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Zero to Hero: Build a Brand Series – Business Incorporation 101 – Part 3 – Banking

Zero to Hero: Building a Brand

Business Incorporation 101: Part 3

Business Banking

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Having a good business structure is only one part of running the business – A good company needs to have the best tools to be financially viable. In this blog posts we will talk about business banking, transfers and international exchange rates. As your business grows, you can’t afford to lose money in fees, for this reason, it’s important to choose the best banking tools you can find.

 

Regardless of the country you choose to incorporate in, we suggest you have:

 

  1. 1 Business bank account In the country of incorporation
  2. 1 Bank account in you home country or country of residence
  3. 1 International Bank Card(HSBC, Chase, Deutsche Bank etc)
  4. 1 Currency Exchange Account

 

We recommend having accounts in all 3 major world currencies – US Dollar($), Euro(€) and Pound Sterling(£). You may ask why would you need so many accounts if you’re only operating in one country or currency?

 

There are 3 reasons:

 

1. Market Crashes & Recession

 

As we have experienced in the past, countries have market crashes or recessions which greatly devalue the local currency. This can sometimes be so severe to eliminate your profits or worse put you out of business. Having an second account in another currency will enable you to switch/move  your assets and reduce the risks.

 

2. Global Expansion

 

At some point in your business, you will want to expand into other markets besides the US. Having an account in the local currency combined with a low exchange rate account; will save you fees on money transfers.

 

3. Material Prices & Sourcing

 

A lot of E-commerce sellers overlook this very important aspect, materials rise and fall according to the local(and global) stock market affecting labour costs – and increasing you Cost of Goods Sold. A good way to go around this issue is:

 

  • Source different types of materials so your risk is spread out (Wood, Aluminium, Titanium, Textiles etc.)
  • Source from different markets. Example: Electronics from China, Textiles from India and Merchandise from the USA

 

In every business there is risks involved, however, what separates successful businesses from unsuccessful ones is that they prepare their business for every situation.

Here are some of the best business accounts in the world you can use – there are no affiliate links and all the companies/banks mentioned are listed because they truly provide the best value and they are tools we use.

 

Best Global Banks 

 

HSBC

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As we will mention in this blog post, nowadays, there are a lot of banking options. However, I would also recommend having a bank account with a major, global brand. While their fees may be higher, the fact that they have a global presence is perfect for E-commerce. HSBC is probably the best choice if available in your country since they offer:

 

  • Free ATM withdrawals from HSBC ATMs worldwide.
  • Insurance packages – Travel Insurance, product liability insurance, house insurance etc.
  • Free Transfers to any HSBC account worldwide – If your supplier has an HSBC account, this will save you a lot of fees!
  • Account opening assistance worldwide if you’re an HSBC customer
  • Very good online banking & secure

 

Citibank

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Citibank is a great alternative to HSBC(if it isn’t available in your country). Their service is top-notch and their accounts come with a lot of benefits. The Citibank Plus Account in particular is a really good option, it’s features are:

 

  • No monthly/yearly costs
  • No ATM fees worldwide – However, they don’t refund ATM charges that local banks charge abroad.
  • No foreign transaction fees
  • No currency exchange mark-up – You get charged Visa’s official rate.
  • No fees on international transfers

USA Bank Accounts

Charles Schwab Bank

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This is probably the best bank account in the US to have if you travel overseas a lot. Almost every service the bank offers is FREE – One amazing feature that is very rare in banks: they refund you worldwide ATM fees you get charged by the overseas banks. Their only downside is their online banking system, which is a bit lacking. However, having this account as part of your banking is definitely an asset.

 

You need to be a US resident or have a US address(if you’re not a US resident you can use a mail forwarding service). You can open an account online and they have a few branches across the country. If you’re not a US resident, we suggest to visit a branch to open the account.

 

Features

  • No monthly fees
  • No set-up fees
  • No ATM fees – Worldwide
  • No foreign transaction fees
  • No currency exchange mark-ups – You only get charged Visa’s official rate

Alternative: Capital One 360 USD Account

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The Capital One 360 offers the same benefits as the Charles Schwab Account, however, they don’t refund worldwide ATM fees. If you travel frequently outside the US, then this might be a deal breaker.

 

European Banks

United Kingdom

Metro Bank

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  • Fee-Free in Europe(SEPA Countries)
  • Low ATM fees Worldwide
  • Very low transfer fees(if transferring within SEPA)

 

Norwich & Peterborough Building Society

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  • No debit card fees worldwide – including ATM withdrawals
  • £5 monthly fee – Free if a balance of £5000 is kept in the account or deposits of £500 monthly

Germany

DKB

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  • Free – no set up costs & no monthly/yearly subscriptions(for the basic plan)
  • No ATM fees worldwide – However, they don’t refund ATM fees the local banks charge(if using an ATM outside the EU).
  • No foreign transaction fees
  • No currency exchange markup
  • Downside – Their English customer support is very limited. However, it’s a pretty good option for German residents.

 

Sweden

ICA Banken

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  • No ATM fees worldwide
  • Free SEPA transfers
  • No currency exchange fees
  • Monthly fee 25 SEK(~2.50€) – Waived for students and persons younger than 21 years old.
  • Free Travel Insurance for trips up to 45 days

 

 Online Only Banks

 

N26

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N26(Formerly Number 26) is by far the best online bank in Europe! Based in Germany it is now available in all EU & SEPA countries except Malta & Cyprus. The bank offers three plans – N26, N26 Black & N26 Business. N26 is now a certified bank and they offer deposit protection up to €100,000 according to EU regulations.

 

Features

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  • Free – no set up costs & no monthly/yearly subscriptions(for the basic plan)
  • No ATM fees worldwide – However, they don’t refund ATM fees the local banks charge(if using an ATM outside the EU).
  • No foreign transaction fees
  • No currency exchange markup – You only get charged Mastercard’s official rate.
  • The entire account opening process is online — you never have to physically show up anywhere
  • Card usage notifications directly from the app
  • Free Mastercard
  • Customer Service Support in German & English

To be eligible for a N26 Account you need:

  • EU resident/citizen – You need to submit proof to be eligible
  • A mailing address in Germany – You can use a German virtual address for this.

This is by far the best online-only bank if you’re from the EU & travel a lot!

Monese

Monese is an online bank that offers a UK bank account to anyone residing in the EU. They are a really good bank, however, there is a monthly fee of £4.95. If you plan on doing extensive business in the UK or need a bank presence there(especially when Brexit takes effect in a couple of years) – Having this account is a must. You can see all the features Monese offers below: 

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Simple – US Only

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Simple is an online-only bank and it’s shaping to become one of the best very quickly. They offer some really cool features & everything is done through their app. Some of the features include:

 

  • No monthly/yearly fees
  • Free Debit Card
  • iPhone & Android App
  • In-app budget tracker & visualized spending reports
  • High level Security
  • Goal Setting via their app

 

Simple is also a full member of the FDIC, so deposits are secure. Furthermore, the bank has been getting a lot of investor funding, so expect more features in the future.

 

Currency Accounts

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Currencies Direct

If your exchange fees are eating up your profits, you will need a service that offers the following:

  • Low Exchange Rates
  • Ability to transfer large sums of money
  • Experience in dealing with online sellers
  • A platform that supports multiple currencies

 

Currencies Direct ticks all the above! The set up process is quite is easy – just fill out the form on their website and a representative will contact you to see what type of business you run. Currencies Direct offers:

 

  • Extensive experience in dealing with online sellers – particularly Amazon
  • Low Exchange Rates
  • Risk Management – if you transfer huge sums of money, you want the best rate in real-time. This service will contact you when the exchange rate is ideal so you don’t loose money on extra fees.
  • Supplier & Manufacturer Payment – This is what separates Currencies Direct from the rest. They cater to a specific need us importers want(ie paying suppliers)!
  • Amazing customer service

 

I can’t stress enough how important having a good currency exchange account is. While Paypal is great to start with, their fees will eat your profits as you grow larger and payments become bigger.

This will also be true when you start to outsource different tasks of your business. It is likely that your employees/contractors/freelancers will be from different countries, having a currency account will allow you to streamline payments more effectively.

 

Conclusion

 

This three-part series was meant to give an overview for the legal and financial aspect of this business. Although it can be quite overwhelming, having a proper legal business will greatly benefit you in the long term. Our goal with the series is to create Sell-able Brands, and a business that has a good legal structure and management, is more attractive to potential investors.

In the next part of the series, we will move over to Product Selection, but with a twist, many sellers are realizing that to succeed in Amazon & in other E-commerce platforms – products need to be unique and innovative. In the next few weeks, we will explore how you can improve existing top seller products and releasing products that customers’ in your category want. Myself and Manuel will give you a complete guide on Product Design, Certifications, Patents & Manufacturing.

 

This topic is very requested, so if you have any questions or if you want us to talk into more detail, kindly leave a comment below.

 

All the best & Happy Selling,

Duncan

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

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What is going on in China right now?

This is a guest post by my partner in crime over at our sourcing operation of ImportDojo :) 

What is going on in China?

I am happy to provide you a bit of insight into the struggles of the worlds factories so for you to understand the background when you get emails like “shortage of packaging, long delivery times, factories shut down, massive price increases” etc.. 

Probably most of you have encountered rising prices and stubborn suppliers in the past few weeks. While some of this is the daily business of all of us, the degree of disturbance has taken dimensions unheard of in the past years and it is important and interesting to go deeper to find out what is happening and what causes the problem.

The US Dollar and its Chinese brother CNY

When Donald Trump won the election the USD fell into a short depression, recovering within hours to a strengths it had not had for almost 20 years. The USD compared to the EUR surged two days after the election to a surprising 1,078 conversion rate and continued to drop to a stunning 1,044 conversion rate in last week. As a reference point, the EUR was recovering and compared to the USD before the election results it had strengthened up to 1,150. This meant, that items purchased for the EURO zone in USD from China suddenly increased by about 9% in their landed price. 

Since we all compare profitability of products with the current possible sales price on the market, that meant margins were melting by 9% and a lot of projects, which looked fabulous before, were doomed. We heard it many times from our customers, that they were expecting a different price calculating back from the sales price on the market to the buying price. The point is, that it takes between 3-5 months for this exchange rate fluctuation to take effect in the market.

Of course the financial professionals will argue about the validity of the above numbers and I have to say they are correct. The strengthening USD forced the CNY to depreciate, which meant that compared to the USD the CNY became a bit weaker and everything coming from scratch from the chinese market in terms of raw materials could become a bit cheaper eventually. However the depreciation of the CNY towards the USD is limited to around 2-3%, while the currency strengthened by 9%, so for the European market it is a loss of around 6% just because of the USD. For the US market on the other side it definitely is a chance, since the depreciation of the Renminbi takes effect and in theory all items should become 2-3% cheaper. Now this is where the second problem kicks in.

The environment

At 4:20 PM on Friday, 16th of December 2016, Chinas environmental control agencies issued a five day “red alert” about a hazardous, choking smog spreading across the northern part of China and Beijing. Skies went black, the public was advised to stay indoors and switch on the television and the whole thing had a little bit the feeling of a catastrophe approaching. The AQI (air quality index) surged from average 150 (which is already unhealthy) to 500-700 in certain areas. Schools and nurseries were shut down, cars older than a certain age were banned from the streets and life almost stopped.

Beijing is just one of 21 cities in China declaring red alert throughout the last 20 days. A couple of days after Beijing, Shanghai followed and around 200 million people were effected by the exhaust fumes of the factories producing for the whole world. The government did the only thing that was right and targeted high polluters like steel mills, coal plants, painting and packaging factories, oil processing plants and all factories not fulfilling the environmental criteria set out by the government at the beginning of the year. As a result, by the end of last week more than 2.500 factories all over China have been shut down. Some of these manufacturers will get the chance to reopen after the red alert passes, many of them will have to either improve and get up to the standard required or file bankruptcy.

We may say “Lucky our factories are not affected”, but it would be a lie. The truth is that only very few of the 1.500 factories we work with have had to completely shut down. However this does not change the fact that their raw material suppliers for steel, aluminum, copper, plastic (oil related) as well as packaging are not there anymore. Yes, China is out of stock on raw material and packaging material. The result of this government policy is, that in the past 3 weeks cold rolled steel prices have gone up by 40%, hot rolled steel prices by 30%, plastic by 25% and packaging – if you are lucky and you can get it – by 35%. Aluminum and Copper follow the main steel indexes.

We have hit rock bottom on this and probably this is as bad as it gets. Suppliers are postponing orders without any guaranteed new shipment date where they purchased the raw material but did not purchase the packaging yet. In some cases if the material is not yet purchased, suppliers even cancel orders with their customers because the price increase they have to ask for would be in a range of 20-30%, which will make them lose their reputation. 

Chinese New Year

The cataclysm is the 28th of January 2017, when all factories put down the work 12% of the worlds population starts their 2 week holiday with a journey to their hometown. This is also the point in time where the environmental “red alert” will probably be lifted again and everything can go back to normal. However nobody can foresee the effect of China standing still 1 month earlier than anticipated because of these environmental issues and we are working hard to find a solution for each and every customer who encounters this problem along their way.

The potential chances in this situation

Concluding this newsletter the situation does not look good at the moment but it is an amazing chance to get some sourcing and product development work done. Offices remain open and concepts can be drafted, samples can be inspected and quotations can be handed out. Even though production is not at its peak, the factories can focus on selling their assortments and capacities for the coming year, for orders after Chinese New Year.

We are prepared to take on your new ideas and requests before Chinese new year and offer a discount to existing customers of 10% with the coupon code #christmas, sent to any of our employees at ImportDojo. Here in Hong Kong our merchandisers work over the christmas holidays and will be happy to grant this lower price to any service from our services overview except for photography and virtual address services here: http://importdojo.com/sourcing/

Finally, there is nothing left to say except for thank you once again for the trust you put in us in 2016. We are looking forward to an exciting 2017 together with you and we wish you a merry christmas, happy holidays and all the best for 2017.

All the best and happy sourcing,

Manuel

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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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From Zero to Hero – Building a Brand – Introduction

My name is Duncan and I have been an Import Dojo Master Class member for the past 8 months. As mentioned in the previous blog post, I will be making a blog series on how to build a better brand and provide an in-depth guide on tools & strategies to help sellers expand beyond Amazon.

The Idea Behind The Series and Course

Over the last month, many established and new Amazon sellers have experienced several changes on the platform – both positive and negative. The biggest change was the update in Amazon’s review policy which made launching a new product much harder.

That’s when the idea of the Zero To Hero blog series came up. Both I and Manuel realized that to succeed on Amazon, you need to have: 

●      A good product

●      A strong brand

●      Multiple sales channels

Over the past few months, we have explored different strategies which will help you not only become a successful Amazon seller, but also gain exposure globally.

Aim For Long Term Success: Building a Strong Brand with Multiple & Global Sales Channels

The main aim of the blog series is to go from idea to a strong, recognizable brand in your niche. Unfortunately, a lot of entrepreneurs are focusing solely on the Amazon platform. While it may be the easiest and the lowest barrier to entry; there are many disadvantages:

●      No control over your brand since the customer belongs to Amazon       

●      Amazon has made several changes which affected sellers badly   

●      Building a business on one income stream is never good   

●      Higher competition & lower pricing   

●      Some markets are saturated

In Zero to Hero, we will go over other E-commerce platforms, both in the US and in other countries. The series will provide an in-depth guide on which channels work best, including marketing strategies for each, including:

1.     Which E-Commerce platform to use to build your own online store

2.     Expanding in the US beyond Amazon, this will include stores such as Walmart and also small retailers(How to find them & approach them)

3.     Selling in Japan & EU

4.     Product branding – How to custom packaging, handling customer service & inserts

5.     Social Media Marketing – A deep look into Adwords & Facebook advertising for e-commerce

6.     Outsourcing & Building a Team – Where to find Virtual Assistants and which tasks make sense to outsource.

This is only a fraction of what will be included in the full blog series. Below is a representation of what Zero to Hero will offer. In the next blog series, we will have an introduction on what makes a successful brand and how to apply it to your brand or product.

An Overview of Our Blog Series

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Please feel free to share and comment if you have any questions or if you want something included in the series.

All the best and happy selling :)

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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Product Liability Insurance

Do you need Product Liability Insurance (PLI)?

Yes, I do recommend you have it but I’d say you don’t need to have it before you list and launch your first or second product.

You are unlikely to get any insurance anyway if your business is very new, have no track record, never filed an annual return or have no experience working with factories in China.

How does Product Liability Insurance work?

Basically you can cover any product in a group of products or by product only under an insurance. Meaning if there is any issue with your end consumers the insurance will cover the damage. That is if you have done everything by the book. Meaning you have certifications, had an inspection, a letter of guarantee from your supplier of conform goods and everything went well during production. Thankfully I’ve never had to make use of my insurance so far and I pray I will never have to but just in case its good to have it. Especially if you sell in the US.

Who needs it?

I’d say anyone importing to the US needs it at some point. Be it low risk items or high risk items, it just is better to have as you never know what your customers may do with your product or if there’s any fault in manufacturing that you didn’t find out during inspection.

Who can apply for a Product Liability Insurance?

Basically anyone can apply for an insurance. After all the insurance companies want your money. BUT not everyone gets it. It really depends a lot on how long you have been in business, who are your suppliers (are they a 20 man factory or do they produce for Walmart), do they have certifications, do you yourself have experience buying from China etc. There are many factors that go into the insurers consideration to issue you a policy or not. Please note you need a company to apply for Product Liability Insurance. You cannot apply as a private individual.

Where can I get a Product Liability Insurance?

Here are some sites that broker insurances from the big Insurers (AXA, MSIG, BUPA,Generali, Globality etc.)
Send them an email with your introduction about your business and they’ll get back to you if they can help you. Mind you these companies are based in Hong Kong so you need to have a HK Ltd. company to apply.
To find insurers in your country you’ll need to check with your local insuring companies.

http://www.lfsinsurance.com/business-insurance/
http://www.hkpli.com/
http://www.business.hsbc.com.hk/en-gb/protection-and-investment/general-insurance?DCSext.nav=foot-mat

(Note: HSBC does not cover US businesses)

Miscellaneous:

You need to understand while almost every insurance company will receive you with arms wide open for a life or health insurance it is actually NOT easy at all to get a product liability insurance.
You will be audited by either the insurance company or the broker and there will be extensive background research on you, your company, your products before you can actually get the insurance.

Like I say in nearly all of my posts, always work with reliable and experienced factories – always have certification available to meet country specific requirements (CE, ROHS, FDA etc).

When you apply for a PLI It is a minimum requirement that you have avilable certification.
I mean it’s only obvious that a insurer will only insure you if you have a quality product and not a product that falls apart or lights up in flames the moment you use it.

So you need to provide a lot of documents. Here are just some of the main documents needed:

  1. High Quality Product Photo of at least one item on each category
  2. Test report on at least one item on each category
  3. User Manual on at least one item on each category
  4. Warning Labels on at least one item on each category
  5. Completed and signed PLI application.
  6. Quality website with detailed information on your products
  7. Ideally you have a background in sourcing. If not, provide an action plan on how you source sustainable and quality items in China

 

I hope this helps as a general guideline. Please feel free to share or comment if you have any questions :)

All the best and happy sourcing,

Manuel

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

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How to scale your (Amazon) business

A lot of people ask me how to scale their business. They get to a point where they have 2, 3 maybe 5 products online and are either facing cash flow problems or don’t know what to do to grow to the next magical number.  

When I have calls with them to find out what can be done it is often one thing that they overdo – optimizing. Be it their listings, backend keywords or PPC marketing. 

Don’t get me wrong this is important and you need to optimize to grow from 2 pieces a day to 10 pieces or more. But it doesn’t mean thats what you should be doing all day. 

Second reason I find is that they are obsessed with numbers, hijackers, copy cats or their competition. Again, you do need to look at these things but honestly I have better things to do than obsess about my numbers or competitors. 

When I put my French Press case study out there in public I didn’t worry about copy cats. Because if I would have decided not to do it I would have missed out on a product thats making me good money for over 6 months. First of all I wanted to document on a generic product how the process is done and second if I make good money for 6 months with that product and then the competition comes so be it. In those 6 months I will already have developed my next products or built further passive income. Yes it is frustrating when someone copies you but that happens in every business. Move on. 

I understand that if you have 1-2 products online its very exciting to look at your growing numbers by the day. But you can only grow that much if you try to optimise all the time and not look into developing new products, your brand, your company or your idea. 

I am sure most of you heard of guys like Will Tjernlund (24 year old Multi Million $ seller or was it 25 ? :) ) or Ryan Moran (Freedomfastlane). Yes they do perfect their listing, photos, keywords and such but they don’t obsess over it. They rather take action, develop the next product or make a call to a wholesaler or factory and land another exclusivity deal that will make them thousands of $ while we review our keywords for the 50th time. 

If you recall in my last blog post I was in Hamburg at a conference and Will was also there. After the conference sitting together on the last day before everyone went home while most of us were discussing strategies on optimising, Will found another product online, picked up the phone, called the sales rep of the company in the US then and there, offered them to purchase and list for them on Amazon exclusively and landed another deal that will make him (hopefully) thousands of $. I wasn’t there in person but I was told by my friend who organised the event. Reminds me of a famous saying from Scott Voelkers (The Amazing Seller) podcast “Take action”. I know easier said than done but it really is just that – pick up the phone, make the call, negotiate and place the order. Don’t over procrastinate and optimise – go for your next product. Obviously research and product validation has to be done but hopefully you don’t fall into paralysis/analysis. 

All of these guys also outsource many parts of their business. That could be virtual assistants for your customer feedback, letting professionals handle your sourcing and manufacturing in China or copywriting for your listings and products.

Why is optimizing your listings less important than developing new ideas and products? 

I’ve touched on this in the last blog post also:

Constantly re-inventing yourself and focusing on the direction of your company – because there is no one there to tell you what to do. You are responsible for the success of your business. 

If you only focus on optimising who is going to develop new products and strategies? 

Scaling up with more products means you need more cash.  

Which brings me to the second issue why people stagnate – cash flow. Yes Amazon makes a nice income after a while but what most people forget is that a lot of your cash will be tied up in inventory and re-orders, especially in the beginning. 

Therefore diversify your income and don’t put all eggs in one basket.. At least at a point where you are making 2-3000$ profit a month on Amazon to support your lifestyle, pay your bills or put even more money into the business. As I explained in my last blog post I made the mistake myself taking out money of the company in the beginning. Today I put nearly every $ made back into my business. That’s how you scale up. Because what is the money good to you in your savings account when you can re-invest it into your business and double it at a much much faster rate than the banks interest rates. Yes of course I put money aside for the rainy days and save up a bit of cash but its less than 10% of my monthly income. If you want to scale up you need to invest in yourself and trust your abilities. 

Therefore to generate more cash flow and pay your bills diversify your income stream as soon as possible. Or maybe you are doing this on the side and still have a full time job? Also good but there are still ways to generate extra income. 

1) Your own eCommerce store

Ok not the ideal way because you will need more cashflow but you can start by adding a small quantity to your next Amazon order placed in China and send it to your warehouse/garage/fullfilment center selling trough your own eCommerce site (Shopify for example). This can be a trial and test and if it works out you can decide whether to continue the eCommerce lane or not. 

2) Teaching your knowledge

Have you heard of  UDEMY? It’s the largest website where instructors/teachers can offer their knowledge in the form of an online course and over 5,000,000 students can view your (paid) content. The downside is that UDEMY takes 50% of the cut (unless you send the traffic there). But you could also set up your own site and offer your course trough that way, all the money goes into your pocket. If you aren’t familiar with setting up websites and online courses you can try teachable.com which offers people templates and ready made landing pages for your course for a 3% commission. 

3) Starting a blog  

I never was much of a writer or blogger. I started my first blog in 2006 with a few entries now and then. I had no idea what I actually wanted to blog about or how this whole blogging thing works. So the blog kind of died down until I started my first actual blog (ImportDojo) in 2015. There are so many ways you can make money trough a blog and while I don’t recommend you start the next cooking or travelling blog (very competitive) there are still so many niches people like to read about or make money in. That could be a small niche like home brewing, diving harpoons or whatever. Just making things up her as I go :) 

Check out this excellent resource on how and what you should do when starting a blog: onestep4ward.com 

Ideally the blog is somewhere in the nature of your physical products that you are selling. Say I sell a French Press I should naturally start a blog about coffee, coffee machines and such. Good thing is the sooner you start a blog or social media presence and the more followers you get the more traffic you can bring to Amazon or your eCommerce store. On top of that you create authority among your readers. People trust you and are willing to purchase your product. Key to blogging is (I find at least) is to give a lot of value. You can also integrate a eCommerce shop (or direct people to your Amazon store) at some point in your blog to create extra income trough physical products on your blog. 

4) Consulting 

You can put up your skills for sale. Be it trough a course or trough a personal one on one phone call. You can either integrate coaching calls trough your own site/blog or even list your skills on sites like Clarity, UpWork, Fiver etc. 

5) Writing eBooks 

As I said already I was never much of a writer but I just put my knowledge on paper. Plain, not very entertaining and fact/experience driven. People need that especially if you are in a niche where you have experience and people can rely on your knowledge. Information and knowledge equals money. Start writing a 15, 30 60 pages eBook and put it on Amazon or your own site. Even if it “only” makes you 30$ a month.  

6) Approach retailers 

I started the other way around. I went to retailers first and then onto Amazon. But that’s because I have 17 years of experience and contacts in retail. If you have a well selling or unique product on Amazon, retailers, brick & mortar stores will approach you. Believe me, it happens eventually. And even if not – walk down to your local retailer and speak to the Manager if they are interested in buying stock for their store. You can also do this online and approach retailers that you think may fit with your product. Do your research, prepare yourself properly put on a suit and try to get a meeting with the purchase department. 

Every dollar counts, ESPECIALLY passive income. I don’t care if I work 2 weeks non stop on a new project and it “only” brings 50$ a month extra. Thats 50$ I didn’t have before and ideally I don’t need to do anything for it anymore and I still make that every month. Imagine if you have 10 projects or side/passive income that make you 50$ each. Thats 500$ a month for a few weeks work. The key word to diversifying and building passive income is hustling and grinding. Passive money takes a long time to build up but believe me the sweat and tears are worth it. 

Key points today to scale your (Amazon) business:

  1. Don’t over optimize your listings – spend the time on developing new products 
  2. Build more income streams, especially passive money. 
  3. Use your passive income to pay the bills. The profits from Amazon go back into Amazon (or other businesses) creating more products up to a point where you either sell it all, retire on a beach, keep working or just spend time with your kids at home. 

Pheew another motivational post, didn’t plan on that. I hope there’s something in it for you nonetheless :)

All the best and happy sourcing,

Manuel 

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

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The lifestyle of an Amazon seller – my story

It’s been a while since my last post and the main reason for that is because I was on my first vacation in over 2 1/2years :)

Well it was also a bit of work in the end but mainly vacation (I was speaking at the Privatelabeldays Amazon FBA conference in Hamburg) among a lot of great speakers meeting hundreds of like minded people. 

This post is also a little different than my other posts. Today I wanted to give you an insight of whats is like to live the life of an eCommerce seller and Entrepreneur. 

It’s not all as peachy as you might think or what you read from all the success stories out there. 

Lots of work, endless nights, ups and downs, frustration, close to giving up but yes eventually after putting in effort and hard work there are glorious moments that make up for everything. 

When I first started my own business (late 2013) I had about 30,000US$ in savings. 

I started my own private label right away selling to retailers and importers in Europe. During my years in Hong Kong I made a lot of contacts in the retail industry so naturally that was my starting point. 

I only heard about Amazon FBA around August 2014 when a friend of mine mentioned it to me. So I went the other way compared to many of my readers. 

Had I known back then how easy it was to start a business on Amazon I would have taken the entire 50,000$ and started with Amazon from the beginning. 

From August 2014 I teamed up with that friend, he was the investor and I took care of the sourcing, delivering to Amazon and launching the products. 

All the while I was running my retail business also. 

I was actually running out of cash at that point (August 2014) because I had pretty much everything in my retail business and not much money to spare for Amazon. 

I made the biggest mistake a becoming Entrepreneur could make. While I did have some incoming orders from my retail business I still lived my lifestyle as if I had a regular income. 

My savings dwindled and altough money would come in soon from the retail business I was running very low on funds. Amazon FBA was exactly what I needed – fast cash. 

Or so I thought. I was once again thinking money would come fast but I haven’t accounted for re-orders and that I shouldn’t take money out of the business right away. 

My one and most important advice for you today would be that you need to account for expenses and you can’t take money out of your business for many months – IF you are planning on doing this full-time.  

Your profits need to go back into your company. 

Today I am very happy with the products I have created and wanted to give you a little advice on how to build your brand: 

Focus on building a brand from the beginning. Keep this in the back of your head with everything you do. 

The majority just starting out or having a few items running 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 if you have existing items improve those constantly. 

Also don’t be afraid to invest your money in the future 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.”

So save up more than the initial product and shipping costs and don’t quit your job. You still need money to live on. 

Fast forward to today. 

My second most important advice to you is to not put all eggs in one basket. Diversify your income streams and don’t rely on one income stream only. 

Obviously in the beginning you can’t focus on too many different things but in time and in between you need to take your time and look out for different income streams. 

That could be teaching your knowledge, blogging, writing books, finding more eCommerce plattforms than Amazon, opening your own shop (Etsy, Shopify…) or even selling to retail. 

I actually recommend you going the other way (as opposed to me) and start with Amazon first and then move onto retail or other eCommerce stores as it is “easier”, especially if you do not have any contacts in retail. 

I now run several different businesses. 

1) I teach importing from China in my online class “The ImportDojo Masterclass”.

2) I wrote books that I sell on Amazon 

3) I teach my knowledge on Udemy and other online course platforms  

4) I run a sourcing company based in Hong Kong that helps importers find factories, negotiate prices and deliver to your (or Amazon’s) doorstep 

5) I sell on Amazon (currently about 20 products with the goal of having 50 by mid next year)

6) I sell to retail 

7) I consult one on one 

8) I have guided tours to China, its exhibitions and factories

9) Several small things that help pay the bills 

Make use of your knowledge, diversify as soon as possible. Dreams come true but you need to put in the hours and work for it.

My third advice: Obviously you can’t run everything yourself so as soon as you’ve mastered a process try outsourcing it. 

That could be finding professional help for your orders in China, hiring a Virtual Assistant for daily simple tasks, hiring full time staff taking care of your Amazon business etc. 

I know I know, it is hard to let go of a task that you think can only be done by you. But that’s not true at all! 

I am so glad I gave some of my tasks away to my staff because now I have so much more time to focus on what really matters for an Entrepreneur: 

Constantly re-inventing yourself and focusing on the direction of your company – because there is no one there to tell you what to do. You are responsible for the success of your business. 

Be it to invest into more staff, build more products or come up with new ideas that help you and your customers. 

My story isn’t some paved road to sucess either. I worked very hard (and still do) for over 2 1/2 years to get to this point (I worked 16 years in corporate jobs and paid my dues to gather experience). I am still nowhere near on retiring in my 30’s and I don’t plan on anyway but there is a lot more hard work ahead. 

Countless hours with no sleep, worries on how I can pay the next bills up to the point where I was applying for jobs again just when the money eventually came in. 

There are many “success stories” out there on how easy it is to make money online but I can tell you that it is a lot more difficult than people make it sound like – including me sometimes :) 

If you are really interested in starting your own online importing business or really any eCommerce business then I recommend you spend at least 6-8 weeks learning the basics. 

How to import from China, how to sell online, how to do your own marketing, regulations and procedures etc. Yes, learning by doing is one way to go but there will be stages in your path where you need to look things up or hire professionals who have been doing things for a while. 

I too hire professionals sometimes because I feel its worth to pay someone who can properly help you instead of stumbling my way through things. 

Today I can safely say I am running my own business and I have helped others along the way. 

When I used to have a corporate job I never got an email thanking me for negotiating thousands of $ or helping a buyer in a difficult situation. It was my job and I was paid to do these things. 

Running your own business can be frustrating but it can be very rewarding. I now get emails from people (sometimes even meeting people in real) thanking me for what I do. 

I am extremely happy when I hear of success stories of my students because it keeps me going. 

The point I want to get across to you today is that if you do something that you have a passion for (or experience), people will thank you along the way and money comes later. 

Of course money plays a role ( & is probably constantly on your mind in the beginning) and it enables you to live a certain life style, pay for your kids college tuition, afford those gadgets you always wanted or just save up for the rainy days. I know it’s difficult but try not starting your business because you want to be rich. Start your business because you want to be free, help others and be location independent. I promise you if you work hard and have passion in what you are doing money will come eventually. Actually money eventually doesn’t become so important anymore because perhaps today you decide you work in the park or at the beach. 

I still get up nearly every day around 6am, get some coffee sit on my laptop for a few hours, go to the gym, work some more, take breaks and even work on most weekends. But I can decide when and how long I work every day and most importantly for me – you can work from anywhere.

Exercising regularly is something I really recommend you to do. No matter how much you work there’s always an hour that you can spare for a walk, a hike, going to the gym or play some ball. Did you know what most of the successful CEO’s and Entrepreneurs have in common? They exercise regularly.    

I worked non-stop the last 2 1/2 years and finally took a holiday this month with my wife travelling to Europe, visting some friends and staying in a cabin on a lake in Sweden for nearly 2 weeks. 

I also spoke at the Privatelabeldays Amazon FBA conference (www.privatelabeldays.de) and some people told me I need to be more personal on my blog :)  

So without further ado I wanted to share some moments of the last 2 years with you and how a life style from working 9-6 in an office can change when you work for yourself:

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I got married on December 14th 2013 in Hong Kong. The very next day I decided to change my life from working 9-6 to being my own boss. I brainstormed the entire week and Mandarin-Gear was born.

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My last day “on the job”. This was on 30th pf April 2014 when I accompanied a buyer from Switzerland to a factory near Shanghai. The next day I flew to Hong Kong “free as a bird” and excited to start a new life.

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I went to visit one of my suppliers in Shenzhen to discuss the assortment of products I wanted to launch to my retail customers.

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2 months in and I sold my first product to retail under their Private Label.

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 I barely left the office in the first 4 months, this was pretty much lunch every day :)

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Checking the first packagings under my own brand.

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7 months in and I had about 20 products under my brand

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My first 5000 unit order from a large retailer in Germany. Only to be cancelled later.

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Time to celebrate that order. 2 months later it got cancelled and I was stuck with a 30,000$ debt. At this point my friend introduced me to Amazon FBA (August 2014). I continue to sell to retailers and start putting things together for Amazon FBA.

IMG_4480 March 2015 – ImportDojo was born.

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March 2015.  I publish “The Import Bible” on Amazon – 3 months later is is the No.1 Seller in its category.

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April 2015. I exhibit my own brand at the Global Sources Electronics show.

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I think there’s a decent assortment? :)

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Discussing possible orders with a US customer.

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May-June 2015 – I write three more books and turn them into a course (The ImportDojo Masterclass)

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In between work I always try to exercise and hike the mountains of Hong Kong as much as possible.

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Yep, this is in Hong Kong.

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In China visiting a factory and negotiating a claim with a supplier, she is not happy I m here :)

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Ningbo, China at night

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and another hike in Hong Kong.

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September 2015. Together with a friend we work on our first own real developed product from the scratch (to be launched September this year). It took a year to develop and fine tune.

IMG_6160 Always at the airport. Chinese have a certain way of taking photographs :)

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October 2015. I find a product at the Canton Fair that I later launch publicly.

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The FBA community is growing. More and more sellers are coming to China.

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Greg from Junglescout organises a big meetup in Guangzhou. Lots of familiar online faces meet in person.

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Sometimes I take the office outside.

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Or to the beach.

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Or on a lake. IMG_5640

Or to my Mum’s. No matter where, no matter when, Monday to Sunday – I work every day but I enjoy it.

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The office can be fun too tho :)

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I get to speak at the Global Sources Summit for online and Amazon sellers in April 2016.

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April 2016. I publicly launch the French Press.

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I get up early every day even if I don’t have to. Then again I get to enjoy this with my coffee.

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I get to travel. Sometimes on a motorbike in Northern Thailand….

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…and sometimes in style…

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to drink Tea in the middle of nowhere…

img_3767or to see the beauties of our world.

You get to meet great and like minded people along the way

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with Will Tjernlund


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BBQ before the Privatelabeldays conference

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with Bastian from officeflucht.de

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with Thomas from Privatelabeljourney.de

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You make new friends along the way

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or suddenly you get to speak in front of 450 people (sooo nervous :) )

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always on the lookout for new products…

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and sometimes beautiful sunsets :)

 

There’s so many photos and things I wanted to share with you but I’ll leave it here.

Follow your dreams, start your journey today, help as many people along the way as possible and in time hard work will pay off, I promise :)

All the best and to our success!

Manuel

 

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

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NDA’s, agreements and having your own tooling in China

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.
Today we are looking 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:

  1. 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.
  2.  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).

It also has to do with your professionalism and how you or your sourcing agent approaches the factory.
Imagine you are a factory based in China and someone with a Gmail address contacts you like this:

“Hi, we are looking to get products manufactured with you. Please see attached drawing and design. Please give us a price”.

The above is an actual email I received from a “potential” client in the US. I simply ignored it. But some suppliers will take this opportunity and steal your design or show it to their customers.
It’s entirely different if I would have received an email with an introduction, detailed business proposal and more background information from the buyer.

The point I want to get across to you today 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.

Update Case Study:

A lot of people have asked me about my case study project and asked me about an update.
As you know I’ve posted about being out of stock end of May: http://importdojo.com/7-weeks-case-study-update-i-am-out-of-stock/
My second small reorder of 208 pieces came into stock around 6th of June. However my BSR had dropped significantly to nearly 100,000 by that time.

In the last 4 weeks if seen a couple of sales a day but not much (hovering around 1-2 pieces) sometimes even none. The reason is mainly because I didn’t do anything in terms of promotions, PPC or give aways. But that doesn’t really bother me, the listing and the reviews are there anyway and I sold close to a 100 pieces within this month (doing nothing for it).
I didn’t want to run out of stock again before Prime Day (today) before my large shipment of 2500 pieces arrives around 15th of July. As of today my BSR is at around 20,000 and inventory is around 100 pieces and I’ve just lowered the price and started with PPC again to get back in the ranks. I should have enough stock to last me trough Prime Day until this second large shipment arrives. Then i will again go full steam on PPC, some give aways and promotions to get my ranking back to where it was. Stay tuned for more updates.

Hope this helps guys!
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.