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Zero To Hero: Building a Brand Series – Inventory Storage

Zero To Hero: Building a Brand Series

Inventory Storage, FBA Prep & Fulfillment Centres

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Welcome to another part of our Building a Brand Blog Series. In last week’s blog post we went over a brief introduction on social media and which social networks are best for Ecommerce sellers or importers.

This week’s blog post will be on a completely different, but equally important subject – Inventory Storage & Fulfillment. When it comes to product-based businesses such as ours, it’s important to not only get your logistics right, but also have the best rates and fast shipping.

I have used both FBM(Fulfilled by Merchant) and also FBA so I will also give my point of view on what works and what doesn’t. Although my main focus is on FBA, I normally still leave some units in a storage facility either to reduce my Amazon fees or to fulfill any orders from my own Ecommerce store.

This blog post will be all about how you can manage your inventory effectively and save fees when compared to Amazon. I will also show you how you can use a third-party fulfillment center to take advantage of busy periods such as the Chinese New Year or the December holiday seasons.

So let’s have a look at what options are there for importers or sellers and explore different ways on how you can manage your inventory effectively.

What To Look For In a Fulfillment Center?

If using a third-party fulfillment centre, ideally it should be as similar to Amazon FBA as possible in terms of service and efficiency. However, here are some features I look for when making my decision:

  • The fulfillment centre should be in a strategic location so I reduce shipping costs from the country of origin.
  • The FC should have a backend software system that enables me to track my inventory  and gather other important data(fees, shipping rates, SKUs comparison, etc.).
  • They should have integrations with all major Ecommerce marketplaces(Ebay, Amazon, Shopify, BigCommerce, etc.). This allows me to manage all my marketplaces(in terms of logistics) from one place.
  • Their shipping rates should be as low as possible and they use all major courier services. Never use a fulfillment center that relies on one courier as it limits your options.
  • If I’m using the fulfillment center exclusively for Amazon, I look for ones that have extensive experience dealing with FBM. The requirements are more strict when it comes to FBM and a few late shipments can compromise your Amazon seller account.

The Benefits of Fulfillment Centers

 Fulfillment centers offer a lot of advantages for ecommerce sellers who want to expand towards other sales channels. Some of the benefits are:

  • Cheaper long term storage than Amazon.
  • Backend dashboard allows you to track inventory and shipping status of your products.
  • Some FCs offer great rates for oversize items and storage.
  • Ultimate control over pricing and customer experience(if selling from your own store).
  • Brand-able shipping packages.
  • No restrictions on inserts or marketing materials.
  • Multiple integrations with eCommerce marketplaces.
  • Ability to process returns easily.
  • FC’s can make custom orders for special clients.

 As you can see, choosing the right fulfillment center has a lot of benefits and if you’re planning on launching your own store, a FC outside of FBA is recommended. 

FBA Prep Companies

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Prep centres are storage facilities specifically used for preparing or assembling your products according to your requirements. FBA prep centres will make sure to prepare your shipments according to Amazon’s guidelines. This service might be very useful if you want to make sure that you have everything in order or if your product(s) come in multiple pieces and need assembly.

Nowadays prep centers have evolved and offer multiple services, including:

  • Goods Inspection.
  • Product Photography.
  • Labeling, Knitting and Bundling.
  • Storage.
  • Inventory Updates.
  • & much more.

Please note that prep centers don’t fulfill any customer orders, they should be exclusively used for storage, inspection and prepping.

Location, Location, Location!

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When choosing a fulfillment center or storage facility, location is very important. Since ideally you want to save on shipping costs from your supplier/manufacturer to the destination(if not an FBA warehouse). When it comes to locations, my preference would be coastal states in the US. In particular:

  • New York
  • California

 If your supplier is in China or any other Asian country, Los Angeles would be my choice. LA has both the busiest port and airport in the US in terms of cargo, making it an ideal destination to ship your inventory. Also, a lot of fulfillment centers and storage facilities are situated around LAX airport or close to the port.

Shipping your goods domestically will always be cheaper, so the only way to save time and money with your imports is to pick the closest location in the US from your supplier/manufacturer.

Amazon Multi-Channel Fulfillment

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Image Source: Forbes

Amazon’s multi-channel fulfillment service where you can use FBA to fulfill third-party orders such as Ebay or your own ecommerce store. This is extremely convenient if you want to have all the shipping and fulfillment in one place. However, in my opinion, the

Amazon fees are quite high and you even have to pay extra to have a multi-channel order.

If you don’t have a lot of sales from other channels you can use Amazon’s multi-channel fulfillment, however, if you really want ultimate control over pricing and customer experience on your own website, you should pick a third-party FC.

Conclusion

Fulfillment centers, prep companies and storage facilities allow you to diversify how you manage your inventory. If you sell on your own ecommerce store or have large/oversize items, a fulfillment center will help you reduce your fees substantially.

I would still suggest you to use FBA if most of your sales come from Amazon, however, ideally you would want to expand into other sales channels. By using a FC you would have ultimate control on pricing and customer experience.

In next week’s blog post we will talk about Product Branding. Manuel will guide you on the best practices on how to brand your product effectively and create stunning inserts and marketing materials.

We hope this blog post was helpful and as always, if you have any questions, kindly leave a comment below.

All the best and happy selling,

Duncan

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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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News and trends from the October 2016 exhibitions in China

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

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

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

Global Sources Electronics (phase 1)

HKTDC Electronics Fair

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

Global Sources Electronics (phase 2, Mobile Electronics)

Global Sources Gifts & Home

Mega Show (Part 1)

Canton Fair Phase 2

HKTDC International Building and Hardware Fair

Mega Show (Part 2)

Canton Fair Phase 3

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

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

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Yep, thats 8 square meter of pure space :) 

 

 

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


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And not so bad to work with this view  :) 

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There’s also a co-working space downstairs. 

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

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

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Rico Ngoma serial Entrepreneur and partner of EnterChina drops knowledge

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working on new projects for ImportDojo on the rooftop

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back at the office with the team :) 

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

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

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

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

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

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

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Smartphone cases. 

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I found this product to be quite interesting :) 

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An actual AI (Artificial Intelligence) 

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This automatic car cover peeked my interest. 


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Gaming & video backpacks seem to be popular as well. 

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

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

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


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

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Quite a lot of buyers on the first day. 

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You’ve got big brands from overseas

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and big local brands from China. 

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

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

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Not sure what these guys do. 

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


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

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

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


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

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

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

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

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

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

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Lots of packaging suppliers there as well. 



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

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Interesting design for a power bank. 



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

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


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

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

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

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

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


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I check the production and facilities. 

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Testing equipment within the factory. 

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My wife gets me a birthday gift :) 

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


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

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Ignore the couple that is making out :)

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

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

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Office and stationery is also very present. 


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

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

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

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

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

All the best and happy sourcing,

Manuel

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

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The 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/

Amazon Case Study

Case Study – How I went from zero to 7,000US$ in 10 days in one of the most competitive Amazon niches

Hey guys, 

Here is an update on the case study. If you followed along in my webinar (Webinar) you know which product I am talking about. 

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Before I get into the results I wanted to share a few photos with you of the exhibitions here in Hong Kong last week and meeting up with a lot of fellow Amazon sellers and ImportDojo members. 

I also had the opportunity to speak at the 3-day Global Sources Sourcing Summit event as the opening speaker where I met a lot of fellow Amazon sellers. The atmosphere and networking there was simply amazing.:

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Dinner with a fellow German/Europe seller 

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Heading for dinner with a couple of ImportDojo members and my business partner

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Waiting to speak at the Global Sources Sourcing Summit 

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Talking with a attendee of the Sourcing event

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Trying not to be too nervous during my speech :)

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Walking the Global Sources Consumer Electronics show with sellers

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Arriving in Shenzhen with ImportDojo members to visit a factory

Without further ado onto the case study

Ok so first things first. I would have never thought that this product is so competitive. 

When I looked into it in November 2015 the competition seemed big but manageable and with a superior product I thought it wouldn’t be so difficult. 

Well I can tell you it was quite difficult to get the product on the map. Having said that I am quite happy with my initial launch results. 

I have now sold over 200 units and a sales turnover of nearly 7000$ within the first week of the launch

And the best thing, I am now number 7 on the best seller list and on page 1 for my main keyword. 

Here’s how I did it: 

When I started this project there were about 30 something sellers with similar items and I already knew it will be quite competitive but I was in for some real tough competition. 

I am not going to lie, this was a though one. 

When I launched there were about 120+ sellers of similar items and my main key word was VERY VERY competitive (over 3 Million searches per month) and I would need a huge launch to kick it off. 

After my initial boost with my email list, bloggers and Facebook group I realised I needed help to push it. 

Here are some of the numbers: 

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

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

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

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

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

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

Total cost: 8099$

I figure if you are on a smaller budget you can do 500 pieces, cheaper photos and white box instead of color box (ike mine) and you can halve the costs of my 8000$. 

BUT to really maximise your profits I suggest a starting budget of minimum 5000$ per item. It is possible with less but a lot harder. 

Alright, numbers, milestones, strategies, giveaways and results after 10 days of launching in order of action taken:

Friends and Family: 95% of coupons used

11 sales at 98% off. Helped definitely to put me on the map and ranks of Amazon. 

Facebook groups: 

3 sales at 49% off. Not much but can’t complain either. None of my Facebook groups are Coffee target groups. 

Blogger list: 

About 23 sales (with 20% off) resulting in a profit of 180$. Deducting the advertisement fee for both bloggers @50$ each leaves me with a profit of 80$. Not bad BUT the sales of the product and climbing the ranks trough these sales is MUCH MUCH more important to me at this stage. PLUS my product is embedded on the Blogger’s pages permanently so I am expecting more sales and traffic to come to my listing “for free” from here on. 

My email list: 

8 sales. Not great but my email list are mostly NON Amazon buyers and retail customers mostly. But either way, I just needed to send out 1 email that took me 10 minutes to write and I got 8 sales from that. 

Twitter:

0 sales (980 followers) I guess you really need to have targeted followers. 

Instagram: 

1 sales (150 followers) I guess you really need to have targeted followers here as well. Most of my Instagram followers are friends or family and I only have personal photos on there usually. Create a new account that targets your product category. 

Reviewkick: 

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My product got buried quite quickly in the “new products” section but you can boost your item to the top every 3 days or so. So far everyone who took the coupon has bought AND left a review. So thats a 100% conversion on reviews. 

It also boosted my ranking but difficult to say by how much. I guess you can leave your product on there forever and boost it once in a while to keep your BSR at a good level. Anyway, its free so I recommend you to try it definitely.  

Spikelisting: 

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Spikelisting’s boost took about 90% of coupons. Difficult to track the reviews but I would say 85% of those left a review so far. Spikelisting helped me from #56,000 to #16000 in Kitchen and Dining. You might think thats a huge boost but it isn’t so difficult to climb from 56,000-16,000 as opposed to from 16,000-10,000 for example. It’s much more difficult the better the BSR and you need to make serious sales to get into the Top 1000 within Kitchen and Dining. Either way give them a try if you need a initial or during sales boost. Their boost definitely helped me and if I were already on page 2 at this stage this would probably help to put me on page 1. 

I needed one more push. 

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Zonblast’s result took me by surprise. 98% conversion of coupons and the boost put me on page 1 within 7 days and my BSR from #16,000 to #1320 in Kitchen and Dining. Yes thats right, my product climbed to rank #1320 within a week in one of the biggest categories on Amazon and hovered there for a few days. I’ve never had any climb that fast on previous launches and THAT immensely helped on getting organic sales. 

Zonblast also used a “heat seeker” URL with my main keyword that pushed my listing to page 1. Contrary to many other review sites, boosts and pages that help you climb the ranks, Zonblast boost your product over the course of 5-7 days which essentially helps more than just a 1 time boost or give away (in my opinion anyway). Zonblast put me on page 1 within 7 days and my BSR from #16,000 to #1320 in Kitchen and Dining. Zonblast’s COO Anthony Lee (who I had the pleasure meeting in person last week here in Hong Kong) was a huge help. He provided keyword research, analytics and was always there when I had questions. 

Conclusion of tools and services to boost your product:

  1. Friends and Family are important for intial boosts. 
  2. Reach out to bloggers and advertisement services. 
  3. Build your Amazon customer email list asap. 
  4. Grow your social media (FB, Twitter, Instagram etc.) from the beginning and target specific interest groups from the beginning (relating to your product). 
  5. Use tools and services to help you. 

What service worked best for me and what is my personal favourite: 

Zonblast is the No.1 tool/service on the market 

Why and when you should use them:

A: launching in a very competitive niche (your product should be superior if you launch in a competitive niche)

B: pushing your product on page 1 in a matter of a week to 10 days (no guarantee there but it worked in my case) 

C: trying many different things to get to page 1 but you just don’t get there.

NOTE: 

I will give AMZtracker a try next week to boost and see how far this product can climb. I’ve been excited giving them a try but I haven’t gotten around it this week. 

Also I wanted to wait and see what the others can do so that I have a clearer picture of what AMZtracker can do for me. I am super excited to try them next week and push my product even further in the rankings. 

Will give you an update asap. 

Some more numbers: 

Reviews so far: 

38 – 5*-reviews 

1 – 4* review (customer received a broken handle but I immediately sent him a replacement without blaming transport or anything so he left me a “stellar 4* review) 

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Ranking:

Top so far: 1320 in Kitchen and Dining

Currently: 5400 in Kitchen and Dining

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Category: 

Top so far: #7 in french presses

Currently: #25 in french presses

Sales: 

Total Sales so far: 6548$

Toal Units so far: 219 pieces

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AND Currently averaging 8-12 ALL ORGANIC sales per day 

Next steps:

Activating PPC:  Start with a automatic campaign and check the report after one week. Use the most searched and effective keywords in your automatic campaign and set up a manual campaign with these keywords.  

Conclusion:

Remember, before you get to this stage you need a superior product and the prerequisite is that you have a great supplier, excellent quality, the right strategy and take your time with the process. Key is to take action but don’t forget important steps when dealing with the supplier such as exclusivity agreements, purchase order contracts, background check and lots more.  

Check out my webinar where I walk you trough my process on how to get a superior and safe product from China. 

I am quite happy with the results of the case study and I could have climbed trough various strategies slowly but above services definitely helped getting the product on the map fast and hence resulting in great organic sales after week 1.  

Matter of fact at this velocity of sales I need to re-order within the next 2-3 weeks. 

Now imagine your product is in a less competitive niche what’s actually possible on Amazon FBA. Take action now :) 

If you are interested in the entire case study looking over my shoulders with each step I took in every detail feel free to check out my course. I have detailed and documented every little thing from the beginning to the end in over 50 video tutorials. 

From the research phase to finding a supplier, evaluating them, placing the order, booking inspections, margin calculations, exclusivity agreements (so you guys don’t try to copy my product :) ) and arranging straight to Amazon shipments until the launch of my product. I am taking out all the fear and worry in the process and show you how it works. 

The point I want to get you to and with this case study is that you can see a complete product launch that starts from finding the right product, the right supplier and shipping it to Amazon, promoting and selling it.

Best thing about this, I’m using my own money and will try a lot of different things so you can see what works and what doesn’t and learn all this without running your own trial and error experiments.

If you don’t sell yet simply watch and see and all your worries and anxiety of placing your first order will be gone because you already know everything step by step.

Apply these methods to your own product idea and become a professional Amazon seller and importer. 

Whats more? This case study is on top of the already existing 50+ video tutorials, templates, private Facebook community and 2 hours of one on one coaching with me personally. 

Check it out here: http://importdojo.com/importdojo-masterclass/

All the best and happy sourcing,

Manuel

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How to properly place an order with factories in China

So while I am waiting for my newest item to be in stock I thought I’d lay out a very important part of the order process to a Chinese factory to you.
(I you haven’t followed my case study check out my last webinar: https://www.youtube.com/watch?v=4tO5y-EHEwM)

So why is it so important to lay out terms and sign contracts with your supplier? Quite simple actually. You want to have safety nets and agreements in place if something goes wrong.
And trust me there can always be something that can go wrong. It could be a failed inspection, it could be that the item produced is severly damaged during transport, it could be that the material used is completely different from what you wanted and so much more.

You might ask yourself for what kind of order value should I have agreements in place? Because maybe you only have an order value of 1000US$, do I still need all this?
Yes! At least you should have agreements in place that bind the supplier to pay for a re-inspection. However to be honest not many suppliers sign agreements or terms if your order is very small.
But you should at least give it a try.

Just recently I heard from a student of mine that the inspection was fail and 25% of the products had faults, were damaged or not properly manufactured.
In this case the supplier wanted to ship out what was OK and wanted to re-work the other 25% later and ship it later. He even didn’t agree on paying for a re-inspection but simply said “ don’t worry, it will be ok”.
Well I wouldn’t worry if the original 100% would have been a pass results but how does he even have the nerve to tell me not to worry and blindy trust him when 25% of the order is screwed up? Not only did the customer have to pay for re-inspection (the supplier wouldn’t budge) but he had higher shipping costs because he now had 2 shipments!

You need to have agreements in pace that state clearly how each situation is to be resolved – to your benefit.

Sometimes it might be a minor issue such as that he forgot to put the labels on the carton. In that case it doesn’t make sense to send an entire re-inspection but you could rather have him issue you an LG (Letter of guarantee) stating that all items have been re-worked and if you find that what was promised was not kept he has to pay for any costs. E.g. he promises that he will label all cartons and then send it out and once you got the order you find out he hasn’t done it. You could charge him the label costs (as agreed on the LG).

So how do you make sure that your supplier follows each of the steps you want him to do? You clearly state things in your order email and in your purchase contracts and agreements.
Due to popular demand and because I was asked for it many times here is an example-email of how I place an order to the supplier (bear in mind to fill in the details of your own product here – please see my comments in red):

Hi xxxx,

As discussed I would like to place a trial order of xxxx pieces of product X to you.
If my calculations are correct I will re-order 2,000 pieces every 2-3 months.

Details as discussed and herewith laid down:

– Product requirement for particular item (FDA approved)
– accessory for this particular item (FDA approved)
– 1 accessory (in acrylic)
– Material; Stainless Steel and Copper
– extra screw on the handle in copper plating as discussed (little detail that you agreed on could be here)
– Color box packaging. To be provided by me in a short time. (You dont need to have the packaging design ready when placing the order. If you have a white box then there is no need anyway)
– Insert card to be provided by me in a short time.

Price: In order to support this first order and in view of all future potential business that we discussed please confirm price of xxx as agreed on during our last phone call. Again please confirm and I will make payment right away. (It is dificult for the supplier to say no here. You are ready to place the order and he smells the money :)

Sample costs: Please deduct the sample cost of Sample Invoice No.12345 of 150$. This was agreed on when I sent you the sample order on xxx.2016.

Please send PI based on above details with your bank acccount details so that I can make 30% T/T deposit to you.

1) I am also looking at an exclusivity deal. Since this model is more or less OEM in nature (modification and custom packaging). I would like you to sign the attached Exclusivity Agreement.
It means that anyone wanting the exact same specifications and is selling on Amazon United States is not allowed to buy from you.
You can still sell this model to other Amazon countries and customers but not with the same specifications like mine. (custom made file that he has to sign)

2) Please sign attached Purchase Order (a custom made file with all details again in a Word document.)

3) Please sign attached Purchase Order contract (a custom made document he needs to sign in Word file)

4) Please advise shipment date. Again, please check if you can ship out before xxxx.2015. I could send you the giftbox and all other order details within Monday next week so you would still have 30 days for production.

5) PLEASE ADD “FRAGILE-HANDLE WITH CARE” STICKERS TO ALL EXPORT CARTONS (my product had glas in it so I wanted this warning on the shipping/export carton)

6) Please advise inspection date (when 70% is finished). Inspection to be conducted trough: Asiainspection (I will pay for the inspection). If there is a fail inspection you have to re-work the goods and pay for re-inspection (this is also mentioned in the Purchase Order contract)

Please provide address, contact details and telephone number and contact person in both English and Chinese for the Inspection company.
I will also need these details so that I can give you the shipment labels from Amazon Seller Central with the actual factory who delivers.

7) Shipment to be conducted trough:
Please contact my freight forwarder to arrange pick up of both AIR and SEA shipment
John Doe
Made up name logistics (SHENZHEN)
TEL:+86-12345678
Fax:+86-12345678
E-MAIL: john doe@madeupnamelogistics.com

8) 100% shipment by AIR to following address. Please add the address in the commercial invoice and packing list.
FBA: Mandarin-Gear Limited
Amazon.com.dedc LLC
560 Merrimac Ave
Middletown, DE 19709
United States

The following is for the documents:

Importer of Record:
Mandarin-Gear Ltd.
xxxxx adress, Hong Kong
Tel: +852 12345678
mail: xxx
EIN: 123455678

Ultimate Consignee:
FBA: Mandarin-Gear Limited
Amazon.com
4255 Anson Blvd
Whitestown, IN 46075
United States

Notify Party for customs:
Mandarin-Gear Ltd.
xxxxx adress, Hong Kong
Tel: +852 12345678
mail: xxx
EIN: 123455678

9) Labels for for export carton as attached.

10) Please send full certificate of FDA and Borosilicate glass for this item.

11) Please find attached logo to be printed by Silk-Screen on the item. Logo to be put at the bottom of the product.

12) If there is a polybag included it needs to have the attached suffocation warning printed on the polybag.

13) Products need to be packed very very well especially around the glass as you know the glass can easily break.

If you have any questions please do not hesitate to contact me.

I am looking forward to building a long term business-relationship!
All the best,
Manuel

So you see there is quite a few things you have to consider when placing an order. Usually I sit 2-3 hours when writing the order email and terms up to each supplier. Since I want to take my time and think of everything that I want the supplier to do. Make sure you attach all files and documents you want him to sign.

Since I am a supplier and manufacturer myself I am sometimes surprised at how I receive orders from customers.
Sometimes I get an email just stating the order quantity, delivery place and not much else. If anything goes wrong I could blame the buyer “well you haven’t specified anything” and there is nothing he can do.
Obviously I am not that kind of supplier but many Chinese suppliers work that way… You as the customer have the right to demand certain terms and if the supplier doesn’t agree to them well then you should move on.

I hope the above gives you a bit of an idea on what you can and should do when placing an order.

If you like this post please share on social media :)
All the best and happy sourcing,
Manuel

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

Ps.: I am expecting my newest product to be in stock in the coming days and will update you soon in form of another webinar, so stay tuned :)

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News and trends from the exhibitions in Asia (October 2015)

It’s been a while since my last post and it’s time to give you guys an update. 

October is the busiest time of the year for me. In October there are usually somewhere between 10-15 exhibitions that I need to attend or that my buyers attend. 

This month I had a total of 26 buyers from 14 countries visiting me and the exhibitions. Here are some of the major exhibitions that were going on in and around Hong Kong: 

  • Global Sources Electronics (11-14th of October) 
  • Global Sources Consumer Electronics (18-21st of October) 
  • Global Sources Gifts and Premium (18-21st of October) 
  • Global Sources Fashion, Accessories & Textiles (27-30th of October)
  • HKTDC Electronics Fair (13-16th of October) 
  • HKTDC Lighting Fair (27-30th of October) 
  • Megashow Toys, Kitchen & Dining  Phase 1 (20-23rd of October) 
  • Megashow Gifts, Houseware &  Premium Phase 2 (27-29th of October) 
  • Canton Fair Phase 1 (15-19th of October) 
  • Canton Fair Phase 2 (23-27th of October) 
  • Canton Fair Phase 3 (31 Oct – 4th of November) 

These were some of the exhibitions that I usually attend but there are a couple more. Feel free to check out schedules for next year here: 

http://m.cantonfair.org.cn/m/en/index.aspx

http://www.globalsources.com/TRADESHOW/TRADESHOW.HTM?source=GSOLHP_TopNav_TS

http://www.mega-show.com/

http://www.hktdc.com/en-buyer/

The biggest of them all is obviously the Canton Fair in Guangzhou spanning over 3 1/2 weeks and 3 phases attracting over 200,000 buyers within this time frame. For me these exhibitions are essential in finding new suppliers and products and meeting up with clients and buyers. It is also a great time to network with fellow Amazon sellers and importers. 

I was lucky to meet with a fellow ImportDojo member, a couple Million$ Amazon sellers (Will Tjernlund & Reed Thompson) as well as attending a meet-up organised by Junglescout’s creator Greg Mercer in Guangzhou.

Without further ado, here are some highlights and moments from my last 4 weeks:

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Beautiful day in Hong Kong, heading to the Gloabl Sources Electronics at the Asia World Expo. 

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Making my way to the expo hall at the Asia World Expo building at the Airport. GlobalSources offers a free Airport Express train ticket to and from the city (12$ value) on each day you attend so make sure to get your free ticket at the entrance of the Airport express.  

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Two different expos were held that day. Gifts & Home / Mobile Electronics.  Notice the “Free sourcing service for buyers”? If you feel lost and need a little help with finding products drop in and ask for help. 

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Making my way to the mobile electronics hall. All I see are smartphones and smartwatches in the first few booths. 

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Tablets and smartphones everywhere. 

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Smartwatches. Not sure these still sell well. I have first seen them in 2013 and sales has significantly decreased I reckon. My suppliers have sent updated offers for these watches every three weeks. From the highest price in 2013 of approx .49$, they now cost somewhere between 11$ – 15$. 

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These “hooverboards” were the most seen product at any exhibition. It seemed that every supplier offered them even if they sold completely unrelated products in their booth. My advice, stay away. Many of them have issues with the batteries and lifetime after a few weeks. 


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IP cameras & smartwatches again. Every booth had them. 

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Remember this Kickstarter that raised over 800,000US$? This is the supplier and they offered me a price 72-80$ depending on the quantity (Kickstarter price was 85-119$). The MOQ (1000) was pretty high but they are trying to find distributors for exclusive deals. I am pretty sure that they will soon be copied by suppliers who can offer half the price. The helmet itself is pretty cool, you can listen to music, flash left/right on the helmet and a lot more all via remote control/bluetooth and an app. 


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Built in speakers in the helmet. 

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Different functions displayed. 

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Remote control mounted on the bike. 

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IP cameras again.

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Remember I mentioned in April that I only saw one supplier for Virtual Reality headset and you should watch out for this category? I saw at least 10 suppliers this time and this category is getting really big. 

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Here we go again, “Hooverboards”.

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Drones were still a big topic but only the professional suppliers have survived. 

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Remember the Indiegogo crowdfunding project for levitating bluetooth speakers? This is a poor copy. 

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Lucky to meet up with Reed Thompson & Will Tjernlund, the Multi Million Dollar FBA sellers. I had to listen to what they were up to that same night over a beer. 

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There were all kind of “segways and hooverboards” and they even had a “little park” to try them out. 

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I then went to the Gifts part and I found these neat Gentlemens sets. 

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Considering to private label this item. Thoughts?

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A bit of walking around in Central Hong Kong. 

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I was invited to a wedding which was pretty cool because it was hosted on one of Hong Kong’s famous Star Ferries that cruises trough Hong Kong harbour.

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It was time to head to China for the Canton Fair Phase 2 and I booked myself into the Landmark Canton. Prices are reasonable (120$/night) but the hotel has degraded over the years. 

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There are several ways to go the to the Canton Fair from HK, I prefer the trough train from HK to Guangzhou for around 30$. 

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Be sure to check if your hotel has free shuttle busses from the hotel to the exhibition grounds. I didn’t use them as I was a little late and would have to wait. These buses are usually in front of the hotel and they run every 30 mins or so (free of charge). 

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Arriving at the Canton Fair Phase 2. This phase featured several categories: Kitchen & Tableware, Gardening, Pet products, Food, Furnitures, Ceramics, Gifts & Premium, Decorative items, Toys, Personal Care, Toiletries, Household items and more. 

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Making my way into the first hall (furnitures) 

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In the back of the halls the booth’s get smaller and usually host small factories BUT they often have better prices than the big name companies. Make sure to ask around for prices. 

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Toiletries bags disguised as small suitcases as you would get them on some airlines in business class. Neat idea as a gift. 

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Car charging pods for smartphones and tablets. 

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Your car audio system doesn’t have Bluetooth? Never-mind, get these 12V cigarette plug bluetooth speakers. 

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Tablet and smartphone charging station.

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Home automation was a big thing again and many suppliers had well working systems this time including a ready to download application. 

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Seen these on your friends smartphone? Starting from 1.5$. 

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These were not new but are a great gift idea. Watch out for suppliers that have at least FDA certification (as in this case) 

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Decorative items at extremely low prices. 

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A variety of pet items at this supplier. A great category for starters. 

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Travel cases and gift boxes with very nice designs. 

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Tumblers and PET bottles. 

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Christmas/Festivity lighting and Halloween products. 

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Jewellery 

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Handicraft items

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A view at the halls. 

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The view from hall C to hall A. Hall A was built in 2005 and there are now 3 halls with the same size. They are all full with exhibitiors.

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Storage containers

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A view towards the city from the exhibition grounds. The pollution is clearly visible. 

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Time for Chinese seafood dinner 

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I teamed up with fellow ImportDojo member Omar on the second day of the exhibition. 

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Registering the Canton Fair badge for Omar. A pretty fast and simple process if you pre-register online. Be reminded to keep the badge. It is valid for all future Canton Fair shows. 

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Interesting travel pillow that keeps your neck straight when you sleep.

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This BBQ apron had all sorts of pockets and even a beer opener included. 

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“Dog-clothes”

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Pottery and garden fountains

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Artificial plants and garden decoration

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Omar keen on trying the “hooverboard” that was again at nearly every  booth here. 

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Tumblers and bottles

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When sourcing household & kitchen products look out for suppliers that have proper certification (FDA, CE or others) 

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Interesting coffee maker. Nothing new but a very nice design in copper. 

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Another Chinese dinner in Guangzhou with fellow German Amazon sellers. 

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I needed a day off after all the hectic weeks and decided to go for a stream hike in the jungles of Hong Kong. 

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Can you believe this is in Hong Kong?


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I couldn’t make it to the lighting fair in Hong Kong but a friend took a few impressions

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Contemporary lighting

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Modern lighting

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Time to head to the Canton Fair Phase 3. This phase hosts the following products: Sports and casual wear, mens & women’s clothing, kids wear, underwear, office supplies, sports/travel and recreation products, shoes, bags, health products, home textiles and much more. 

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Amazing Junglescout meetup in Guangzhou with fellow FBA/Amazon sellers!

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Ready for Phase 3, I opted for uncomfortable leather shoes as usual :)

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No matter which hall, nearly every booth had function/active wear in the trendiest designs. MOQ’s ranged from 300-3000 pieces. 

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Swimwear

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Kids, diving and bicycle gear

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These knitting shoes look very familiar (ahem Nike?) 

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Gym time anyone? 

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The sports/travel & recreation products hall was the most interesting in my point of view. 

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 Foosball kickers

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Titanium camping gear

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This e-bike was not comfortable to sit on

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Blow-up whirlpool

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A view of the city

There were a lot more pictures and expos that I went to but it would be too much to post here.

If you are selling or planning on selling on Amazon within the next year I highly recommend that you make your way to China. ImportDojo offers you training and expertise preparing you for these exhibitions here: http://importdojo.com/importdojo-masterclass/

Also feel free to join Importdojo’s Facebook group and keep updated for next year’s exhibitions and meet ups. I am organising a buying trip in 3 groups during April 2016 with a maximum of 4 people per group and if you are interested to learn more feel free to message me.

I hope you got a bit of insight into the exhibitions in and around Hong Kong and I look forward to your comments :)

Happy sourcing everyone!

Manuel

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The Cantonfair – All you need to know about the biggest expo in Asia

The Cantonfair is coming up and I thought I’d give you guys an insight on the exhibition, how you can prepare, what you can find there and who it isn’t for.

I first went to the Canton Fair in 2005 and things have certainly changed since then. There were literally not many places to eat, find an ATM or book hotels around the area.
China and the Cantonfair have seen the potential and improved the general experience a great deal since then. I can only imagine how it was 20 years ago.

Some general information first:

The Canton Fair is the holy grail of exhibitions. This event is so large that it is held twice a year and each time runs over a span of 3 weeks in three different phases. Each phase comes with different product categories.
As of 2014 there were over 22,000 exhibitors. This exhibition is a must for me and it should be for you too. You will find a lot of suppliers, big brands, small factories, or the product you have been looking for for so long.
Plan at least 2, or better 3, days for your product category/phase. Sign up once and get a badge that will be valid forever.

Insider tip: Don’t throw away your badge. You can use it for your next visit without paying 100 Yuan for a replacement card.

How to register?

Most exhibitions require you to pre-register if you want to get in for free. Registration on-site is also possible but usually there will be a fee of 10-20USD. You will need to provide a name card for your registration.
When you pre-register online, just fill in your company’s details and print out the confirmation. Bring that confirmation and you will be handed a badge for entry.
The Canton Fair has the same procedure, however you can keep your badge for years to come. If you lose your badge you will have to pay a fee of 200RMB for re-issuance.
There is a first time registration fee of 100RMB. If you have a supplier who can invite you, you don’t need to pay any fees. Also remember to bring along a passport photograph for the application (required).
You can register here, among many other useful tools for the Canton Fair:
http://invitation.cantonfair.org.cn/Home/Index
Remember to keep the badge for the Canton Fair, as it is valid for years to come.

Know your goals

Remember you don’t have all day. I usually try to finish an exhibition within 1 day (except the Canton Fair). But this is also because I know how to spot the good from the bad ones and know which questions to ask. As a first timer I recommend you take some more time but don’t try to spend more than 20 minutes per booth with each supplier.
If you spot some item that really catches your attention and you would like to discuss further steps with the supplier right away, take your time. It is likely you will have 2-3 meetings that can take an hour.

Price preparation

You will likely be looking for a category of a product so you should prepare yourself with some basic prices that you have received from suppliers beforehand. Knowing your prices is essential before going to an exhibition.
If you are looking at new products and are not aware of prices try my “rule of thumb” calculation of 30%, adding this to your margin and calculating your selling price. You will quickly figure out if the price the supplier gave you at the booth is realistic or not.

Prioritizing

The Cantonfair is enormous in size. Grab a map at the entrance or the information counter of the exhibition and take a moment to study the areas of interest. You can also look online prior to going to the exhibitions at which hall or category is where to save some time.
Once it is clear where your suppliers are situated, start there. Go through each hall in an organized way and prioritize the halls by importance.
Once you completed all the halls you wanted to see you could go to the halls that were initially of the least interest to your business. You may find some ideas on other products in less interesting halls too.

Hotels during the exhibition:

Many hotels will provide a free shuttle bus to exhibitions. Check with the hotel staff to see if this service is provided.
Book hotels now if you haven’t booked them yet! Hotels during exhibitions can get very expensive. The sooner you book the better.
I usually won’t stay too far from the exhibition area, as I don’t want to waste time. Unfortunately that carries a price tag.
If your budget doesn’t allow this, find a hotel near a subway station (MTR).
Whatever you do, don’t take a taxi TO and FROM the exhibition. Take the subway or free shuttle buses provided by your hotel. At the Canton Fair, for example, it is impossible to get taxis at night. You can take a taxi in the morning TO the fair; that should be ok.

First things first. Here is what I bring to exhibitions:

• Name/Business cards (an absolute MUST)
• Trolley to carry all the catalogues that I collect
• My own (printed) company presentation
• Notebook & pens
• Passport photo (some exhibitions such as the Canton fair require a passport photo)
• Comfortable shoes (you will be walking all day)

At the exhibition:

Once you are at the exhibition, get a map; you should be able to get them anywhere at information counters.
Walk the aisles until you find something that interest you is definitely an approach but I prefer to prepare a little and do some research on my main interests.
You will want to work with manufacturers only at the exhibition and not with representatives. There are hundreds of representatives at the fair ground offering translation services, negotiation, insight etc. Do not go with them! They usually charge very high fees and aren’t totally honest with you. They are probably also no experts in every product category and that might end up in a disaster.
Never place orders right away. You should negotiate prices, ask questions and maybe show more than interest and tell the supplier that you may want to order when you are back. But don’t tell them to enthusiastically that you want to order right away. Why?

  • The prices you get at the fairs are usually not the best prices. Negotiate when you are back home.
  • You will want to clarify your terms first via email/phone calls before you place an order. Have him sign a purchase order agreement.
  • You will want to compare prices of more than one supplier for the same product

To determine if the person you are speaking to is a manufacturer or representative make sure to ask a lot of questions:

How to act and ask questions at exhibitions

I usually prepare a little speech before I go to the exhibition. It depends on my project or product that I am looking for but I like to introduce myself a little bit and give the supplier a professional image of me.
He is likely more interested in giving me answers, good prices or proper email feedback after the exhibition. Here is how it could look:

Hi, I am Manuel and I am the Managing Director of Mandarin-Gear Limited in Hong Kong.
I manage/own a sourcing and buying office for many large retailers worldwide.
My customers are looking for product “X” and I am interested in discussing more details or receiving a quotation based on my customer’s requirements.

Then I ask my questions and once I am satisfied I will ask him to provide me a quote based on my requirements. I will hand him my business card and I will MAKE SURE that he wrote down everything we discussed.

Could you please send me a quote of this item (from his booth) based on “X” quantity, including certification “XY”?

I will also take his name card and catalogue to study later.
Here are some questions that I ask the suppliers. You can adapt these to your product or requirements as necessary. You can also make yourself a checklist with these questions and print it out for each supplier meeting you have.
Obviously you can also memorize these questions and make notes on your notepad.
Clip the supplier’s name card to your notebook and write down answers to these questions:
• When was his factory established?
This is important as to figure out if he has been doing business for a long time or if he is newly established. If the factory is brand new I will be wary of dealing with them, while if they are older than 5 years I will probably go ahead with further questions.
• What is the total count of staff, workers, engineers and managers?
A well-organized factory has at least 200 employees. That could be 160 workers, 30 sales staff, 10 engineers and 10 managers.
• What certifications can he provide for product “X”?
Know the certifications that you need for your product. If a supplier has no idea about FCC, CE, RoHS, ERP, GS or other certifications of a chemical or other nature, you can probably leave the booth right away. If he is aware of the certifications and requirements but hasn’t applied them to all his products it’s not an eliminating criteria, but make sure to ask if he is willing to apply for the certifications after order-placement.
• Who are his main customers?
Do you know the customers he is talking about? Do they have a certain reputation in your country that would make you feel comfortable working with him? If he is working with customers that you know, it should be a good sign of his competence.

• Mention a few of your competitors or bigger clients
Drop a few names of the bigger competitors or clients of yours. If he knows them it’s a good sign. If not, it is very unlikely that they are doing overseas business and perhaps aren’t even interested in your business, knowing that your requirements are too high or “too much work” for him.
• What is his main market?
If he operates already within or near your country it is also likely that he can fulfill your requirements. It’s usually a good sign if he works for countries like the UK, Germany, Switzerland, Sweden, the United States, Canada and other first world countries. It means that his factory is able to pass audits, tests and certifications needed for these countries.

• What is the factory quality management standard?
Remember that good factories are also easy to spot if they have a certain quality management System (QMS) such as ISO 9001, BSCI and so on.
• What is the MOQ?
Can he actually provide the low or high MOQ that you need? Is he willing to produce a first order based on a very small quantity or does he have the capacity for large volumes?
• What is the rough price of this item based on X quantity?
Most suppliers will give you a very rough figure for the product they are exhibiting. These can be vague as often these are “blank” prices that do not include any certification, licenses, etc. But it is necessary to ask for prices (and write them down in your notebook) for your follow up. You can also use my “rule of thumb” to add on 20-30% on top of the supplier’s price to calculate if the price is competitive.
• What certification is included in his price?
Does the product currently fulfill your minimum requirements for certifications or standards? If not, is he willing to apply for certifications after order placement? Is he aware of the different certifications that you need or do you get the feeling he doesn’t know what you are talking about?
• Ask if he can provide samples after the exhibition
If you would like to have a sample after you come back home ask him if he is willing to send samples. Most likely he will agree but make sure you remind him once you are back home to send you the sample. Some suppliers will actually sell or give you a sample right on the booth if you ask for it. It is actually not allowed but if there is a sample I would need right away because it’s that good and I want to show it to customers back home, I will ask anyway.
• Ask for payment terms
Are his payment terms a K.O. criteria? Make sure he agrees to your payment terms and doesn’t insist on 100% payment upfront.
• Ask for his top-selling items and who his customers are
Sometimes you may not have time to look at all products so you might miss the best selling items. Ask him either to show you his best selling items or send you a quote later for his top-sellers. Make a note that you are expecting his prices and offers later.
If I get the feeling after 1 or 2 questions that a supplier has no idea what I am talking or asking about, I politely end the conversation and leave the booth. There is no use in screening a supplier with all questions when I already know he is not interested or can’t fulfill my requirements.
After all, I need to scan the entire exhibition and I can’t waste my time with suppliers that are ignorant or need a basic education on my market’s/customer’s requirements. You will develop a gut feeling pretty soon if it is worth it to speak to a supplier longer or if you should leave the booth right away.

Hall arrangement:

Once you arrive you need to pass trough the registration area which is pointed out through signs. Don’t forget to pre-register trough the link I gave you and bring 2 passport photos. At the registration area you will have to line up for “pre-registered buyers”. You will be guided trough the process by the staff there and then get your entry badge. You can then move to the main halls.
There are 3 main areas on each phase:
http://www.cantonfair.org.cn/hall/en/index.aspx?start=bn
Once you choose your phase you can hover over the hall and see what products you will find in these halls. Within the 3 main areas (A,B,C) you have numbered halls as for example 6.1. (ceramics). Within this hall you have over 200 suppliers!

Depending on your priority products I recommend you start with the most important halls first.
During the registration you will also get a printed guide with all hall details that helps you to navigate. But you can already write down the main halls now when you look at the link above.

At the Entrance of each hall:

Look at the main halls you want to see and prepare to walk them trough in order. It is your first time to visit the fair so I am guessing you have no appointments with suppliers. Therefore I recommend you just start walking until you see something of interest. That could either be a product that you have on your agenda or an item that really pops out.

In the halls/at the booth:

Suppliers will either be eager to give out brochures of their products or you simply walk into the booth of this supplier if there is anything of interest for you. Unlike in the US or at European exhibitions, the suppliers are very open and welcoming in receiving you in their booths. No appointments are required. Just walk in and introduce yourself and what you do or what you are looking for. You don’t need to hand out any business cards at this point since you don’t want to be spammed later from suppliers that do not interest you anyway.
If you see anything of interest within the booth point to these products and start asking the questions I mentioned above:

If you are happy with the discussed (make sure they also take notes) hand over your business card and tell them to email you all the details. Nice touch with the “thank you in Chinese” on the back by the way
Take a catalogue or a brochure from the supplier as well, have him staple his business card on it and note down what is important to you. Try to get catalogues from each supplier that you visit. They will be happy to give you a catalogue in exchange of your business card.
You will quickly see which booths you should walk in. The goal is to find manufactures or good trading companies.
For example avoid booths that have only a few products in the shelves (A) or booths that have too many different kind of product categories (B). Go for booths that have maybe 3-4 product categories but seem to be specialised on each category (C).

 

A: Few products only indicate a small trading company with high margins and no real expertise and little value
B: Say you see a booth that has all these products inside: towels, pet supplies, electronics, ceramics etc. It’s a clear sign that this supplier trades everything and anything. They may have expertise in certain areas but their prices are high.
C: A booth that has 3-4 product categories. For example a booth that has: bathroom accessories, shower cabinets & faucets. They all relate to each other and thats a good sign for a real manufacturer. Try to focus on these.

Miscellaneous:

Food: There are a few western restaurants and coffee shops on every corner
Money: There are a lot of ATM’s everywhere in case you need to withdraw money.
Printing services: Printers and business centres everywhere available.
WiFI: Is available for free. Just ask for the log-in at the info centres.
Hotels & ticketing: Travel agents are available on several main levels to book flights, train tickets or hotels
Bus: There are buses leaving to major hotels during peak hours (9am 5pm) for free. Major hotels also arrange buses TO the exhibition. Check with your hotel.
Taxis: Taxis are a nightmare to get. You can take a taxi to the exhibition in the morning from your hotel but in the late afternoon you can sometimes wait up to 2 hours to get a taxi. There are illegal taxis everywhere but they charge 10 times the price. I recommend to take the hotel bus or the Subway.
Subways: There are 2 subway stations at the exhibition grounds. One at the beginning & one at the end. I usually take the Subway as it is the most convenient way to get back to the hotel. When booking your hotel see to book one close by a subway station.
I hope this gave you a bit of an overview and I wish you all the success at your trip during the Cantonfair :)
Happy sourcing guys!

GlobalSources

Global Sources – The oldest (and most professional) supplier directory in China

So I previously posted about Alibaba hacks and how to navigate on there. 

I thought I’ll give you guys also an overview of Global Sources which from my point of view is more professional and has stricter guidelines when it comes to verifying suppliers. 

 

They also have a ton of valuable resources and information on their website. Check out the video and let me know if you have any questions. Enjoy :) 

paypal

PayPal payments & general payment terms

Quite often I get asked what the reasons could be that his supplier doesn’t accept PayPal? Well it’s not because he wants to rip you off and wants to avoid PayPal’s buyer protection.

No, it’s because PayPal payment is not really a widely accepted payment term within the industry plus the fee’s are really high, especially on the sellers side.

Many factory’s won’t accept PayPal payments mostly because of the fee’s and because it is difficult to withdraw money in China from PayPal.

I often hear on forums or podcasts how they stress to NOT place orders unless the supplier accepts PayPal because of the buyer protection. That information is partly misleading you and I want to explain why.

Yes, it does protect the buyer in a certain way but most factories that work with the retail or eCommerce business work with wire transfers and do not accept PayPal.

A sample payment or the occasional purchase on Aliexpress with small quantities (20-50 pieces) is the exception of course. It’s fast, convenient and protects the buyer in case the sample or small order doesn’t arrive.

Having said all that of course you can try to get the supplier to accept PayPal but do not dismiss a supplier because he doesn’t agree to PayPal payments.

One reason why most suppliers also do not accept PayPal payments is because of the high fees for the seller.
Most buyers don’t even know there are so many fees and they think the seller is trying to scam them when they ask for additional fees on top.

Here is a recent example of a PayPal transaction I have received from a buyer. Being a manufacturer and supplier myself I accept PayPal for some of my orders because I know it is convenient for the buyer but if the amount gets large I don’t.

In this particular case the order amount is 500US$, PayPal deducts 4.4% immediately because most people choose “ I am paying for goods & services” which is technically correct but that means the seller has to bear all the fees.

PP

That brings us to 477.7USD. Then it gets interesting. PayPal does not allow the user to deposit these 477.7USD to the users USD account even if he has a USD account.

For example, I have 2 bank accounts in Hong Kong and both of them have USD deposit accounts. However PayPal doesn’t transfer the 477.7US$ to my bank account.

No, they force me to use their internal exchange rate to exchange into Hong Kong Dollars, even I tell them that I have a USD account (same thing happens in China with Chinese Yuan or RMB).

The official exchange rate as of today is 7.75HKD to the USD. PayPal’s exchange rate is 7.5HKD to the USD. Meaning I lose another 15.38$ in exchange fees for a total of 37.68US$ in fees (8%).

So essentially I get 462US$ paid to my bank account which is not fair for me as the supplier either. Thats why when someone insists on PayPal payment I usually add 8% to the total amount and so do all the other suppliers.

Now imagine the amounts get to 2000$ or above. The fees on 2000$ with PayPal would be 160US$ while a simple bank wire transfer would cost 15$. Wouldn’t you like to save that kind of money? You could have an inspection from one of the cheaper services available on Alibaba for the amount you are saving on fees.

The most common payment term accepted is T/T payment or wire transfers and thats why suppliers are most likely telling you that this is the only form of payment they accept.

This is not a red flag for you, it’s actually a sign they are serious and not a mom & pop shop who accept PayPal. All the retailers worldwide work with this payment term.

Now lets take a look at some of the other payment terms available and if you can protect yourself with each payment term somehow. They are mentioned in my book but I will go into more detail here:

There are several common methods of payment, and each have their pros and cons for both the buyer and the seller.
The longer you work with a supplier the easier it will be to deal with payments. In the beginnings you will most likely (and should) work with a 30% deposit or down payment on your order.

The rest is paid after or immediately before shipment. If you have an established business relationship you could ask that the next order should be paid 100% on delivery (T/T). The supplier can always say no, but if he agrees this gives you financial liquidity.

Many retailers actually work on a T/T basis 60-90 days AFTER shipment, allowing them to sell goods already while they haven’t even paid for them yet. That is the ideal situation for you as a buyer but not many suppliers will agree to this term.

Let’s take a look at the most common payment options and the associated risk level to you as the buyer:

1. TT (Telegraphic Bank Transfer or wire transfer)
Risk Level For Buyer: Medium Risk
With a bank transfer, the supplier will receive payment before production starts. Very important: if you agree to this payment, NEVER pay more than 30% upfront. 70% will be paid upon inspection and shipment release. This payment method bears a medium level of risk to the buyer and generally is not recommended when dealing with a completely unknown supplier. There is little that can be done to get your money back if something goes wrong.

You can request a re-call of the funds trough your bank but the other side still has to sign and agree the re-call when they are notified of it.

However you can protect at least the initial 30% of the money (deposit) by having an inspection and releasing the rest of the money ONLY after the order is to your satisfaction (passed shipment inspection).

If you can’t afford or do not want to have an inspection (for example because the total order value is so low it wouldn’t be economical) then I recommend to have the supplier self-inspect and send you an internal inspection report.

This report should include pictures during and after production of the product, packaging,labels, cartons etc. that shows your order is made according to your requirements.

Usually every supplier will agree to give you an internal inspection report. If not, thats a red flag. So it is important you clarify this part BEFORE placing the the order and sending money.

2. Letter of Credit (L/C)
Risk Level For Buyer: Very Safe
A letter of credit is very safe for both parties. However a letter of credit is rather complicated to issue through a bank, costs quite a lot of money, and is generally only recommended for larger purchases ($50,000 and above).

What essentially happens is that your bank issues a letter of credit to the suppliers bank and the supplier has proof that you have enough financial capital to pay him eventually. Once the order is produced the supplier will send the requested shipment documents to his bank and his bank in turn will send all the documents to your bank upon which your bank releases the cash to the suppliers bank. The good thing for you as a buyer here is that you can at any point decline to release the money if your order was not produced according to your requirements (remember to have an inspection) and you can ask the supplier to re-work the order if there was any problem. Otherwise he won’t get his money.

L/C payments are widely accepted especially for very large purchases because the supplier can get a large credit from his bank to purchase raw material to get production going. The downside is that L/C’s usually have fees of 500US$ or more.

3. Western Union
Risk Level For Buyer: Very Risky
Western Union from my point of view should ONLY be used when dealing with people you know very well. There is no guarantee if something goes wrong.

Anyone can go and pick up the money you send to this certain person. There is no insurance, your money can be gone and there is nothing you can do.

4. PayPal
Risk Level For Buyer: Fairly Safe
PayPal is a popular payment method for buyers as it presents a much lower risk, ease of use, and generally pretty good buyer protection. Although it’s a popular option with buyers, it’s less popular with suppliers due to difficulties in withdrawing money, high tax rates, and potential charge backs from less than honest buyers. PayPal is widely accepted on eCommerce sites like Aliexpress, DHgate.com or for sample payments. Other than that, the above applies.

5. Escrow
Risk Level For Buyer: Very Safe
When using an escrow service, the buyer’s money is held by a third party and is only paid to the supplier after the buyer confirms satisfactory delivery of their order.

Escrow is a fairly safe payment method for buying and selling online because it protects both the buyer and supplier.
You can read about common payment methods on Alibaba on the Alibaba Safe Buying page. Escrow fees range from 4-11% so this can be rather expensive for both parties.

http://www.alibaba.com/help/safety_security/class/buying/pay_ship/002.html

Generally, when you are just starting out and ordering small quantities like 20-50 pieces, you’ll probably want to look for or negotiate with suppliers to either accept PayPal or some type of escrow service to give you the highest level of protection.
When you have an established relationship with a supplier you should aim at T/T or L/C payment possibly with terms that benefit you e.g. T/T or L/C 60 days after shipment as mentioned above.

Bank account information
Pay attention to the bank details the supplier gives you. Does the name or the address of the beneficiary match up with the suppliers’s name? At least partly? If not be very careful.

Perhaps your contact is even asking you to wire money to his “boss” or his “personal account” because of internal finance issues? DO NOT believe that for a moment.

If the information doesn’t match up ask why and if there is no good explanation, walk away and look for a new supplier.

Happy sourcing guys!