The Fulfillment by Amazon (FBA) program has created one of the most exceptional business opportunity for sellers in and outside the United States. The most profitable way of harnessing this opportunity is to import from China as it stands.
China has emerged as one of the biggest exporters in the world and a significant supplier for the e-commerce market all the world over. China has a much lower manufacturing cost and cheap labor which means that businesses that sell their products can gain due to the low cost and big profit margin.
Given the advantage of outsourcing from China, Amazon, the US-based e-commerce giant, rolled out its FBA (fulfillment by Amazon) service, which only requires Amazon sellers to ship their products to an Amazon warehouse. All orders are fulfilled by Amazon employees, leaving you free from product storing, shipping, packaging, etc.
Amazon’s services makes sourcing from China significantly easy for Amazon FBA sellers.
Are you interested in trying out the FBA business model? Do you know how you can source products from China?
Sourcing products from China could be a headache; you are dealing with people halfway around the world, with cultural and language differences, negotiating over your investment of potentially thousands of dollars in inventory with people you likely just met on the internet.
Knowing how to find the right Chinese supplier to partner with, understanding how to structure the negotiation, payment, and quality control are critical steps to successfully launching your Amazon business.
The key to finding the right suppliers is Research.
Many factors such as buyer reviews, business age, expertise, supplier experience, product quality, and more should influence your decision during your research. If you pick the wrong suppliers, your experience will be bad, and the cost could set your business back.
It is not easy to find a manufacturer in China who is dependable — this is where the challenge lies — and for many aspiring entrepreneurs, this is one hurdle they never get to surpass.
Outsourcing for Amazon sellers entails a lot of research, so we’ve put together this guide to help you on your way to becoming the next Amazon FBA success story.
Ah! Alibaba, the largest online marketplace in China. It has a large number of suppliers and manufacturers who offer products at rock bottom prices; however, if you don’t know how to search for a manufacturer, you can easily get burned or end up wading through a sea of unreliable suppliers.
Think of it as a marketplace for suppliers and buyers like you. But what about the trading companies?
It can be difficult to differentiate actual manufacturers from agents looking to get a middleman cut.
On Alibaba, the best way to find good suppliers is to choose companies with badges. There are three trust badges:
- Trade Assurance badge
- Gold Supplier badge
- Assessed Supplier badge.
Trade Assurance Badge
A supplier with a Trade Assurance badge is part of Alibaba’s dispute resolution program. This means that if there are any issues with your transaction, you can submit a claim and get a refund if the facts are in your favor.
Gold supplier badge
Gold suppliers badge holders pay Alibaba for a badge (In the THOUSANDS), and this can be positive or negative. It shows that the business cares about its public image and would be less lightly to scam as they have invested heavily in their Alibaba account.
Assessed supplier badge
Last is the Assessed Supplier badge which is important for those who want to deal directly with the manufacturer and cut off any middleman. Assessed suppliers are those that Alibaba themselves has physically assessed their factories and certify that they are actual factories. However, it’s not 100% foolproof so do your research.
You can filter the results by selecting any of these badges or a combination of two or more badges. Try to find the original manufacturer instead of the many middlemen agencies that are out there. You have an option to send a “Request for Proposal” to several suppliers.
There’s 1688.com (China’s Alibaba for the locals) and it can be a great place to find wonderful suppliers. I bet a few of the trading companies search their suppliers here. Simply use google translate and start searching!
Global Sources can also be a good place to find your suppliers.
Use Google or Baidu
Google is the simplest and most cost-effective way to start your search for suppliers in China. Searching with Google will help you find manufacturers and suppliers who are active on the internet; you can also view their online profile and reviews.
If its not on Google, simply use Baidu for suppliers that only have Chinese websites. (Google translate helps here once again)
Technology has advanced to such an extent that it enables you to get in touch with reliable suppliers, but, some suppliers in China haven’t kept up with the internet and may not have a website. You want to reach potential suppliers who have an online presence as well as a reputation to protect, enter a search term for what you are looking for and go and check their business license, company/factory location, contact information, photos of their operations etc.
Attend International Trade shows/Trade Fairs
Finding suppliers who are not listed on Alibaba is like a gold mine. If you successfully find one, you’ve eliminated a large bulk of your competition.
These types of suppliers usually have exclusive products that no one else is selling on Amazon, and often many of them can be found in Chinese Trade Shows. When you meet a potential supplier, exchange contact info and check their displayed products. Are their product design, raw material, and product quality what you are looking for?
Trade shows are especially valuable because you may find some suppliers who have products not yet in the market, build relationships instantly, meet other vendors like freight forwarders, FBA inspection, etc. You also get to see your product sample and can place your order immediately.
There are two highly popular trade shows/fairs held in China each year: the Canton Fair and the East China Fair.
You may wish to hire a translator when you pay a visit even if you understand Chinese. The suppliers pay closer attention to you when they see that you are serious!
The Canton Fair is the largest, held twice a year in Guangzhou, near Hong Kong in southern China. The East China Fair is the largest regional trade fair in China and is held once a year in Shanghai. Both fairs are usually packed suppliers and a great variety of exhibits and the most onsite deals.
The East China Fair has the highest turnover. There are also industry-specific trade shows in the US and Europe where you can meet Chinese suppliers in person and build your business relationship.
I must say that going to one of these trade shows are a must for your personal exposure as a FBA business owner.
Outsource to a Sourcing Agency
Outsourcing to a sourcing agency can be potentially cost and more importantly time saving! They are like your agents stationed in China dealing with the suppliers on the ground on your behalf.
Sourcing Companies can be a hit or miss. Anybody could claim to have the qualifications needed to be a fully-functional sourcing agency.
There are, however, some highly reputable sourcing agencies you could get in touch with. Once you find a good agency, your success on FBA just got a lot closer. Some reputable agencies are;
- Easy Imex: Owned by Adam Gilbourne, Easy Imex acts as a one-stop import service while offering a wide range of services that include: Product sourcing, purchasing, negotiating, shipping and logistics, quality control etc. Their pricey one time $500 fee can be a turn off though…
- KEA Sourcing CO., LTD : Owned by Kenny Qian. Now he’s on this list because I have personally used his sourcing expertise and can vouch for Kenny that he gets the job done, wonderfully. Simply send an e-mail over to email@example.com to ask for his expertise.
Use this promo code: SpriceSource in your e-mail to get a surprise discount. Your welcome!
All in all, if you are ready to source products from China, remember to do your homework and make great preparation for your business.
Hopefully, the above tips will help you a lot.
Essentially, there is a lot of planning that goes into importing and outsourcing for Amazon sellers.
But you can save yourself a lot of hassle and money when you are well-informed about your suppliers, products, and the processes involved.