2021

2021
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Is Dropshipping dead in 2021?

Is dropshipping dead in 2021?

Is dropshipping dead in 2021?

By Manuel Becvar
By Manuel Becvar
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Introduction

First off I think I should let you know that I have never done dropshipping. For some reason it never seemed appealing to me. 

Low quality products from China that I can’t inspect, long delivery and possible upset customers that can kill my dropshipping business days after I started. However dropshipping can be great when you are just getting started and have a low budget. 

Having said that, there are ways to make money with dropshipping. So is dropshipping dead in 2021? No, it is very much alive and in this post I want to share some ways on how to succeed in dropshipping. So lets get into it. 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

What is dropshipping?

Simply put, dropshipping is selling other brands products on your own website or store. A customer comes to your website and buys a product that you sourced from somewhere and put on your website. In most cases this will be Aliexpress or perhaps Oberloo.

The product you are promoting and selling on your site is then shipped to the customer from the original supplier. In many case you will have to place the order at the supplier yourself or if you are using an integration/automation the supplier gets the order electronically and ships it to the customer. 

Sounds great actually, no? Well, this may have worked 10 years ago and many people did very well with dropshipping. Especially in the pre-Amazon FBA and Shopify times. Customers weren’t used to 1 day or free shipping. There wasn’t much competition online for a new product. So customers were also willing to wait 7-10 days for shipment. 

The problem is and always has been for me that I can’t control the quality of the product. Sure, I could get a sample first and check it. But I never know what the supplier will send out to the customers. He could have just sent me a “golden” sample. This kind of trust is silly to me. I need full control over quality. What’s more, these dropshipping suppliers have stock, meaning they’ve produced the item I want already and its laying around somewhere in their warehouse. 

It could be in a Chinese packaging or from some other customer that I don’t know. Imagine you’re getting a product that you bought online and the entire packaging and instruction manual is in Chinese. 

And as I’ve mentioned already I am not sure if I want to wait 7 days for something not knowing what I’ll get. Me personally, if I buy online I buy directly at the brand (e.g. Adidas or Amazon). And these guys ship in 1-4 days and I know I can return the item if I want. 

Thats another thing with dropshipping. You basically have to offer free return (perhaps shipping is paid by the customer) and I can’t get the money back from the supplier. Completely different to Amazon FBA. If the item gets returned I get the money back from Amazon. 

If the money gets returned and the customer claims its broken I will claim it back from my supplier in terms of a refund of free unit on the next order. E.g. if I sell 1000 units of a product and 60 are returned from the customer claiming they are faulty I will ask the supplier to give me 60 units for free on the next order. As support I will email him the Amazon return screenshots from customers. I mentioned this clause every time before I place an order, be sure to do the same on your next order.

Succesful dropshipping business models

I initially said dropshipping is not dead. So who are those people that make money with it? For me there are only 3 ways to have a successful dropshipping business:

  1. High price items with a local dropshipping company

  2. One hit wonder products

  3. Clear communication to customers on delivery times

High price items with a local dropshipping company

Probably the best way to go is to find a local company with higher priced items (like outdoor furniture).

First off you don’t need to make many sales to make this profitable as compared to an item that makes you 1$ per sale. If you sell 50 items with 1$ profit per sale you probably only need to sell 1 set of garden furniture to make 50$ in profits. And it is probably easier to sell 1 set of outdoor furniture every other day than selling 50 fidget spinners. 

Second, if you deal with a local company, shipping times will be much faster, quality is likely to be better and their customer service is probably better orientated to get you back fro repeat business. You could possible even visit the company, meet people in person, see the samples, negotiate deals etc. 

Johnny from JohnnyFD talks about this extensively. I dont know Johnny personally but I’ve seen his content and he talks about this extensively and explains in details how you can build a dropshipping business with local suppliers and high priced items. He’s been rather successful with his dropshipping business for many years. 

One-hit-wonder products

Just like that 1 song from that band you never heard of again. This is a very short lived success but may very well pay off. I am talking about products that only you sell and hopefully you’ll be the only one for a while that are a true hit. Things like a fidget spinner. If you were among the first ones you probably made very good money. When the competition came in – like 30 days later the product was dead. 

Granted, this could work well but you are not really establishing a brand or doing anything meaningful. You would always be on the lookout for that next hit and thats very stressful. And we all know how well that goes with musicians for example. 
 
I prefer building a brand and having a fanbase of customers who will buy from me again and again. 

Clear communication to customers on delivery times & customer support

If you do find a low/medium priced product and a quality supplier (which is entirely possible) then I would want to make sure to communicate to my customers that it takes a certain time to deliver. 

I asked Nichedropshipping the other day what their outlook on dropshipping is. Here’s what they prepared for me that I wanted to share with you: 

Dropshipping is simply a way of running an ecommerce business without having to handle the products personally. It’s a simple approach to selling online, especially for startups on a tight budget. But, despite the ease of entry, success doesn’t come easily.

When it comes to succeeding in dropshipping, we’re not talking about getting rich quickly; instead, we are talking about building a legitimate, sustainable, real business. 

To be successful, it takes more than a research-backed niche, a user-friendly store, good suppliers, and effective marketing campaigns. The core of success is to care about your customers.

As a dropshipping agent, we have witnessed quite a few times that our clients had to shut down their stores due to poor customer feedback. However, you don’t have to suffer the same failures if you keep the following in mind.

  • Sell products that add value to customers and never compromise on quality. 

  • Instead of exaggerating the benefits of your product or promising over-optimistic shipping time, stay honest and set clear expectations for your services. 

  • Provide exceptional customer services. Answer customer queries timely and remain proactive in providing solutions if unforeseen issues arise such as inventory shortages or shipping delays.

We can see that dropshipping is not dead but growing. However, you’ll only see growth in your dropshipping business if you constantly strive to refine your strategies and remain client-centric.

If you are interested in dropshipping and need to look for quality suppliers and products I suggest you visit Nichedropshipping.

Where can I find dropshipping suppliers?

Having said all that, while dropshipping is not for me, it can work for many people. So here are some resources to find suppliers:

  1. Nichedropshipping.com

  2. Aliexpress.com

  3. Goten.com

  4. Inventorysource.com

  5. Oberlo.com

There are others of course, but these are the ones I know well and recommend.

Final Thoughts

So should you give dropshipping a try? Why not. The initial investment capital & the risks are low. you could try several product categories until you find your niche. And if you do make some money why not take the profits and start your own private label to sell on Amazon or go into higher production quantities with a unique product 🙂

I hope above helps!

All the best,

Manuel 

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The ultimate guide on starting an ecommerce business and build a brand – Part 2

The ultimate guide on starting an ecommerce business and build a brand – Part 2

The ultimate guide on starting an ecommerce business and build a brand – Part 2

By Manuel Becvar
By Manuel Becvar
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Table of Contents

Introduction

Welcome back to the second part of this series on how to build an ecommerce business and brand! If you’ve missed the first part you can check it out here.

As in the first post, this is a rather long post (10,500+ words) but brand building is so essential that I wanted to bring the most to you. Sorry if it got a little bit longer. 

In this blog post I will be focusing on Product Innovation, Manufacturing, eCommerce, Social Media, Retail and much much more. 

Brand Building – Product Innovation

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

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

  1. General items with unique logo and packaging.

  2. Completely unique product.

  3. Improvement over existing products.

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

 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

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

  • Listing

  • Photos

  • Price

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

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

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

The Product

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

  • Number 1 Best Seller in Dog Toy Balls

  • 4,432 reviews

  • 2 Variations

  • Multiple Colors

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

  • Multiple reviews indicate the product is popular

  • Variations show demand for different sizes and colours

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

Product Listing

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

  • Poor Images & Very Bland – A product with this popularity/demand should have higher quality pictures.

  • Bullet Points – The bullet points are too short and don’t describe the product features in detail.

  • Listing Title – This, in my opinion, is the most lacking part. The title is not Keyword Optimized and they have the words “Colors May Vary”. As a customer viewing the listing, the question I ask is:  What colors are available for this product? Which color will I receive?

Product Description

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

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

Reviews

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

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

Positive Reviews

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

  • Fun Toy and most dogs love it.

  • Adjustable difficulty of the item makes it accessible to any dog.

  • A lot of the reviews suggest customers bought 1 or more. This is a very good sign.

  • The product makes their dog exercise more.

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

Negative Reviews

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

  • Cheap material – most dogs break it easily.

  • Dangerous – Some dogs have risked choking because it comes apart easily.

  • Boring – some dogs found the toy to be boring, this suggests that the toy is only ideal for particular breeds.

  • Functionality – Some customers found that the treats don’t come out properly.

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

External Research

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

Google Trends

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

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

Non-US Amazon

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

  • No demand for the product outside the US – Highly unlikely considering the category(Pet Supplies).

  • The seller main focus is only the US, so releasing a better product in the other marketplaces would give you an advantage.

Amazon DE

Amazon Spain

Amazon Japan

Re-Cap

Based on the initial analysis, my conclusions are:

Positive

  • Quality is an issue – We can make a better product.

  • Material is low-quality hard plastic and therefore we can improve the material quality or use a different material.

  • Certifications – No certifications are mentioned in the listing, by obtaining certifications we can make the product better.

  • Photos – Higher quality photos.

  • Listing – Better product descriptions & bullet points.

  • Variations – Include colors in the listing & offer 2-3 colors.

  • Packaging – With some effort we can make a better packaging.

Negatives

  • The product is extremely popular and therefore hard to get the #1 spot.

  • Large amount of reviews – However, 24% are 3 star or lower, so a better product can outperform it.

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

What’s Next?

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

  • Hiring a product designer to design a completely new product based on the feedback you give them.

  • Sourcing a factory that produces similar products and see if they can make the requested changes.

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

A Note About Product Research

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

  • Build a brand around a category/niche you’re passionate about. If you have a strong passion/interest towards a particular niche, you know what the market wants.

  • If you already have a product in a category, focus on building a list & interact with potential customers via social media. Once you build trust with your customer base, they will often tell you what products they love/want.

  • Release products which are both unique and better than the competition.

Moving Forward

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

  1. Cover many sub-niches in one category.

  2. Show expertise in your niche

  3. Build trust with your target market(if you consistently release great and innovative products)

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

“Frequently Bought Together” section

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

“Customers Who Bought This Item Also Bought” section

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

“Sponsored Products Related To This Item” section

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

Category Magazines

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

Forums

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

  1. You can get inspiration for blog posts

  2. You can segment your audience( Gender – Age – Household Income etc)

  3. Advertising – Forums have advertising sections, see what type of brands and products are advertised and do your research on that.

Tradeshows & Exhibitions

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

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

In this next part of the post I’ll talk about private label versus your own design and why being unique (in the long run) is better.

I will also talk about Industry Research & Demographics (Who will be your customer?) because I feel this goes hand in hand with the decision on choosing a product. 

Before we discuss private label versus your own design I will dig into Research & Demographics first – who will be your customer? Is there enough demand? Your customers or target market can also determine whether you go for private label or your own design.  

Brand Building – Industry Research & Demographics

I’ve talked in previous blog posts on how to choose a product and do your industry research. So I won’t go too much into detail in this post, check out the post I did on this a while ago here.

Let’s imagine that you aren’t sure yet which product you want to sell in but you have a certain industry in mind. I always say follow your passion or something that you can relate to. 

After all it doesn’t make sense to start selling Bluetooth speakers when you know nothing about them let alone explain features or answer technical questions of your customers. 

So ideally you start with something that you can at least relate to or feel that you can improve on. 

Let’s pick an industry. As some of you know this from me already – I love hiking and trail running here in Hong Kong, so lets look at that niche 🙂. Me hiking/trail running in HK’s mountains 

1) I go onto Google and start my search. 

2) I check the first few links and I find a site that has a compilation of the top 10 products – makes it very easy for me. 

Here’s the Top 10:

  1. Jacket

  2. Shirt

  3. Pack

  4. Handheld bottle 

  5. Shoes

  6. Socks

  7. Poles

  8. Neck Gaiter

  9. Medical Kit

  10. Food 

3) Next thing I do is go onto Google.trends.com and enter “trail running”.

It is a very trendy topic as you can see

4) Now lets look at particular states in the US:

Colorado, Utah, Washington, Arizona, North Carolina are the top 5. 

5) If I look into cities as you can see there is a very high demand in Denver, Portland, Seattle, Austin & San Francisco (& a few more)

I know from living here in HK there is very high demand as well. Now if Amazon would have a store here that would be probably my first item to put up on as a listing. 

As an alternative I could also set up an eCommerce shop here in Hong Kong (there’s my next business idea). 

However I am going to focus on selling a product in the US now either on Amazon or my own eCommerce shop. 

Next thing to do would be to research the particular top 10 products and then focus on either the highest demand or the product I can affiliate myself with the most. 

After I pick a product I go onto Google keywords planner. I pick “trail running jacket” and as you can see there’s a very high demand (100,000 – 1Million monthly searches on Google).

If I were to go after shoes it would even be 1M-10M per month. Thats a lot of potential customers 🙂

What do I do now with all those numbers? Nothing for now since I still am far away from launching a product, but the point of this exercise is that I become aware of the trends, the search and interest volume of my potential clients and how I can take that to my advantage. 

E.g. I can set up my own shop or sell on Amazon and drive traffic via targeted Facebook ads (or Google) to my listing. And I can specify that by country, state, city and interest. I am not going into detail now (thats for later) but just a quick look at a Facebook campaign with these keywords and targets generates a audience of 790,000 people. Something for later when my product is live (or during the launch). 

Now obviously this is just a brief and short trip into researching demographics and interests. But as you can see from above, there’s literally a million potential clients for me. 

Obviously I would now have to do my product research, find suppliers etc but this will be a post for next week. 

What you can do from here on is to look up the competition on Amazon and how you can improve a product or even get unique ideas.

Let’s assume that you have your product and industry well researched. What do you pick now? Private Label or having your own design? 

Lets look at the options:

Private label

4-5 years ago Amazon FBA private labelling became the No.1 way to start your new business with a small capital. Simple – find a lightweight product, fits in a shoe box and costs less than 2$. 

So many people jumped onto that train that today we have immense competition on Amazon. While there are still categories and products out there that have small competition, its getting more and more difficult for everyone. 

I am sorry to tell you but those days where you start off with 1000$ or less are over. I still see success stories with private labelling however starting capital should be at least 3-5,000USD. You are going to want to order a quantity (say 500-1000 pieces) that last you 1-3 months when you launch, especially if your product goes well. You will need capital for marketing (PPC, Facebook ads etc., influencer campaigns), logistic costs from China, inspection costs, photography and business set up costs. If you are looking at higher priced items from China – because they have less competition, 5000US$ are easily spent on product costs only. 

How does private label work? By now I think most of you how it works but basically you are buying a product off the shelve from a manufacturer, maybe improve it, put your own logo on the product or packaging and send it to Amazon. Obviously there are many steps in between but thats pretty much it in a nutshell. 

Does private labelling still work? Yes it does, but the competition is just immense right now that you’ll want to pick your product carefully with extensive research. Perhaps instead of making it difficult for yourself with limited capital you may want to look into other private labelling like wholesale private labelling. 

So while private labelling in its different forms is still a viable option and will make you money you will have to have a good product that stands out plus extra capital for marketing and advertising.

The most obvious downside on a private label item is that anyone can come in and hijack or have the same product up after a few weeks. Even if you are brand registered, a competitor can come in and modify the product with his factory, maybe even improve it and sell under his own listing. Within a matter of weeks you can have 4-5 competitors and the price gets driven to the ground. Think of the melon slicer that everyone tried to sell and within 2 months there were 30+ sellers of this product. Imagine you would have been the person designing this item, how long you’d been the only one making huge profits. All the other guys that came in after you had to fight for the price and customers. Basically a race to the bottom. 

What are the advantages on private labelling?

  1. Small investment costs (3-10,000USD+)

  2. Quick turnaround time from placing orders to selling the product

  3. Good starting point to make money on the side and learning the process

  4. Don’t get me wrong, to start out and if you are concerned about capital and big investments private labelling is a great way to get started. You’ll learn the ropes, get your first experience in China and on Amazon and you’ll be set up with your business. 

Even I started with a private label but quickly moved on to create unique products. 

Your own design and why unique is being better

What’s your own design and what are the risks involved? What sort of capital do you need to invest? 

OK, so first off you might say – even my unique products can be copied at some point. Yes, thats true but you’ll have a head-start of at least 6-8 months and by the time the competition comes in you’ll have a lot of reviews (that he doesn’t have) and you’ve already made good money and ideally even work on your next product. Thats the business cycle anyway, you create a product, someone comes and copies you. Deal with it and move on.

Next question may even be how to avoid that anyone copies you – patents and trademarks. First you’ll definitely want to register your brand on Amazon so that anyone trying to hijack your listing has to ask you for approval – guess you won’t approve 🙂 Second you may even want to patent your design in the US (or wherever you are selling) So anyone trying to copy you has a very low chance of succeeding. You can easily report them to Amazon infringing your patents or design.  

Whats the downside with your on design? There are three things that come to mind.

  1. Long period of development & perhaps the feeling of missing out on action

  2. Medium to Large investment costs (10,000USD+)

  3. Risk of product not selling well (but you’ll have that risk with private label items as well) as it is new to the market and “no one knows it exists yet”. 

Whats the upsides of your own design? 

  1. You dictate the selling price and market. Out of experience your margins can be 100% upwards. Private Label usually has anywhere from 15-45% (which is actually not bad when you are starting out) 

  2. You can interest retailers and other businesses with a unique design. It’s very unlikely that Walmart is interested in buying a private label garlic press. 

  3. You have a USP (Unique Selling Point) that your competitors (private labellers) don’t have. If you keep coming out with unique products your customers will return. Just think of Nike or Adidas how they constantly re-invent themselves with new designs, material etc. If you are a one hit wonder there’s not really a momentum that you can build (e.g. improving the garlic press for the 50th time). 

CONCLUSION Product Innovation & Private Label

I think it is pretty clear that a lot depends on your capital and assessing your risk tolerance. Investment more and get paid off (hopefully) or start small and grow slow. It is really a personal decision that I can’t take off your hands 🙂

Researching your demographics and possible target audience helps making a decision.

Brand Building – Beginners manufacturing guide

How to manufacture in China – I’ve probably written about this topic for as long as the blog is up (7 years now) but I’d like to give you a summary of the most important parts of manufacturing overseas in this blog series on how to build a brand.   

Guide on Manufacturing Overseas

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

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

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

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

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

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

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

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

Here are a few examples:

  • Guangdong province (South of China): Electronics of any kind, especially consumer and household, toys

  • Zhejiang province (Shanghai area): DIY products, tools, metal and fabrics, lighting

  • Hebei province (Beijing area): Textiles, coal, steel, iron, engineering, chemicals, power, ceramics and food

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

Certification

This would be a separate 8000 words post and I have written about it in detail before HERE. Please read this part separately. 

Products & components to avoid when starting 

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

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

Products that are difficult for importing:

  • Anything related to gas

  • Cars

  • Supplements

  • Foods, drinks

  • Animals

  • Guns, weaponry

  • Hazardous material

  • and more

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

Contracts & Tooling Guide 

Same as for certifications, I wrote a very detailed post on this separately HERE. Please read it also. 

Choosing a supplier

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

Ordering samples & how to test each sample effectively

As with the above, I have written an in-depth guide over here for you to read.

Inspections

I’ve been saying this forever and I still see people shipping their products from China without inspecting their products by professionals but my recommendation is never ever ship without inspecting your goods. Here’s a super great example why you always need inspections and how you can book them.

 

Brand Building – An Introduction To eCommerce 

How To Build Your Own Audience and Gain Control Over Your Brand

In this part of the post I will focus about building your own E-commerce store. While selling on Amazon has numerous benefits, nothing beats the feeling of having your own store and having full control over your brand.

While the process is time consuming and requires some capital investment, in the long run it will pay off. Here at ImportDojo I always recommend to expand into new countries and to have more than one sales channel – nothing beats having your own sales channel!

The Importance of Having Your Own Store

1) Have a stronger online presence

A website is not only an additional sales channel, but also an asset. If you manage to build up enough sales volume, the valuation of the site can be added to your company’s overall valuation. It’s never wise to build a business solely on someone else’s platform(Amazon/Ebay), by having your own website you have an additional channel to drive traffic to.

2.      Control Pricing, Offers & Marketing

Marketplaces like Amazon and Ebay have a lot of sellers competing for the same customers. This causes price wars and more often than not, it’s a race to the bottom. By having your own website, you can control your pricing, make your own offers and be in control of what you charge.

3.      Better Branding

A website offers endless possibilities when it comes to customization. Marketplaces have guidelines which restrict the amount of customization you can make. With your own site, you have complete say on what goes into the design, colours and overall branding.

4.      Customer Relationship Building

Through email marketing and social media, you can truly connect with customers in a much more meaningful way than Amazon. Amazon limits sellers on having buyer’s information and restricts communication with them. When you have your own website, you can focus more on the customers and listen to their needs.

The Challenges

Capital Investment

Although building an online store requires minimum capital investment, marketing will require a significant amount of money. This can be difficult in the early stages as you also need to outsource website copywriting, blogs and design.

Getting Traffic

This is by far the biggest challenge of an online store. With Amazon, sellers don’t need to focus much on traffic(except Amazon PPC) as the marketplace gets enormous traffic. With your store, chances are you won’t have visitors on day 1 so you need to dedicate a lot of effort for driving traffic. These include:

  • Facebook Ads

  • PPC(Adwords/Bing)

  • Blogging and SEO

  • Social Media Marketing

Website Set Up 

Luckily many platforms have made this part easy. However, you still need a lot of time to make the design of your store ideal. Most platforms like Shopify and BigCommerce have a lot of integrations which helps you sync inventory across all marketplaces.

Besides the design, the most important parts of a website are:

  • Have an SEO friendly website.

  • Design fits your brand and audience.

This can be easily done with the use of integrations, plugins and premium themes.

Content

Between the blog, website copy and your email capture & sequence, you need to write a lot of content. If you’re not a good writer, you need to outsource all of the writing which requires a lot of capital initially.

When writing content, a good tip is to diversify content not just on your niche but the whole category or subcategory. Use different long tail keywords that cover different topics and once you monitor traffic and engagement for a few months, you will find out what your audience is interested in.

You can use the data to release new products based on what your audience wants.

Essential Pages & Content For Your Site

About US Page

The about us page allows you to tell your brand story, mission and goals behind your products. This page is very important as it gives a “face” to your brand that customers can identify themselves to.

Store/Shop

The store should be simple and easy to navigate. Like Amazon, include keyword focused descriptions and great images. I recommend Shopify because it connects to Amazon and Amazon can then fulfil your Shopify orders. 

Blog

A blog not only gives important updates and information about your niche, but it also helps drive traffic to your site and build up SEO.

Policies

The most important policies you should put on your website are: 

  • Privacy Policy

  • Terms&Conditions

  •  Shipping & Returns

Building an Audience & Getting Traffic To Your Website

The beauty of selling on Amazon is that you don’t have to worry about driving external traffic to your products. Aside from Amazon Sponsored Ads and Facebook Ads, Amazon generates enough traffic to their marketplace. What makes Amazon unique is that the traffic is mostly buyers.

When it comes to your own website, getting traffic will be the major challenge. However, there are a number of ways to drive traffic(and sales) to your E-commerce store.

Pay Per Click Advertising

Like Amazon Sponsored Ads, pay per click marketing is very powerful in driving traffic towards your products. The most popular pay per click networks are Google Adwords and Bing, when it comes to these two however, you will have higher competition on keywords so your strategy has to focus on long tail, less popular keywords.

Blogger Outreach

This is a similar technique to the one I used in my French Press Case Study. When you’re a new brand, chances are that few people know about you. In this case you have 2 options:

  1. Build an audience yourself which requires time and money.

  2. Leverage someone’s existing audience to gain exposure.

Bloggers are perfect for gaining exposure! They are trusted by their audiences and gain consistent traffic to their blogs. When choosing bloggers to promote your brand or products, take into consideration the following:

  • Are they well known and trusted in my category/niche?

  • How much traffic does their blog get?(use Alexa to check this)

  • Are they active on social media?

  • Are they experienced in promoting products similar to my category/niche?

  • What is their target audience demographics?

One advice is to find someone that truly fits your brand, audiences can tell if someone is truly passionate about your product(s), so be very careful in who you pick. Once you filter down the blogger(s) of your choice, you need to contact them. You can do this either via their website(normally they have a specific Advertisers page) or via social media. Based on experience, these two incentives work best:

  1. Money offer with no commission involved(This can normally range from $50 to $1000 depending on the blogger).

  2. A free product sent to them and they get commission for each referral. They can use the Amazon Associates program or you can create your affiliate program on your website.

The second option normally works best as the blogger will be more incentivised to promote your brand. Bloggers are a great way to drive high amounts of traffic both to your Amazon listing and your website. If a blogger proves very successful, a good option would be for your brand to sponsor the blog as you get a permanent advertising presence.

Social Media Marketing

Social Media Marketing is the number one tool to drive traffic to your website and get exposure for your brand. Although building a following takes some time, you can drive huge amount of sales and traffic with targeted discounts or giveaways. The most popular social networks for E-commerce are:

  • Facebook – Great for all types of businesses and they have the best converting ads out of all social media networks.

  • Twitter – Although not very ideal for promotions and showing your products, it’s excellent for giving news, updates and connecting with influential people in your category.

  • Instagram – The most popular social network for E-commerce entrepreneurs, it’s design and features make it ideal to show your products. The only downside is that only the bio is clickable so you don’t have many options for driving traffic. However, it’s by far the number 1 tool for getting exposure.

  • Pinterest – Another great social media platform ideal to show your products and branding through images. It is the only social network that has a majority female following, so if your target audience is in this group, it is recommended to focus your efforts here.

  • Snapchat – This social media platfoorm is not ideal for every businesses, however, its popularity is growing and if you’re targeting millenials – you need to be on Snapchat.

  • YouTube – Out of all the social networks, YouTube has the most power to drive huge amounts of traffic and make your brand go viral. The only downside is that producing videos requires capital investment and a lo of time. A way to go around this is to send your products to YouTubers who target your niche, by doing this you leverage the audience of the YouTuber

Building your own e-commerce store requires a lot of work and patience. However, the benefit of having your own platform and customers is very rewarding. While the Amazon platform will most likely always be the main source of revenue, having an additional sales channel that you fully control is the ultimate step towards having a strong brand.

Brand Building – Social Media & eCommerce

Social Media marketing – a beginners guide. In this part I want to explain the key steps you should take to create your own sales channel. Another way to create a powerful sales channel is through Social Media.

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

Why Having a Social Media Presence is Important

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

  • Advertising conversions are higher than other forms of promotions such as traditional PPC, offline marketing and television.

  • People spend a lot of time on social media so it’s very easy to find your target audience.

  • Social Media provides a lot of data on demographics and behaviours which if used right it can scale up your business significantly.

  • Drive Huge Amounts of Traffic To Your Website & Amazon Listing.

  • Connect with your customers on a personal level and find out their concerns or needs in your category.

A Look at Social Media Platforms

Facebook

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

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

  • Gender

  • Income

  • Country

  • State/Province

  • Interests

  • Age

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

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

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

Instagram

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

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

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

Twitter

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

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

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

Snapchat

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

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

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

YouTube

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

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

The major tips I can give regarding YouTube are:

  • If you’re starting your own channel, your videos must be very well made.

  • Focus on providing value and showcasing your brand.

  • If sponsoring other videos, make sure that your products are of a higher quality. Packaging, inserts and the product itself need to look professional.

  • With thousands of videos uploaded every minute on YouTube, your videos can easily get lost, have a keyword strategy in place and leverage other social media networks to get views.

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

Pinterest

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

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

Social Media & E-Commerce

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

  • Show what your brand is about(your brand story). People are more willing to buy from brands they can connect with.

  • Run Giveaways, Polls and Promotions frequently. These will not only boost sales but it will also give you some great data about your customer base and buying habits.

  • Show unique features about your products and great looking pictures will attract more followers.

  • Use social media to provide great customer service. Check your inboxes frequently and reply to comments you get on your posts.

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

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

  1. Set-Up your Facebook/Instagram/Youtube Ads targeting your ideal audience.

  2. Links should point to your website or Ecommerce store.

  3. Have a landing page and an offer to get email subscribers.

  4. Provide customers the option to either buy from your website or Amazon itself. 

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

  • Pitch offers during holiday seasons or when you experience slow sales.

  • Connect with your customers to build a relationship with your brand.

  • Send an email blast when launching new products so you not only get some sales, but also some traffic to your listings.

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

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

Brand Building – Inventory Storage

This part will be on a completely different, but equally important subject – Inventory Storage & Fulfilment. 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 fulfil any orders from my own Ecommerce store.

The part of this 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. 

I personally only use SHIPBOB as my choice of Fulfilment partner. I’ve done an in-depth post on them here.

Shipbob

Brand Building – Branding your product

I’ve done two in-depth posts on creating a great packaging here  and on differences in private label packagings here. 

Brand Building – Retail & Wholesale

My background is actually retail, so I naturally started out with retail before moving onto Amazon. When a friend told me about FBA I didn’t even know that Amazon let’s third parties sell on Amazon. 

I thought they only sell their own product. I am glad that friend pointed me to FBA, otherwise it would have been a lot more difficult to get my brand off the ground. 

It has been nearly 3 years since I started my own business and as I said I started in retail. I had collected many contacts in retail and that was the natural way to go for me. 

Looking back I am happy I started out in retail as it helped my brand immensely to get exposure while creating a second income trough Amazon.

The ultimate goal of any brand or company is to get their products in front of as many customers as possible. The only way to do this is by listing your products through all the sales channels that are available to brands.

The most powerful or “rewarding” sales channel is retail and wholesaling. Retail has the power to move your product quickly, thus getting huge exposure for your brand and products.

The Challenge

Retail is notoriously one of the hardest sales channels to get into. Your products must not only be appealing to consumers, but also packaging and marketing materials have to be of a higher standard than E-commerce.

However, one of the hardest challenges is finding retailers who are willing to take on a new brand and its products. Retailers often don’t take huge risks with their capital and prefer to invest in brands that are already established or brands that carry really unique products. So the key is to have unique products rather than generic.

Selling a Garlic Press that has some accessory doesn’t make you unique. The retailer will buy this product from his trusted source. 

Larger items also have the issue of shelf space; which in retail is limited. On top of that you can’t just knock on a retailers door and expect a smooth and fast process.

Retailers have decision maker hierarchies and it is often difficult to get to the right decision maker. Often times retailers already have their suppliers or connections and they aren’t open to a new supplier. Reasons being that they already may have great buying conditions and relationships with their existing suppliers.

In some cases I worked on a potential retailer for over 2 years before getting an order (in my previous job) and in those 2 years there were 3 changes on decision makers and I had to start from the beginning again.

The new guy might not be open to you as the previous guy was and maybe he is already bringing sources/suppliers to the job and you need to start all over again convincing the new guy. 

On top of that most larger retailers get emails and phone calls every day from new suppliers wanting to sell them their product. So it is a long and windy road to get into retail, sometimes as much as 2 – 3 years. But once you have your foot inside the door you are in a great position. 

Solution and how to get into retail

One word – relationship. If you have a good relationship the price or your product doesn’t really matter. 

Someone is likely to buy from you if you have a relationship with him right? The more credentials you have and the more history you have with a person the more likely that person is to buy from you right?

An example. Let’s say you need a new health insurance. You already have an insurance from your trusted childhood friend (let’s call him Steve). Steve is quite expensive and maybe his insurance package doesn’t even have a lot of benefits. 

But you still buy from him because he’s your friend and you’ve known him for years & on top of that you trust him. You even have him over at your house for BBQ’s, you meet up for beers etc. 

You get a phone call from an insurance company trying to sell you a new health insurance with much better benefits. You don’t know this company but the offer sounds appealing.

You take the offer and go to Steve and tell him he needs to make the same offer or you buy from this new insurance company. Steve probably can’t make the same offer but he’ll adjust his old package and give you more benefits, maybe even at a better price. On top of that he throws in a coupon or voucher for shopping at Amazon. 

You close the deal with Steve. That’s the power of relationships. And that’s how retailers work – they have their trusted sources and relationships.  “You need to become Steve”. 

Many of those relationships especially in the “old days” included some sort of bribery. For example if you switch to a new supplier that supplier would buy out your entire old stock from the old supplier. Back in the 90’s it wasn’t unheard of that a new supplier would invite you over on his yacht and take a trip down to the South of France.

Thankfully these “unfair” tactics aren’t accepted anymore – at least not with multinational retailers. There are strict enforcements in terms of bribery in big retailers. However, the relationship factor still plays a key role in doing business.

Today its just called “wining and dining” a customer. You take the customer out for a steak dinner and a nice bottle of wine and you probably don’t even end up talking business but a few days later you’ll get an order.  

Now the key is to build a relationship with the buyer. You probably won’t be able to close a deal for months or even years because every offer you send to a new prospect ends up in the “trash” inbox. 

1) Start out by visiting local stores that have maybe 20-30 stores in the area/country or state. Try to get an appointment with the Manager or Purchasing Department. Once you have an appointment prepare yourself with:

  • Company presentation (Powerpoint / PDF)

  • Product Catalogue (Can be PDF but prepare something nicely and don’t just show a link to your Amazon listing)

  • Bring samples and business cards

  • Bring your wholesale price list 

A store can probably take up 5 pieces per item/per store. So 30 stores makes 150 pieces, not bad for a first order. 

2) Once you are listed in a smaller or local store look into larger retailers that have 100-200 stores. 

Same principle applies in terms of preparation but you are probably not the only one knocking on their doors. So you need a bit of track record with a smaller retailer or your online portfolio. 

Retailers with more than 100 or 200 stores probably have their own purchasing department, maybe even a buying office in Asia. So you need to get to the decision maker. 

There are several ways to get to decision makers but the most effective yet also most frowned upon are cold calls. 

Email the decision makers or better cold call first. There are cold call guidelines for free on the internet. Key is to let the buyer speak and you only listen. 

Most buyers just want to talk about how great they are, let them. You need to make them feel that they have the upper hand. 

After your first cold call, follow up on the topics and email a proposal as discussed in the call. 

Give it a few days and then either email or call again. 

3) Exhibiting your products at a local or international exhibition is the best way to find retailers and wholesalers.

This time the buyers come to you and all you really have to do is follow up with the topics of the discussion. 

The key takeaway here is that getting into retail really is a marathon not a sprint but it can be very rewarding: 

The Rewards

The best thing about retail are re-orders. You might not make much money on the first order but if the item sells well re-orders will come and often times in much larger quantities than the 1st order. The good thing then is that the entire process is already set up and all you have to do is to place an order with your factory, knowing the entire process with the retailer. Or if you have stock back home you can just send in the new order to the retailer from your warehouse. 

From some retailers I get re-orders every 1-2 months for the same product and all I have to do is place an order to the factory and ship the item to the customer. 

These orders can be 2-5,000 pieces each time. Sometimes I make 1$ on a product, sometimes 5$. So in 1 day I can make 25,000$ in profits not really doing anything (a bit exaggerated – there’s still work to do

Imagine how many months you’ll have to sell on Amazon for an order and profit that large. 

Getting into retail is very hard but as I said it can be very rewarding. It’s not a sprint so some deals can take 2 or more years but if the client is worth it don’t give up. Obviously the above is just a short visit into the topic, there’s much more to it such as contracts, advertisement material, sampling, pricing structures etc. 

Brand Building – Moving Forward From Amazon

We are nearing the end of this blog post, bear with me 🙂 This part will be all about thinking forward and expanding your business into other areas.

 

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

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

  • Amazon Japan

  • Amazon Australia

  • Amazon China

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

Expand Into Other E-Commerce Marketplaces

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

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

  • Walmart 

  • Newegg

  • Ebay

  • Rakuten

Focus On Growing Your Online Store

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

  • Creating special offers/giveaways.

  • Store Design & Branding

  • Customized Packaging

  • Control over Customer Service & Experience

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

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

Outsourcing

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

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

Importing

  • Product & Packaging Design

  • Product Inspection

  • Logistics(Freight Forwarder, Warehousing etc)

  • Product Sourcing

Business

  • Legal & Accounting

  • Social Media Marketing

  • Company Branding

  • Graphic Design

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

Conclusion

This concludes the blog series, I hope that this series proved helpful in your efforts to build a truly successful and global brand.

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

If you are interested I have released a course titled Brand Evolution where I discuss brand building even more. You can check it out here as part of the ImportDojo Masterclass.

I would appreciate any feedback you have on this series and if there is anything I can help you with. If you’ve enjoyed this post please feel free to share it 🙂 

All the best & happy selling,

Manuel 

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The ultimate guide on starting an ecommerce business and build a brand – Part 1

The ultimate guide on starting an ecommerce business and build a brand - Part 1

The ultimate guide on starting an ecommerce business and build a brand Part 1

By Manuel Becvar
By Manuel Becvar
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Table of Contents

Introduction

Welcome to the ultimate guide on starting an ecommerce business and build a brand. These days it is more important than ever to have a brand, a community, customers and social media channels. It simply isn’t enough any more to run Amazon PPC or Google/Facebook ads. To succeed on Amazon, you need to have: 

●      A good product

●      A strong brand

●      Multiple sales channels

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

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

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

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

●      Amazon has made several changes which affected sellers badly   

●      Building a business on one income stream is never good   

●      Higher competition & lower pricing   

●      Some markets are saturated

In this post I will go over other E-commerce platforms, both in the US and in other countries. This post will provide an in-depth guide on which channels work best, including marketing strategies for each, including:

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

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

3.     Selling in Japan & EU

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

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

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

This is only a fraction of what will be included in this post. Please note this post has over 8500 words (hence the ultimate guide) so I will separate into 2 posts. Below is a brief overview of this ultimate guide:

 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

Brand Building Essentials Checklist

Brand Building Essentials Checklist – The phrase “Build a Brand” gets thrown around often and most people know that having a brand is essential, by implementing these features, you are guaranteed to have a good foundation to build a global brand.

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

Building a Brand    

❏ The importance of building an Ecommerce brand

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

❏ Creating a Logo

❏ Choosing a slogan that fits the brand

❏ Creating a story behind your brand

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

Business Incorporation   

❏ Why incorporating is essential for your business )

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

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

Choosing a Product  

❏ Product Research Guide

❏ Industry Research & Demographics 

❏ Competition Analysis

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

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

Manufacturing  

❏ Complete Guide on Manufacturing Overseas

❏ Certification

❏ Materials & components to avoid when starting

❏ Contracts – Protecting your brand 

❏ Choosing a supplier

❏ Ordering samples & how to test each sample effectively

❏ Product Design Guide

❏ Mould Process Guide

E-Commerce    

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

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

❏ Building you store

❏ Email Marketing & Building a List      

❏ E-commerce SEO and how to drive traffic 

❏ PPC Overview

❏ E-commerce blogging

❏ Why good product descriptions is key to success

Social Media Marketing   

❏ Setting up Social Media

❏ Gaining Exposure

❏ Social Media Marketing

❏ Connecting with Authority in your niche

Inventory Storage   

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

❏ List of fulfillment centres

❏ Fulfillment centres vs FBA 

Branding your Product      

❏ Product Photography

❏ Custom Packaging – standing out from your competition

❏ Shipping Boxes

❏ Insert Cards & Marketing Materials

❏ Customer Service & Experience

AMAZON 

▪ A guide on using sellers central platform effectively.

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

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

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

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

Retail & Wholesaling  

❏ Finding retailers & distributors in your niche

❏ Create a catalogue

❏ Contacting retailers

Going Forward 

❏ Expanding to other countries

❏ Maximising other sales channels

❏ Creating a product line

❏ Exhibitions & Tradeshows 

❏ Outsourcing

Building a brand -Choosing a Brand Name

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

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

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

2. Category Specific – Example: Joe’s Beverage

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

3. Unique Brand Name – Example: Empower Drinks

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

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

Logo Design 

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

Simple but Detailed

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

Colour Scheme

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

Demographics

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

1. Gender: Male or Female

2. Age Range

3. Location – Country and State/Province

How ImportDojo Applies Branding

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

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

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

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

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

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

Brand Story

With lots of brands coming up everyday, it’s essential to differentiate your brand from others – especially if you want to expand further than Amazon. Having a story or a purpose for your brand will help you connect with customers and gives a human touch to the company. 

Before coming up with a story, ask some key questions:

  • Who is my target market? (Age, Income Levels, Gender)

  • Why am I selling this/these products?

  • What problem/need I want to solve?

  • Why did I start this brand/company?

These will all help you come up with a good story that you can use both in your products and marketing materials. One of the most viewed pages on a company’s website is the About Us page -customers / viewers want to know who they’re purchasing from. 

They are more willing to purchase from a company they can connect with. This will be the foundation of building a customer base off your site and be different.

Here are some examples of how some brands applied their stories into their whole company profile:

Yellow Leaf Hammocks

Whipping Post

Au Lit Fine Linens

Great brands focus on their story to sell their products. 

Creating a Slogan

Slogans are a key part to branding because they either:

  • Tell viewers what your brand is about

  • Deliver the brand/company message

This will be even more important if you choose to go the unique brand name route. While having a unique brand name has a lot of benefits, potential customers will have no clue what your brand is about, unless your Logo is related to the category/niche you’re selling. A good slogan has to be very short, memorable and unique.

A good place to start is Shopify’s Slogan Generator.

As you can see the program generated over 1,076. It’s important to choose a slogan that fits your brand and the products you will sell. Generators are good for brainstorming ideas and inspiration – using the slogans the generator give you is not recommended. However, you can pick a slogan that fits you and modify it as your own. 

Hiring a Designer 

The final step is to put all these great ideas to mind and find a designer to put your brand to life.

Ideally, choose a designer which has the following attributes:

  • A great portfolio

  • Experience working with medium/large companies

  • Experience in E-commerce design

  • His/her experience is not limited to logos only. This is because you will need to apply the same branding throughout packaging, website design, inserts etc.

  • Ideally has worked with clients in your same niche/category 

Here is an email/proposal template I use on freelance websites. I always try to give as much detail as possible. This helps me filter candidates who are truly interested/passionate.

Subject: Seeking Brand Designer For E-Commerce Brand

We are an up and coming E-Commerce brand specializing in the [Niche/Category]. The candidate we’re looking for should have:

– Experience working with E-Commerce brands, preferably in the [Your Niche/Category].

– Extensive branding experience. Preference will be given to candidates with experience in the following categories:

1.      Logo Design

2.      Marketing Materials & Inserts

3.      Advertising Design

4.      Product Design & Packaging

If you’re interested in forming part of our team, you should provide us with:

– Portfolio of your designs – E-commerce/brand related preferred.

– Rate Sheet with your pricing.

– Proof of Experience/Work with medium to large brands.

Our budget is of ***$/***€, however, this is flexible for the right candidate/s. We have additionally attached:

– A brief overview of our brand.

– Description of our product/s.

– Some Logo and Designs we like. These can be used as inspiration for the project.

Looking forward to hearing from you.

Kind Regards,

[Name]

Managing Director

[Company/Brand]

The Importance of Building a Brand

With the effects of globalisation becoming stronger, more people are looking into creating new income streams, one of them is E-commerce. This is especially true in emerging economies where people are exploring different ways of making money. Competition is at an all time high as more new sellers from different nations and income levels are diving into E-commerce & online selling.

Having a good product will come first, however, repeat customers and word of mouth is priceless for long term success & growth. This is happening more often on large E-commerce sites like Amazon, where private label sellers have similar products targeting the same audience. The only way for a customer to issue a purchase is:

-Price

-Reviews

-Listing

-Photography 

This becomes complicated when most of the products have the same design. In fact, at the slightest change from Amazon, they lose sales since there is no control. The only way moving forward is to build a brand both on and off Amazon, expand globally & build a trusting customer base

Brand Building – Business Incorporation 101

Now that we have covered part 1 of this post (building a brand essentials) let’s get into the next part, legally setting up a company, banking and more. 

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

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

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

Why Incorporate? 

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

  • Electronics or Electrical Appliances

  • Toys & Baby products – and any products used by children ages 3-10

  • Supplements

  • Cosmetics & Beauty Products

  • Food & Drinks

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

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

Personal Asset Protection

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

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

Transferable Ownership

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

Tax Benefits

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

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

Separate Credit Rating

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

  • Increased overdraft facilities

  • Higher Credit Card Limits

  • Bank Account Upgrades

  • Dedicated Financial Advisor(depends on the bank and account history)

  • Reduced or No Account Fees

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

Retirement Plans and Payroll

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

Disadvantages of Incorporation

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

A Lot of Paperwork

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

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

Fees! Fees! Fees!

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

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

Liability Is Not Guaranteed

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

USA Incorporation

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

  • Reseller Licence

  • Employer Identification Number 

US LLC State Registration

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

Delaware

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

  • State Filing Fee: $200

  • Certificate of Formation: $90

  • Annual Fees: $300 Alternative Entity Tax by June 1 + State Filing Fees $200 = $500

Nevada

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

State Filing Fee: $75

Annual Fees: Business Licence $200 + Annual List $150 = $350

Wyoming

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

  • State Filing Fee: $100

  • Annual Fees: $100

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

Employer Identification Number

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

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

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

Getting a Bank Account

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

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

  • Passport

  • EIN & Company Registration Documents

  • Business Licence

  • Articles of Organization – This is a list of all the members in the company, you should get the documents when you register the company.

  • Operation Agreement

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

Virtual Address

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

Phone Number

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

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

Other incorporation countries

Let’s also explore some of the best countries where to incorporate.

 

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

The Ultimate Double Taxation Guide

Most E-commerce sellers come from a wide range of countries and sell in a wide range of markets. The most common ones are:

  • US residents selling in the US, EU & Asia

  • Europeans selling in the EU & USA

  • Individuals who either come from other parts of the world and sell in the US/EU

  • US/European residents who sell in other markets & countries outside Amazon

Most sellers normally pick one market, for example, the US, and start selling there. This is easy because when it comes to tax, you have to deal with:

  • US Taxation(sales tax, customs, import duties etc.)

  • Personal Income Tax based on your country of residence

Naturally, as you your business grows, you need to expand into other markets. This is where things get complicated as each country has it’s own tax laws & systems. In particular, when it comes to international tax, double taxation comes into effect.

What is Double Taxation?

Double Taxation is commonly referred to when income taxes are paid TWICE on the same source of income. It normally occurs when income is taxed at both at personal and corporate levels. There are two types of Double Taxation:

1. Juridical

This is when one source of income is taxed by two or more countries. For example, you’re a German resident who sells goods on Amazon US and you get taxed by both US and German authorities on the same income.

2. Economic

This happens when more than one person is taxed on the same income. This often happens when a company has multiple members/shareholders and the same income is taxed on that income(instead of redistributed amongst each member and personal tax is paid).

Important

Double Taxation is often a unintended consequence of international tax legislations. Countries and tax authorities try to avoid double taxation as much as possible and systems are in place to avoid you or your company paying twice on the same income.

International Double Taxation

International businesses are often faced with issues of double taxation. Income may be taxed in the country where it is earned, and then taxed again when it is repatriated in the business’ home country. In some cases, the total tax rate is so high, it makes international business too expensive to pursue.

To avoid these issues, countries around the world have signed hundreds of treaties for the avoidance of double taxation, often based on models provided by the Organization for Economic Cooperation and Development (OECD). In these treaties, signatory nations agree to limit their taxation of international business in an effort to augment trade between the two countries and avoid double taxation.

What is a Double Tax Treaty? Does my country have one?

Many countries around the world have signed agreements or treaties between them as a means to avoid double taxation. These are based on models provided by the Organisation for Economic Cooperation and Development(OECD). This is a life-saver for business owners as they often have issues of the income being taxed in the country where it is earned and then taxed once again once it’s moved to the owner/s home country(or residence).

To find out if your country of tax residency has a double taxation treaty with the country you do business in, check on both countries tax authority website. You can also search on Google by typing: “Country” + “ Double Tax Treaty” – replace the country field with the country you do business in(example: USA).

How can I avoid Double Taxation?

To avoid double taxation, there are two ways:

1. Speak with your accountant/CPA so they file for taxes correctly on your behalf.

2. Have a limited liability company(or the equivalent) – Limited companies have the ability to pass on their profits to their owners and pay personal income tax on the earnings.

The Advantage of Having a US LLC

Having a limited liability company in the US has a lot of benefits. However, perhaps the biggest benefit of all is the ability to make the LLC a disregarded entity. This means that any profits the LLC makes, get passed onto the member/s – so basically the LLC in itself never gets taxed, only it’s owners. This is perfect for those who are non-US residents and are part of a double taxation treaty with the US, as you can get taxed on your personal income in your tax residency.

Keep in mind that you still have to file a tax return with the IRS at the end of each financial tax year(normally April). This is a great benefit and when you form your LLC, is something you should definitely discuss with your CPA.

Tax regulations can be very confusing, unless you have experience in handling taxes on your own, always consult your CPA, accountant or tax authorities first. Double taxation can be avoided if there is a structure in place.

In the event you’re taxed twice on the same income, this can always be refunded back. However, it’s a long and bureaucratic process which can greatly reduce your cash flow and delays to your business.

Other Limited companies in other countries have the same structures as a US LLC, so make sure you’re aware of the tax laws before incorporating in a jurisdiction where there is no Double Taxation Treaty!

Offshore Incorporations

There is a common misconception surrounding foreign incorporations being labelled as tax havens. This is all depends on where you incorporate and how you declare tax – I would always recommend declaring your offshore company with the tax authorities back home. A good idea is to incorporate either:

  • Where the majority of your business operations will be

  • The country of residency

  • Countries which have a very good legal, banking, and taxation systems – such as Singapore and Hong Kong.

  • Let’s look at some of the best offshore incorporation structures and what they offer.

British Virgin Islands(BVI)

Warning: BVI has been recently in the news due to tax evasion. Currently, these jurisdictions are at a greater scrutiny from tax authorities in the US and Europe. Should you still want to incorporate here, consult with the tax authorities back home and make sure you declare your registered offshore companies to comply with the law.

Other jurisdictions under the public eye are Bahamas, Panama & Barbados.

The BVI are an idyllic paradise islands located in the Caribbean Islands known for it’s super-rich expat community & low tax rates. Here is a complete overview of BVI incorporation:

Main Features

  • Company documents are widely accepted by major international banks.

  • Fairly low yearly renewal fees.

  • Information about the owners, directors and shareholders is not public.

  • No property purchase restrictions in the BVI & freedom of doing business in any country.

  • Anyone can register a company in the BVI

  • Companies incorporated in other jurisdictions can be moved in the BVI

Requirements

  • Must have a registered address inside the BVI, main address can be in any country. For this, you can easily use an agent or law firm to act as a registered agent.

  • Minimum member requirements are 1 shareholder and 1 director.

Capital

BVI companies have to issue a minimum amount of shares on their behalf. The maximum authorized capital for 50,000 shares($1 value for each share) is subject to a government fee of $350.

Tax Rates

BVI companies pay zero tax for all it’s members, directors, officers & shareholders. This is what makes the BVI an attractive option.

Annual Fees

Each BVI company must pay the annual renewal fee of around $800 – 1000$. The fee mostly depends if you’re filing for renewal on your own or using a service.

Public Records

 Names of the directors, officers and shareholders are not filed with the BVI Register of Companies, not included in the Memorandum and Articles of Incorporation and not available for the public.

There are no accounting and audit requirements for BVI companies.

Time-frames of Incorporation

 5 to 8 business day from making the Apostille & documents. Most third-party incorporation services can register you in 1-2 business days upon receiving all documentation.

Overall Costs

$1200 Incorporation Fees & $800-$1000 yearly renewal. This doesn’t include any share capital for the company.

Estonian E-residency

The Estonian E-residency program is not quite an incorporation – However, it’s specifically designed to act as a digital identity. This is perfect for location independent entrepreneur who need a “base” in a European country. The E-residency is not a residency program, however, you can register an Estonian company which is also very attractive.

Features

  • Digitally sign documents and contracts.

  • Document verification and encryption

  • Form an Estonian company online. You need an Estonian address & bank account(which you have to fly in Estonia to open).

  • Merchant Accounts available

  • Tax Filing can be done online. However, tax residency must be established first.

  • In addition to this, people who enroll in the e-residency scheme will receive a smart ID which provides:

  • Document encryption & authentication

  • Digital signing of documents

  • Digital Identification

This scheme is truly unique as it provides a way to shift taxes & documentation entirely online. As more people are working from home or becoming digital nomads, having an online ID which provide top security features is a must. The E-residency only costs around €100 and the process is done entirely online.

Singapore

Singapore is perhaps one of the best places to incorporate since it’s very entrepreneur-friendly and a strong financial centre of Asia and worldwide. The main attractive thing about Singapore is that it’s own government pushes for new entrepreneur to register their companies there. This makes the process more streamlined and you get a lot of help. The government website also provides a lot of information.

A limited company in Singapore is called a Private Limited Company and each registered company must bear the suffix Pte Ltd in all official documentation.

Features and Benefits

  • The Pte Ltd is a separate legal entity in Singapore. This means that the company liabilities are completely separate from it’s members and shareholders(ie You)

  • Singapore’s Pte Ltd. outlives the lives of its shareholders. Meaning the company stays active even if the owners pass away.

  • Registering a company in Singapore will give you a credible image and makes it attractive for business and investors.

  • When registering the company you have the option to pass the company to a new ownership if the need arises. This is a great feature as you can easily pass company ownership to investors and buyers in the event of an exit.

  • The first 300,000 SGD earned are eligible to a government tax credit of 50-100%, for incomes over 300k SGD, the corporate tax rate is 17%.

  • If the profit is already taxed on an income level, the Singapore PTE Ltd. Frees you from any capital gains.

  • If you’re not a resident of Singapore(ie a foreigner), you MUST appoint at least 1 local director – which can be either a Singaporean/a citizen or PR. However, if you want to shift operations to Singapore, you can obtain an EntrePass visa – Singapore’s employment pass.

Registration Process and Requirements

  • The entrepreneur must choose a unique business name for the business, preferably with an available domain name. A name check can be done and reserved also.

  • A Singapore Limited Company can have a minimum share value of 1 SGD, there is no maximum capital share value. The company can have a maximum of 50 shareholders.

  • Company must have a real address in Singapore and the local person appointed as director must be 18 years or older.

  • You must appoint a local secretary no later than 6 months from the date of formation.

  • Some private limited companies will require enlisting auditory services. This can be checked before applying for registration.

  • Some sectors of the economy require government approval before incorporating. Some of these sectors are finance, banking and insurance.

  • If you’re planning to set up the Singapore Limited Company as an offshore company, you must use a third-party service to file the application process. Foreigners are not allowed to file for registration for there own. Singapore has a visa-free policy of up to 90 days for most nationalities and you don’t need any special permits to form the company.

Hong Kong Company

Hong Kong is where I have incorporated myself and I find it the best option for an eCommerce seller. 

Hong Kong has long been considered a financial Mecca of Asia and it’s actually the place I would recommend to register an offshore company. Their banking system is excellent and it’s a very entrepreneurial country. The process is getting a bit more difficult, however, with the proper guidance, the incorporation process is fairly straightforward.

The most common type of business entity registered in Hong Kong is a private limited liability company. Limited liability companies are a separate legal entity for its owners compared to structures such as sole proprietorship. Anyone above the age of 18 can set up a company in Hong Kong.

I will list all the process and requirements for registering a HK Limited Company. Due to the complexity of the process and tighter regulations, it is recommended you engage a professional firm to handle the process.

Requirements for HK Companies

Company name – The name must be unique and needs to be approved before proceeding with incorporation.

Directors – Unlike Singapore, directors can be from anywhere in the world. You must appoint at least 1 company director and there is no requirement for the director to be a nominee shareholder in the company. Directors must be of at least 18 years of age and board meetings can be held anywhere in the world.

Shareholders – HK Limited companies allow a minimum of 1 and a maximum of 50 shareholders. There is no residency requirement of the shareholders and a single individual can own 100% of the business. Nominee shareholders can also be appointed and shares can easily be redistributed and sold.

Company Secretary  – The appointment of a company secretary is mandatory. The company secretary must be a resident in Hong Kong or have it’s official office/place of business in HK. The company secretary must be a different person in the case of a sole director or shareholder. The role of a company secretary is to maintain the company books and ensure compliance with the laws of Hong Kong.

Share Capital – The general norm is to have 1 share per owner, the currency of shares can be in any major currency and if transferring shares they are subject to a stamp duty.

Registered Address – To be able to register the company, you need to have a registered Hong Kong address. This must be an actual address and not a P.O. Box..

Public Information – Information about the company and it’s members is available to the public in compliance with Government laws. If you wish to keep details and names hidden, you can consult with a professional firm.

Taxation – Profits tax is set at 16.5% for profits made in Hong Kong. Only profits and income earned in Hong Kong are subject to the tax as HK has a territorial taxation policy – Meaning profits made outside Hong Kong aren’t subject to tax. There is no capital gains tax & withholding dividend taxation.

Compliance – It is mandatory for companies to maintain accounts. Accounts must be audited annually by a Certified Public Accountant in Hong Kong. Companies must also file an annual renewal fee and must hold an Annual General Meeting, 18 months from the date of formation. The subsequent years, the AGM must be held every 15 months.

Time-frame – It usually takes between 5 to 7 days to incorporate in Hong Kong.

NB: Although there is no official requirement to be physically present in Hong Kong, you must be present in order to get a Business Bank Account. It’s difficult(if not impossible) to get a bank account remotely. 

Documents Required

To set up a company in Hong Kong, the following documents are required:

  1. Articles of Association of the company. A copy is normally provided by the firm assisting the incorporation process.

  2. Incorporation Form that includes all of the following:

  • Company name

  • Registered address

  • Description of your business & sectors you will be operating in

  • Personal Details of shareholders, directors and company secretary

  • Member Liability

  • Share capital – Amount & No. of shares

If directors or shareholders are non-residents of Hong Kong, these additional documents are needed:

  • Copy of passport

  • Overseas proof of address

  • Bank Reference Letter

For resident shareholders and directors:

  • Copy of Hong Kong identity card

  • Proof of address

For corporate shareholders and directors who are registering a subsidiary in Hong Kong:

  • Copy of parent company registration documents such as Certificate of Incorporation and Articles of Association

NB: If your documents are not in the English language, they must be professionally translated.

Further Assistance

If you need further guidance on the best policies of registering a Hong Kong Company, Michael Michelini from Global from Asia can possibly help you here.

I know this can be a really confusing topic, especially when starting out. This is one area(the others being taxes, accounting & IP) where you should seek out professional advice due to the complicated nature & international laws.

However, the aim of this (ultra-long) post is to guide you in the right direction and be protected from the legal aspect. The correct incorporation structure can have a lot of benefits for you and your business – whether it’s tax credits or legal protection of your personal assets. In the next section we will move over to business banking where we will explore some of the best accounts & practices to save you money.

Business Banking

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

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

  1. Business bank account In the country of incorporation

  2. Bank account in you home country or country of residence

  3. International Bank Card(HSBC, Chase, Deutsche Bank etc)

  4. Currency Exchange Account

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

There are 3 reasons:

1. Market Crashes & Recession

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

2. Global Expansion

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

3. Material Prices & Sourcing

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

  • Source different types of materials so your risk is spread out (Wood, Aluminium, Titanium, Textiles etc.)

  • Source from different markets. Example: Electronics from China, Textiles from India and Merchandise from the USA

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

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

Best Global Banks 

HSBC

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

  • Free ATM withdrawals from HSBC ATMs worldwide.

  • Insurance packages – Travel Insurance, product liability insurance, house insurance etc.

  • Free Transfers to any HSBC account worldwide – If your supplier has an HSBC account, this will save you a lot of fees!

  • Account opening assistance worldwide if you’re an HSBC customer

  • Very good online banking & secure 

Citibank

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

  • No monthly/yearly costs

  • No ATM fees worldwide – However, they don’t refund ATM charges that local banks charge abroad.

  • No foreign transaction fees

  • No currency exchange mark-up – You get charged Visa’s official rate.

  • No fees on international transfers

USA Bank Accounts

Charles Schwab Bank

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

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

Features

  • No monthly fees

  • No set-up fees

  • No ATM fees – Worldwide

  • No foreign transaction fees

  • No currency exchange mark-ups – You only get charged Visa’s official rate

European Banks

United Kingdom

Metro Bank

 

  • Fee-Free in Europe(SEPA Countries)

  • Low ATM fees Worldwide

  • Very low transfer fees(if transferring within SEPA) 

Norwich & Peterborough Building Society

  • No debit card fees worldwide – including ATM withdrawals

  • £5 monthly fee – Free if a balance of £5000 is kept in the account or deposits of £500 monthly

Germany

DKB

  • Free – no set up costs & no monthly/yearly subscriptions(for the basic plan)

  • No ATM fees worldwide – However, they don’t refund ATM fees the local banks charge(if using an ATM outside the EU).

  • No foreign transaction fees

  • No currency exchange markup

  • Downside – Their English customer support is very limited. However, it’s a pretty good option for German residents.

Sweden

ICA Banken

  • No ATM fees worldwide

  • Free SEPA transfers

  • No currency exchange fees

  • Monthly fee 25 SEK(~2.50€) – Waived for students and persons younger than 21 years old.

  • Free Travel Insurance for trips up to 45 days

Online Only Banks

N26

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

Features

  • Free – no set up costs & no monthly/yearly subscriptions(for the basic plan)

  • No ATM fees worldwide – However, they don’t refund ATM fees the local banks charge(if using an ATM outside the EU).

  • No foreign transaction fees

  • No currency exchange markup – You only get charged Mastercard’s official rate.

  • The entire account opening process is online — you never have to physically show up anywhere

  • Card usage notifications directly from the app

  • Free Mastercard

  • Customer Service Support in German & English

  • To be eligible for a N26 Account you need:

  • EU resident/citizen – You need to submit proof to be eligible

  • A mailing address in Germany – You can use a German virtual address for this.

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

 

Currency Accounts

WISE 

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

  • Low Exchange Rates

  • Ability to transfer large sums of money

  • Experience in dealing with online sellers

  • A platform that supports multiple currencies

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

  • Extensive experience in dealing with online sellers – particularly Amazon

  • Low Exchange Rates

  • Risk Management – if you transfer huge sums of money, you want the best rate in real-time. This service will contact you when the exchange rate is ideal so you don’t loose money on extra fees.

  • Supplier & Manufacturer Payment – This is what separates WISE from the rest. They cater to a specific need us importers want (ie paying suppliers)!

  • Amazing customer service

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

This will also be true when you start to outsource different tasks of your business. It is likely that your employees/contractors/freelancers will be from different countries, having a currency account will allow you to streamline payments more effectively. I have personally used WISE since 2019 and I’ve saved thousands of $ along the way. 

Pheew this post is getting really long. So I’ll seperate into two posts. 

Conclusion Part 1 

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

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

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

I hope this post helped you and if you like it please share 🙂

All the best,

Manuel 

Click here to read the 2nd post

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The lifestyle of an Amazon seller – my story

The lifestyle of an Amazon seller – my story

The lifestyle of an Amazon seller – my story

By Manuel Becvar
By Manuel Becvar
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Introduction

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. First I wanted to tell you a little bit about my journey as well as some advice and below I wanted to share some very personal photos of my last few years 🙂

It’s not all as peachy as you might think or what you read from all the Amazon 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 platforms 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. 

Learn 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:

My journey in photos:

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.
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.
I went to visit one of my suppliers in Shenzhen to discuss the assortment of products I wanted to launch to my retail customers.
2 months in and I sold my first product to retail under their Private Label.
I barely left the office in the first 4 months, this was pretty much lunch every day 🙂
Checking the first packagings under my own brand
7 months in and I had about 20 products under my brand
My first 5000 unit order from a large retailer in Germany. Only to be cancelled later.
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.
March 2015 – ImportDojo was born.
March 2015. I publish “The Import Bible” on Amazon – 3 months later is is the No.1 Seller in its category
April 2015. I exhibit my own brand at the Global Sources Electronics show. Don't worry, I wore a suit on the actual exhibition day 🙂
I think there’s a decent assortment? 🙂
Discussing possible orders with a US customer.
May-June 2015 – I write three more books and turn them into a course (The ImportDojo Masterclass)
In between work I always try to exercise and hike the mountains of Hong Kong as much as possible.
Yep, this is in Hong Kong.
In China visiting a factory and negotiating a claim with a supplier, she is not happy I m here 🙂
Ningbo, China at night
and another hike in Hong Kong.
September 2015. Together with a friend we work on our first own real developed product from the scratch. It took a year to develop and fine tune.
Always at the airport. Chinese have a certain way of taking photographs 🙂
October 2015. I find a product at the Canton Fair that I later launch publicly.
The FBA community is growing. More and more sellers are coming to China.
Greg from Junglescout organises a big meetup in Guangzhou. Lots of familiar online faces meet in person.
Sometimes I take the office outside.
Or to the beach.
Or on a lake.
Or to my Mum’s. No matter where, no matter when, Monday to Sunday – I work every day but I enjoy it.
The office can be fun too tho 🙂
I get to speak at the Global Sources Summit for online and Amazon sellers in April 2016.
April 2016. I publicly launch the French Press.
I get up early every day even if I don’t have to. Then again I get to enjoy this with my coffee.
I get to travel. Sometimes on a motorbike in Northern Thailand….
…and sometimes in style…
to drink Tea in the middle of nowhere…
or to see the beauties of our world.
to drink Tea in the middle of nowhere…
You get to meet great and like minded people along the way
BBQ before the Privatelabeldays conference
with Bastian from officeflucht.de
with Thomas from Privatelabeljourney.de
or suddenly you get to speak in front of 450 people ..sooo nervous 🙂 )
always on the lookout for new products…
and sometimes beautiful sunsets 🙂

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

I just revisited this post (it’s 2021) and its 5 years later. Yes, I am still around being self-employed and run most businesses I mentioned above. I do different things also but still hustle. 

There were tough years and there were good years. But it was all worth it. 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

https://importdojo.com/importdojo-masterclass/

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Read More »
April 29, 2021 7 Comments

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Blog Updates - 05/05/2021
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The best way to pay your Chinese suppliers

The best way to pay your Chinese suppliers

The best way to pay your Chinese suppliers

By Manuel Becvar
By Manuel Becvar
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Introduction

I often get asked what is the best way to pay your Chinese suppliers. There are several forms of payments but we also want to look at the safest way to pay your Chinese suppliers. Today there are several ways to pay suppliers in China and thanks to many payment service providers things have gotten a lot cheaper over the years 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.

So let’s dive right into the best and safest way to pay your Chinese suppliers. 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

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.

Telegraphic Transfer is my preferred method of payment. It is fast and cheap if you use a payment service provider like WISE. Is some cases the money can arrive as fast as 5 minutes. I definitely recommend you check out WISE. Below you’ll see an example sending 1000EUR to the UK. In this example I could safe up to 76€!! Sending money to China you can safe up to 200€ (depending on the amount you send). 

WISE payment

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. 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. If you are using Alibaba you can use their Escrow service for example. 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.

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.

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.

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.

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.

5. Western Union

Risk Level For Buyer: Very Risky

Terrible idea, really. 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.

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!

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The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

Read More »
April 29, 2021 7 Comments

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Blog Updates - 05/05/2021
Screenshot 2021-05-03 at 08.06.35

The Best eCommerce Fulfilment Company In 2021

The Best eCommerce Fulfilment Company In 2021

The Best eCommerce Fulfilment Company In 2021

By Manuel Becvar
By Manuel Becvar
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Introduction

If you’re an online seller, you may need an eCommerce Fulfilment company at some point. Whether Amazon’s warehouses are full or if you are shipping via your own eCommerce store, at some point you will want to hire a Third Party Fulfilment company. Recently because of Coronavirus, Amazon has also limited what you can send them (for a fair reason). So you may need a Fulfilment company urgently to fulfil your orders. For that reason I wrote up this blog post on one of the best Fulfilment companies in the space. Namely: Shipbob.

Ideally you’ve raked up sales in the last few months and created more and more turnover. Unfortunately that can also create quite a bit of stress for small and mid-sized online retailers that handle order fulfillment on their own. A spike in sales comes with a spike in logistics requirements. That means inventory management, shipping, returns, exchanges, dealing with freight carriers, and a ton of other headaches.

That begs the big question: Should I go for DIY shipping again this year, or hire a 3PL? This post will help you decide on the right answer for you.

 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

Shipbob

DIY Shipping vs. Hiring a 3PL

Let’s start with some explanations and definitions.

There’s nothing inherently wrong with DIY shipping or self-fulfillment. In this model, the retailer (sometimes even a solopreneur) handles packaging, shipping and reverse logistics by him or herself. That includes everything from stocking inventory and determining shipping rates and methods to choosing packaging, calculating shipping costs and physically getting packages to the carrier with the right address.

(That’s all to say nothing of more complex situations, like restocking returns, processing exchanges, handling angry customers and shipping overseas.)

For some retailers, this model makes a ton of sense. For others, not so much. We’ll get into the differences shortly.

The other side of the coin is outsourcing fulfillment to a third-party logistics company, or 3PL. These companies handle retailers’ logistics and distribution needs semi-autonomously. Goods are stocked in the 3PL’s warehouse (or warehouses). When an order is placed, the retailer’s shopping cart software triggers the 3PL to pick, pack and ship the order. Ideally, the eCommerce seller never needs to touch any part of the distribution, warehousing and shipping cycle.

best ecommerce fulfilment company

Is In-House Logistics Better Than Outsourced Logistics?

The answer to this question completely depends upon the situation.

DIY shipping offers a number of benefits, though they are primarily realized by companies with relatively small volumes (i.e., less than 1,000 packages shipped per month, or roughly 33 per day).

  • Complete Control: Handling all aspects of fulfillment and shipping yourself gives a unique level of autonomy over the supply chain. You can customize the entire process – from order through returns – to suit your exact needs. Of course, this can also be a negative. If you or your team don’t have logistics experience, you could be saddled with a set of tasks far outside your core competency.

  • Minimal Costs: If your order volumes are quite low, you might be able to save by handling fulfillment in-house. Scalability is questionable, but if you can easily handle your requirements today and don’t expect a spike in the near-term, DIY shipping might be a better option than outsourcing to a 3PL.

  • Personal Touch: If you sell a relatively small amount of a very personal product, like hand-made original goods, DIY shipping is often a good fit. It allows you to place handwritten notes in each shipping box, for instance, or to package each item by hand. This can be useful for sellers on platforms like Etsy.

Outsourcing to a 3PL, meanwhile, offers its own set of value propositions. In most cases, they’re attractive to eCommerce sellers that expect a spike in orders over the holidays, or those that want to scale their businesses rapidly.

Shipbob

Benefits of Outsourcing Fulfillment

  • Scalability: The most obvious benefit of outsourcing eCommerce fulfillment to a third-party logistics firm is scalability. At some point, even a hard-working team is limited by the number of packages they need to send out each day. If you figure that it takes an individual just five minutes to package and address a single item, even 10 orders a day takes about an hour to handle. When things get complicated (e.g., orders with multiple items, exchanges, etc.), that estimate of five minutes is probably very low. You can see how things get out of hand fast. A good 3PL can scale basically infinitely, meaning your sales are never limited by your ability to fulfill them.

  • Delivery Speed: Let’s say that you have a full-time resource dedicated to picking, packing and shipping your online orders from a small warehouse in Pennsylvania. That’s great; you can probably handle 100 orders a day or so. Problem is, if all your inventory originates from Pennsylvania, you’re completely at the mercy of the shipping companies. Next-day shipping (or even two-day shipping) is going to be basically impossible for the West Coast unless you pay exorbitant rates for expedited shipping via air. Leading 3PLs like SHIPBOB offer locations in major metro areas across the country, allowing you to stock your goods coast-to-coast and deliver just as fast to Nevada and New York.

  • Free Shipping: If your shipping rates and times vary, say goodbye to being able to offer free shipping. And free shipping is table stakes in the era of Amazon. The second you ask a customer to pay half the cost of their order for shipping, you’ve almost certainly lost them. Outsourcing to a nationwide 3PL allows you to realize consistent fulfilment and distribution costs, letting you budget for free shipping. If you have it and your competitors don’t, guess what? You get the order.

  • Experience: If you’re an online seller, chances are you’re more into merchandising, marketing and innovation than logistics. Working with a 3PL can make the whole critical aspect of shipping and logistics go away, freeing you up to handle what you do best.

  • Total Cost Savings: While self-fulfilment can be cheaper than outsourcing to a 3PL in some cases, there is absolutely a tipping point. Let’s say you’re spending four hours per day picking, packing and shipping orders, and another half-hour dealing with customer service calls. That’s more than 22 hours in a five-day work week. The opportunity cost there alone is significant, to say nothing of whatever you’re paying for physical space to house your inventory.

Shipbob

When Should You Hire a 3PL?

Clearly, there are positives to both sides of the coin. DIY shipping and fulfilment lets you control the process completely, deliver a self-consciously personal experience and avoid paying unnecessary costs if you’re shipping less than 33 packages or so a day. But self-fulfilment doesn’t scale well, and it might require expertise your team doesn’t have.

Conversely, a 3PL allows you to deliver a more upscale customer experience, offer benefits like free shipping and next-day delivery, and focus on your core competencies. But there is a cost to outsourcing fulfilment, and it takes some time. 

So when should you hire a 3PL? Outsourced fulfilment makes sense for eCommerce sellers who:

  • Ship 1,000 or more packages per month

  • Have relatively standard package sizes

  • Sell mass-produced or semi-mass-produced goods (i.e., not complete one-offs)

  • Need to compete with Amazon but realize higher profit margins

  • Plan to grow their operations in the next 12-24 months

  • Compete with online retailers who offer fast, free shipping

  • When Amazon doesn’t accept your shipments due to seasonal highs (Xmas) or events such as Coronavirus.

  • Deal with returns and exchanges

  • Want to ship internationally

By contrast, DIY shipping is likely a fit for online retailers who:

  • Plan to sell and ship less than a maximum of 1,000 orders per month

  • Rarely see complex or multi-item orders

  • Have in-house logistics expertise

  • Rarely deal with returns and exchanges

  • Do not expect to see a surge in orders over the holiday season

Shipbob

DIY Shipping vs. Hiring a 3PL: The Bottom Line

For eCommerce sellers, there are pros and cons to both DIY shipping and hiring a 3PL. That said, with the holiday season approaching, it really comes down to one thing. Will you be able to keep up with the rush? If you’re doing it yourself, will you be able to get your customers their orders faster and cheaper than the competition? And even if you can, do you really want to?

If you’re staying small this year, DIY is probably a great fit for your needs. But if things are going to get hectic, it’s probably worth calling an experienced third-party logistics provider. You can get a fulfillment quote from SHIPBOB within 24 hours for services that include:

  • Nationwide warehousing

  • 100% order accuracy

  • 1-2 day ground shipping to 99% of the U.S.

  • Seamless integration with your website

  • Responsive client support

I hope this post was helpful. Spread the word or leave a comment below 🙂

All the best,

Manuel

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Manuel

Is Alibaba safe?​

The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

Read More »
April 29, 2021 7 Comments

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Sign up for ImporDojo and get our free eBook “The Import Bible” – the complete starter guide to importing from China. As well as updates on blog posts and news around the eCommerce world. We’ll never spam and you can unsubscribe any time – its FREE to subscribe! 

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Blog Updates - 05/03/2021
find your niche on Amazon

How to find a niche product to sell on Amazon in 2021

How to find a niche product to sell on Amazon in 2021

How to find a niche product to sell on Amazon in 2021

By Manuel Becvar
By Manuel Becvar
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Introduction

So how do you find a niche product to sell on Amazon in 2021? I will seperate this post into 2 sections: 

A) Tools and actual ways to find a product

B) Mindset and product development 

Just a heads-up, this is a long post so take your time to fully digest 🙂 So let’s get right into the ultimate guide on how to find a niche product to sell on Amazon:

 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

A) Tools and actual ways to find a product

1) Follow your passion

Let’s say you love the outdoors, hiking, camping, and exercise in general (like me). There are so many products to choose from, but you have two advantages:

  1. You know what you like.

  2. You know what your product should be able to do.

So you already have an edge over many of your competitors.

Put your passion for this category into your product. For example, if you were disappointed about the quality of camping mats you purchased in the past, you already know what to tell your supplier to improve upon. Choose products you can talk about, improve and be passionate about selling.

Here’s a real-life example. A friend of mine was really into hiking and trail running but not satisfied with the products on the market. He started a outdoor gear company a few years back. Today he has a portfolio of 20 different outdoor gear products and making 6 figures every month. It wasn’t an easy journey and I followed along but it was well worth it.

2) Use your industry knowledge

Let’s imagine you have 17 years of experience selling electronics (like me). What was the first product I picked? It was an electronic item. Why? Because that’s where I had my experience.

I believe you should not just have passion about your product, but also experience. If I sell a product online I want to be able to answer customers’ questions and inquiries. So when I started my own brand I improved an existing item based on my industry knowledge and felt confident answering questions as well as re-presenting my brand.

What if you don’t have experience in an industry? Do you have a hobby? Or are you a parent? If you are a parent you’ll have lots of experience with your children and could perhaps start in that category.

3) Brainstorm and research

You shouldn’t worry if you don’t have a social media following, products you are passionate about or industry experience. Most people I know are in this scenario and there are still many success stories.

Here’s a brainstorming and research approach that I recommend:

  1. Take out a notebook and list your interests, hobbies or responsibilities. Yes, actually write it down. Call me old-fashioned, but I still find writing to be the best medium for generating ideas.

  2. Subscribe to newsletters from companies that talk about or sell products related to your interests. You’ll find some ideas for this in Part 2 below.

  3. Over time, gather a list of at least ten product ideas in that niche.

  4. Research existing products, consumer demand and selling prices using Amazon, eBay, Jet.com, local shops, tools like Jungle Scout etc. Is there space for one more seller (you)?

  5. If there is no demand, is it because the product is in its fledgling stages? If you can improve the product, create a to-do list of improvements based on reviews, feedback from friends and family etc. Then move onto finding a supplier.

  6. If there is no evidence of demand and you can’t improve the product, but still think it could sell, then follow your gut feeling and also ask around your friends. Move onto finding a supplier if you remain sure.

  7. Move onto the next product in your list of ideas.

Let’s say you have found your niche, category or general product idea. You are now ready to find your first private label product.

4) Lose yourself on Amazon

You can look for hours on Amazon in the different categories and niches, if you already have a product idea.

If you have no idea at all, I suggest you start with the best seller lists. Many categories are saturated on Amazon already so I recommend that you look into emerging and trending markets. This could be drone-racing, augmented reality or any other industry that’s just getting started. Be careful however not to choose a hype that’s going to fade in a few months. By that I mean a category like fidget spinners.

5) Blogs, gadget and trend sites

One of my favorite sites to find interesting blogs and trend websites is Kadaza. It’s a collection of the best sites in many different categories. Click on any of the categories and you will find websites in that niche.

For example, I found The Gadget Flow through Kadaza, and by subscribing to their newsletter I get weekly updates on trendy items that may not even be on Amazon yet.

They have a lot of products that are currently on crowdfunding sites like Kickstarter. But you know what? If it’s only on Kickstarter now, it means it isn’t on Amazon yet. You can take the product idea and even improve on it.

The point I want to get across is not to copy these companies, but to find ideas on blog sites and see how quick it is to buy from Alibaba or Global Sources. Add an accessory, change colors or do whatever you feel could improve the product. The best thing about subscribing to these sites is that you get ideas delivered for free to your email address.

6) Research tools

You may have heard of Helium 10 already. Helium 10 is probably the most advanced tool when it comes to navigating Amazon and finding best-selling products. It integrates into the Google Chrome browser to streamline product research.

Helium 10 can extract sales rank, sales volume, FBA fees, categories and more. From the early days only available to Amazon.com it is now available to track sales in almost all countries where Amazon is present. Last time I checked it didn’t work in Australia but all other countries seemed to work.

Helium 10 has several tools at your disposal, but what I like most is the “Chrome Extension”. It is a paid tool but it has helped me many times to confirm a validity of a product that I wanted to sell. Personally I love their chrome extension that you can simply install and then scan the Amazon category pages. You get a lot of data from sales per month, potential profits and much more. My favourite has to be the “Opportunity Score” which can quickly tell you whether a product might be worth it to pursue. It ranges from 1-10 and while anything below 7 isn’t considered great with some of my following strategies you can still have an opportunity. The market might be saturated but I can still find gems with scores 7 or higher. Just the other day I found a product for one of my clients with a score of 10 (which is nearly impossible).

7) Get out in the world

There are hundreds of trade shows each year in many countries (I know, not right now due to COVID-19). You get to meet the supplier, see the products, and talk over details such as prices, models, and much more. On top of all of that I guarantee you that you will get inspired.

To find local trade shows just Google an exhibition center near you, then browse their upcoming events and apply for a ticket. You might need to provide a business card and contact details, but you can order cards online for a few dollars these days. Going to a show prepared and with a professional image gives suppliers a great impression of you.

Another way to find new products is simply when you are out in a shopping mall or a local store.

To start your own import business means that you also working when you are out shopping with friends or family! Keep your eyes open, and when you see something cool make a reminder for yourself on your smartphone to look the product up later.

Traveling is also a great way to find ideas. When you are out of your country or state you are likely to see items that you can’t find locally. There are many reasons why a product might not be available where you live, but it’s always worth checking an idea out.

I remember about ten years ago, a friend told me about Bubble Tea and Fancy Green Tea drinks sold in Hong Kong and Asia. She was from Germany and she had never seen these drinks back home. She didn’t pursue that idea but a few years later back in Germany these drinks started to pop up and were a smash hit!

Even an idea that at first seems like nothing could be worth millions! Share it with a few friends and brainstorm it.

8) Sourcing sites

When you sign up on Alibaba you generally need to say which product categories you are interested in. Based on this criteria, and your recent product searches on Alibaba, you’ll get automated emails with new product deals. Here’s a guide for you on how to safely use Alibaba as a buyer: Alibaba guide!

You can also simply type “newest products” in the product search function and you’ll find a lot of the newest and trendiest items from their suppliers.

It’s pretty similar with Global Sources. After signing up you’ll get automated emails with great product deals.

They also have a section with the great product as well as an “Analyst’s section over HERE newest products in every product category: But my favorite part is their Sourcing Magazines that are updated on a monthly basis with the hottest and newest products on the site. Whenever the magazines are updated you get a free e-copy delivered to your email. It doesn’t get easier than this and I’ve found some gems in their magazines sometimes.

9) A combination of trends and existing markets

Sometimes I look at existing products and see if I can improve them with a design trend. Let’s say for example you Google for “design and interior trends 2021”. You then visit these sites that have reports on them and see what trends there are for the particular year.

The other day I combined an existing product with a design trend. So if for example floral patterns are in for 2021 perhaps I could sell bed sheets or pillow covers with floral patterns (just an example).

If the color “millennial pink” is in for 2021 I could think of a few products where I could apply that color.

If vintage is a trend for 2021 I could look into furnitures, lighting, or decorative items that exist and give them a vintage look or color. All you have to do is find an interesting and potential niche and see if you can implement a design trend into that particular product.

What also helps is Google Trends and Google Keyword Planner (It’s free if you have a Gmail account). Just head on over there and type in a keyword and look out for the monthly searches. Anything with a search volume greater than 1-10,000 is a good indication. Google trend also helps me because it also gives me keyword related keywords that I may not have thought of. So for example if I type in “vintage decor” I can see other suggestions or trending keywords in that niche below:

find your niche

I could now look into vintage bathroom decor or vintage suitcase decor on Amazon with Junglescout and see if I can find an opportunity. What’s also super helpful are sites like TRENDHUNTER.COM

B) Mindset and product development 

Innovation before Improvement

Now that we’ve discussed traditional methods I want to discuss what is in my opinion the most important part on having a successful product on Amazon – innovation before improvement. Meaning that you actually listen to what the market needs and wants, ideally develop your own product, instead of thinking what you think the market needs. This may be contrary to above methods but I suggest that at some point you develop your own products.

Here’s my step by step checklist on developing a successful product:

There’s a saying in the tech industry: you’ll succeed by setting the industry standard and not to improve existing standards. Just think about Apple or Nike. These companies are leading the way in their industries.

Let me explain how I go about developing products. The goal is to create 1 or more rockstar products that define your brand and guarantee the success of your company. Think about a seed that you plant for the future, everything takes time.

Ideally the first product is what defines your brand and you should also stick with these values. Just like Nike or Apple are famous for their expertise in their field, you should be known in your field. Same goes for every industry. For example if you think about the best Italian restaurant in town they are probably famous for their pasta or pizza and not for having a fusion of Italian and Mexican food. Stick to your assortment and branding strategy. I am not saying you shouldn’t sell underlying product groups or assortments but don’t sell Bluetooth speakers and shower heads. Focus on 1 core assortment.

That’s were many people make their first mistake, starting with a product without defining their niche. Yes, 5 years ago you could go onto Alibaba, select anything and it would sell on Amazon and later you’d think about other products that would fit. But those days are over. What you’ll need is a clear branding and marketing strategy as well as a “product to market fit”. This term is one of the most important factors in the commerce.

Find your niche

First, find your niche. I’ve already discussed a few ways above but I want to give you an actual example later. Many people start with the idea of a product first and then notice that the market entry level is too high (either dominated by brands or too much capital needed). So find your niche first and have at least somewhat of an interest in the niche. All my brands are selling things that I have either a passion for or that I have an interest in.

Amazing products connect with the target audience

If you have amazing products and a target audience then you have the recipe to success. Think of it this way, if you have a happy customer or fanbase how likely will it be that they buy from you again? Very likely. People already trust you because of your rockstar product and they’ll buy from you again.

Finding interesting and established markets

So the first thing to do is to find interesting markets. Obviously you can follow the news but that’s perhaps not the ideal way. Most people want to make easy money but if you don’t venture down the more challenging part now it will be more difficult later.

If it were so easy to make money online everyone would be doing it right? A lot of people fall for marketing gurus that sell you pipe dreams like “make 40,000$ in 1 month with little to no work”. I can promise you that business does not exist.

You need to finding existing markets that have reached a mature size otherwise you don’t have customers – this is the most crucial part- product to market fit. These markets/niches can also give you the best feedback. If you don’t have a mature market where you can collect feedback from it will be very difficult as you would have to establish a whole new market by yourself.

If you don’t have a product to market fit and you need to establish the awareness or market at first you’ll need a lot of capital for marketing.

Suggestions on finding your niche

Make a list of your areas of interest, split this list down into niches. Only list general interest at first and then research each one. This could be something that you identify yourself with, a hobby, an expertise, part of your profession or similar. Break down the niches and go into the smallest niches. For example if you are into outdoor sports go down into sub-niches:

There might be a core community on Facebook, forums or Reddit you may want to check out. You will want to solve a problem for these guys and really connect with them.

In an ideal world you’d find interests that you’d be totally enthused about. But don’t be an artist. Artists don’t survive on Amazon. Don’t try to invent trends that don’t have a future or demand. Don’t fixate yourself on one idea or industry because you personally are enthusiastic about it. Remember – product to market fit.

The right mindset

At this point it’s also important to leave your ego out of the business. I saw a few people in my time (including me) that were too attached to ideas and convinced that there idea is what the world needs. You need to see your business objectively and don’t let your personal emotions or preferences interfere too much. Only concentrate on what the market needs and not what YOU think the market needs.

Of course it is important to invent, develop and look into new markets but always keep the product to market fit in mind.

Do something that you aren’t comfortable with. That could even be items in a higher price range assortment. Most items that I release, cost more than 15$ in buying price.

Few people actually go into higher priced or difficult categories. But that’s where the air isn’t so thin as in low priced and common items. You could argue that you may not have the capital for it but on the other hand this is a business as any other and sometimes you need to take the risks. 15 years ago it was unimaginable to start a business that could generate 100,000$ within the first year with just a 5-10,000$ investment.

We have all the tools today that make it possible; social media, Junglescout and others. So it takes a bit of the following components: gut feeling, data analysis, community access and brand building to succeed.

I often hear that people don’t want to invest 200$ into a custom made sample for their idea. If you aren’t willing to invest 200$ into your business then maybe this is not for you anyway.

Research problems in the industry

During your research, find out what the problems of the industry are. Or what people ask for (a good example in a bit). Sometimes it’s simple things that make a product easier to handle or just more aesthetic in design. Can you do something about a product that makes people’s lives easier and make you a hero while doing it? Sometimes these communities are just waiting for the bigger brands to solve their problems or introduce the product that they so desperately want.

Obviously you want to tap into mature markets but also into markets that are still growing. A bad example would be fidget spinners. Not kidding you, when the trend came out I got 20 people within 1 month asking me to source fidget spinners for them. Imagine how many people went to other sourcing companies or sourced on their own? This really confirms that the majority wants to make quick and easy money without too much work.

You have to be the one who doesn’t jump on these trends but bring innovation to the market. This does not mean that you redesign the fidget spinner or bring it in other colors. You have to convince customers from the beginning and not bring a great feature only on your second product. Customers want to be wooed.

Your 1st Rockstar product should also be something that you can sell over and over again for a long time. Basically a cash cow in the long run. Sure, competitors will come and copy you, but you’ll always be ahead and ideally work on your next product once the competition catches up. Thus the competition will always try to catch up.

Your focus should not be on your competition but developing new products and think one step ahead. If you have 1 or 2 cash cows that bring a constant amount of money in, you also act much more relaxed when developing new ideas.

Access to the market

Before you even get started with the product idea you should make sure that you can actually reach your target audience and customers. A good example where you’ll fail would be branded goods like women’s bags. Consumers trust or want to have branded things. No matter if your product is superior.

Let’s say you had the idea of a women’s tote bag, found a supplier, ordered the product, listed it on Amazon and now you come to realize that people are not buying your bags. Naturally; because women want to buy branded stuff like Gucci, Louis Vuitton etc. You’ll also have difficulties getting magazines or influencers to write about your bags because they usually promote the big brands

To tap into such a market you need connections, years of marketing and essentially a lot of money. This can quickly be the end of your ecommerce career. What’s more, on high competition items like women’s bags you also have high PPC costs that can quickly evaporate your profits.

So again, you need access to the marketplace & its customers. Access to market is critical and you should be thinking of that right from the start, otherwise you are constantly in survival mode and run after sales. If you are constantly in survival mode, you simply have no time for product development, long-term strategies, or other important things that will shape the future of your brand. So – cash cow products, audience and access to the market.

Once you’ve settled on a niche, you should think about product ideas. For example what is currently selling well in this niche? Are there any technical or groundbreaking trends coming in the future? For example when I heard rumors in November 2015 that Apple wants to remove the audio jack on the iPhone and only offer the earphone with lightning connector, I was thinking about what that means for the future and the iPhone 7.

So I spoke to some suppliers and developed earphones with lightning connection. Granted it was a big risk to develop a product based on rumors but then when the rumors became true in September 2016, I was the only provider of iPhone earphones with lightning connection (other than Apple). Obviously many sellers came after but for about 12 weeks I was the only seller of certified iPhone lightning connector earphones and I made nearly $30,000 on a $6,000 investment. The moral of the story is that you sometimes have to take a risk but more importantly listen to the community or solve an existing problem.

What does the community want?

Listen in on what communities are saying in your niche. What are people talking about right now? Is there a certain problem within a niche? Here the community work is really very important. You can be active in 1-2 communities and really listen in on what customers prefer, what brands are popular, what are those brands doing or not doing at the moment etc.

A great indication of whether a product is needed is when people say that they have to use other products in combination with the actual product to make it work more smoothly.

For example, when Bitcoin and all the other cryptocurrencies came out, you could download the wallets to your computer or save them online on exchanges. Many people worried what if the exchange goes belly up or if their computer dies on them?

Then Ledger came and developed a hardware wallet that would store your cryptocurrency. You could then put your Ledger hardware wallet in a locked up safe or store it somewhere safely. Ledger was sold out for months and couldn’t even cope with demand. Again, someone listened to a problem in a community and solved it by offering a solution.

All these things will define your product. The more you incorporate problems of the community and try to solve them with your product you’ll minimize the risk of failing with your self developed product.

You will always see the following attributes for successful products:

1) A great solution,

2) Quality that you can trust, easy to get and easy to handle

Are these all attributes of your article? If not, how can you apply these attributes to your product?

Imagine you are your own customer. Would you be satisfied with your product? Why would customers not buy your product? What does the product do for your customers? What doesn’t it do? At this point, you also have to come back to the point: Are you your own biggest fan or are you solving an actual problem with your product? Consider the product or idea objectively.

To further define your product, split your product into 3 categories:

1) The functional part (which problem does your product solve?).

2) The emotional part (how do people feel when they buy or use your product?)

3) The social part (is this product an icebreaker? Does it show a certain social status?)

Remember your product should solve a problem or be part of your costumer’s daily life. Why does someone need your product? Can your product solve complexities or frustration with other products that the customer experiences?

Entry barriers

At this point, it is important to take another step back and look if there are any other entry barriers. For example, sometimes industries are tied down and all suppliers are actively working for these brands or major customers. Like smart-phones. This industry is dominated by 4-5 big brands. Do you have a chance to even work with the suppliers of these brands? Are there any patents, license or royalty fees? Sometimes the costs, licenses or certifications required to succeed are simply too high.

Sometimes you also need to be honest with yourself and ask, “Do I have the technical know how” to develop such a product?

Ask your supplier which certifications; costs (including tooling) could arise. Or are there continuous product costs, royalty, licensing fees etc.

Another point would be your selling price. Can your target audience even afford your product? You could talk to your active communities and just ask what people would pay for a certain product.

Another option to validate a product or its price would be to simply start a PPC campaign on Facebook with a “buy now” button that leads to a listing where people can buy samples of your product at a certain price. Obviously there is no stock but this method makes it easier to show if people are interested at all. You can then look at the analytics and data and make better decisions for the price & product development.

Can you scale the business? Is there a point where you just cannot expand the business? (E.g. fidget spinner)

Conclusion

At this point, you are probably overwhelmed with all the theories and work ahead when developing a product and you are already thinking this will never happen.

Simply put, good things take time and you don’t need to rush. Imagine a long hike that you have to plan ahead of time. For example I always wanted to hike the Pacific Crest Trail in the US. The whole hike lasts between 4-6 months and you just have to prepare yourself with good equipment, read about how to find water and food, get maps etc. So it’s a long process to get prepared.

There is no shortcut in any business. Sometimes you can be lucky and struck a gold mine quickly but you can’t rely on that.

There will also be days when you have to ask yourself unpredictable questions or face unpleasant situations. There will be days when you are super excited about your idea, going to bed unable to sleep because you love your idea. And then on the next day, a difficult situation will bring you down and make you feel depressed about your idea. At this point either continue and ignore your ego, make improvements & changes to your product or actually say – ok this is too much to handle.

Once you’ve answered all these questions for you, it’s time to start sourcing with suppliers, negotiate prices, ordering prototypes, and putting everything together. Also, don’t give up too soon just because the first suppliers don’t want to do what you ask or completely redesign their existing product. Just because you haven’t found a supplier after 7 days doesn’t mean you won’t find one.

For one of my own products, I looked for a supplier for 6 months and I finally found them that at a trade fair. Of course it also makes sense to go to China (or go to local trade shows in your country) when it comes to selecting suppliers.

But also be open for suggestions from the suppliers you talk to. Talk to suppliers about modifications or suggestions that could improve your design. Do not cling too much to your ego when 10 out of 10 suppliers say it doesn’t work that way.

Now that the community, trend & general research is done you should have a pretty good feeling with your product. Often you actually don’t have to go through all the above steps and sometimes results will come much quicker in a way you didn’t anticipate. My point is to be aware of these situations.

Once you’ve actually cleared all doubts and realized “yes the world needs my product and it will even sell very well” then there is actually no reason left, not to do it.

If a big investment of say $ 20,000 is your only problem, then entrepreneurship or this business is not for you. A certain risk will always exist but with this strategy and calculated risk, there is really nothing left to stop you.

Now you could say, yes but should I not start with something simple first? Sure, I’ve explained how and when in Steps 1-9. But considering that the competition is getting bigger and bigger and the strategy I just laid out for you worked on many of my products, you may want to ask yourself if you want to improve or set standards.

Because if you are always just making me-to products and just trying to improve other products with an add-on or other colors or more accessories, you are behind the market. But if you have several self-developed products on the market that bring you more money in the long and always put you ahead of the competition wouldn’t that be worth pursuing? To make simple products at first is totally OK but if you want to do this as a full-time job, you have to think innovatively over time and follow this process.

Remember, you don’t have to reinvent the wheel but just adding a different colour to an existing product in today’s market won’t be enough. Listen to what your customers want or need and take it from there.

With that being said, good to you!
All the best,
Manuel 

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Blog Updates
Manuel

Is Alibaba safe?​

The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

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April 29, 2021 7 Comments

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Blog Updates - 04/29/2021
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Is Alibaba safe?​

Is Alibaba safe?

Is Alibaba safe?

By Manuel Becvar
By Manuel Becvar
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Table of Contents

Introduction

The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

The short answer would be, YES, Alibaba is safe. Alibaba has been around for 2 decades and when i first used it back in 2004 things were very different from now and it was easy to get scammed. However, things have certainly changed since then and Alibaba itself has done many improvements to the site and is making sure, the consumer is safe. 

It is easy to get overwhelmed with the selection of suppliers on Alibaba and I can understand how you might have difficulties figuring out if it is safe to transfer your money to a supplier you’ve never met. 

To be honest with you the easiest way to make 100% sure if a supplier on Alibaba is safe is to go visit the factory but I realise that most of you won’t be able to do so.

The goods news is there are ways to figure out if a supplier is legit or not without going to China. The bad news is that some of these options will cost you some money.

Many people will tell you just to go for a “Gold-supplier”. But that means NOTHING. Anyone can buy that “badge” from Alibaba. The questions shouldn’t be “is Alibaba safe”. Because yes, Alibaba as a platform is safe. There’s escrow payments, third party inspections on site etc.

The real question should be: is the supplier you found on Alibaba safe / legitimate? So I’ve come up with a different approach over the years. 

Here are my four proven ways of researching a supplier on Alibaba. I will go into detail for each one of them and hopefully it will help you determine whether you can transact business with a chosen supplier. 

1) Alibaba research

2) Certificates & reports

3) Skype call

4) Factory audits

Alibaba
Alibaba platform

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

1) Alibaba research

I’ve made a video for you below for easier explanation, but lets look at some of the main points. Alibaba research is free of charge and these days it is quite safe to manoeuvre on Alibaba. Alibaba itself works constantly on improving buyer’s safety and trust. So here are a few things you’ll want to look out for: 

How long have they been in business?

Have they been around for 2 years of 20 years? Would you buy something from someone who has specialised making hair dryers for 2 years or 20 years? 

What are their main markets?

Under the section company profile, you can look up what their main markets are. Are they mainly delivering to Egypt, Vietnam? Or is their main market the US or the Western European area? Make sure to choose someone who has experience with your market. You don’t want to have a supplier who you’ll have to explain all the quality requirements for your country. 

Does their assortment match up?

Meaning do they have many different categories that are suspicious or don’t make sense? Do they sell bathroom furniture, lawn mowers and kitchen appliances? Or are they specialised in 1 product assortment? Chose someone who makes 1 or maximum 2 product groups. You also won’t be going to the Greek restaurant around the corner and order Pizza from the just because they have it. 

Is the address a small office address or an actual road address?

If a factory prides themselves with a turnover of 10MilUSD and their address is for example: Room B, XYZ Office building, something is off. Also see if you can find a website outside of Alibaba – just Google the company name. Is the address you find on there different? Make sure they match. 

Third party assessment reports 

You can get copies of the reports that Alibaba saves on its database and you can look into the reports. These could be a ISO or a BSCI audit report. That means the factory has been audited at some point for manufacturing compliance. If the factory doesn’t have any, its not a good sign. 

Product certifications

Does the factory have product certifications such as FDA approvals, FCC, or for Europe things like GS, LFGB certification? Are they visible on the Alibaba profile? Does the product number or name match up with the product you are interested in? If a factory has no product certifications its a sign that they aren’t into safety and quality regulations. Hands off!

Gold suppliers/Pre-assesed suppliers/Onsite Check/ Trade assurance filters

While I initially said anyone can buy a Gold-supplier badge, these do help to make a decision. After all, a scamming factory wouldn’t spend money on getting a Gold supplier badge (it still happens however). Be weary of non or 1-year Gold suppliers. See if the supplier has been checked by Alibaba or if they offer Trade Assurance. If for example a factory does not have any of the above checks I would be very suspicious. Because why wouldn’t they want Alibaba or a Third-Party to inspect their facilities? Simple, they know they would be uncovered as either an expensive agent or a scammer.

Finally at the end of this blog post I’ve made a video for Alibaba hacks, tips and tricks, so keep on reading to make sure you find the best suppliers.

2) Certificates & Reports

Another free option is to look at certificates & reports from factories. If your factory is neither on Alibaba, Globalsources or any other supplier directory you can still check their reports.

Simply email the supplier to send you the following (or one of them) reports for your evaluation:

  • Their latest factory audit report from any other customer.

If they haven’t had an audit yet ask why. If they can provide you a report scan trough it and look for anything unusual or critical.

  • Certificates of the product itself. For example :

FDA approvals (kitchenware, supplements, etc.)

REACH certification is necessary for most European countries & the Americas. It prohibits certain hazardous material within the product.

CE is a certification for Europe to meet general standards. Its good if a supplier has this.

FCC is a required certification on electrical products & also a standard for the US.

If they do not have any certification, approvals or even audit reports is its a VERY bad sign and you should stay away from this supplier.

Why?

1) Because they are not interested in developing any business with overseas clients and are only after quick and easy orders (most likely South East Asian customers who don’t care about certification).

2) Because paying for an audit or having your products certified costs time and money. Reliable & customer oriented factories do not shy away from making these investments. Scammers, un-reliable factories don’t even want to bother. They probably won’t even answer your email with your inquiry in the first place or they write something back that I received quite recently from a factory that i knew was up to no good: “We don’t do business with Hong Kong company”.

They realised I know my business, because I requested a couple of things in my first email to them. I am not saying overwhelm your supplier with questions and requests in your first email but find a fine line of what you want to have from your supplier in the beginning.

Learn more about QIMA

3) Skype/Zoom call

Still not convinced of your supplier? Something off in your conversations?

This research option is free if your supplier has Skype/Zoom and most suppliers usually do. Request a video call with your supplier and prepare yourself with a few questions.

  • Ask anything that would make you feel more comfortable in working with the supplier.

  • Ask about the factory, how many workers, etc.

Basically anything that gets the supplier answering your questions so that you can develop “a gut feeling”.

  • Ask them to show you the sample (of your interested product) in the video call.

If he doesn’t have a sample in hand, arrange another time for a Skype call. If he refuses or finds some excuses you will quickly see that something is off.

4) Factory audits

Finally, you could conduct a factory audit. A factory audit is where you hire a Third-Party Inspection Company to conduct an audit at the factory’s facilities. I wouldn’t recommend this in the early stages of your communication. Check all off the above first and if for some reason you want to stay with the supplier but want to have him audited anyway, you could arrange a factory audit. 

This way you can make 100% sure your supplier is legit.

Be aware that not all factories allow you to perform an audit at the location which is in turn already a huge red flag.

If they are willing to undergo an audit straight away it is a good sign already. You don’t necessarily need to perform an audit but announcing to a supplier before you order that you will conduct an audit already gives you some idea on what your supplier is up to.

There are many Third-Party Inspection companies out there and I mention them in a few posts (TUV, SGS, Bureau Veritas etc.) but I always use QIMA because they are efficient, cost effective and reliable. There are companies out there who charge half the price but you don’t have a convenient interface/dashboard online that lets you do the booking trough their system. Most of the cheaper Inspection Companies have only email/phone conversation bookings available. 

You can create a free account anytime and book online at your convenience. What’s more, QIMA has many other services that come in handy. Such as product inspections, product testing etc. I’ve written on product inspections previously here. I never ship from China without an inspection! This is how their interface looks like:

I admit the price (629US$) is pretty steep and it only makes sense to perform an audit if you have larger orders and continuous business with a factory. Another reason could be that the factory you are planning to order from is the ONLY factory producing the item you are looking for but for some reason you have a feeling you would rather have the factory audited or inspected before placing an order.

Based on the audit report a factory actually also can benefit. The audit points out things to be improved from the factory’s side and it will help the factory to get more customers if they are audited by a Third-Party. You could even ask your factory to share half of the costs and pointing out to them that they will benefit from this audit in any way.

Learn more about QIMA

Conclusion

Even with many years on my back in this industry I can’t always know for sure that a factory is legit or not trying to scam me. Unless of course I send an inspection or go to see the factory myself.

A member of our Master Class told me a story recently about an absurd encounter via Skype with a supplier in China and I hope she don’t mind me telling the story here 🙂

He looked like he was at a house rather than work. He looked like he had just woken up and recovering from a hangover. There was a child screaming and running around in the background…then a second guy came up to give him a cigarette, which he then proceeded to smoke during the Skype session….he then told me that the factory is “moving” so 100 pieces in a custom packaging would take about 2 months. It was a bit comical at times. 🙂 

Now I would think twice ordering from this factory but apparently everything went well (this time).

It’s like in poker. You have a certain amount of “tells” available on your opponent and depending on how he makes his moves, you call (place an order) or fold a hand (eliminate the supplier).

Even when you know you did all you can do to protect your money sometimes there is no guarantee you can win, but having the above tools and research options available you can at least make a decision knowing you did your best.

Now, I do hope the above gives you some idea and help to safely select a supplier in China on Alibaba (or other platforms). 

Last but not least, as promised – here’s the video I made a while ago on how to safely navigate Alibaba:

Happy sourcing!

Manuel

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Manuel

Is Alibaba safe?​

The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

Read More »
April 29, 2021 7 Comments

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Blog Updates - 04/29/2021
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What is a private label packaging & differences

Private label & packaging differences

Private label & packaging differences

By Manuel Becvar
By Manuel Becvar
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Introduction

The obvious and most profitable way to create sales is a private label with a nice packaging. But what is a private label packaging?

In German we say “Eine gute Verpackung ist die halbe Miete” which literally translated means “ A nice packaging is half the rent” or in other words with a nice packaging you “win half the battle”.

Meaning that a nice packaging will convince your customers to buy your product by 50% already. That saying even goes when you are selling online and your customers won’t even see your packaging.

BUT say you sell online and your customer receives your item and he sees the nice packaging he sure will give a better review just because the packaging is nice already.

Note: Even if you sell online, you should put a picture (high resolution) or even a 3D-rendering picture amongst your product listing so that customers can see your packaging.

It is even easier if you sell offline (in retail stores). Just think about it, how often have you made a decision buying a product because the packaging was nice.

Look at Apple’s packaging.

Nice and clean, no fancy colors, UV coating (the logo and product), clear and to the point descriptions with high resolution photos. They got me, I buy their products also based on their packaging.

Now lets look at the different options in packaging’s.

 

private label packaging
A great example of a private label packaging. Clean and simple.

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

Differences in Packaging

You basically have 3 options:

– Private label packaging (color box or white box with private label sticker)

– No name packaging

– White box

 

Private label packaging:

You have to differentiate between a white box private label packaging and a color box private label packaging.

Obviously a full color box would be the best way to go but the thing is you need a certain quantity to print color boxes.

Suppliers will usually request a minimum order of 500 or more. It’s not that the supplier doesn’t want you to have your own boxes on a low quantity but the prices they usually quote come with a private label box.

It is not the factory itself that requests a high quantity but it is the printing factory who needs a minimum of say a 1000 pieces to offset their printing costs. Of course sometimes high MOQ’s are set by the factory (unrelated to the packaging) because they need to purchase a certain amount of raw material but in most cases they give you high MOQ’s because of the packaging.

That’s the next thing, when a supplier quotes you a price based on private label he often is referring to a color box.

But what you can still do is to have a white box with a sticker or your logo on it.

The good news is you can ask your factory to print lower quantities of color boxes and just pay a little more. Most buyers just give up on their private label when the factory tells them that they need 1000 pieces for a private label box.

Simply ask your supplier to either adjust the cost so that he can cover the more expensive packaging or ask him to have a white box and put a sticker with your logo on it. A sticker typically costs less than 0.1USD per sticker. I will get into costs on packaging in a little bit.

A private label color packaging also allows you to change everything on the box. Pictures, descriptions, instruction manual etc. I will get to that in a little bit.

It's a great idea to ad a QR barcode to your packaging that customers can scan and get to your website faster.

No Name packaging:

When you start off importing you are probably selling items off the rack (no- name items) from the supplier bought through Aliexpress or Alibaba.

Usually these items have the manufacturer’s “brand” or even just a simple white box when they are shipped to you.

A manufacturer’s brand or no-name brands are not really brands. They are simply the manufacture’s name on the packaging with no or little meaning to your end-consumer.

This kind of packaging is only recommend if you are testing a product and say you don’t want to place an order of 500 pieces, changing the packaging and not even knowing if you will sell the product well.

no name
Typical "no-name" chinese supplier packaging.

White box: 

Whenever you can and especially if you are testing a product ask your supplier if he has white box available for your shipment.

In most cases the supplier won’t have a white box but sometimes they do.

A white box is ideal for you to put your logo on it and not having to change anything on the packaging, especially if you are just testing the waters with this product.

Instruction Manual & Description on the box

Having a proper instruction manual is essential. There are of course products that do not require an instruction manual but whenever you can, have an instruction manual. Usually (99% of the time) the supplier will have an instruction manual. Often these can be in a very poor English.

Before you place an order, check with your supplier on the instruction manual. Inspect the manual and look for grammar or vocabulary mistakes. If you are ordering small quantities (no name packaging) the supplier will probably not agree to have the instruction manual changed. BUT say you are a native English speaker you could suggest to proofread and revise his Instruction Manual for free in exchange for him printing new instruction manuals for your order. That will also benefit him because he now has a proof-read and proper manual for his future customers.

If you order larger quantities, the suppliers will usually agree to print new instruction manuals. In this case you ask the supplier for his current instruction manual and revise it the way you need it.

It’s a little more complicated when it comes to descriptions on the packaging itself. If it is a no-name packaging and you order small quantities the only thing you could do is to put stickers onto the packaging to cover certain wordings or pictures on the packaging. But this will obviously look cheap.

 

Different story again when you have your own packaging (private label).

To change a products packaging you need to ask the supplier for the “die-cut”. That’s usually an .ai file (sometimes a PDF file) that can be rendered and modified by your designer (trough photoshop or similar programs).

 

If you do not have a designer or layouting company on hand check out www.fiverr.com. There are a lot of guys on there doing amazing jobs on packaging. I recommend to pay a little more (hire more gigs on the fiverr job) and have a nicer packaging than if you pay 5US$ only.

 

Once you have the .ai file from the factory send it to your layouter and advise him of the changes you would like to have. Remember if you are selling on Amazon you will also want to have the UPC and FNSKU code embedded onto the packaging already.

Once your layout designer finishes the job, send the file to your factory and confirm the new packaging with him.

Thickness

There is no general thickness that you can apply to your packaging as it all depends on the weight and size of your product. If I would have to tell my supplier the thickness of the carton I would probably tell him more than 0.25mm (or 0.01inch) as anything below would be too thin and my product is likely to be damaged during transportation.

UV Coating

A nice but more expensive way to finish your color box is a UV coating that you apply to your packaging. You don’t coat the entire packaging but only highlight a few things like the product picture or your logo. If you look closely enough at my packaging you can see that the logo as well as the picture on each side of the packaging are elevated and UV coated. It gives the packaging a nice and high-end finish. UV coating usually costs an additional 0.2-0.3USD cents.

UV coating on the packaging

Photos

Ah the photos. Photos are so essential to your packaging and your sales.

If you don’t have high resolution or clear photos your customers won’t be able to see your product clearly and it will turn them off buying your product.

When you first ask for a quotation from a supplier you usually get an excel file with a small picture. That kind of picture won’t suffice for your listing (online) or your packaging. Ask your supplier for a high resolution photo of the product and don’t believe him when he says he doesn’t have one.

They always have high resolution photos because they probably have a packaging of their own (or from a different customer) where they had to take a high resolution photo. They needed to take a high resolution photo at some point because you can’t use a snapshot photo on a packaging. If you would use a snapshot photo on a packaging it would be highly pixilated.

The more photos you can collect from your supplier the better.

If the photos are good quality, great, if not try to enhance them with programs on your computer. There are several programs these days for free to enhance photos. If you would like to have it done professionally you can revert to fiverr.com again. There are a lot of guys on there offering photo enhancement for 5$.

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Costs of packaging

As previously mentioned, when a factory quotes you a price based on private label or color box the costs are included.

If the factory refuses to print your packaging because of the low quantity you may tell them that you will outsource the printing job. If they agree you need to follow the same direction as described above. Find a layouting company (service on fiverr.com) and send your newly made packaging to a secondary printing factory that will in turn deliver the empty boxes to your factory.

I often use a secondary factory for my packaging as some of my manufacturers have a very high MOQ for packaging’s (1000 or more).

To get an idea of how much a color packaging actually costs when outsourced I will list indicative prices here:

1000 pcs ~0.3US$ cents per packaging

500 pcs ~1US$ per packaging

300 pcs ~3US$ per packaging

100pcs ~7US$ per packaging

These prices are from my printing factory and are based on 4-color box with UV coating (contact me for details of the printing factory if you need someone). You can get it a little cheaper without UV coating.

You see that the prices go up the lower the qty but that’s normal as printing a low quantity of 100 pieces really is quite expensive.

Alibaba has a lot of sources for printing factories as well.

Use Alibaba just like sourcing any other product. However, below the search bar click on “Location” and find the area closest to your product factory.

That way the packaging can be quickly delivered locally to your factory and much cheaper. Many suppliers will deliver free to your factory if the distance is close enough.

I hope that the above gave you some overview of differences and options in packaging.

If you have any questions, comment here or shoot me an email at: mail@importdojo.com

Happy sourcing!

Manuel

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Manuel

Is Alibaba safe?​

The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

Read More »
April 29, 2021 7 Comments

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Do you have what it takes to start your import business? 10 steps reality check

Do you have what it takes to start your import business?

Do you have what it takes to start your import? 10 steps reality check

By Manuel Becvar
By Manuel Becvar
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Do you have what it takes to start your import business? 10 steps reality check

Starting your business from the scratch is not as easy as you might think. Trust me, I have been there.

Even if a friend of yours has a successful importing company and he is making millions, at some point he was probably close to bankruptcy and did not know what to do next.

Everyone starts off the same way; there is no get-rich-quick scheme that works. Well, none that I know. Your expecations are often not what reality will have in store for you.

It takes a lot of hard work and dedication. Especially when you’ve been working on your project for months with no results.

For me, the less money I had the more creative I got.

I was thinking of ways to make money I had not thought of before but at a certain point it was suddenly so clear to me. Things started to roll and I wish I had a guide to tell me what to do.

With the IMPORT BIBLE and the following checklist you have a guide on what you need to consider and questions you should ask yourself.

 

Disclaimer: Some of the products may contain an affiliate link and we may make a commission if you click on it at no additional costs to you.

1) Do you have it in you?

  • Are you motivated enough?

  • Are you ready to work longer hours than ever before?

  • Do you have real passion about your project/business?

  • Do you have the financial means to pull this off?

If you answered any of the above questions with NO then it probably isn’t the right time to start your own business.

2) Reality Check

Don’t fool yourself; having your own company is the hardest work there is:

  • No guaranteed salary at the end of the month.

  • No one is there to push you or give you directions.

  • Are you organized enough?

I hope you realize that from now on you will work harder than ever to achieve financial success.

3) Experience & Resources

  • Are you experienced enough in your industry?

  • Do you have the technical and basic skills to succeed?

 

If you do not have the necessary skills and experience, do more research on the topics until you feel confident with the product.

4) Research & Competition

  • Have you done your research?

  • Do you have competition?

  • What advantages do you have over your competition?

  • Do you have a supplier or manufacturer for your product?

Research on your competition is vital to your success. It’s one of the first steps you need to take.

You may end up with a product that’s already in the market if your research is not thorough.

5) Business Plan

  • Create a business plan, even if you don’t need to present it to anyone for funding. It will help you to focus on your goals.

  • Share the business plan with an experienced professional and let him give you an honest opinion.

  • A business plan is a must have. Hang it somewhere you can see it every day to remind you of why you are doing this.

6) Finances

  • Do you have the necessary funds to invest in this project?

  • Have you considered the down payments you need to make to suppliers?

  • Do you have money saved to last you longer than 6-8 months? That is if you plan on making this your main source of income for the coming months.

Many business fail because they didn’t prepare for the dry spell that may come. Make sure you have enough money in savings.

7) Profits

  • Remember that your possible turnover does not equal profit.

  • Make yourself a turnover and profit calculation.

Be accurate and precise. Don’t fool yourself when you calculate your profits and loss.

8) Company type

  • Have you set up your legal company?

  • Do you have any investors or shareholders to back you up?

Check with your local government to see what type of company you need to set up for importing.

9) Marketing

  • Have you prepared and completed your marketing strategy?

  • Website in place?

  • Social media presence in place? (Facebook, Twitter, Instagram, Pinterest etc.)

You don’t necessarily have to have a Facebook page with 1000 followers in place but it makes sense to start early. A simple website with a “ landing” and “about page” should be in place before you start. If you are selling through Amazon make sure you pre-launch your product before arrival (e.g. build a email list on your website, Facebook promotions & give aways etc.)

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10) Import Checklist

Make sure you follow these steps and cross them off honestly. The Import Bible will help you along the way to complete tasks.

A) Your motivation to import

  • Are you motivated enough to go all the way?

  • Are you ready to work longer hours than ever before?

  • Do you have real passion about your project/business?

  • Do you have the financial means to pull this off?

B) Did you find the right product?

  • Does your product have a “product-to-market fit”?

  • Did you research your competition?

  • Is your product unique?

  • Any copyright issues associated with the product?

C) Are there any restrictions on importing in your country?

  • Does your product have any restrictions on import in your country?

  • Does your product have any anti-dumping tax rates?

  • Is there a limited amount of import on this item?

D) Have you found the right supplier?

  • Is your communication smooth or problematic?

  • Are the payment terms difficult or suspicious?

  • Is he willing to send samples?

  • Is he genuinely interested in working with you?

E) Have you calculated all possible costs into your products?

  • Item and detailed specifications are all clarified with the supplier?

  • All possible license costs are included? (e.g., Bluetooth, Mp3, etc.)

  • Taxes and duties to be paid are clear?

  • Inspection costs have been calculated?

  • Shipment and logistics costs for sea transport are calculated?

  • Distribution, warehousing, or fulfillment costs are calculated?

  • Sales commissions are calculated? (e.g., FBA or Ebay)

F) Logistics

  • Pre-arranged shipment details confirmed with a logistics company?

  • Costs, pick up, and drop off are defined and confirmed?

  • Labels and markings are discussed with the supplier?

  • Fulfillment center has been advised of the necessary labeling?

G) Invoice & Payment

  • Has the invoice (PI) been checked thoroughly and confirmed?

  • Prices and terms are as agreed?

  • Payment has been discussed and deposit (if applicable) arranged?

H) Supplier price negotiation

  • Price has been discussed and finalized based on your requirements?

  • Price from the factory includes all necessary documents and certificates?

  • Price includes all necessary licenses (if applicable)?

I) Order Monitoring

  • Order checklist in place?

  • Weekly reminder to make a call/email to the factory?

J) Inspection / Quality Control

K) Shipment release

  • Shipment is released based on the inspection report?

  • Logistics company will arrange the pick-up and documentation?

  • Payment to the supplier is released?

L) Shipment

  • Your warehouse/fulfillment center is prepared for the arriving goods?

  • Checked with logistics company on arrival and prepared to pay duties and taxes?

M) Arrival of goods

  • Goods have all been accounted for in the requested condition?

  • Fulfillment center is briefed and standing by?

N) Claims & compensation

  • Returned goods have been documented with photos and reports?

  • Internal report has been sent to the supplier for compensation?

O) Sales Channels

  • Is your sales strategy clear?

  • Promotions & Advertisement in place? (Amazon PPC for example)

Follow above guidelines and ask yourself these questions to make sure you are clear about your business strategy.

Happy importing!

DIY U.S. Customs Clearance

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Manuel

Is Alibaba safe?​

The most asked question I get are “how to avoid being scammed by a supplier” or “how do I make sure this supplier is legit”? Especially on platforms like Alibaba – the biggest of its kind. This begs the question, is Alibaba safe? 

Read More »
April 29, 2021 7 Comments

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