When you start selling on Amazon as an FBA seller, the first thing you need to do after starting your business is sourcing your first product, right? This means you’re going to have to do three things – (1) figure out the product you want, (2) find a supplier for the product, and (3) make sure the cost of the product plus the cost of shipping it to the warehouse are within your budget.
Today, we’re going to cover how to do the latter two. We’ll be using Boost9, a proprietary software from Nine University, for parts of this, so if you’re not using Boost9 just look at how to do this in the software you are using, or look into Nine University and see if they can help you on your Amazon FBA journey.
How To Source Products As An Amazon FBA Seller
To contact suppliers, you’ll need to go through Alibaba. You’ll want to start by creating an account on the website. Use your business email account (if you don’t have a dedicated business email account, I highly suggest you take a few minutes to set one up).
After you register on Alibaba, make sure you complete your profile. If you don’t complete your profile, your account may be marked as spam by suppliers – and you don’t want to start off on the wrong foot with them! Completing your profile is easy – from the homepage, click “My Alibaba” in the top right corner. Then look just left of center at the top of the page, and you’ll see the “Complete Profile” link.
Fill in as much information as you can. You may not have everything or know specifics just yet – and that’s okay! Just complete what you can for now, and as you figure out what you’re doing, you can add in more later. Make sure you add a photo of yourself to your profile – it helps with getting suppliers to talk to you. Once you find a product, you can use Boost9 to link it straight to Alibaba.
Just click on “Products,” then click a product that’s a close match to what you want and click “View on Alibaba” near the top of the window. If you aren’t using Boost9, you can also search manually on Alibaba itself.
Once you find a product that’s a close match to your basic design or idea, click on it and then click “Contact Supplier.”
Making First Contact With A Supplier
The best way to talk to suppliers is just to be yourself. Be friendly and polite. This is the template I generally use when I start a conversation.
”Hello, my name is (YOUR FULL NAME). I am the CEO of (COMPANY NAME – if you don’t have one yet, just make one up). We have a successful online retail business and are looking to expand our product line. I am interested in the (PRODUCT NAME) you offer.
Please only respond to this message if you can answer these questions.
- What is the price of 100 units + DDP air shipping to (YOUR HOME ADDRESS) (IF YOU LIVE OUTSIDE THE US, JUST SAY DALLAS, TEXAS)?
- What is the price of 500 units + DDP air shipping to the same address as above?
- What is the price of 1500 units + DDP air shipping to the same address as above?
- What is the price of 2500 units + DDP air shipping to the same address as above?
- What is the price of 5000 units + DDP air shipping to the same address as above?
PLEASE DO NOT ANSWER WITHOUT THE SHIPPING COST, this is CRUCIAL to our business.
Once these questions are answered, can you also send me:
- Pictures of the actual product as well as the product packaging.
- Your payment terms – I would like to pay using Paypal. Is that acceptable for you?
Sincerely, (YOUR FULL NAME)”
***HACK ALERT*** The reason you ask the price for 5,000 units isn’t necessarily to purchase 5,000 units – it’s to use for later negotiation. Later on, you can tell them that since this is the first time you’ve worked with them, you want to have a good and long relationship with them. You can ask them to get the same per-unit price for 5,000 units when ordering 500 or 1,000 units (or whatever quantity you’re ordering).
To get the highest quality of suppliers on Alibaba, go to “Filter By,” look under “Supplier Types,” and make sure you check the “Trade Assurance” and “Verified Supplier” checkboxes.
How Many Suppliers Should I Contact?
Ideally, you want to contact as many suppliers as you can – at least fifteen to twenty suppliers. This allows you flexibility when determining who to cut from your list of potential suppliers. Look for suppliers who demonstrate good communication, helpfulness, best pricing, and things of that nature.
***HACK ALERT*** Once you’ve narrowed it down to just a few suppliers, you can use their quotes against each other to help lower the price more.
Why Isn’t The Supplier Responding?
This is a common issue. There are a few reasons why a supplier may not be responding quickly.
First – is it a Chinese holiday?
- Chinese New Year varies each year, but generally comes between January 21 and February 20.
- Qingming Festival usually starts on April 4-5, but activities may begin as early as ten days prior.
- Golden Week is a collection of four national holidays in the span of seven days. It takes place between late April and early May.
- Labour Day falls on May 1.
- Dragon Boat Festival takes place on the fifth day of the fifth month of the Chinese calendar – which usually puts it between May 27 and June 25.
- Mid-Autumn Festival usually takes place late September to early October.
- National Day of the People’s Republic of China takes place on October 1.
If it isn’t a holiday, keep in mind that China is 12-13 hours ahead of the Eastern Standard Timezone (the difference is because they don’t observe Daylight Savings Time).
Make sure you’re sharing your “business card” as well. This aspect of Alibaba allows information from your profile to be shared to suppliers. It’s a way to show who you are and that you are trustworthy.
From “Contacts,” click on the conversation with the supplier and click “Agree to Share your Business Card” in the upper right. Once you do this, it will have a checkmark and say, “Business card shared.”
Be professional and courteous, but be yourself. If you have tried everything and you still aren’t getting responses, your account may have been marked as spam. If that happens, simply open an account with another email address.It may be your inquiry is too similar to everyone else’s – too much like a template. “Why is there a template if you aren’t supposed to use a template?” you might ask. Templates are more like guidelines. In the end, just talk to the suppliers like they’re ordinary people.
One thing you need to understand as an Amazon FBA seller is the difference in shipping methods offered. Three of the more common are:
- EXW (Ex Works) – The buyer is responsible for picking up the product at the seller’s place of business or factory. You as the buyer assume all risk and cost for shipping it to your desired location.
- FOB (Freight On Board) – The FOB price is the price of the item delivered to the seller’s port city. It is the buyer’s responsibility to get it from the seller’s port to the ultimate destination.
- DDP (Door to Door) – The supplier assumes full responsibility for making the product, getting it out their warehouse, and shipping it to either your door or Amazon’s warehouse. This is what we recommend.
Narrowing Down Product Ideas And Ordering Samples
After narrowing down suppliers, your next goal is to ask initial questions you have about the product. Look at the negative reviews of similar products (your competitors). Talk to your supplier to ensure those issues don’t apply to their product or things you can do to fix/mitigate.
Talk initial pricing. You’re looking to achieve a 200% return on investment (ROI). If you have the necessary ROI, a prompt and professional supplier, and they can supply the right product that you want, it’s time to move forward with samples!
A common question when it comes to samples is if the price of samples is negotiable. The answer is – everything is negotiable. Sample prices will be more than you’re paying per piece for a larger order but still shouldn’t be too expensive.
You will want to order at least two or three samples. If you will have variations in your product, you will want samples in each variety. Let the suppliers know you need the sample air shipped to your address. Through this process, really get to know the differences between each supplier.
When it comes time to pay, ask the suppliers for the PayPal emails associated with their businesses. When you log into your account, you’ll click “Send and Request” and then the “Goods & Services” option. This is to help protect you and allow you to get your money back in case the seller disappears or rips you off.
When you send your payment, include a note stating that it’s for (product name here) sample from (the supplier’s name), attention (your contact). Take a screenshot showing your payment is sent and send it to the supplier – this can help expedite shipping your samples to you.
Negotiating The Final Price
You’ve gotten your samples from your suppliers and hopefully settled on a single supplier. Now it’s time to negotiate your final price with them. You’ll send them something along the following lines:
I’ve just finished testing your product (along with the samples of some other manufacturers). We like your product, but it seems to be fairly equal with what we can get from other suppliers. We will be working with whoever can give us the best price. You initially quoted me a price of ($xxxx) for 5,000 units. I want to place an order for 500 units. Is it possible for you to give me the price you quoted on 5,000 units for a 500 unit order?
Hoping this is the start of a good, long-term business relationship, and looking forward to your prompt response,
***HACK ALERT*** It’s important to mention you are also seriously talking with other suppliers. This will let them know you’re not messing around, and they’ll be more likely to take you seriously because they want your business.
The supplier may come back with a response along the line that the price is already the lowest, they can’t go any lower. That’s fine. Let them know you understand and will be taking your business to a different supplier who has already agreed to give you the price you requested from them.
Even if you haven’t got another supplier – they don’t know that. It’s the cyber equivalent of walking away. They want your business – so be patient and see what they do. They may try to say they have a higher quality product or they can’t go that low. Stick to your guns. Make sure you get that 200% ROI.
Above all, be patient throughout this process. It’s not a quick process. It shouldn’t be. Don’t settle for a low ROI or bad product because you want to get your product listed. There’s no point if your product fails or your profit is too small. Take it slow.
Hopefully, this helps some when it comes to finding a product and supplier. If you’d like even more help, make sure you check out Nine University, and their new FastTrack program, with 24/7 access to expert help in setting up your FBA business!
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