Brand Name

This will be the main feature besides the logo of your brand, so it must be chosen carefully. Brand Names can be mainly classified into 3 main categories:

1. Niche Specific – Example: Joe’s Tea Company 

This choice is fine if you’re planning to exclusively sell within one specific niche or main category. However, as your company grows, it is essential to expand into different areas of one category. 

2. Category Specific – Example: Joe’s Beverage

This option is ideal if your main focus right from the start is to grow your brand to dominate your niche. By not limiting the choice of products in the brand name you can diversify according to the market at that time. Targeting multiple sub-categories within a niche is essential(as we will learn later on in the series) because you can target multiple keywords within that niche.

3. Unique Brand Name – Example: Empower Drinks

This gives you the most freedom for your brand, as you can expand and release products without being limited by the brand itself. However, a lot of effort must be made to get the name out there and customers won’t start associating your brand with a specific category in the short term. The best benefit of a unique brand name is that you have complete control, this is especially true if trademarks, domain names and other intellectual property is available for you to register.

Ultimately, a brand name goes down to preference. All three choices require effort, a line of successful products and excellent customer service to succeed.

Logo Design 

The logo, in most cases, IS what makes the brand. It is the key feature with which your customers will identify your brand. Before hiring a designer for your logo, here are some key aspects your logo should include:

Simple but Detailed

A logo shouldn’t be too complicated as it can be distracting, especially when it comes to products. Think of the products you will release, or plan to release on the market, it is likely your products will be made of different materials(wood, stainless steel, fabric, etc.) and a variety of methods of application(embroidery, engraving, stamping, etc.). A great logo will make your products stand out more and its a great way to start building a brand.

Colour Scheme

Ideally your brand shouldn’t have more than 2 or 3 colours in all of it’s branding. This applies to all aspects of the brand. In the pictures below, you can see how all the major brands pick one main colour and focus all their branding on it.

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Image Source: The Logo Company

Here is how certain colours effect Men and Woman. Depending on your niche, this may prove helpful in the design process

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Image Source: Entrepreneur.com

Demographics

 

Make your brand appealing to the audience you’re targeting. Audience segmentation will be helpful in targeting the right demographics that may be interested in your brand through advertising and social media. The main demographics you should be interested in are:

1. Gender: Male or Female

2. Age Range

3. Location – Country and State/Province

How ImportDojo Applies Branding

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As you can see from the image above, Import Dojo implements all key elements when it comes to branding. The brand name in itself has great relevance to its audience. The logo is fairly simple and recognizable, with few, but bright colours. 

However, what makes the brand in this case, is the story of how Import Dojo was started and why Manuel had the idea to start the blog. You can read more about it here.

Products, even if essential, are only one aspect of the brand. When you combine the same concepts throughout your website, social media and packaging; that’s when a brand truly starts to distinguish itself from the competition.

The Hard Truth: Branding Takes a Long Time To Be Effective

Unfortunately, the not so sexy part about branding is that it takes an unbelievable amount of work, consistency and time to see the rewards. Nonetheless, people are more likely to buy from a company that offers a unique experience to its customers. The whole point of the series is expand your brand to multiple sales channels and expand globally.

While Amazon will still be the main sales channel, having control over your brand, customers and products is going to be the only way to succeed in the future.

 

Conclusion

This was only a brief overview and guideline on the process of kick starting your brand. We hope this blog post was helpful in guiding you in the right direction. the upcoming weeks blog posts, we will dive deeper into:

– Choosing a great slogan and how to make a slogan that fits your brand.

– Brand Story – How stories can help your sales and connect with customers.

– Finding a Designer – The questions to ask before hiring a designer and what to look for.

 If you have any questions or you would like to know in more detail, please leave a comment below.

All the best,

Duncan

http://importdojo.com/importdojo-masterclass/

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News and trends from the October 2016 exhibitions in China

I have made it a habit to give you an update on trends after every exhibition season in April & October within Hong Kong and China so I won’t break that habit this time :)

It has been a hectic 8 weeks for me. When I returned from Europe in September I flew straight to Hong Kong and had an extensive amount of work waiting for me. 

While the first few weeks were all about catching up with work after my holiday I was excited to go to the exhibitions in Hong Kong and China. Here are some of the exhibitions that I went to in October/November over the course of 4 weeks: 

Global Sources Electronics (phase 1)

HKTDC Electronics Fair

Global Sources Smart China Sourcing Summit – for Amazon and online sellers

Global Sources Electronics (phase 2, Mobile Electronics)

Global Sources Gifts & Home

Mega Show (Part 1)

Canton Fair Phase 2

HKTDC International Building and Hardware Fair

Mega Show (Part 2)

Canton Fair Phase 3

Without further ado here are some impressions from the last 8 weeks. 

Hong Kong is constantly at the Top 3 most expensive places to live in the world. Wonder how my apartment looks like in Hong Kong? 

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Yep, thats 8 square meter of pure space :) 

 

 

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At least there’s a rooftop with a view :) 


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And not so bad to work with this view  :) 

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There’s also a co-working space downstairs. 

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Back at the office with one of my newest products.  Check it out if you are in need of a portable photo studio. 

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End of September I head to an Amazon seller and eCommerce meet up in Shenzhen, China, organized by my friends over at EnterChina

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Rico Ngoma serial Entrepreneur and partner of EnterChina drops knowledge

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working on new projects for ImportDojo on the rooftop

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back at the office with the team :) 

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another hike at the end of September. Remember to work out whenever you can :) 

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The exhibitions start! I head to the Global Sources Electronics show Phase 1. Make sure to get your free train ticket ticket with your buyers badge. 

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Global Sources hosts two electronic phases with different categories from 11-14th and 18th-21st. 

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Walking the aisles at the shows. Predominantly Smart Phone accessories on nearly every booth. 

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Sport & Action camera’s are evolving and it’s amazing what you get these days. 

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Video & WiFi glasses/camera’s seem to be the newest thing. Maybe not the newest but a lot of suppliers exhibit those. 

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Smartphone cases. 

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I found this product to be quite interesting :) 

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An actual AI (Artificial Intelligence) 

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This automatic car cover peeked my interest. 


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Gaming & video backpacks seem to be popular as well. 

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Virtual Reality getting bigger and more interesting in terms of developments. 

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Drone’s are definitely still popular but less than half the amount of booth’s than in April this year. 

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Global Sources held the first Drone Racing Championship this year at the event. I wasn’t there to witness but it looked pretty cool.


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I head to the HKTDC Electronics show. Make sure to pre-register (its free)

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Quite a lot of buyers on the first day. 

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You’ve got big brands from overseas

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and big local brands from China. 

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The HKTDC doesn’t focus on Smart Phone Accessories only but has regular household electronics as well. 

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Smart Home Automation has made big leaps and improvements in terms of apps and technology

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Not sure what these guys do. 

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It’s a beautiful day in Hong Kong and I am stuck at the expo :(


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It’s my birthday and I hike to the beach with a couple of people

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I am invited to speak at the Global Sources Amazon sellers summit again. I got to present my case study there as well in April. This time I talk about how to select the right supplier.

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I meet a few fellow ImportDojo members and familiar faces from online :) This is Taye from Hong Kong.


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Chris McCabe delivers amazing value in regards to Amazon account suspension and prevention. 

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Chris Davey & Danny McMillan arrange a meet up that evening in central Hong Kong. Over 40 Amazon and eCommerce sellers come. 

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Discussing with Mike Michellini from Globalfromasia some strategies for our business. 

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I talk about supplier selection and how to verify suppliers in China when at exhibitions but also online.  img_6586

In case you are wondering what some of the testing companies charge. 

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I walk the halls of the Global Sources home and gifts. 

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Lots of packaging suppliers there as well. 



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The first suppliers with Lightning earphones for the iPhone 7. I test them and they are horrible in quality :) 

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Interesting design for a power bank. 



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Flexport talks about the recent Hanjin collapse and the forecast of the freight forwarding industry at the Sellers Summit

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In between all of this I become the Number 1 bestseller on Amazon with my French Press case study. Even if only for a few days I am happy because I sell between 100-200 pieces per day :)


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Danny McMillan and Currencies Direct organise a meet up in Central with Will Tjernlund at a “fireside” chat. Will talks about Wholesale strategies and amazes the crowd as usual :)

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The next day a Typhoon with a signal T8 (the second strongest) hits Hong Kong and everything closes. I plan on heading to the Megashow part 1 but have to delay that until the next day as public transport closes all together. 

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I eventually make it to the Megashow for a few hours before heading to Guangzhou for Canton Fair Phase 2

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Remember to book train tickets in advance as they are sold out days in advance. 
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I walk around Canton Fair for the day and take catalogues and snapshots of interesting items

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On the next day I head to Shenzhen to visit one of my suppliers. Some of them go the extra mile :) 


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I check the production and facilities. 

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Testing equipment within the factory. 

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My wife gets me a birthday gift :) 

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back in Hong Kong I check out the “OBEY” exhibition thats running for a month. Very cool art!


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My friend organises a “junk boat trip”. You basically rent a boat that caters food and drinks all day and you drive out to some island 

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Ignore the couple that is making out :)

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I head to Canton Fair Phase 3 and check in at the Aloft. The value you get for 60US$ is amazing. 

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I walk around Phase 3 for a couple of hours and meet existing suppliers and try to find interesting products for my outdoor brand. 

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Office and stationery is also very present. 


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Chris Davey from FBA4U organises his 4th Amazon Seller meet up in Guangzhou. The crowd is huge. Make sure to join his Facebook group if you are looking to meet up during your trip. 

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I meet familiar faces and friends from all over the world :)

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On 7th November I head to Bangkok for a couple of weeks. I hear a lot about UBER Hong Kong has Tesla drivers. I give it a try and I actually find a Tesla for my airport ride. I had to try it :) 

Pheew! Lots of photos and stories to share. All in all I’d say I’ve met a lot of great people, made new friends, found new products and definitely had a good time the last weeks :) If you are planning on coming to China I highly recommend you do.

In the coming weeks I’ve got a lot of news and amazing content coming for you. I am starting a new blog-series here on ImportDojo focusing on building a brand and how to drive traffic to your Amazon listing. Furthermore we are going to show you how you can build a business outside Amazon, so stay tuned :)

All the best and happy sourcing,

Manuel

http://importdojo.com/importdojo-masterclass/

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The ultimate guide on how to find a product

 

How to find a product?

This is the number 1 question I get asked on almost a daily basis. I have no definite answer for you today but I will try to break it down in two sections and a step by step guide on how I select products and hopefully you’ll get a few ideas :)

Lets look at your personal situation (scenario) first and then see how you can benefit from your scenario when picking the product.

1) How to pick your product niche:

Scenario 1: You’ve got money

Congratulations! While it is easier to get started the question of what product you are going to pick still remains open. More on that below.

Scenario 2: You don’t have money and you’re scraping together every little cent you have to reach 5,000$ because that’s the budget you heard of is the minimum (well its my minimum that I recommend to everyone).

While it is more difficult to get started you have the same starting point like everyone else out there. You probably want to make sure that the product you are going to pick is worth the investment. But even if your first product is not a killer don’t worry. You learn a lot in the process and in most cases you can at least get your investment back. Read on.

Scenario 3: You have a large follower-ship on social media

You are in a great spot. You already have a list of customers to get your launch and product going. It is imperative to pick a product that fits your social media.
In my recent case study (http://importdojo.com/case-study-how-i-went-from-zero-to-7000us-in-10-days-in-one-of-the-most-competitive-amazon-niches/) I reached out to bloggers and that boosted my launch immensely. Even nearly 3 months after my launch I still get sales from that site.

What does that mean if you have a large followership? Lets say I have an Instagram account with 50,000 followers that talks about eating healthy, fitness, the outdoors etc.. I could launch so many products to that followership, even competitive niches. For example:

  • Yoga mats
  • Accessories for the gym (tumblers, bags, sporting items etc.)
  • Backpacks, travelling gear, camping accessories
  • etc.

When you research your future niche and have decided on it build social media right away if possible. A client of mine built a social media follower-ship of 8,000 followers within 2 months (various social sites) and then launched her product. She sold nearly 100 pieces the first week only trough social media. That helped boost her organic sales and the rest is history.

So consider social media right from the beginning when choosing a product.
Ideally you will want to enlarge your assortment with similar products that all fit into your following. For example if your first product was a yoga mat and your followership is about exercising etc. it probably doesn’t make a lot of sense that your next product is a vacuum cleaner.

Scenario 4: You have passion about a certain product category

Let’s just say you love the outdoors, hiking, camping, and exercising in general (like me). So many products to choose from but you have one advantage. You know what you like and what your product should be able to do. You already have an advantage over many other competitors. Your passion for this category goes into your product. E.g. if you were to be upset about quality of camping mats you would already know what to tell your supplier where to improve. Look into categories you have passion for and then choose a product that you feel you can talk about, improve and passion in selling for.

For example if you like cooking you could look at developing a product that makes a certain cooking process easier. The exciting thing about this is that all your passion also goes into your product and listing and people just buy your stuff because you are so convinced of your product yourself.

For example I recently bought a travel bag from a German entrepreneur based in Thailand who loves travelling. Over the years he went trough so many of his traveling bags already because they were of poor quality (the straps broke, the leather peeled off etc.) and he decided to make his own bags. After 6 months of hard work he launched his site and product and it took off immediately. All his passion went into his product and site (https://www.travlmind.com/). You could tell by his story that he was really passionate about creating the best bags out there and not just copying the big brands. And only that convinced me to buy one of the bags even that it was at a higher price tag.

Scenario 5: You have vast experience in a certain industry

Lets imagine you have 17 years of experience in selling electronics (like me). What was the first product I picked? It was an electronic item. Why? Because that’s where I had my experience in. I believe you should not just have passion about your product but also have experience. When I sell a product online I want to be able to answer customers questions and inquires. To be able to do that I need experience in that category. Your passion and experience goes into creating your product. So when I choose my first product I improved an existing item based on my experience in that industry: http://importdojo.com/how-i-started-my-own-private-label/

So if you have a lot of experience in a certain industry make that industry your first product category.

Don’t have experience in a certain industry? What about a hobby? Or are you a parent? I am sure if you are a parent you have lots of experience with your kid/children and you could start in that category :)

Scenario 6: You have none of the above

Not to worry or be frustrated. Most of the people I know that get started start with Scenario 6 and there are still many success stories out there if you are within this scenario. Here’s an approach that you could use:

First: Take out a notebook and create a list of your interests and hobbies (or responsibilities as a parent for example) e.g. kitchen products, electronics, sports, your kids etc.. Yes actually write it down. Call me a bit old fashioned but I like to drop down ideas in written :)

Second: subscribe to newsletters of companies that talk about or sell products of your interests. See below on which sites for example (point 2)

Third: Gather a list of potential products from that niche. Collect at least 10 ideas.

Fourth: Research phase. Junglescout, Amazon, eBay, jet.com, local shop that sells the products etc.
See if there is any demand? Or is there space for one more seller (you)?

Fifth: If there is no demand is it because the product is in its fledging stages? Can you improve the product with your passion and interest in this product? Yes? Create a To-Do list of what you can improve based on customers reviews, what friends and family say etc. and move onto finding a supplier.

Sixth: No? Are you still convinced of the product? Follow your gut feeling and also ask around in friend circles. Move onto finding a supplier

Seven: No demand at all? Move onto product 2 of your list of ideas.

Lets say you found your niche, category or general product idea. Depending on above scenarios here are a few examples on how to find your product:

2) How to find your product ideas:

Choose your scenario and lets look at the following options:

  1. Amazon
  2. Blogs, Gadget or trendy sites
  3. Exhibitions
  4. Supermarkets, shopping malls
  5. Tools
  6. When travelling
  7. Alibaba & Globalsources

1) Amazon
You could look for hours on Amazon in the different categories and niches if you already have a certain product idea. But if you have no idea to start I suggest you start with the best seller list: http://amzn.to/1ZN3rY3

2) Blogs, gadget or trendy sites

Please don’t just look on Amazon! While there are great tools out there to scout Amazon for products (Junglescout, Cashcowpro etc.) I get many of my ideas outside Amazon.

One of my favorite site to find interesting blogs and trendy websites is Kadaza. It’s a collection of the best and most interesting sites on product ideas:

http://www.kadaza.com/

Click on any of the categories and you will find x amount of websites in that niche. For example if you look under the Tech category (http://www.kadaza.com/tech) you will find “The Gadget Flow”. By subscribing to their newsletter you get weekly updates on trendy items (that may not even be on Amazon yet). Lets take a look at an example:

Just a few days ago I received an email from The Gadget Flow. Its a site that I subscribe to among many others. I found the site by looking trough above Kadaza links.

So when I opened the email there were a lot of products that are currently on sites like Kickstarter or other similar sites. But you know what? If its only on Kickstarter now it means it isn’t on Amazon yet hence you can take the product idea and even improve on it. So I looked at the first product that caught my attention (lots of other good ideas too in that email):

 

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After clicking on the link I found that the company is based in Denmark and funded their product “the Sitpack” successfully on Kickstarter.

 

 

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Just a quick search on Alibaba.com and I immediately find a supplier:

 

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As you can see the supplier either stole the pictures or he is the actual producer for this company. I think it is the first one but it could be that they are the sole manufacturer.

 

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Now I go on Amazon and see that there is only one seller, the actual company “Sitpack” selling for 149$!!! Look at the listing. So much to improve!!

 

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Also I am pretty sure that this product does not cost more than 10$ to manufacture. Wow what a margin!

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Either way, the point I want to get to you is not to copy these companies but find ideas on blog sites (subscribe to them) and see how quick and easy you can research suppliers on Alibaba or Globalsources for suppliers. Maybe add an accessory, change colors or whatever you feel could improve the product. The best thing about subscribing to these sites is that you get ideas delivered for free to your email address.

3) Exhibitions
One of my favorite and most efficient way to find new products is at exhibitions. There are hundreds of exhibitions each year in many countries. You get to meet the supplier, see the products, and talk over details such as prices, models, and much more. On top of all of that I guarantee you that you will get inspired. To find exhibitions near you just Google the exhibition center near you and get your entry ticket. Most times you will need to provide name cards and contact details for that. You can order business cards for $5 these days. Going to an exhibition prepared and with a professional image gives the supplier a great impression of you.

There are countless exhibitions around Asia throughout the year but mostly during April and October. Here is a list of exhibitions for October 2016: http://www.globalsources.com/NEWS/TRADE_SHOW_CALENDAR_OCTOBER2016_A.pdf

A great write up from one of webretailers earlier posts of Danny McMillan who I had the pleasure of meeting in Hong Kong in April: http://www.webretailer.com/lean-commerce/sourcing-trip-china/

4) Supermarkets, shopping malls
Another way to find new products is obviously when you are out in a shopping mall or a local shop. To start your own import business means that you also work when you are out with friends/family at a shopping mall. Keep your eyes open and when you see something cool make a reminder for yourself on your smart phone to look the product up later.

5) Tools

A) Junglescout
You have probably heard of Junglescout already. Junglescout is probably the most advanced tool when it comes to navigating Amazon and finding bestseller products. Jungle Scout integrates into your Google Chrome browser, streamlining your product research. Extract rank, sales volume, FBA fee’s, type and quantity and a lot more! From what I hear soon also available for the German market.

I had the chance to meeet Junglescout’s founder Greg Mercer twice. He is a really cool and down to earth guy who seems to work purely for the community. Check out his blog and site where you can get hundreds of product ideas itself if not using his tool.

B) Cashcowpro

In January this year I was contacted by Antoni Watts, the founder of CashCowPro. I looked up his tool and was amazed by how he has probably put together the most comprehensive tool that not only helps to boost sales but also provides accurate insightful metrics for selling on Amazon. From all the tools out there I think this is my favorite when it comes to keeping track of all my sales as well as testing features.

It also works also iPhone and Android APP. Within the tool there is a Top 100,000 NICHE selector… They actually scanned over 100 million products + ASINs on Amazon to create this list.
They automatically calculate the factory cost and Air + Sea freight to give you the Top 100,000 most profitable NICHES on Amazon. Not products, but actual NICHES, using the average of the TOP 5 ranking products for each Niche to calculate the overall performance. The tool has many more functions apart from the niche selector that you can see here:

 

6) Travelling

Travelling is also a great way to find ideas. When you are out of your country or state you will likely see items that your country/state does not have. There could be many reasons why they may not be available where you live, but it’s always worth it to check an idea out. I remember when my friend told me about 10 years ago about Bubble Tea & Fancy Green Tea drinks sold in Hong Kong and Asia. She was from Germany and she had never seen these drinks back home. She didn’t go on any further with that idea but a few years later back in Germany these drinks started to pop up and were a smashing hit! So even when you think at first that idea might be nothing, it could be worth millions! Share the idea with a few friends and brainstorm about it.

7) Alibaba & Globalsources

A) Alibaba

First off when you sign up on Alibaba you generally need to fill in which product categories you are interested in. Based on this criteria and your recent product searches on Alibaba you’ll get automated emails with new product deals. Als you can subscribe look in their “selection site” where they post a lot of the newest and trendiest items from their suppliers:

http://selection.alibaba.com/?spm=a2700.7848340.0.0.tevCsV&tracelog=hd__cor_selection

B) Globalsources

Pretty much the same with Globalsources. You sign up and get automated emails with great product deals here. But not enough, they also have a section with the best deals and newest products out of every product category: Top Products. And my favourite part are their eMagazines that are updated on a monthly basis with the hottest and newest product alerts on their site.

Check out the links listed above and browse trough hundreds of products. Use the techniques and step by step scenario as described above depending on your situation.

Well that’s all I can think of today but there are literally so many other ways to find products. Even if you personally went trough some of the above ideas already I hope there’s still something for you that could help to find your next or first product. Some more ideas on how to find the “perfect” product also in one of my earlier guest blog posts from Thomas Albiez based in Switzerland: http://importdojo.com/how-to-find-the-perfect-product-2/

Once thing I can recommend everyone at some point is to come to Asia and visit some of the exhibitions. I feel it is just the most efficient way to find products. I know it may not be cheap to come here but I can guarantee its worth it. A plane ticket and a few nights at a cheap hotel can go from $1500. But you’ll see actual suppliers, products and samples in real. Saving you a lot of money and time in the process. Here are a few impressions from October last year and this year April’s exhibitions :

http://importdojo.com/news-and-trends-from-the-exhibitions-in-asia/

http://importdojo.com/news-and-trends-from-the-exhibition-april-2016/

I hope you enjoyed this post and that I could somehow inspire you a little bit to find your product ☺

All the best and happy sourcing,
Manuel

 

Ps.: some of the links are affiliate links and at no additional cost to you, I will earn a small commission if you decide to make a purchase.  I have personally used and tested all of these products or companies, and I recommend them because they are helpful and useful, not because of the small commissions I make if you decide to buy something. The cost to you remains the same, sometimes even cheaper if I have negotiated a special deal for our readers. Please do not purchase these products unless you feel you need them or that they will help you achieve your goals.

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7 weeks case study update – I am out of stock

I have a problem. Well its more of a luxury problem. Don’t get me wrong, I am not complaining :)

I have sold 1008 pieces of my French Coffee Press and am out of stock after only 7 weeks.

How did this happen? 

If you re-call my last blog post (http://importdojo.com/case-study-how-i-went-from-zero-to-7000us-in-10-days-in-one-of-the-most-competitive-amazon-niches/) I was doing about 8-12 pieces organically after my initial launch.

After about 5 weeks I was doing around 20-25 pieces a day

IMG_4738

and in the last 2 weeks I was doing between 35 to nearly 50 pieces a day!!!

IMG_4359

I contribute this to the following factors:

  • My listing and photos are better than the competition
  • My product is superior to the competition
  • Great copywriting does matter
  • 79 reviews within 5 weeks  
  • Launch tactic and tools used 

So now I’ve been out of stock for nearly a week already and my ranking has obviously dropped significantly. The good news is I have 1 shipment (208 pieces) that will be arriving this Friday. Unfortunately it is only 208 pieces that the supplier had in stock for me. 

As soon as I saw that I am heading towards 30 pieces a day I ordered another 2500 pieces that are being produced right now but I have to send it in via Sea otherwise it gets too expensive. Also I will not do any give-aways or PPC until my 2500 pieces nearly arrive, otherwise I am running out of stock again. Luxury problems like I said :) 

Alright, numbers:

Start of the project: 17th of November 2015 (Chinese New Year added nearly two months to my production) 

End of the project (launch): 12th of April

Length of the project: ~5 months. It can be done in less time (2-3months) especially if you don’t forget to place orders before the Chinese New Year  

Total order value of product: 4500$ (1000 pieces at 4.5$) 

Total cost of inspection, photography, layout and packaging: 949$

Total cost of shipping: 2650$ (~900KG by Air – thats 2.94$ / per kilogram) 

Total cost: 8099$

Update numbers after 7 weeks:

Units sold: 1008 pieces

Returns, units broken: 12 pieces (1% return quote) 

Profit made after PPC, give aways & others: ~8400$ 

My estimate profit when I started was around 12,000$. So I am short about 4,000$ but I am not not complaining. 

I’ve taken these 8400$ and re-invested them in my 2nd (208 pieces) & 3rd (2500 pieces) re-order. 

Meaning that the following orders are pure profit because I covered my initial investment (8099$) and nearly covered my 2 & 3rd re-order. 

Conclusion of this case study

It’s been 6 months since I started this project and I thought its time to give you a recap of what has happened, what went well what didn’t and where I can improve.            

The fact that the Chinese New Year (CNY) was in between and that I have not worked full time on this project has delayed my project. 

If I would have focused on this project from the start and work more than the 1 hour per day I could have shipped out before CNY and would have had a total of 3 months from the start until launch of the product. Since I am aware of most things that need to be done for this project it is easy for me but if you are a beginner I estimate that from finding a product until shipment/launch you can do this in 4 months.

Now onto the things that went well and some that didn’t work well.

One thing that caused a long delay was my mistake in paying the wrong beneficiary for the sample payment. That delayed my project for nearly 2 weeks.

So make sure that you check all banking details when you make a payment. I also lacked the motivation in the beginning because I had so many other things and other products going on. That delayed my product for 2 months. Why? Because I won’t ship out before CNY. So make sure of the timelines when you want to launch a new product and be aware of Chinese holidays.  But I will explain in a little bit why this actually doesn’t bother me so much. Another thing that didn’t go so well was the misunderstanding on the extra filters that I wanted. 

Apparently I didn’t make myself very clear to the supplier on this point. Also the fact that I wasn’t able to get a price reduction bothers me a little bit but I can’t complain too much because every other modification that I wanted was accepted from the supplier even though I have a small order quantity.

One thing that bothers me a bit are the high shipment costs of Air shipment. Reason being that the quantity is low and forwarders charge high premiums for small shipments. With my re-orders I will order a larger quantity and go by SEA and that should bring shipping down to 20% at least. Which will improve my margin in the end.  Also the fact that the supplier messed up on the product dimensions and weights and that I was paying 270$ more than planned is not ideal but it is what it is.

Another thing that I didn’t plan well for was the re-order. I am now out of stock for another week and I have to get my ranking going again. Once that ranking is up again I should receive my large re-order by Sea. I should have projected my sales velocity at an earlier stage and simple send in a large re-order right away after seeing first results.

What went well was definitely the communication with the supplier and the quality of his work and attitude towards working with my small quantity. I attribute that for meeting the supplier in person at the canton fair and my clear instructions when I first made contact with him. Subsequently I also promised him more business in the future ,which definitely makes him more eager to work with me. The initial sourcing results were also pretty good, all suppliers had good prices and decent MOQs. But the fact that my actual supplier had exactly what I needed and the fact that I met him in person made my decision easy.  

I am also happy with the artwork and photos. I admit I paid a premium price for the packaging and photos but I want quality work. So often I read from people in the FB groups that they hire someone on Fiver or Freelancer.com and the results are either bad or mediocre. Or the seller of the service disappears completely or doesn’t keep deadlines which can be crucial for your launch. Think about it, a great listing and photos will set up your product for the long term even if the initial investment is bigger. I could also book a cheaper inspection now but that’s not the way I do it. I want this product to be of high quality and I don’t want unhappy customers or give my competitors the chance to give me a bad review.

I may go with a cheaper inspection for re-orders which are less complicated. There are services I work with that charge 100$.

The fact that my shipment was delayed for more than 2 months because of the CNY  actually doesn’t bother me at all because this course should be for beginners on importing from China who are launching their first product. So you actually should take your time for all the different steps. Don’t hurry the process just to ship as fast as possible. I had two months to prepare my launch, perfect my listing and think about different strategies.  Also I think many of you are just starting out or doing this on the side. The one thing I suggest you is that you take you time, do the research and know the process when dealing with factories in China. Don’t just quit your job because you heard of FBA and do this full time. Have a capital on the side, maybe do this besides your full time job and once you have a couple of SKU’s running you can think about quitting your job. If you can’t invest 5-6000$ for your first product try ordering a smaller MOQ.

However I personally think 5000$ is the minimum budget one should have and I am not saying it can’t be done with a budget of 3000$ but you will likely be in a much more competitive field when choosing a product because a lot of people look for the same products because of their limited budget. Save that money you would spend on a weekend out with friends and put it into your budget. 

Now don’t get me wrong, I have spent quite a lot of money on photography, inspection and logistics. It can be done for less, that is for sure. I could get an inspection for 100$ instead of 309$. I could get photos for 100$ instead of 650$. And maybe that would work also ok and in time I can improve photos and other things. But I don’t see it as that. I see the initial investment important because it will set up my listing for good. Now obviously a lot of people will see this case study and might copy me so I will have a lot of competition, but that is not my point.

I normally wouldn’t disclose my product and therefore (if I don’t disclose my product) the steps that I have taken will make sure I have a high quality product, great photos and a money maker for the coming years. If I were to cut costs everywhere maybe because of budget reasons I would have to cut into quality of the product, leave out the inspection, poor product photography and more.

That puts my Amazon account, Best Seller Ranking and everything else in danger. I want to have a reputation of a quality product and satisfied customers, because in the long run that is what you need to grow your business. If I were to try this as a one time thing I might make some money quickly when cutting costs and then what? I have to start all over again with a new product because someone copied me and made a better product.

See the initial investments as a road to success and don’t think about the number too much. I am not saying you should pour money into suppliers and inspection companies or photography, these have to be reasonable and negotiated but don’t be too stingy with investments either.

I think the saying “want cheap? Then you get cheap!” plays a big role when buying in China and selling on Amazon. Do your research on services that you need for your product, don’t pay too much but not too less either just to save 100$ that will hurt your product’s performance in the long run. 

I am a bit off on my initial calculations and profit projections (about 4000$ off) but I’ve added a couple of things and looked for the best so that decreased my profit. However I as I said I nearly covered both of my re-orders only with my profit. And I have no more photography or give away costs and that will certainly improve my margin. Keep in mind that your first product will not make you a lot of profit but the re-orders when launched successfully will.

Ok, so I am wrapping up here. I hope that this case study helps you to figure out the process in China and how you can apply my techniques to your own product. I have also learned that two of my students will launch the same product in Europe’s Amazon markets and in a few weeks I can give you some more results on the European market with this product

Looking back at this project I would call it a success. Here’s why:

  1. I have a product online that has quite some reviews already (mostly 5 star)
  2. No future investment needed (except re-order inventory)
  3. The product makes me 3,000$ a month minimum, possibly more.

Now onto YOU my loyal reader. Let’s assume you are still considering moving into FBA on Amazon. Imagine this was YOUR first project on Amazon and you are still employed. If you would have started this while working a full time job you could possibly quit your job now and have a guaranteed income of 3,000$ per month. If not, here’s a few scenarios what you could do with those 3,000$ extra:

  1. Escape the rat race and quit your job? Maybe not the safest decision but add one or 2 more products and you are good to go.
  2. Want to add additional income and keep your job? You’ve just added 3000$ to your monthly income.
  3. Want to go to tropical beaches on a holiday and not having to stay at budget hotels?  
  4. Want to send your kids to an expensive school? There you go. 
  5. Need more money to support your family? 

What I am trying to get to you today is:

“Focus on building a brand from the beginning. Keep this in the back of your head with everything you do. The majority of you just starting out has limited capital and can therefore not play around. So build better products from the beginning, have A+ photos and listings, great customer service and don’t be afraid to invest your money into higher priced and better quality products, be unique in what you do.

Look at this business not as a get-rich-quick scheme but rather see your investment as an opportunity to build your brand and in turn make more money in the long run (Do this as opposed to release and launching a product every week). Build it slowly and keep quality and focus in the back of your head.”

One last thing. If you are just starting out do not take your first profit and spend it on a Vegas weekend :) 

I hope that this case study has somehow inspired you to start your own business.

Be it on Amazon or other eCommerce (or offline channels)

If you are interested in the step by step video lessons (over 50+ video tutorials) and the other great parts of my course have a look at my Masterclass:

http://importdojo.com/importdojo-masterclass/

All the best and happy sourcing,

Manuel

http://importdojo.com/importdojo-masterclass/