Full disclosure: One the companies that I own does ecommerce consulting, specifically we work with many clients on their Amazon accounts. This article is in no way a self-promotion to work with my business, but rather an opportunity to share information with you. I will not be sharing any links to my company in this article.
If you haven’t already read my first article from the series, I would highly recommend that you go back and do that first. You can find it here.
As you should already be aware, the purpose of this three-part series is to help you, our readers, understand the opportunity in front of you with Amazon. Whether you’re looking for a side business, passive income, you want to leave your day job or anything in between, Amazon can be a great place to turn.
For me it was a great place to learn the ropes of what it meant to be a business owner. From accounting to digital marketing to business licenses and everything in between it has been a great opportunity learn the basics (while making good money). With that, I want to talk today about what happens after you’ve picked the product that you’re going to sell.
Keep in mind that at this point we have done our own research via Amazon directly or a service like Jungle Scout to find an opportunity for product arbitrage. You happened to stumble across bamboo spatulas, which are apparently light weight, stick resistant and eco-friendly. However, everyone in the comments complains that they wish they came in more than one size. Given that information, we know we want to sell three packs of bamboo spatulas that are all different sizes at a competitive price.
Finding a Manufacturer
The first place I always go when I think I’ve found a great product and I’m ready to find a manufacturer is to Alibaba. If you haven’t heard of Alibaba, it is basically a place you can go to find overseas manufactures (namely China) and purchase their products at a wholesale (lower) price. If that’s not clear, please Google it before reading on.
There are advantages and disadvantages to finding a manufacturer overseas. The biggest advantage is low cost and the biggest disadvantage is quality. If you are creating a standard product that already exists I would recommend always going with overseas. If you have a complex high-tech gadget or something you want more control over then stay domestic. Bamboo spatulas fall under the “standard” category (meaning they are probably already being produced) so we’re sticking with Alibaba for now.
So first I run my search on Alibaba (screenshot below) and see multiple manufacturers who produce what I need. You can easily see whether they are offer trade assurance (order is protected by Alibaba), which payment methods they accept (I prefer PayPal), what their prices are per unit (lower cost if you order a high quantity, higher cost with low quantity), their MOQ (minimum order quantity = the lowest amount of units they are willing to sell) and their history on Alibaba (total dollar amount and number of transactions). You can then click thru on them to learn about much more. You can even learn about the specific factory like where it is located, annual revenue, core products and pictures.
Contacting a Manufacturer
Now that we have found a handful of manufacturers who can help you, it’s time to see who is the best fit. Some sellers would only reach out to specific manufacturers with very customized messages. Personally, I work the opposite. My goal is to get as many responses as possible so that I can use the manufacturers to negotiate against each other.
There are a couple things you want when finding a manufacturer (other than obviously quality). We want the lowest price possible, the lowest MOQ, a low sample cost and the fastest delivery possible. I would be very blunt in my email and ask for those things specifically.
I usually use a blanket email that is something along the lines of
“I run a large xxxx company in the US and we are interested in your bamboo spatulas. I need to know the following:
- Your minimum order quantity
- Your prices and where the quantity breaks happen
- The cost of your sample.
- Your turn around time
Once they start responding to you, that is where the fun begins. There isn’t enough time in the day to explain how to negotiate, but just remember low cost, low sample cost, low moq and quick delivery. Finally, EVERYTHING IS NEGOTIABLE. Don’t get fooled into thnking that their first response is the lowest they can go. Use responses from other vendors to pit them against each other and in turn get a better deal.
Getting Your Product
Once you’ve settled on prices, minimum order and all the other details it is time to get your sample. Remember, you ALWAYS want to get a sample. Pictures can be deceiving and you never really know the quality until you can hold it in your own hands to examine it. When you get your sample if there is something that you don’t like or you are concerned about never hesitate to bring it up to the vendor. They work for you after all.
Also be sure to ask about packaging and get that included in your sample. Most manufacturers will do customizd packaging for you at little or no additional cost, but sometimes they cannot for one reason or another. In that case you would have to source packaging separately. A bit of a headache.
Remember to always use common sense when you’re buying from someone you don’t know. This means never do a wire transfer, western union or anything like that. There are zero safety nets. Your best bet is PayPal because that offers the most protection, however manufacturers do not like this as it has high fees for them to withdraw. Alibaba also has their own escrow service that is safe as well. If you want more tips, just run a couple of searches for “how to protect myself on Alibaba” as there is a plethora of information out there.
In the final installment of this series I’m going to talk through how to receive your inventory, send it into Amazon and finally how to start selling! Feel free to send me questions or concerns to [email protected]