How I sold one of my eCommerce businesses for 6 figures…and got depressed

Hey guys,

Not many people know this (I hinted at it in my previous post) but I’ve sold 1 of my eCommerce businesses about 4 months ago.
I can’t go into specifics on what business and what the deal was but it was a healthy 6 figure number. I can tell you that it was an Amazon & Shopify business.

Today I wanted to give you an idea of how you can build and sell a business and what specifics a deal like that entails.

Before I go into details I wanted to give you a brief update of what I’ve been up to in the last few months. I took a bit of a time out and travelled a lot.

I am currently in Bali with a good friend (Bastian from Officeflucht – check him out if you speak German).

 

Bali so far has been amazing and we were lucky to be here around a couple of traditional ceremony days. Melasti was one of them. Villagers walk in traditional clothing and cartable temples from their village to the beach.

 

Bali has amazing sunstets, check it out

 

Other places are equally stunning.

 

 

Before that I was travelling to Germany in January for a conference (Amazon Sales Kongress).

Always present in style 🙂

Stopped by my hometown Salzburg in Austria for a few days

Salzburg at night.

Went back to Bangkok and had a friend visiting and we took a motorbike ride up the North of Thailand.

Village near Pai, Thailand.

Mae Hong Son near the border to Burma.

 

Farming near Mae Hong Son.

 

We went on to Cambodia to see Angkor Wat (the biggest temple complex in the world). Simply stunning, see for yourself.

 

 

 

 

Dirt Quads around Siem Reap

And then I had enough and work was calling 🙂

So now I am in Bali working again full time on my businesses. Thats what I love about eCommerce and this business model. You can take some time out, travel, bring your laptop and work from anywhere in the world. Obviously I had to put in a lot of work in the beginning, its not all as peachy as I make it sound like 🙂 But after 1-2 years anyone can do this.

So now onto my actual posts. How I sold 1 of my businesses last year.

When I sold the business in November I really didn’t know what to do for a few weeks. I was really depressed for a few weeks.
You might think why would you be depressed if you just netted a six figure amount? Well I worked on this business for more than 3 years and it was kind of one of my babies that I took care of every day.

 

All of a sudden it was gone and while I still had my other businesses going on I felt empty with one big part of my daily life gone. Haters gonna say, take the money and be happy. But thats not what I m about.

 

Every since starting on this eCommerce journey I realized I like building different businesses. Now, 4 months later I have come to terms with the fact that I just need to move on and build something else in its stead.

Through all these years I’ve met so many amazing people, students and eCommerce entrepreneurs that made me grow my skills, experience and much more. So eventually I just moved on and found motiviation again.

 

Another thing why I was so depressed and couldn’t find any motivation was the fact that I felt secure. I never had this amount of money in my bank account and I realized why I didn’t hustle anymore. I felt safe and lost my “hunger”.

I am talking about the “hunger” that I had for 3 years working somewhere between 8-12 hours a day for months on end.

 

I know many entrepreneurs who have flipped many businesses for lots of money and they don’t retire. They just move on and build other businesses.

 

For me this was a first timer. I thought I can take a couple of weeks of, take it easy and chill. These weeks turned into 2,3 & 4 months doing barely anything. I really felt miserable.

My other businesses still generate 5 figures every month but they could be doing 6 figures a month. Slowly that is decreasing as well and I am starting to eat into my savings (I spent way too much money in the last 4 months)

 

I really neglected things. But meeting a few entrepreneurs over the last weeks here in Bali really gave me motivation again and I’ve started to pick up things again. That’s another great thing with this industry. You meet a lot of like minded people that can help you along the way. Be in brainstorming or doing projects together.

 

So after selling that business I basically travelled around Asia, went to Germany for a conference, and took life really easy. I always thought once you make a big chunk of money you can relax and everything is awesome.

But let me tell you its not. I guess thats how many people feel when they retire with 65. All of a sudden you have nothing more to do. While I still had things to do I felt that way. The good thing about my business set up was that I diversified and had more than 1 income stream.

 

If you recall in my older blog posts (How to scale an Amazon business / Existenzangst) I always stress out the importance of that. If I wouldn’t have those other income streams I’d be eating up my savings for the last 4 months.

Not that I could retire anyway but I felt like semi retirement for a few months. Trust me, it is REALLY boring doing nothing for a few months (apart from travelling).

 

You may understand me if you get to that point and I hope that many of you will 🙂

But onto this blog posts topic. How I actually sold that business and what that entails.

It started early last year after I released my last courses on ImportDojo (ImportDojo certifications & Brand Evolution) that a friend approached me and told me he sold his business on Empireflippers.

I wasn’t even thinking of selling the business. But after hearing how much my friend made on the sale it sounded good.
I went onto Empireflippers Calculation tool to evaluate the business’ worth. I got an email with an estimation and I was surprised.

Within the same day someone from Empireflippers contacted me and asked me for a phone call to see if my business is suitable for their marketplace. I think that was around late May.

In that call we discussed how the business is set up, if I have social media following, email lists, age of the business and other details that may influence a sales price. He gave me another estimatation at the end of the call which was even higher.

 

In a follow up email after the call I now had to prepare a lot of documents and answer over 30 questions regarding my business. For the next two weeks I was collecting income proof, screenshots and answer the questions related to my business. I had to fill in a very detailed profit and loss sheet that they provided and that took me at least 10 days to complete. I sent in all the necessary documents and then I waited.

 

After about 2 more weeks I got an email that my listing is approved and a final sales price has been calculated. Forget the typical 24X you can get in a normal business. eCommerce businesses can be sold much higher.

 

The older the business and the more consistent in growth the better. A lot of things go into the final sales price. Like how old the business is, how many email subscribers, how many Facebook fans, Instagram followers and so on.

So I agreed to the sales price and the listing went live. Within the first week I got 12 depositors on my business. The way this works with Empireflippers is that the business itself is not revealed. However a description and actual figures are revealed.

So interested buyers can deposit a minimum fee and then see the actual business. This is actually good because otherwise everyone would see your business. This could be bad, people could copy your business or even hurt your business if they knew who you were.

 

Within the second week we had an interview with a potential buyer. Empireflippers is on the call with you and prepares you before hand.

 

They manage the entire call while the buyer is asking questions. You just honestly answer the questions and at the end of the call Empireflippers will gently ask the potential buyer is he is interested. He said he’ll evaluate and think about it. Two days later I got an email that the buyer wants to close the deal.

 

However at a lower amount than I was asking for. The buyer had concerns about seasonality and the industry which was normal so I agreed to the price. He couldn’t wait to make the transfer. The deal was done. At this stage Empireflippers will collect the money and hold it in escrow until I hand over the business completely to the buyer.

 

This is called migration. Once the buyer confirms that he is now in control of the business the money is released to me.

 

This “migration” part took about 3 weeks. Empireflippers will be there with their team to help transfer domains, email and other things. I had about 4 or 5 calls with the buyer to explain everything about the business. Another 4 calls and 2 months support via email was agreed upon. Then finally the buyer confirmed that he is in control of the business.

 

3 days later I had the money in my account. I looked every day and just on the 3rd day there it was. I couldn’t believe it. The business I built for more than 3 years has just netted me a nice chunk of money. And just 2 days later I fell into the “hole”…see above.

To wrap up, all in all it took about 3 months from contacting Empireflippers to closing the deal and getting the money. If you are cosindering selling your eCommercebusiness I can highly recommend them.

 

So thats that. What I also probably learned of this is to not get too attached to your business. Of course if it’s your life’s dream to build a business and run it until the end and you throughly enjoy doing it then don’t sell it.

 

But if you want to build different things then go for it. Also the money you get for your business can be used to invest into other businesses.

I choose to put it into my other Amazon business to grow it and real estate as it is the most secure way to put your money in. Even it a property would decrease in value – you still have a roof over your head.

 

The moral of the story today I guess is, build a business, sell it if you can and keep building other businesses. Take some time off but don’t loose track of why you went into entrepreneurship in the first place.

 

To live freely, travel the world and build something meaningful. I don’t regret selling this business and to anyone who is hesitating if Amazon FBA is right for you – don’t hesitate. It has enabled me a lifestyle I never thought possible.

 

I do hope this gave you a bit of an idea what its like to sell a business and how I felt doing it. Don’t make the same mistake I made. Taking off too much time and loosing yourself. Get some well deserved rest and then tackle the next thing 🙂

 

You may ask yourself whats next for me? Well I m really putting in a lot of time into my remaining Amazon business (Mandarin-Gear), my sourcing business (ImportDojo Sourcing– message me if you need help), working on a new (FREE) course for ImportDojo, as well as building an Amazon affiliate site which I want to document publicly.

But the big news will come towards the end of the year. I am working on an interface that lets you see if a supplier or his test reports are verified by a third party testing company. I contemplated a lot over the last few months what I can do that will actually help people and change the industry. Because two of the most common questions I get asked are:

  • How do I know if a supplier is legit and not a scammer?
  • How can I verify a test report from a supplier?

Obviously with research, due diligence you can answer these questions for yourself. But what if you could see in an interface that this is true and verified by third party companies? This is a big project and will take 2-3 years to develop but I am confident we can bring it to the market. Let me know if this is something you would be interested.

Stay tuned 🙂

All the best,
Manuel

When and how to work with a sourcing company in China

Hey folks,

Today’s post is all about how sourcing companies work and when it makes sense to use a sourcing company instead of doing the entire job yourself.
Back in the days when I worked for a Buying Office/Sourcing Company in Hong Kong I was travelling 10 days of the month scouting new products for customers in factories in China.
As a Sourcing Company we provided every service the customer needed to import so he didn’t need to handle everything himself. We earned a small commission (non-profit wholly owned buying office) on our orders and made life for our buyers a lot easier.
That was back in 2013. Today things are a little different and sourcing companies have adapted.

Here’s how most sourcing companies work and how they charge:

1) Up-Front Flat Fee:

ImportDojo (https://importdojo.com/sourcing/) was one of the first sourcing companies to adapt this model. Basically you pay a fixed up-front fee that is agreed on at the start of the project. The company starts sourcing and you’ll get a report after a couple of days. Usually complete with 1-3 supplier recommendations and which one would work best for you; an Excel file containing supplier contact details, product weight, measurements, description etc. At this point you could possibly hire the sourcing company for further steps (what that entails explained below) such as a full sourcing package or take it from here. No further costs are involved.

2) Up-Front Fee & Commission:

Some companies charge you an up front fee (usually fixed) and if you decide to order that product from the choosen supplier the sourcing company also gets a commission. This is a rather unpopular model as the sourcing company even gets money even if they don’t do anything further anymore.

3) Commission only (with contracts, usually big sourcing offices with monetary commitment every year)

This might be a bit of the older model but not many sourcing companies offer that to a new customers. The sourcing company does all the work in finding a suitable supplier and once the buyer is ready to place an order a commission is agreed upon and paid to the sourcing company once the goods are shipped. Since the sourcing company doesn’t have any guarantee that the buyer places an order this is usually only available for existing clients or buyers who have their own sourcing office in Asia. A good example for this would be the company I worked for many years in Hong Kong (Eurogroup.com.hk).
Eurogroup acted as the sole buying office for 3 big companies (Rewe Germany, bauMax Austria and Coop Switzerland). Every order had a fixed commission (agreed upon every year during a yearly meeting between buyers and sourcing company) and paid out at the end of the year to the sourcing company. Usually these percentages range somewhere in between 4-8%. This might be the best solution for you if you have the need of a contact person any day of the year and have a lot of orders every month (possibly more than 5 containers per month).

4) Making money on the backend

This is a practice used by MANY chinese sourcing agents or companies without Western management. It was very common in the 90’s and 2000’s but more and more oversears buyers have gotten wind about this (rather unfair) practice.
What basically happens is that the buyer pays an agreed commission or fixed up-front fee to the sourcing company and the sourcing company collected extra commission from the factory itself without the knowledge of the buyer.
Many Chinese sourcing agents have this agreement with factories. If they introduce a buyer to the factory the factory pays a commission to the sourcing agent after the order.
Obviously the sourcing agent doesn’t tell the factory what kind of money they already got from the buyer. It is difficult to figure out if there is money involved in the backend. Usually it is when a sourcing agent offers to work for a very low fee or does not allow you to contact with the factory itself. Beware of these types of sourcing companies.

When to use a sourcing company?

I find that there are different types of buyers and depending on what type of buyer you are you may want to use a sourcing company or not.
1) Experienced buyers who want to focus on other parts of the business
These type of buyers usually have imported from China for at least 1-2 years and have experience in dealing with Chinese factories and companies. If you are one of these buyers you are very likely stable on your profits and you may want to outsource this task to sourcing companies. Mostly because sourcing in China is a tedious process and can be very time consuming. Especially if you are in a growth phase and you need to focus on non-China activities in your business such as marketing, developing new products or difersifying your business.
2) Tight budget buyers who want to try themselves at the process first
You are very likely at the beginning of your eCommerce or general commercer business and have limited amount to spend on sourcing companies. If you are in this phase I actually do recommend that you do not use sourcing companies as you might want to learn the process first and experience working with Chinese factories first hand. There are a lot of tutorials available on the internet to learn about importing from China (including my blog posts and Import Bible). Sign up here if you haven’t yet and get my Import Bible (The beginners guide to importing from China) for free: https://importdojo.com/pricing/ (choose the free membership plan). Also make sure to read trough my blog posts: https://importdojo.com/blog/

So what do sourcing companies do?

Keep in mind sourcing companies do the entire job for you. Just to give you a brief overview of what this entitles and how long this process usually takes:
  1. Establishing your needs (1-2 days of communication)
  2. Sourcing compliant suppliers/factories in China based on your requirements (7-10 days for off the rack items)
  3. Preparing quotation and findings in a summary for you (1 day)
  4. Order samples and evaluate them for you (5-10 days)
  5. Negotiate final conditions/pricing (1-2 days)
  6. Issuing contracts and agreements (1-2 days)
  7. Placing the order in your name, making sure all terms are met and everything is fixed (2-3 days)
  8. Arranging production, packaging, labelling, shipment (7-10 days)
  9. Monitor production period (30-45 days  – obviously it doesn’t take 45 days to produce but when you place an order with a factory you need to wait a certain amount of time for all materials to arrive, arrangement of production etc.)
  10. Arranging inspection (1 day)
  11. Release production and arrange shipment (1 day)
So we are looking at 87-90 days (roughly always 3 months) from beginning of the project until shipment.
So if you do not have to monitor the entire process but rather want to focus on developing and growing your business it makes a lot of sense to hire a sourcing company.

When does it not make sense to hire a sourcing company?

I always recommend first timers to go trough the process at least once. That way you learn a lot about the trade and obstacles a sourcing company has to go trough. Also it will make you simply understand the process better – and appreciate the work a sourcing company is doing for you 🙂

What do sourcing companies not do?

Some sourcing companies may offer these services, some may not:
Inspections – make sure you use a third party inspection company. There are sourcing companies who offer this as an integrated service but I recommend hiring a company (such as Asiainspection/TUV, SGS etc.) who have many years of experience.
Logistics – some sourcing companies offer this – also here make sure you use a third party inspection company.
Reason why I say use a third party for inspections and logistics is that your sourcing partner is probably not the strongest in that field. Meaning their prices are higher and they are less experienced. You might argue that you want an all-in solution with one company and don’t mind but I’ve seen my fair share of problems with these all-in one companies.
Just think of it this way: if you want to have a great pizza you aren’t going to the Greek around the corner because they also serve Pizza. You’ll want to go to the best Italian in town (if they are affordable). And if the Italian serves a Greek dish it’s probably not the best Greek dish you can get…. I think you get my point 🙂

What can you expect from a sourcing company?

China is not a department store. What I mean by that is that you simply don’t walk into a store (even with experience) and everything goes smooth. There are a lot of obstacles that can come along the way. Governmental Inspections (https://importdojo.com/what-is-going-on-in-china-right-now/), Chinese New Year holidays, unexpected delays on raw materials, unclear communication from the buyers side delaying things and so much more.
Obviously most sourcing companies work in YOUR interest, not in the factories interest. However if the buyer is in-experienced with doing business in China some situations can become difficult in the buyers eye. Therefore it is important to understand all facets of doing business with Chinese companies. Again, I recommend to have gone trough the process at least once and ready up on my blog posts 🙂

Conclusion:

I think it generally makes sense in any business to outsource those tasks that you aren’t good with (or have no time for). Just as I outsource certain tasks in my business. Do your research on sourcing companies and determine based on the following factors of the sourcing company:
  1. Experience
  2. Reputation
  3. Pricing
Pricing is usually my last priority in all tasks I outsource because I rather pay a little more but have less headache afterwards.
I hope this gave you a bit of an overview of what sourcing companies do and how they can help you.
Let me know in the comment section if you have any questions 🙂
All the best and happy sourcing,
Manuel
Ps.: Here’s a shameless self plug ☺
I’ve been running my own sourcing company together with my partner over at www.asiainwest.com/sourcing-service for a little over 3 years now and we have great packages available.
Check us out here:https://importdojo.com/sourcing/ or email me (mail@importdojo.com) if you have any questions.

How not to get suspended on Amazon (Regulation & Compliance)

Hey folks,

First of all, apologies. It’s been a while since my last post. There are several reasons to that. Family & personal issues, selling one of my Amazon brands (more details in one of my next blog posts) and just a general time out that I gave myself.

But I am fully back to grinding and hustling on Amazon & eCommerce!

In the last few months I’ve seen more and more posts in groups as well as emails from my subscribers about getting suspended on Amazon or even getting products seized at customs because of non-compliance with regulations and certifications.

In this post I wanted to educate you in more details about the recent suspensions or headaches Amazon is giving new and existing sellers. More and more people email me about Amazon suspending their listing or not letting them list a certain product (sometimes super simple items). Most of the times it is too late if they are already suspended. Especially new sellers.

I’ve been warning people since last January 2017 when Amazon cracked down on sellers who don’t comply with legislations & regulations. No matter in the US or Europe, being compliant is getting more and more important to Amazon as governments try to crack down on in-compliant eCommerce companies.

I’ve taken a screenshot from Amazon Seller Central to show you what I mean:

So what does that mean essentially for you as an importer? And how can you comply with these regulations?

I am sure you’ve done your research when looking at a product how you can comply but most of the times its pages and pages of text on government websites that are very difficult to understand.

So I wanted to give you a breakdown and brief overview of how you can can understand regulations. Be warned this is quite the long post but please remember this is a super important topic!

The following is an excerpt from my certificate course. This is such a comprehensive topic that it took me 10 months to finish the course. Here we go:

1) Country specific requirements

This can be a nightmare. Each country has different requirements and regulations. On top of thatthey change all the time or are being updated every few months. Making it also very difficult for suppliers to keep up with it. So it doesn’t always mean that when your supplier hasn’t heard of a new regulation that he is incapable of working with you but because these change all the time. See chapter 10 on capability of suppliers. Even though for example the European Union has general guidelines that are valid for many countries in the EU some countries have even sub-requirements.

There are norms & regulations that count for all countries. As for example D2001/95/EC or General Product Safety Directive (in short GPSD which regulates the CE directive) is valid for most countries within Europe.

Then again take Switzerland for example, since they don’t officially are a member of the European Union they have their own regulations. E.g. a GS certificate is not valid there, you have to have the equivalent on your product (S+ certification).
However in general it is safe to say if your supplier has a high standard of a specific country already (GS certification for example) that you are unlikely to be in trouble.

Make sure to check country specific requirements in your local countries websites and do not assume
that if GS is necessary in Germany the same goes for France for example.

2) What type of certifications are there?

First things first. You need to understand that certifications are based on directives and legislations. So for example the GPSD in Europe (General Product Safety Directive Legislation) or the CPSA (Consumer Products Safety Act) in the US says that a product needs to meet certain standards and need to be safe in general to import or bring to the market.

Simple right? Unfortunately not. The GPSD has tons of directives under its belt such as the CE, RoHS, REACH directive). Which means that for each product or category there are further sub-categories that have directives which tell you exactly what your product needs to meet. Wait a minute, what exactly are you saying? I can’t read all this technical jargon….

There are several types of certification. Before I explain which ones are available please note that most countries have different certification requirements. There are also directives and legislations issued by Government Agencies or councils which can
be met when having the right certification. A Third Party Testing Institute for example issues a certification after having tested the product according to directives and legislations.

Simple please? For example if the RoHS directive (which is under the GPSD legislation) says that a product has to be tested on how many percent of a chemical compound is in the raw material (e.g. Cadmium or Lead) of the final product, the certificate will only be issued once the testing is completed and the percentage of chemical is not above the allowed directive/legislation of RoHS. With that being said, there are:

A) Certifications/Marks required by law
B) Certifications/Marks good to have
C) Certifications/Marks recommended

3) Who and how are certificates issued?

1) Certificates are not issued by factories themselves (except SELF certifications declarations of conformity). If they are
issued by the factory as a declaration of conformity – this is not evidence as such that the product complies.

2)Certificates are issued by Third Party Laboratories (TPL) or Government Agencies (GA). These certificates are actually
evidence of conformity, give you peace of mind as well as support you when someone claims that your product is not
conform to regulation.

Whats the workflow? The supplier or you needs to send in the sample of the product to a TPL or GA. The TPL or GA will then
conduct testing according to requirements issued by the governing country or body. If the requirements are met, the TPL/GA can then issue a certificate that is in some cases valid for a short period or in some cases does not expire. The TPL/GA will then forward the original and copy (PDF) of the certificate to the party who paid for the testing costs

4) What does my product have to meet legally?

In general your product has to meet country specific legislations & directives. Those can be as simple as a document of conformity (DOC) which can be self-declared or a Third Party issued certificate (or Evidence of Conformity) which will cost a
certain amount specified by the Third Party. What your product has to meet legally can be researched on government’s websites such as the CPSC in the US or the European Commission in Europe.

5) Do I really have to have all certificates?

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

Simple product:
Solar powered garden light for 1.2$. Comes with nothing but a few cables, some
plastic and a solar cell. Simple right? Technically I have to meet the following: LVD
(EMC), ROHS, REACH & CE in general for Europe. Now if I were to test all of
these the costs would amount to roughly 2000USD with a very cheap Chinese laboratory.

If it was TUV or SGS the costs would be triple that. Now what if I am
going to order 1,000 pieces and my testing costs would already cost more? That
doesn’t make sense. In this case I suggest to get self declaration of the above
regulations and save yourself these costs. Obviously you’d still want your supplier
to declare that he can fulfil those requirements so look for suppliers who already
deal with customers in the country you want to import to and have a good
reputation or can back up their claim that the item is compliant with raw material
certificates for example (from the raw material supplier).

Complicated product:
Small Electric fan heater 5.9$. Comes also with a few cables, some plastic, a plug and a PCB. Simple right?
No. You see, I need to plug this product into the socket (230Volts plus) and the potential dangers are very
high. If the unit tips over or a child puts a cover on top, the entire unit can burn up (and the house with it).
Also here technically I have to meet the following: LVD (EMC), ROHS, REACH & CE in general for Europe.
Ideally I will also want a GS mark for Germany because this is a product consumers want to have with GS.
On top of that I want abnormal testing from TUV for example. Abnormal testing means they would test
what happens if you cover the unit with a blanket or if it tips over that the unit switches off automatically. A
good supplier knows that there needs to be a tip over switch installed and overheating fuse included. This
abnormal test alone costs 4-5,000USD.

A GS mark costs somewhere in the same vicinity (2-4000US$). The other tests (LVD, RoHS, REACH & CE) are
roughly 2,000USD. Now we are looking at 10-12,000USD investment costs. Would I do all these testings before
purchasing? Yes, 1000%. I do not want to risk my business or anyone else’s life because I wanted cheap. You
may say ok but I don’t have that kind of money. Then you need to find a supplier who either has these
certificates already or is willing to invest the money for you. If you can’t find one than its simple – the product is
not for you and your budget. You can still go for it without all the testing and certifications but I think we are on
the same page here that that would be a very foolish decision in case anything happens.

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

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

You don’t have to have recommended certification like GS or UL on an electronic product. These
are recommended certifications that improve your chance of selling and create more trust for your
customers. We call these “Quality Seals”. But remember, a self declaration is not evidence of compliance.
It is merely a statement by you or the supplier that all regulations are met.

So if you want to be on the safe side you do testing with a third party laboratory and get actual
evidence certificates). This is for your own protection.

Imagine you are a consumer and you see an advertisement somewhere (online/offline)
and the advertiser has a certain quality seal like GS/UL. Would you rather buy the quality
approved product (even if more expensive) or that of another seller who does not have
these quality seals? I think it’s needless to say you go for the quality seal product. Most
big retailers only purchase a product when it even meets all quality seals. For example
Walmart or Sears will probably not import a baby product that hasn’t got FDA approval
and BPA free certification. They just can’t afford to be in the news when the product gets
tested by a watchdog and the test fails.

6) How does everyone else do it without certificates?

Many importers, especially small ones, eCommerce sellers or importers who send via Air Express (DHL etc.) avoid getting caught by customs and authorities because these carriers (DHL etc.) have special clearance at customs. Why? Because they clear millions of shipments every day around the globe. If every shipment would be inspected by customs,
logistics and delivery times would be a nightmare. So yes basically everyone else is breaking the law.

Importers who go the regular way (regular Air or Sea freight) have to clear each shipment with customs. Since clearance takes a lot longer and there is no “waving trough” of your goods like with DHL they do look at most shipments in detail. If your product does not have necessary certification/documentation your products can get seized and you’ll never get them back (unless you miraculously acquire the certification in a few days).

So yes, you may save a few hundred or thousand $ if you don’t get caught. But if you do get caught, fines or seized goods that can be much more expensive aren’t worth it. So go the correct way from the beginning. Not only do you have an edge over your competitors (you have a quality seal, they don’t) but you also have a safe product that your customers will appreciate (in turn even mention during a review).

7) General costs

As a general guideline here are some costs from a local Chinese testing laboratory (CTS):
1) CE/EMC (800RMB) calculators, clocks etc.
2) CE/LVD (luminaires 2800RMB)
3) RoHS (950RMB)
4) REACH (590RMB)
5) FCC (800RMB up)
6) FDA/BPA(4000RMB)
7) LFGB (6500RMB)
8) GS (7500RMB)
9) Colorfastness (80RMB)
10) PAHS (390RMB)
11) AZO DYE Test (210RMB)
12) California Prop65 (800RMB)

8) Who pays those certificate costs?

If the product does not have certification and your market requires it the costs lie with you. However if you can convince the supplier to pay for it you may save those costs. Why would the supplier pay for it?

For one, it increases his chance on selling more of his product because he can advertise the certification to other customers and second it helps to improve the quality of the product (if he needs to make adjustments to the product in order to meet the testing requirements). One may argue and say “but I don’t want other customers buy this product, especially not in those countries that I am selling from” – well then it is pretty clear that you have to evaluate if the testing cost is worth it so you can have the
certificate exclusively and in your name. Because if you pay for it the supplier cannot advertise or lend the certificate to other customers.

9) Where can I save money?

In general simple products that have very low requirements such as a knife sharpener, salad bowl, decorative items etc. are ok to have only a Letter of Conformity

  1. examples  of European templates here:http://ec.europa.eu/DocsRoom/documents/5830/attachments/1/translations)
  2. examples of US templates here: https://www.cpsc.gov/Business–Manufacturing/Testing-Certification/General-Certificate-of-Conformity-GCC
  3. or a Letter of Guarantee issued by you or the supplier stating that all items are conform with regulations and standards. Best to check with your supplier or a third party test laboratory.

10) Are EU certificates valid in the US & vice versa?

In general NO. Even though some certifications have a stricter testing procedure (such as LFGB in Europe)
they are not acknowledged in other countries. So if your supplier has no FDA certification for the US but
he has LFGB for Europe (the equivalent to FDA) it is a good sign that his products can meet regulations
but it won’t help if you need certification for the US. If you have a good product and feel the investment
is worth it then go for the certification and pay it (or convince your supplier)

11) Getting the supplier to test for you

As mentioned before you can also have the supplier apply and pay for the certification. Especially if you are selling
solely in one marketplace and “allow him” to sell to other countries or markets than you are selling. E.g. Imagine you are based in Germany and for now you only plan on selling on Amazon Germany. You could tell him that he is allowed to sell to any other customer within Germany (online or offline) if he pays for the certification.

German importers or bigger clients are more likely to buy from a factory if they have a certain certification for example. Same goes for the North American market. Walmart for example is more likely to buy from a factory if he has proper certification.

12) Why do some suppliers have no certificates at all?

Sometimes suppliers have no certification at all because either:

  • The product is new and they want to see if the market needs this product before paying for any certification. Basically they want to test the waters before investing themselves.
  • The supplier only sells to countries where no certification is required at all (imagine regulations in Africa)
  • No one has told him yet what is needed and he waits for customers input
  • He simply doesn’t care and wants to make a quick buck (stay away)
  • He doesn’t have experience in your market but is otherwise capable.

The above is only a brief overview of thousands of regulations and I hope this gave you a bit of an overview. If you want to learn about this topic with in-depth material to make sure you are compliant, check out my Certification Course or post your question in our Facebook group here.

All the best and happy sourcing,

Manuel

How to increase traffic to your Amazon listings

This is a guest post written by Dave Barry, which outlines a number of ways you can get more traffic to your listings on Amazon. Dave is an Amazon Seller and also a co-founder of AMZEurope.com. AMZ Europe specializes in listing optimization for Amazon UK & US and Amazon EU (Germany, France, Italy & Spain).

INTRODUCTION

Poorly performing products on Amazon arise due to:

  1. A lack of traffic – not enough people are clicking on your listing; and / or
  2. Low conversion – not enough visitors are buying your product.

In this post, we’ll focus on issue #1.

A lot of effort goes into listing a product on Amazon, including product research, negotiating with suppliers, logistics, photography, keyword research and copywriting. As such, when your product is not being seen by enough potential customers, it can be enormously frustrating.

Does your product have low or declining traffic?

To answer this, you need to determine the number of people that are visiting your listing.

You can find the number of views a particular listing is receiving in seller central:

  • Under the “Reports” menu, click, “Business Reports”
  • On the left side of this page, under subheading “By ASIN”, click on “Detail Page Sales and Traffic”
    • You will then be presented with a table of data for each of your ASINs
    • Find the relevant ASIN (you may need to scroll down) – column “Page View” will display the traffic or number of views your product listing has received
    • In the top right of the screen, you can adjust the period for which you want to see the data

If it’s a product that you have been selling for a while, check the traffic over the past 6-12 months.

A significant drop off in traffic or a steady decline indicates a problem and your focus should be on addressing this, using the tactics we’ll discuss in this article.

However, beware of the seasonality of some products when performing your analysis. Seasonal products are in higher demand at a certain time of the year and thus, will receive more traffic during this period.

For example, if you’re selling board shorts, you can expect a reduction in traffic in the months following the summer. You can check the seasonality of a product by inserting its main keyword into Google Trends.

Launched a new product that’s getting very little traffic?

This is common at the start and likely due to limited sales history and low number of product reviews (people tend to buy products that have a larger number of positive reviews) relative to your competition. Follow the tips in this post to increase the number of visitors to your new product.

Is your listing being suppressed by Amazon?

Before we discuss the methods that will help increase the traffic to your listings on Amazon, we must quickly check if your listing is being suppressed

What does this mean?

In simple terms, it refers to when Amazon lowers the ranking / limits the visibility of your listing – leading to a reduction in traffic and sales. It arises when some part(s) of your listing is not compliant with Amazon’s rules.

Is my listing being suppressed?

Here’s how to check in seller central.

Under the “Inventory” menu, click, “Manage Inventory”:

  • If you have suppressed listings, you will see “Suppressed” in the top navigation pane
    • To solve this and restore your listings to normality, you’ll usually need to provide some additional information or make an adjustment to your listing e.g. reduce the number of characters to your title.
  • If you do not have any suppressed listings, you will not see the “Suppressed” option in your navigation pane.

Here is a more detailed overview of listing suppression from Amazon – https://www.amazon.com/gp/help/customer/display.html?nodeId=200898450

BOOSTING YOUR TRAFFIC

1 – Improve Your Main Image

When a customer searches for a product like yours on Amazon, what is one of the first things they see?

Your main image.

To get more clicks and increase your traffic, you’ll need to have a top quality main image that stands out amongst your competitors.

Amazon has specific rules for your main image, which you should abide by to avoid potential suppression of your listing. In summary, your main image should be on a pure white background and your product should fill 85% or more of the image – while these are rules, following them will also better showcase your product.

Here are some other ways to improve your main image:

  • Hire a professional product photographer – in a competitive niche, this can help you get more clicks
  • Ensure it is high resolution – 1,000 px minimum in height or width
  • Present your product at a different angle than your competitors
  • Feature any extras or bonuses provided with your offering e.g. a carry bag or user guide
  • If you have high quality packaging, include this in your main image

Torn between two potential main images? Perform a split test to confirm which one will generate more traffic.

Split Testing (also referred to as “A/B Testing”) is done to find out what works best in your listings, and will ultimately generate more profit over the long term. In simple terms, it involves deriving two options / variants (main images in this case) and determining which one provides better results.

Use option 1 as your main image for 7 days. Then, change to option 2 for the following 7 days.

You can then compare the traffic and performance of your listing with these 2 main images. The image which provides more traffic and sales is the one to use for your listing going forward.

The 2 week time period above is used as a guideline – you can do longer if you wish, although I would not recommend a shorter test period. The more data and clicks you compile, the more confident you can be in the results provided.

Software like CashCowPro and Splitly can help you automate the split testing processing.

2 – Evaluate Your Pricing Strategy

Pricing is another key variable in determining whether a potential customer clicks on your listing or those of your competitors.

Finding the sweet spot can be difficult. Price too high and you’ll prevent customers from clicking on your listing. Even pricing too low can reduce traffic, as it may suggest you’re selling a low quality product and turn off some buyers.

However, if you’re not getting enough traffic, here is my advice on pricing.

To start, review the pricing of the top sellers in your niche – it’s fair to assume they have tested and determined an optimal price that attracts customers and sales.

Go to Amazon and check the price range of the top 3 to 5 sellers in your niche.

If you’re significantly above this range, you might well be pricing your offering too high.

If your product is new (with very few reviews) or in decline, an effective way of getting more clicks is to lower your sales price. This should increase traffic and sales, and in turn improve your ranking on Amazon.

Once you have restored your listing to a healthy level of traffic and sales, you can then consider a price increase.

Be careful not to price too low. I made this mistake on a listing myself. Traffic and sales on one of my products were in decline, so I wanted to offer a larger discount to customers to regain my ranking and sales.

I lowered my sales price to $8.99. However, this actually had a negative effect on conversion and sales!

My product had become an add-on item on Amazon. If your product is listed as an add-on item, it can only be purchased by customers that check out with a shopping cart of $25 or more.

Lowering your price is definitely a tactic that works to grow traffic.

However, it’s important to note that competing on price may work temporarily, but there’s nothing to stop a competitor pricing lower than you. Downward price pressure like this erodes your profit margin.

To avoid this, ensure your product offers some unique value / features compared to your competitors. This will help you succeed amongst the sprawling forest of generic private label products being sold on Amazon.

3 – Run A Lightning Deal

What is a lightning deal?

It is a promotional offering, where you provide a special discount for your product and Amazon features it on its Deals page for several hours.

This is almost guaranteed to provide a large influx of traffic and along with it, sales!

It’s an excellent way to revive a slow moving product listing.

However, not all products are eligible for lighting deals.

To check if your product(s) are eligible, go to seller central. Under “Inventory”, click “Lightning Deals”. The lightning deals that you can opt to run (if any) will be listed under “Recommendations” at the bottom of the page.

If the product you are seeking to boost is not eligible for a lightning deal, check back a week later as this page is updated on a weekly basis.

4 – Find New Keywords

The keywords included in your listing have a major impact on the traffic your listings receive.

Your product will not appear in Amazon’s search results if a customer uses a keyword that is not in your listing or search terms (also known as “back-end keywords”).

As such, by failing to include just one high-volume keyword that’s relevant to your product, you’ll be missing out on a significant amount of traffic.

To ensure all important keywords are identified and included in our listing, we must perform comprehensive keyword research.

With Amazon recently reducing search terms to a maximum of 250 characters, it’s more important than ever to identify and target the right keywords.

Tips when doing keyword research:

  • Experience with keyword research is preferable, including familiarity with tools and software that can provide data and automation to enhance the process;
  • Keyword research should be done by someone with (a) comprehensive vocabulary and (b) understanding of your product / niche, to ensure all important keywords (high volume and relevant) are identified; and
  • Understand the difference between keyword research for Google and Amazon. People search on Google for information, services and products, while searches on Amazon are just for products – prioritize keywords that have buyer intent, over more informational keyword phrases.

In summary, investing time in keyword research is essential as it has a major impact on the quantity and quality of traffic directed to your listing.


Don’t have the time or knowledge to perform comprehensive keyword research?

Hire us! Our listing optimization services features detailed keyword research, along with copywriting for Amazon US & UK, and localization (a mix of copywriting and translation) for Amazon EU (Germany, France, Italy & Spain).


As part of our listing optimization services, we also optimize your product title to get more clicks / traffic, which we’ll cover next.

5 – Optimize Your Product Title

Along with your main image and pricing, your product’s title is the other key variable displayed in search.

These 3 factors provide the first impression of your product to customers. The better they are, relative to your competition, the more traffic you’ll get.

We have covered main image and pricing already, so now let’s talk about improving your product title.

The first goal of an Amazon Product Title is to capture the attention of buyers. We do this by placing the most important keywords at the start of your title. If buyers don’t see keywords relevant to their needs, they likely won’t click on your product. This is also important because mobile devices (smartphones and tablets) display fewer characters of your title – almost 60% of Amazon customers report that their primary way to purchase products on Amazon is on their smartphone or tablet.  

Titles must be written in a compelling way too, encouraging customers to click on your product, instead of your competitors’ offerings.

It’s important to note that product titles in most categories are limited to 200 characters (including spaces). To maximize space and feature as many important keywords as possible, your title should not comprise grammatically perfect / full sentences – it should be a mix of keywords and copywriting.

For example, let’s assume we are selling a wallet made from high quality leather. In a full sentence, we would write, “the product is made from premium leather”. For an Amazon Title, the phrase “Premium Leather” is better – we don’t waste too many characters, but emphasize the important feature we want to.

You can derive a new title for your product using these tips.

However, it’s important to verify that it actually improves the performance of your listing.

Run a split test to check if the new title gets more clicks than your original title.

Next up, we’ll talk about advertising. While this is a paid method to increase your traffic, it is certainly an effective one.

6 – Advertise on Amazon

There are 2 ways to advertise your products on Amazon:

Sponsored Products for promoting / advertising individual listings.

Headline Search Ads – available to brand registered owners, with 3 or more product listings.

Low traffic and not advertising your listings on Amazon?

Get started with sponsored products. It’s easy to do and will drive traffic to your listing. Amazon offers a $50 credit to those starting out oo.

If you are advertising on Amazon, but still have low traffic, there are a few things you can do to get more traffic from advertising:

  • Increase your bids on keywords – this will improve your ad placement and help you get more clicks
  • Increase your daily budget – this will increase the number of clicks you can get from advertising in a particular day. Do this if you are regularly spending / reaching your daily budget / limit set on Amazon.
  • Perform keyword research to identify new keywords to target in your advertising campaigns

BONUS TRAFFIC TIPS FOR AMAZON EUROPE

For those selling on Amazon Europe (UK, Germany, France, Italy and Spain), here are some other ways to increase your traffic.

A – Enable FBA Export

FBA Export allows sellers to choose which European countries their products can be shipped to.

If your listing’s export settings in Seller Central (pictured below) is set to “Disabled” or “9 Countries”, you are missing out on traffic from many countries in Europe.

Update to “26 countries” and open up your listing to traffic and sales from a number of other European countries. Note that sellers are not charged additional fees for FBA Export orders – as you can see below, there are “no additional fees for FBA Export orders on Amazon”.

 

B – Keyword Research & Amazon Europe

If English is your first language and you’re selling on non-English speaking marketplaces (Germany, France, Italy & Spain), make sure your keyword research is done by a native speaker.

A comprehensive vocabulary is key to ensure the best keywords for your listing are found, and included in your title and search terms – both key to generating traffic.

Also, a native speaker will also ensure that only keywords relevant to your product are included in your listing and search terms – non-relevant keywords will lead to traffic from customers not specifically searching for a product like yours, and likely hurt your conversion rate. Also, targeting non-relevant keywords is technically forbidden by Amazon.

You may be tempted to save money and just translate your English keywords. But this is not recommended. Without doing the “research” part, you will fail to identify keywords and limit the potential traffic to your listing. Furthermore, direct translation of keyword phrases (two or more words) from English into another language will often produce a phrase that has a totally different meaning than intended.

C – Product Titles for Amazon Europe

As we learned in section 5 above,a good Amazon Product Title captures the attention of buyers by including the right keywords and being written in an appealing way.

The best way to ensure this for the non-English speaking marketplaces (Amazon Germany, France, Italy and Spain) is to hire a native speaker to write and optimize your listings for Amazon EU.

A poorly written or translated title (like the example below) will reduce your credibility in the eyes of your potential customers and is certain to hurt your traffic and sales.

FINAL THOUGHTS

I hope you liked this post and use the tips provided to increase your traffic on Amazon!

If you’re looking for help with new listings or to boost your current listings, check out our listing optimization offerings for Amazon US / UK and Amazon EU (Germany, France, Italy & Spain). Designed to increase your traffic and sales on Amazon!

We have also created a listing optimization blueprint – it’s a checklist you can work through to improve your listings. It’s based on what we’ve learned from optimizing hundreds of listings to date and I’m sure it will provide you with a few helpful tips – download it for free here! www.amzeurope.com/amazon-listing-optimization-checklist

Before signing off, I’d like to say a special thanks Manuel. There is a lot of excellent content on his website, and it’s a real pleasure to have my post featured here.

If you have any questions for me, you can get in touch directly through AMZEurope.com or comment below. Please share this post if you like it too!

Why you ALWAYS need inspections in China and Europe trip report

A little more than 2 weeks ago I came back from my Europe “vacation” which was not really a vacation but more work because I was constantly on some calls or working on other stuff.

It was quiet around me but I was not sleeping but rather working on many projects. Some of them I wanted to share today. Before that I also wanted to share some moments of my 7800 kilometer trip (4800 miles) in Europe before I start with today’s blog post which is about factory inspections in China. 

What else can you expect in this blog post? 

  1. I launched a new product (the best day & dry pack 2018) 🙂
  2. I ordered more products to ramp up my second brand Mandarin-Gear
  3. I launched a new case study on brand building and social media (all for free)

But more on that later. So without further ado, here are some impressions from my Europe trip:

Before I left to Europe I spoke to Thai Amazon sellers about Brand Building. Fun!

We left to Europe on 29th of July. Most people who know from my previous posts about my fear of flying. Also explained here. So I treated myself to lying flat again.

We landed in Vienna (Austria) pretty late that night and had a long breakfast the next morning with an amazing view

Perfect setting for a Sunday morning.

We then headed to my Mum’s place near Salzburg and would you know there was a village festival. Which was pretty empty for what it was 🙂

Stayed for a few days there and then headed for a hike in the Tyrolean mountains near my friends place. I took the opportunity to snap a few pictures with my newest product that I launched 2 weeks ago. 

Pretty proud of this item and I even use it myself (or ask my wife to stand in for photos) 🙂

We then made our way to Sweden and stopped in Hamburg in between to meet up with Gil from Privatelabeljourney.de and his lovely wife.

We finally arrived after a 16 hour drive to my private sanctuary. Had to chill for a few minutes to let it all sink in.

On the very next day we went looking for mushrooms in the forest.

There you go 🙂

Enjoying a sunset.

And we are off fishing!

I M ON A BOAT

Preparing for my speech in Innsbruck (Austria) 2 weeks from now.

In between goofing around and relaxing.

Or eating Swedish food.

Our first catch!

And more mushrooms!

…and mushrooms….

 

On the last few days we had friends from Thailand visiting

A few days later we were in Venice, Italy. Another 18 hour drive.

Venice

Venice

From there we headed to Budapest, Hungary (another 8 hour drive) for one of my best friends wedding.

Including a bachelor night. No details here 🙂

Meeting friends from Hong Kong in Budapest

The wedding was set in a beautiful castle outside of Budapest.

And there’s the freshly married couple

We went to lake Balaton (Europe’s largest fresh water lake) and Vienna for a few days after that.

Eventually bringing me to the last leg of my trip. I was speaking to becoming and existing Amazon sellers about niche selection and why innovation in product development matters.

Amazing crowd and excellent event!

And Vienna again on the last night before flying home.

 

So that was that, my 6 weeks in Europe. A lot more moments that I wanted to share but I don’t want to bore you and get into today’s topic:

why you ALWAYS need inspections in China.

So when I got home to Asia I had an inspection on my 7th re-order of the French Press case study product I did a year ago. 

I’ve always preached how important inspections are and I do them every time. Even with suppliers I work with for a long time.

It really doesn’t matter how well you know your supplier and how often they plead not to do inspections. You hear something along this line: “don’t worry my friend – always good quality, no need to inspect”. Have you heard that phrase? I’ve heard it a million times and I ALWAYS do inspections anyway.

So this was an inspection with my “famous” French Press and before I received the report the supplier told me many times that we don’t need an inspection… Even on the day before I received the report the supplier messaged me (because he was obviously in the factory during the inspection) that I should release the shipment, there are just a few scratches, nothing to worry about and I should go ahead and send him the payment….

Never trust your supplier. I am not talking about the sales representative of the factory. I am talking about the factory workers, the QA manager on duty and down the hierarchy. They might have a bad day or the factory manager decides to rush an order (remember many factories are being closed right now so I attribute these issues to that).

Have an inspection, evaluate the problems and release shipments if these are minor mistakes. I often release shipments even if the inspection is “fail” when there are minor issues. However in critical cases, demand re-work & re-inspections until its fixed. Otherwise the supplier doesn’t see his money. Another good point to never pay more than 30% downpayment.

To see what I mean when I say critical issues here are some images from the inspection:

Always view inspections from a customers point of view. Would you accept these type of issues? 

The supplier just switched screws that were cheaper without my approval!

And there were many other issues. So what do you do in these kind of situations? First of all you need to have an agreement in place when you place the order. I usually have three terms that I include in my contract and 95% of suppliers will agree to that:

  1. Re-inspection and re-work at suppliers cost if the inspection has major and critical issues
  2. Replace returned units from customers higher than 6-8% (depends on product). This usually means those 6-8% are free units on my next order.
  3. Penalty fees for late delivery. Say 10 days after agreed delivery date 0.5% of total order value. 15 days – 0.75% and so on.

Most suppliers will agree to these terms. The point is you negotiate this when you place the order and before you transfer any money. These things happen can happen to all of us and you always need to have a safety net (inspection).

So what happened in my case? The supplier asked me if it would be ok to send pictures only without a re-inspection… no way. How would I know if he just takes photos of items that were in perfect condition anyway and not re-work?

So I asked them to acknowledge our agreement of paying for re-work and re-inspection in case of serious issues. And that’s what happened. The supplier has since re-worked everything and the re-inspection was a few days ago, this time with very minor issues and I released the shipment.

The moral of the story here is really to have a safety net and don’t let the supplier talk you into easy solutions (for him). Because your business will suffer in the end. Granted this was the first time the supplier screwed up but that just makes my point. You never know what is going on on the day of production and it might not even be your sales representative fault. HAVE INSPECTIONS they start from 100$. 

So what else happened? 

  1. I launched a new product that I developed over the last 6 months. If you’re into hiking and outdoors, feel free to check it out 🙂

2) I launched a new website a few weeks ago called eCommercebutlers to help people on brand building, social media and decided to do a new case study on brand building (all for free). 

I will be documenting my entire journey on growing and further building my brand with videos on where one of my brands (Mandarin-Gear) is right now and how I intend to launch all my products in the future via social media and email lists only. 

My goal is to show that it is inexpensive to build a brand but it can be done (while I admit it takes time). 

The entire case study is free to watch so please head over to below link and sign up for updates if you are interested in watching my progress:

https://www.ecommercebutlers.com/brand-building-case-study/

Ps.: We also have a FREE Product Launch Checklist for you when signing up to our newsletter. 

I’ll also have a group where I’ll share updates and where we can discuss strategies over here: 

https://web.facebook.com/groups/124707288184753/

I aim to release a new video every week to show my progress.

I’d be happy to have you join me on this journey 🙂

That’s it for today, long overdue and long blog post. Thanks for reading and if you enjoyed it, please share 🙂

All the best,

Manuel

What’s new on ImportDojo?

Hey guys,

It’s been a few weeks since my last post and this is due to a holiday I took in Europe. Currently I am sitting in Budapest, Hungary writing this up. It’ll be another week until I am back in Hong Kong but I thought I’d give you a brief update on what I was up to.

Ecommercebutlers

I’ve launched a new page a few weeks ago called eCommercebutlers.com

The goal of this site is to help people build brands online. We’ll be regularly posting free content to help you build your eCommerce brand.

I’ve also moved the Sourcing Operation of ImportDojo to this site. So if you need help sourcing from professionals please check it out. As many of you know I’ve had a sourcing operation for quite a while now in Hong Kong which helps people find manufactures in China as well as handle the whole order follow up with factories for many eCommerce sellers.

Junglescout Million Dollar Case Study

Last week I was in a webinar with Greg Mercer & Kym from Junglescout to help with their Million Dollar Case Study. Currently they are in a supplier outreach phase and asked me for help and giving directions when sourcing in China. It was a little over an hour and we had a great chat.  If you are curios how I choose suppliers and what background checks I do before placing an order you can check out the whole webinar here:

The Million Dollar Case Study: Europe – Session #4: Find A Manufacturer In China

 

This also made me think of a few things in terms of supplier communications so I wanted to write up a few more notes and this brings me to today’s blog post:

Why Chinese suppliers never (or only partly) answer questions I asked? 

I’d like to give you a bit of an overview why Chinese suppliers don’t or might not reply to questions. 

1) Unprofessional inquiry

Since I am also a supplier based in Hong Kong I get inquiries from overseas clients on my products sometimes. You wouldn’t believe the level of un-professionalism I get sometimes.

Here’s an email from a inquriy I received a couple months back:

“Hi,

Please quote your products.

thank you”

And thats it. There is no name, no introduction, no details to which products are to be quoted, no quantity no final market etc. 

I usually delete these emails right away simply because I feel the buyer isn’t serious enough to buy from me. If he is, he would put in more time to send me a professional introduction what he does, what he intends to buy from me, what certification he might need, the market he is selling to and other details. Just as I, no supplier will take you serious with this kind of inquiry. 

Here’s how an email could look like:

Hi …,

My name is ….. and I am the ….(Manager/President/Buyer etc.) of …. Limited/Inc.

We are a (fill in your company’s business, e.g., Importer/Buying Office/Whole seller/Online shop) and are operating in (fill in your

country). You can also check out our website under: www. …..

I am writing to you today to inquire about the product I saw on your website/catalogue/exhibition.

The model number is….

Could you please give me the following information: (You can fill in the details in the attached quotation format or send me your quotation in the first step.)

Unit price based on …. Pieces

Minimum Order Quantity

Available certification (CE, RoHS, FCC, GS, etc.)

Production lead time

Available colors

Payment terms

I would then evaluate and get back to you as soon as possible.

If you have any questions please don’t hesitate to contact me.

Thanks and best regards,

 In 95% of all cases you should get a more serious reply from a supplier. 

2) Unstructured inquiry

Some buyers don’t structure their initial inquiry well. Or they put important questions at the end of an email which can be easily overseen.

As an example looking at above email inquiry:

….Payment terms

I would then evaluate and get back to you as soon as possible.

If you have any questions please don’t hesitate to contact me.

Thanks and best regards,

Oh, also we need to know what is the colors you can provide? 

The last sentence can be easily missed. So make sure that your inquiry has either bullet points, numbered paragraphs or other forms of structure. 

If you want you can also make important points BOLD. 

3) Too much work from other customers – ask again and again until you receive answers. 

Sometimes suppliers are simply overworked. I’m sure you’ve seen it, they even reply emails and work on Saturdays and Sundays. 

Usually 1 sales representative had 20 or more customers that he he/she needs to handle at the same time. And just like in any business they prioritize bigger customers first. 

Keep in mind that “we” Amazon/eCommerce sellers are mostly small fish if we order 500 or 1,000 units. Most retailers or wholesalers order 5,000 units upwards. 

You can imagine who gets priority. So suppliers tend to pay less attention to us smaller buyers and generally oversee some parts of your questions. 

4) Low potential client

supplier doesnt really care if you place an order and will treat your business with little seriousness. 

5) Supplier simply isn’t interested in your business – walk away

Chinese are very afraid of loosing face. So instead of telling you that they aren’t interested in your business they treat you with very little priority. 

Sometimes they don’t need any additional business at all. Maybe because they have too many clients or as previously mentioned don’t see your potential as compared to the workload.

Imagine you are a supplier and you have several clients who place orders every month more than 50,000USD. Easy work, setup processes with the existing clients and not much work. Then you have a client who has x amount of modifications, high standards and very little purchase order quantity. 

One could argue that you could become such a client if the supplier puts more effort in your first orders and your orders will grow in time. However these days factories have a lot of pressure filling production. Rising raw material prices, labour costs and expensive machinery to automate manufacturing. So obvioulsy you’ll go for clients who are easy, place larger orders, make you more profits and can fill your production capacity. 

Generally there’s to say that many new Amazon sellers have the impression that the factories are waiting for their orders and welcome every client with open arms. That is not the case. 

In our business to stay ahead of the competition you need to be unique, set yourself apart from the competition and most likely you don’t want to risk too much capital with new products. 

That also means that on top of our high requirements towards factories we don’t give them “big” business in the beginning. 

Key to a great supplier realtionship is to communicate your needs in the beginning and weed out those suppliers who aren’t really interested in your business or only reply half of your questions.

Imagine how difficult it will be down the road if you are having problems before even placing an order. Move on to the next supplier. 

Having said all that, there are great suppliers out there and even if I sometimes don’t get all my questions answered I can generally say most suppliers are willing to cooperate on many levels and ARE interested in my business. 

Don’t try to squeeze out every cent in your negotiation because what is it worth if you get a cheap price but poor quality and a supplier who’ll dissapear if you have problems. 

Treat your suppliers with respect – I’ve had great success with my strategy when building relationships with my suppliers. Live and let live. 

That’s it for today. Let me know if you have any questions. Simply comment below 

All the best and happy sourcing,

Manuel

Why Amazon Germany is a desirable market and how your customer support becomes an idea machine

Hey folks,

This blog post is from a friend of mine who I met twice in Germany already. Her name is Nadine and last year she set out to create the only Amazon customer support based in Germany for your expanding eCommerce business. The site is called ENIDA – check it out!

Whether you are selling in the UK, IT, ES, FR, the US or in Germany, Enida takes care of your customers and has your best interest at heart. Their focus is on delivering stellar service so your customers will recommend your brand to other potential customers (friends & family).

And the best thing: Due to their internal “replacement” system you no longer have to worry about filling in for your staff on the weekend or during holidays. Enida has got you covered.

Onto today’s blog post: 

 

Why Amazon Germany is a desirable market and how your customer support becomes an idea machine

An ode to customer support

First off, let’s talk about customer support and its perceived image around the world. I admit it is not the sexiest job in the world but it can be very, very beneficial for your eCommerce business.

For most business owners customer support is the last thing they think about. It is solely something they have to do once customers notice the company. Funnily enough, most business owners hire customer support last. It’s a huge  pain. It only wastes money. Sadly though, the majority ignore the potential benefits you get when you focus on what your customers have to say.

Here’s a big welcome to the business owners who run eCommerce businesses and want to explore how customer support can open doors for new possibilities. 

In the following paragraphs, we are going to look at a general perspective on customer support and then move deeper into European and German customer support along the way. Let’s get started in finding out out what your customers want and what they would potentially buy.

Start to listen and build a customer FAQ

There has been no function more important for the growth of a company than its support. I know, you think that is a myth. But I can assure you it’s not. Working closely with customers pays off, especially when you empower your support staff allowing them to make decisions, set up an FAQ and thereby cut their customer interaction in half. When your support staff pays attention, you know what will sell and what won’t. And if you treat your customers right, you can send out a newsletter and even ask them, whether they would rather buy the new product in blue or orange – or purple?

If your product often requires an additional explanation, let your staff make a list with frequent problems and questions. You can then design a product inlay that will enable the customers to help themselves. After all, the best support is no support.

Therefore: use your support team to better understand your customers problems, which features of the product could be improved upon and how the process could run more smoothly. Based on this information you can raise the customer experience to the next level.

So: the more customers have a great experience and don’t require a contacting support, the happier they will be.

Now let’s move on to the next question.

Is European customer support any different from the rest of the world?

The simple answer is yes. We are quite spoiled here in Europe – especially in Germany and the UK. And since I am running a German customer support agency, that also covers English speaking customers, I am going to focus on the German market now. 

Germans, as you may have already heard, are always on time. Therefore, we like things to be done quickly and precisely. Also we can find it rather rude if you don’t speak our language and try to get by with Google Translate. 

So, in a nutshell: we are picky. We want to be treated like VIPs. But Germans also love consuming: out of around 80.5 million Germans, 44 million own an Amazon account and use it on a regular basis! Over 50%! Therefore, the European (German) market is not something you should just ignore. Like one seller said during a recent podcast I was in: “If you are not selling in Germany yet, you’re an idiot.”

Exactly. 

Herewith I want to help you get a better understanding of the German customers – after all this is my area of expertise. So in the following section, I will answer some common questions that sellers ask me on a regular basis.

Can’t I just use google translate?

No and if you do: stop it immediately. I know you might think that it’s not a big deal, but if you don’t speak a second language, you have no idea how bad the translation actually is. If you are serious about selling in Germany, if you want to build up your brand and make a lasting impression: get a German native speaker and add it to your support team. Especially Germans are very picky about this. As I have pointed out, over 50% of the German population is using Amazon and they expect you to speak their language. This also includes your listings.

Can I just use any German freelancer?

In theory, you could. But I advise you to at least know one German person who can look over their work. Why? Because Germans also make silly mistakes and typos can happen as well. If you pay for it, you better get flawless German. Get what I am saying? At Enida we have regular quality checks to make sure everyone is doing their job properly.

Can my listings just be in English?

Don’t do that. Seriously, don’t. Grab some money and get a good German copywriter or a translator to take care of your listing. After all, 44 million Germans browse and they compare. If you look at a product on Amazon in Spanish (because the Mexican seller didn’t bother to translate it) or a listing in broken English, would you think the product is a high quality product? Go figure.

Obviously, there are several translation services out there. Go get one that will help you optimize the listing even AFTER you have paid money for your PPC campaigns. For this reason, Enida runs their own translation service to help you get the best out of your listing: Enida Translations

Reach out to us and we will help you asap!

In the meanwhile, these are the main questions I get asked by foreign sellers. If you have any more, just send us a message at hello@enida.de and we will answer them swiftly.

Now: are you ready to tackle the German market?

Germany, as the second largest Amazon marketplace after the US, is the heart of the European Amazon battlefield. It might all sound complicated to you now, but once you have set up your system, it will run as smoothly as your current Amazon business. Therefore, we suggest starting with Germany and the UK and then expanding to all other European marketplaces.

If you are unsure whether you are ready for the German market, head over to Enida, click on the “English” button and sign up for our “6 Must Knows before you get into the German market!” Or, just click here to sign up and download the PDF.

After all, half of Germany’s population is waiting for you and with good product listings and hands on native customer support, there is far less to worry about. Obviously, there are also European taxes to consider but I won’t get into that for now. Because we know the right people to help you out there too. 

In case you are interested in Enida or Enida Translations, please make sure to mention “importdojo” – this will get you a discount.

Bis bald! Cheers!

Nadine

Founder Enida

www.enida.de

What is going on in China right now – Part 2

In November last year I shared a blog post from the sourcing and manufacturing side in China. There were shortages on packaging material and many price increases across all suppliers in China.

To read about this blog post check it out here: https://importdojo.com/what-is-going-on-in-china-right-now/

Today me and my partners in our Sourcing Company (https://importdojo.com/sourcing/) wanted to give you an update on the market situation in China.

The world is changing. In the past 6 months we have been through ups and downs of currency, raw material and labour cost fluctuation. Also the political landscape does not prove to be as stable and solid as it was considered to be in the end of 2016. With the US taking a turn away from China the economies in Asia are looking at a changed customer landscape and an insecure future.

This newsletter will help you gain a bit more insight in what is happening on this side of the world.

What is going on in Asia?

As we enter Q2 2017, global demand for goods produced in low cost sourcing destination looked positive, with growing exporters such as Bangladesh, Vietnam, India and Indonesia all seeing big growth in exports and foreign investment. Some shifting of exports and trade allegiance was evident due to the U.S./Trump policy. It is very important to note, that alternatives to China are quickly developing in countries like Vietnam, India, Bangladesh and Thailand. These countries are taking a fair share of what is rightfully theirs. Especially the economic growth and the growth in export from Vietnam is remarkable, with a 15% increase compared to the last years first quarter.

So the small countries are on the fast lane while good old China keeps doing, what they do best. And let us be realistic, there is still no feasible alternative to China in terms of infrastructure, automation and efficiency.

It is also remarkable to see that based on China National Bureau of Statistics (NBS) data, the average monthly wage of migrant workers (who tend to work in China’s manufacturing sector) increased by 6.6% to 3,275 yuan in 2016, which is almost comparable to the average income of an eastern European worker in countries like Romania, Bulgaria or Hungary. 

What about the money?

Well, not much to say here. Since the USD/CNY exchange rate adjusted to its new level, the Euro zone is suffering whereas the USD zone is happily jumping around about their favourable purchasing prices.

The lush movement in the currency gave a bit of stability to the trading environment and is not expected to change unless the US politics dramatically change the course of the country.

Now what is going on with the raw materials? If production volume in China is going down then we probably have good cards to buy cheap raw material because the government wants to drive the economy.

Unfortunately the answer to that is a clear NO. Some analysts are predicting that oil prices will increase by up to 20% by late 2017, with ongoing conflict in the Middle-East and attempts by OPEC countries to limit supply. Natural fibers such as cotton and wool have trended up, reflecting stronger consumer demand and healthier global economic conditions.

Natural rubber prices increased through Q1, steadying off into Q2 as Asian buyers slowed down on purchasing. Prices are expected to increase, through 2017 based on expectations of a global economic recovery and a reduction in supply from rubber major producers. Metal prices will follow this trend. Cotton prices were strong through Q1 and into Q2, a trend which some analysts do not expect to continue through 2017. According to the International Cotton Advisory Council (ICAC), cotton stock-piles will reduce due to solid production, growth in global consumption and demand for exports.

Fine wool prices followed a similar trend to cotton, breaking a 29 year high in March, based on demand for better quality wool from Chinese mills. Unlike cotton or synthetic fibers, wool only comprises 1.5% of global fiber consumption and as a premium product, the price is really an indicator of consumer demand.

China is not a department store

On a last note I wanted to share some of our findings over the course of working with private label sellers. Many private label sellers believe that when they purchase something in China, the factories are just waiting for them to place a 500 pieces order with many changes, packaging requirements, additional features AND the lowest price.

Unfortunately this is not the case. China is not a department store where you can simply walk in and purchase something within a day and expect it to be delivered within 2 weeks. There is a lot to it. Supplier relationships, years of doing business together, production lead times, raw material purchase, packaging print and much more.

While some factories do adapt to the new eCommerce world with smaller quantities, many factories actually still have 90% of their turnover coming from large retailers, importers or wholesalers. We as Amazon/eCommerce sellers are small fish for most factories and while the trend is going into eCommerce rather than actual retail there is still a long way to go.

So you can’t expect to get the same price, priority handling or delivery time as a Walmart or HomeDepot. These guys buy hundreds of thousands of units per month, therefore they get the best price and are put in front of the production queue. Often you don’t have a chance against these retailers if they are also selling on Amazon. So the only way you can distinguish yourself is trough customer service, packaging and additional services.

I’ve also noticed that buyers are expecting drastic price decreases like 30-40% if they increase the order quantity say from 1,000 to 2,000 units. This is very unlikely unless you increase from 1,000 to 40,000 or 50,000 units. Price decreases when doubling the quantity usually results in 3% to maximum 6%. Most factories are laid out to produce 10-30,000 units of a single product in a day. Yes, believe me 🙂 So when a buyer comes with a 500 unit order it is certainly appreciated but it means that they have to squeeze in your order somewhere, negotiate low raw material purchase with their sub supplier etc. which is more of a hassle than profit for them.

Don’t try to squeeze every little cent out of a product when you negotiate. Let them have their profits so that they can continue to run their factory. Because what is it worth if you get the lowest price but then the supplier goes bankrupt or doesn’t help you in case you are facing quality problems. Live and let live.

Having said all that, with the right approach towards a supplier you can get your way around things. There are many suppliers who specialise on small order quantities or eCommerce sellers in general. Speak to your supplier in your initial inquiry if he is willing to work on your MOQ, prices etc. If you have the feeling they are hesitant move on to the next supplier. There’s nothing worse than making a deposit of 30% on your order and the supplier afterwards struggles to keep the prices or delivery terms and eventually not really motivated to produce according to your requirements.

Update on Import Dojo Sourcing Service

If you need help sourcing you are in the right place. We have recently celebrated our 1,000th customer and are growing together with the demand for know how and for the need of „eyes on the ground“. Our placed orders have generated a turnover of around 1.4 Mio USD with a steady customer base of around 250 customers. Together with this growth we could see that there is the need to adjust our service and pricing structure slightly.

With our 6 person strong sourcing team based in Hong Kong we want to provide the best possible service to our customers and we believe that the adjustment of our conditions and how our service is put together will help our customers be more effective, more cost efficient and more successful.

With our new concept we have less variety and are more focused on your needs. We are introducing the quick and easy Basic Sourcing for 99 USD, which delivers a quick supplier offer for an item within 5 – 7 working days to evaluate if your project is workable. In addition to that we have decided to provide at least 3 offers and supplier contacts with the standard sourcing request.

We have also decreased our photography prices by 25% and we can deliver 2 reference sourcing results if you decided to do sourcing and development with us for your price comparison and back up.

What is actually changing?

  1. Introducing our BASIC sourcing request for 99 USD – Delivering one supplier offer and their contact in 5-7 working days for quick reference.
  2. Extending service of STANDARD sourcing request starting from 169 USD – Delivering three supplier offers and their contact in 7-9 working days to you for a well established project base. 

Our service starts at 169 USD for one item, 299 USD for two items and additional 100 USD for every additional item. We are reducing complexity and increasing efficiency.

Decreasing photography costs

Reducing white background shots from 69 USD per picture to 49 USD per picture since we want to provide this service as a roundup for our customers.

We also adjust our full service pricing and keep splitting it to reorders and new orders. All other services will remain the same as before.

For those who believe our previous pricing is a better fit for them, you can still come to us and place your orders until 31/7/2017 with the coupon code #lastcall. If you present this in your email or in the flat-rate submission, we will be happy to handle your order with our old price logic even if we believe our new one is more beneficial to you. Please remember that all coupon codes are only applicable on flat rates. 

As always, it is a pleasure serving you and we are looking forward to the second half of 2017!

All the best,

Manuel & ImportDojo Sourcing team

How to deal with price increases from Chinese suppliers

Today I wanted to share a blog post to hopefully help you and teach you how to deal with price increases from Chinese suppliers.

Read until the end – we have a giveaway on ImportDojo in the value of 997US$!!! But before that, let’s get into today’s blog post.

So you received an email from your supplier that prices have to be increased because the Chinese Yuan (RMB) is being appreciated, his labor costs have risen or some other reason.

Never accept any price increase blindly. Let’s first analyze the situation:

  • Has he increased the price within the last year? If yes, how often?
  • Has he stated on his last quotation the validity of the price?
  • What are the reasons he wants to increase prices?

Here are common reasons for price increases:

  • Labor costs need to be increased
  • Raw material costs have increased
  • Chinese Renminbi (YUAN) has appreciated against the USD
  • Purchase of machinery to upgrade the factory

Lets go through them one by one and see how you could avoid the increase or find an acceptable solution between the both of you. I also want to give you background on each so that you can understand these reasons.

Labor costs need to be increased:

When I moved to Hong Kong in 2005 the average salary of a worker was around 250USD per month. Yes, that’s right, per month!! Nowadays a worker in the production line can get up to 1000USD or sometimes more. Some of the workers earn more than the staff in the office. Factories need to pay a high salary to workers because it’s so difficult to find them.

Yes, China has over 1.3 billion people but not everyone wants to stand in a workshop or production line doing rudimentary work. Education has improved a great deal since the early 2000’s and people want to work in offices rather than on production lines. So factories have to reach out to far provinces to hire workers. Costs automatically rise in that process. I have been told that some factories rent a bus and drive to far away provinces actively hiring workers to bring them back to the factory that same day on the bus.

What can you do in that case? Honestly not much. But if a supplier keeps increasing prices because of labor costs you might want to look for another supplier who has more machinery or automated processes that require less workmanship. This can actually be more expensive (because of the investment for machinery) but you should have more stability on prices in the future.

Raw material costs have increased:

This requires a little research but if a supplier uses this reason for price increases you can quickly find out if he is lying.

Go onto websites like the following and research the price index on your product’s main material:

http://www.meps.co.uk/raw%20material%20index.html

http://www.indexmundi.com/

Unfortunately, there is not much free information on the Internet; you have to pay for most services if you want real accurate data. You can also check out your local stock or commodity market online and see if you can get free data. Once you find your product’s raw material price check the development over the last few months or even years.

Compare it with the orders that you made to your supplier at the specific price drops or increases. If for example you ordered your item before at a lower raw material price than now, you can use this information to negotiate with your supplier.

I often find that suppliers use this excuse of raw material price to increase their profit margin. When you have data that backs that the raw material price has perhaps even decreased since your last purchase, let the supplier know and share the link or information that you found. Demand the same or an even lower price than what you are paying now.

If raw material really has increased then you might want to check by how much. If the supplier’s price increase does not match the actual raw material price increase, let him know and demand a lower price increase.

Chinese Renminbi (YUAN /RMB) has appreciated against the USD

The Chinese Yuan has risen over 60% since its revaluation in 2005 (when it was pegged against the USD). It has been undervalued for a long time but that has changed since the economic reforms under Deng Xiaoping. Since China opened to the rest of the world and became the world’s factory the Yuan has risen a great deal.

Many factories increase prices once the Yuan gets appreciated against the USD.

If the Yuan gets appreciated against the USD it is usually in the news and you should hear about it. You can also check official USD/RMB exchange rates to verify this claim.

Not much you can do here either, except perhaps asking for one more order with the last price before you accept the new price.

Purchase of machinery to upgrade the factory

This usually doesn’t happen very often, but when the factory claims there is machinery to buy to upgrade the factory it’s actually a good thing for you. It will lower the labor costs over time and you should have a stable price for a while. Ask your supplier to explain the type of machinery he is buying and how you can benefit from it in the future. Let him give you a guarantee or confirmation that this will benefit your price in the future.

Advanced negotiation

Validity of prices

Always ask your supplier to give you a validity of the quoted price. A common time frame should be 90 days, sometimes more sometimes less. In any case, ask your supplier for a validity of 180 days (6 months). It might take you a long time to decide to order this product for various reasons.

If you get back to the supplier after a while and you haven’t confirmed validity he might increase the price. That can put you in a difficult spot if you gave the quoted price to your customer. You might have to re-offer to your customer and that’s never good.

Big retailers usually have 1 year or even longer terms with suppliers. They can do that because the suppliers know that the quantities will be large and retailers often take a long time to decide because of their decision chain/process.

How to avoid or battle a price increase:

Short term:

  • Insist on the last order price for this order. Tell him you are about to give him a re-order.
  • Look into raw material price sheets. There are free sources on the Internet. You don’t even need to be updated all the time, but simply look at a price curve of the main material of your product for the last few months.

Has the price dropped or risen significantly? Did the supplier claim that the “xxxy” material has sharply risen? Check it out before you trust him.

Long term:

  • Put measurements in place such as contracts or buying terms to which the supplier has to agree before you do business. Set up your own buying terms with, for example, a minimum validity of prices in all offers.
  • Ask for bonus payments or agreements. If you know that you will be reordering from this factory, make a written agreement that you will receive a discount of a certain percentage from the next order based on your previous year.

Bonus payments:

It is getting more common to agree on bonus payments these days. It works the same way as back home with your local supplier. You agree on certain delivery terms, merchandising payment, back-payments and bonuses if a certain turnover is reached per year.

This usually only works with suppliers that you already work with. But you can certainly try it on any supplier. Even if you get a few hundred USD discount or bonus payment it’s definitely worth it!

You could set the following simple bonus payments with your supplier:

Turnover Goal 2017: xxxxx USD

If reached, bonus payment of 5% (for example) to be discounted from the next order.

For every xxxx USD above this amount a further 1% (for example) to a maximum of X% applies.

Send this agreement to your supplier. You can obviously work out a more detailed agreement but this is a simple illustration on how it could look. In any case I am sure there is some bonus or discount that can be arranged on future orders. 

The best option would be a direct bank transfer of the bonus at the year’s end but most suppliers will only agree on a discount deducted from any future order.

Other ways:

How to negotiate a good price with a low order quantity:

It is quite common that the supplier will send you a price based on a certain order quantity. Say 10USD for a quantity of 1,000 pieces. Sometimes suppliers will give you 2-3 different prices for different quantities. If you are planning to order an item, you should have a general idea of how to negotiate when you ask your supplier for a quote. 

DOUBLE (2,000) or even TRIPLE (3,000) this expected order quantity when asking for a price. It’s a tactic I use to see what the price range can be. If I actually order this item later at the quoted price but I am below the requested MOQ of the supplier I will pledge with the supplier to keep the price so that we can get started.

I will also mention that it will be a trial order and if everything goes well I will order the initial MOQ that the price was based on.

Perhaps the supplier will not give you the price based on your 1,000 pieces but he will give you the price based on 2,000 pieces to show his support.

This works in most cases. A supplier always will want to support you because they need to feed their factories with orders, even if they t make less profit, just to keep production running and to be cost effective.

Ask for a mixed calculation:

Say you buy 4 items from the same supplier and there is one item out of your assortment that is really price sensitive but the other 3 items are not.

Ask your supplier to keep the price on the price sensitive item the same (or decreased) and allow him to increase the other items at the same time (up to the maximum of the original price increase).

This way you can still offer the price sensitive item at the same price to your customers and lose only a little bit of profit on your higher margin items.

Advanced raw material purchase:

Many suppliers like to increase the price on your re-order. Let him know that you have an order coming up and that he should purchase raw material now at the lowest prices and that you want to have a better price than the previous order. He may want a written order confirmation for that so that he can purchase raw material on your behalf. Other suppliers offer on hand (or not)

If you have other suppliers’ offers on hand that are cheaper than the same item from your current supplier then tell your supplier and demand at least the same price. If you don’t have another offer on hand you could also pretend that you have an offer that is (say 10%) cheaper. Some suppliers may ask who it is from or if they can see it, but you don’t necessarily have to send it to him.

If you do have an offer from another supplier I would actually send it to my current supplier and ask him to lower the price.

How I got 7 suppliers to pay my buyer 100,000USD in bonus payments 

I had a buyer for Christmas items flying in from Austria pre-order season. We arranged to meet up with 9 suppliers over 2 days in our office in Hong Kong. I asked the suppliers to come in and meet with us to discuss the upcoming orders and next season items. The suppliers were happy to come and meet us because we usually would place orders in excess of 100,000USD to each of them per year.

We started off each meeting the same way. We told them we would be selecting new items and then we would tell the supplier how happy we were with the previous season and that we wanted to enlarge business this year. This got them in a happy mood. We selected a few new items to add to the assortment with each supplier. Eventually my buyer sat back and I started to talk about newly introduced bonus payments to each supplier. 

We wanted 10% of the last year’s order amount in bonus payments to be deducted from the next order. I also prepared an agreement to fix the payments right there and then with the supplier’s signature. We sat a long time with each supplier explaining the difficult economic situation, the EUR/USD exchange rate and how this all made it difficult for the buyer to succeed in his business. 

We needed the supplier’s support, there and then or else there might not be any increased orders. (You can always use other reasons, such as economic situations in your country, etc.) Two suppliers wouldn’t pay anything but we ended the 2 days of negotiation with over 100,000USD in bonus payments (some suppliers had orders of over 300,000USD from us). This was a lot more than we expected. 

How did I do that?

Initially the suppliers were reluctant. Since I wasn’t the actual buyer but the product manager it sure was a good thing the buyer was there. This way the supplier saw the buyer and had no way of wriggling himself out easily. Chinese do not want to lose face in front of their customers. They often promise the “best prices / best services,” etc., and it was time to prove they meant what they said. If you continually insist on a bonus and financial support they will eventually give in, because they want your future business and they don’t want to upset you.

In your case, since you will be the buyer, you see the importance of coming to China to negotiate your deals. A negotiation like this is highly unlikely to succeed via a phone call or an email. You don’t need to have an office here. You can hold meetings and negotiations in your hotel or at the factory. 

Even if your quantities or order value are not as big as the example above you still have an edge. Even the smallest discounts on your next orders could cover the airfare ticket you bought to get to China. Not to mention the suppliers you met on other days to source for new ideas. It will definitely be worth it.

Before you go into a negotiation with a supplier, plan ahead with a clear strategy similar to the one described above.

I do hope that this blog post helped you in some ways to get leverage when negotiating with your suppliers.

If you enjoyed the blog post, please share or comment below 🙂

IMPORTDOJO GIVEAWAY VALUED AT 997$!!

Now, before I let you off, we are currently running a Prime Deal giveaway here at ImportDojo. You have the chance to win 1 lifetime membership worth over 997US$! For more information click on the link below and sign up 🙂

https://importdojo.lpages.co/import-dojo-giveaway/

All the best and happy sourcing,

Manuel

2017 Seller Summit in Florida recap & trip report (got to meet the President of Nepal)

Hey folks,

So I just finished speaking at (and listen to other speakers) at the Sellerssummit in Florida, Fort Lauderdale. 

I was invited to speak about importing from China or to be more exact how to find the right supplier in China. 

Steve Chou, the host of the mywifequitherjob.com podcast and organizer of the event had invited me to speak and while it would be such a long trip I decided to go because I knew I’d learn a ton and meet amazing people. 

Before I get into the key takeaways from the Sellerssummit for me I wanted to share a few impressions with you from a personal side. 

This was a long trip for me – I took off on a Saturday morning and arrived on Sunday evening +12hours time difference so in total the trip was over 36 hours. 

That is also because I stopped in Sri Lanka to hang out in Colombo for a few hours before heading to Abu Dhabi, New York and finally Miami. 

Why was this such a long trip? Well to be honest with you I prefer laying flat and since I don’t want to pay for business class I used a lot of miles. 

Why do I fly business class? Not many people know this but I am extremely scared of flying and being in cramped spaces. 

When I mean extremely scared I mean the slightest turbulence or bump in flight would send my heart rate to 180bpm for half an hour. 

This “fear” all began in 2005 when I flew from Hong Kong to Germany and my plane had to land for an emergency landing in Kathmandu, Nepal because of severe turbulence. 

Since then I hate (or am scared) of flying and sitting in business class, having more space (I am also quite tall – 6’2) relaxes me and somewhat eases my fear. 

You would think that flying at least twice a month for the past 12 years would get me over that fear but it doesn’t. 

So anyway, I was prepared to take a long trip as long as I can relax. And some people might think flying business class is crazy expensive when it’s actually not. 

If you look long enough in advance, make use of mileage and credit card programs you spend less in business as in economy. I usually pay less or the same for my ticket than those in economy. 

So I ended up spending over 120,000 miles but only 260$ in taxes and fees for my return trip flight. Which also meant I had to hop onto 4 different planes to get to Miami. 

Call me crazy but I’d do that every time as opposed to a direct 14 hour flight in a cramped space. 

So anyway, I left Bangkok on Saturday morning on a 3 hour flight to Srilanka and was checking out a few sites in Colombo sine my stopover was 10 hours. 

I had quite a surprise at the start of the trip when I learned that the President of Nepal was sitting one row in front of me. There was tight security on the plane but I was able to shake the hand of the President of Nepal 🙂 

The president of Nepal

I just wasn’t allowed to take any photo with her so I snapped a few from my seat. 

I went to the Galle Face hotel in Colombo after I landed in Sri Lanka and was having lunch there, working a bit and enjoying the view from the terrace of the hotel. 

Arriving in Colombo, Sri Lanka

Tuk Tuk’s everywhere

The Galle Face hotel in Colombo

My flight was bound to leave at 10PM so I made my way to the airport around 7, worked a bit more and chilled before boarding the flight to Abu Dhabi. 

I boarded the 4 hour flight and slept the entire way. I then had a 4 hour layover and transit in Abu Dhabi before boarding for my flight to JFK. This was a 14 hour flight and I was really glad (& excited) because for this flight Etihad uses their A380 plane. 

I did meticioulus research before booking this flight and made sure that I get to try their “business class studio” again which is by far the best business class in the skies.

Lots of space for the 14 hour flight.

Their A380 even has a bar in the middle of the plane. 

The bar on the A380 to New York

So I took a few snaps, had some wine and slept for the next 7.5 hours. I think I’ve never slept that long on a plane. 

Looking “fresh” after 7.5 hours of sleep 😀 (not)

Arrived in New York JFK on Sunday early morning and made my way to the another terminal for my final flight to Miami. I didn’t do much in Miami for my days there as I was mostly working in the hotel and walking around in the area. 

I had a webinar with Augustas Klygys on how to build a brand (which you can find here: http://augustaskligys.com/how-to-build-a-true-brand/), podcast interview and lots of emails to conquer before the conference. 

On Wednesday I made my way to Fort Lauderdale which is about a 50 minute drive from Miami and checked into the hotel to chill for a day before the conference started. 

Arriving in Fort Lauderdale

The line up for the summit looked like this: 

As you can see these are some of the biggest guys in the industry. Among them: Steve Chou, Greg Mercer from Junglescout, Scott Voelker from the Amazing Seller, Jeff Cohen from Sellerlabs, Bernie Thompson, Michael Jackness, Brian Johnson from PPC Scope and yours truly 🙂

Collecting my badge for the conference.

And we are getting started!

Steve Chou talking about how he runs his eCommerce store.

Create give aways or games like Steve Chou does with this “wheel spin” to collect email addresses.

Super important – the 4 pillars of a successful online store.

I am off to a good start 🙂

Scott Voelker is talking about how to launch your product in 2017

Just finished my speech and answering some questions.

Heading for dinner with Franz from Sellics (Marketplace Analytics) & Mike

Last session (ask me anything) and it’s a wrap!

With Greg from Junglescout and Carla at the networking event.

I definitely wanted to hear some of the other speakers and tried to sit in on as many sessions as I could. After the 3 day event I wanted to sum up my key-takeaways for you:

1) It is not too late

I am sure you hear it’s overcrowded, difficult to launch a product and stand out from the crowd. But that’s not the case if you have the right strategy. The potential of the market is so huge that there’s space for everyone. 

And the best part is that all the tools that you need (that many of us sellers didn’t have years ago) are available on the market. If you are looking to find a product, exact ranking, sales volume of a product you want to sell then use JUNGLESCOUT. If you want in-depth profit analysis, inventory management, keyword ranking optimization use SELLICS. If you want to research trends go use GOOGLE TRENDS. If you want to find product ideas outside of tools use one of my favourite sites KADAZA.

If you’re unsure with the process in China check out my blog. If you need launch strategies check out Scott’s podcast and recent launch strategies (https://privatelabelclassroom.com/product-launch-list-building-replay) There’s so much more out there that helps you grow or start your business. 

2) There are tons of other product launch strategies out there

Whether you are just launching your first product or your 10th product. You don’t need to worry about “can’t use reviewers anymore”. There are lots of strategies that actually work better than anything else. 

Just 3 months ago I tested a new launch strategy which admittedly takes time and effort but now I don’t have any PPC costs anymore. All my traffic to my listings is organic. Most importantly build a mailing list. With a mailing list you can kick start the launch of your new product – every time. You can also run give aways on your Facebook, Instagram or own website. The strategies are endless.

3) eCommerce is only growing and growing

Jeff Bezos is now the second richest man in the world and I think that says it all. eCommerce’s share in all of the retail business is only 8% at this moment. Imagine the growth potential. 

If you are concerned that the market is overcrowded don’t worry. There’s space for everyone. Perhaps not the 50th French Press but if you have a unique product and service proposition you too can make it in this market. 

4) Finding a product is not as important as actually pulling the trigger

I’ve seen it over and over again. People find a product which in my opinion is pretty good and then just before placing the order to the supplier they find excuses after excuses why the product all of a sudden isn’t a winner anymore. 

Granted, you need to do your research into numbers, demographics and market demand but you can overanalyze everything. As Scott Voelker says – Just take action! 

5) Amazon is working hard on getting Chinese factories onto their marketplace

You need to up your game and customer service. More and more Chinese sellers are coming to the marketplaces and Amazon is helping them. See the video here at around 2.27minutes: https://importdojo.com/importdojo-brand-evolution-branching-out-into-other-sales-channels-part-four-of-the-puzzle/

Amazon wants to offer the best prices to their customers and they do so by bringing in the actual manufacturers. However we have one definite advantage – customer service and unique product or service proposition. Two years ago I said “dont’ worry for now” over here: https://importdojo.com/chinese-sellers-on-amazon-dont-worry-for-now/ But now is the time to really step up your game. Here’s a breakdown again on how you can compete with the manufacturers:

  • Improve your product quality based on reviews
  • Pay a little more for better quality and regulations-compliant products
  • Develop your own products and packagings and make them exclusive for you on Amazon
  • Build or grow your brand with cross product selling and larger assortments
  • Build or grow your audience (Facebook, mailing lists etc.) and be ahead of the Chinese competition
  • Build relationships with suppliers for the long term and become one of their largest customers so that they don’t have to sell on Amazon themselves

6) Building an eCommerce business and brand is not complicated. It just takes time

Many of the speakers at the conference started where you are today. Today they run 7-9 figures eCommerce businesses. When you asked them how they did it they all answer in the same way. 

Step by step and it just takes time. You just have to focus on building a brand and diversifying as much as possible. Not just sell products on Amazon but also branch out into other channels.  

7) Social Media & Influencer marketing will be the No.1 traffic source to come (already is in my opinion)

There were a couple of speeches on how powerful Social Media and Influencer Marketing is. PPC and general paid advertisement is great but expensive. 

If you start your social media platforms now or continue to grow them you’ll have a launch tool that works every time. 

8) Outsource & automate as much as possible. 

I sat in the talk of Bill D’Ambrossio and I was baffled by how much you can automate and focus on the one thing you should be doing – devise your companies future and strategies. 

A year ago I was doing pretty much all of my tasks myself. I just couldn’t let go of some tasks and I thought only I can do them. I was wrong. I now have several VA’s and permanent employees that handle my daily tasks. And I can focus on the most important part of the business – working on things that make money. 

9) Retargeting – don’t miss out on your customers

I realized I am missing out so much on customers that visit my store and listings. With Facebook or retargeting tools you can now easily retarget your customers. 85% of first time visitors don’t buy from you. The majority never returns. 

But with re-targeting you can catch a lot of customers. It’s not just Facebook retargeting with lookalike custom audiences but also catching emails of visiting customers to your own website. Have a pop up window with some give aways or a coupon code or anything that lets you catch the visitors emails. These are essential things you should be doing (including me). 

Wrapping up

The best part for me personally was the last day when all the speakers got together in a private room and discussed their wins & struggles. 

Everyone of us had 15 minutes to speak and share their tricks and strategies as well as ask for advice. 

I was sitting amongst people that do 8 to 9 figures a year (working on mine :)) and was getting advice from top level people in the industry! This was the best Mastermind I’ve ever been to. 

Obviously I had to share some of my secrets as well and I think people were surprised by a product launch strategy that I developed in the last 3 months (which I will soon reveal).  

Getting and sharing advice with the big guys 🙂

If you are interested in the speeches given at the Summit here’s a link to a virtual pass. The recordings will be up in a few days:

http://sellerssummit.com/members2017/virtual-pass/?ap_id=importdojo

I hope this gave you a bit of insight from my trip, what the trends in the Amazon world are and what’s to come 🙂 

I got back two days ago to Asia and I am currently fighting a massive jet lag. On top of that I am heading to a conference in Berlin, Germany tonight (http://amzcon.de/). If you are around say hi 🙂

Let me know what you think in the comment section. 

We got this! All the best and happy sourcing,

Manuel