How to get your shipments from China to Amazon FBA
Shipping from China to Amazon FBA is the most common amazon business strategy, and is not as complicated as it may sound to an e-commerce market entrant. However, it is indeed a little more complex than simply asking the supplier to stick a UPS label.
The shipping could directly be to FBA or via a middle man. If shipping directly from China, then the products must be prepped as per the FBA specifications, by the supplier. Thus this way, a lot depends on the Chinese suppliers end that could either make it to FBA or not. Communication gap when dealing with Chinese is not uncommon and is one of the most crucial points that one should should watch out for. Though, lately a lot of suppliers are now familiar with the FBA specification.
The other way, if you’re shipping via US, then your shipment can be divided into smaller packages and quality inspected.
But before the import of your own goods from China can be started, some questions should be clarified.
How do I find the right product for me?
How does the import process proceed? Sea freight, airfreight?
How to secure the best purchase price?
How to build long-term relationships with suppliers?
What are the best selling amazon products
How to sell your product on amazon
Shipping directly to Amazon FBA, Pros and Cons
Quicker Transit times
Middle man cost is saved
Amazon requests the products to be shipped to different warehouses and not to one centralized location.
The freight and duties have to be paid before arriving to Amazon.
You can not inspect the products upon arrival.
Amazon’s shipping and packaging requirements must be met.
Shipping to a middle man
The products can be shipped from China directly to yourself or a third party middle man. There are a lot of such middle men who are glad to be doing FBA shipments for you. They are popularly know as Pick and Packs, Prep and ship or 3PL (third party logistics).
Pros of using a middle man:
Products shipped from China in a consolidated form.
You can inspect for the quality of products upon arrival
Sales strategies remains undisclosed to Chinese suppliers
Shipment is unlikely to be rejected by FBA
Cons of using a middle man
Either having oneself to do the work or paying someone to do it
Shipments take longer to be received by FBA
Deciding on Direct Shipping vs Using a middle man
In general, going for a middle man would be helpful when:
It’s the first shipment/ launching of the business.
First subscription to FBA
If financially constrained, the consolidated shipment sent from china helps
When to go for direct shipping from China
In lack of time and you want delivery to Amazon, as soon as possible.
Good sync up or lengthy experience with supplier such that direct shipping is considerable less expensive than the middle man way.
Lets get into the details of FBA
Many goods at Amazon are from China. Marketplaces, such as Alibaba, made it possible for these products to be accessible to multiple companies regardless of their size. Even smaller traders are thus able to get access to these cheap products. Other companies manufacture in China itself. First timers on Amazon certainly would want to know how do products from China land on Amazon and how to work with Chinese suppliers to get good to Amazon FBA. Here are some tips for those sellers:
Check products to comply with your country standards
Before products are imported, they must always be checked beforehand. Is product safety fulfilled? Are there any patents prohibiting the sale? Especially smaller Amazon dealers often believe that the big suppliers in China automatically meet all legal requirements. But this is by no means so! Because suppliers do not have to check their articles on intellectual property or on existing patents by law. As long as they sell their products so, they will not be interested in complying with such matters.
If something goes wrong with an import, the issuer is always responsible. If the goods are already in the your country warehouse, the entire inventory must be destroyed. To find out whether a patent is infringed, no expensive patent attorney is required. A simple Google search already helps to determine if the competitors on the market have a patents division.
It is more difficult with regard to testing for safety regulations, such as, for example, with electronics. A corresponding experience in the field is necessary for this purpose. Furthermore, the legal provisions differ according to the type of product and also to the country in which they are to be sold. The United States, for example, has other provisions than most countries. The supplier should therefore be asked for the corresponding certificates – experienced suppliers know which ones are required.
Consider the period for the offered price
As a rule, the supplier will write in his offer “The price is only for month …. valid”. Thus, buyers have the certainty that the price will last for a certain period of time and only need to take account of exchange rate fluctuations. This is important, because during this time the raw material costs may increase. If the offer price is not fixed, this may mean a higher price for the Amazon dealer.
Logistics is a big cost factor in the trade – in some cases it is up to 50% of the costs for some products. One of the biggest mistakes made by new buyers and smaller traders is that they are aware of the purchase price, but not the cost of shipping, packaging, taxes and customs clearance. Often sellers go online on marketplaces like Alibaba, to buy their products. But Alibaba is open to everyone and every trader can buy products there openly. This may quickly lead the competitor to buy from the same vendor and undercut the price by one Euro on Amazon.
Suppliers are not automatically trustworthy just because they market through Alibaba
Alibaba does not give any guarantees that the suppliers listed there are really reliable. Therefore, a verification process of the suppliers is necessary before the first order is issued. Because China is not an easily reachable destination for most countries it is simply too expensive, just to fly to China to solve problems.
Is the provider real at all? In China everyone can simply rent a room and shoot a few photos of foreign manufactures. In addition, it is not possible to have products reworked or returned if they do not correspond to the agreed quality.
The manufacturer is not always the best supplier
It is often better to buy goods from the manufacturer so that you can cut costs of middlemen and save margins. However, this can be a little difficult, especially with larger manufacturers. It may be better to work with intermediaries, since a small Amazon dealer will be at the end of the customer queue for a supplier with large factories.
This problem is avoided with a powerful agent or intermediary. The agent will be useful for the customer as he may have more knowledge and large know-how, which shipping and export concerns to be addressed and can provide appropriate contacts.
Verify how the product was made
Those who want to sell on Amazon, must know its manufacturers and suppliers exactly. Are there any engineers who make sure that the product really works? Which team is behind the manufacturer? In addition, the Amazon dealer should know exactly how the products he distributed work. It is therefore a good advice to personally test all the products because in an emergency, the seller may have to completely disassemble it and fix it. Only in this way is it possible to know which material was used and what is concealed inside. Special care should be taken with electronic products, as defects and problems with the product can only occur after weeks or months and then lead to returns and / or claims for warranty service.
When it comes to new products, sellers should always initially ask for prototypes or product samples. If this cannot be done, our advice is to hire a a local supplier to build a model and to send the second to the Chinese supplier to produce more. This allows the prototype to be compared with the delivered product later. Especially in the case of products from China you should always have a sample in your hand before a larger order and then decide objectively and emotionlessly whether it meets the expectations of potential customers on Amazon. A tip on the edge: take these patterns to your friends and relatives and get their honest opinions as well. This can help you decide whether you want to buy the product in a larger style and save money.
Compliance with your country standards should not be taken for granted
China’s definition of standard might be different from your country standards. For example, if you want to have a good quality, the supplier has to explain exactly what he means by “quality”. Again, the above pattern comes into play: Amazon dealers should send it to the manufacturer. However, transport costs must be taken into account. While a DHL parcel with less than 16 Euro is still cheap, this does not affect the shipping of heavier items anymore. Also, one should be careful with possible copies of branded deal. Not only the name, but also the usage pattern is protected.
Never pay for the entire goods in advance
Most Chinese suppliers do not accept payment via PayPal, because it is simply too expensive for them. However, this payment method is suitable for a first sample order – even if the seven percent charges are borne by the buyer. Most Chinese manufacturers and suppliers do not have so high profit margins to carry such margins. It is safer to pay a small advance and pay the rest later. Also 50/50 deals are not unusual here. Make sure that even on the purchase price of the goods delivery will be added and, if necessary still apply customs duties.
Use other sources for suppliers
Alibaba is not always the best source of suppliers. This marketplace says of itself that it is the leading platform for small and medium-sized businesses. This means big companies are not on Alibaba. Another source in this area, although not on such a wide range of products but still has on a similar level of acting is made-in-china.com. It is also worthwhile to take a look at the portal, because the products offered here also move in price in a similar framework.
Do not leave the shipment to the supplier
As already mentioned, the costs consist largely of the logistics. However, it is a mistake to believe that it is the simplest and fastest thing so many leave the shipment to the supplier. Our tip is exactly opposite: Never use the supplier’s shipping line – unless there is no other choice.
Instead, a carrier who is on his own side should be chosen, since this is the only way to ensure a certain control over the consignment. Sometimes, due to capacity problems, it is difficult to get a seat with the shipping companies or the airline, for example in the middle of the high season.
The production of a new product requires (sometimes a lot) time
How long the production takes in China is also dependent on the product itself. For this, Amazon dealers simply have to keep in mind that for example the development of the iPhones 7 lasted more than two years. Of course this is not transferable to all commodities, but to a certain point. Four to six weeks production time (sometimes even 3 months) and the time for delivery and customs clearance also again may take at least four weeks. All this shoould be taken into your amazon strategic plan. Therefore, one should always take time to calculate all of this BEFORE the inventory in the Amazon Seller Central runs to zero, or below a critical amount.