This episode, #51, is the first of two parts of the interview with Manuel Becvar of Import Dojo. Manuel has 11 years’ experience of sourcing in Hong Kong and China and also is an Amazon seller with several product lines live and selling well.
EPISODE 51 SHOW NOTES
What took you to Hong Kong?
Went there for a 6 month internship for an Austrian electronics firm in 2005. He was handling sourcing from suppliers. He fell in love with the city and a woman and never left!
He loved the drive and opportunities of Hong Kong. Very expensive but great place to live.
Do you also sell on Amazon?
Yes since August 2014. Also documented launching a whole brand. He currently has 7 products and 10 more coming in the next few months.
He’s focussed on getting after 3-5 categories in different categories. He launched then stopped a few more. He has several businesses which were more of a priority till now.
What are they?
- Selling on amazon
- Sourcing company in hong kong for amazon sellers.
- A consulting and import course, step by step guide to import from china and sell on amazon but also sell to retail.
He started out with a consumer electronics brand, selling to retailers in Europe under own brand and their own brand, but also now on Amazon. Now Manuel is focussing on his own Amazon business as it is really picking up.
Tell me about stopping a product?
He used to sell smart phone accessories but then the prices got so low there was not much profit. Electronics can be very competitive.
What’s your process for selecting products? What are your selection criteria? Do you go by the numbers of individual products? Or build a brand in a niche?
Manuel is more old fashioned, doesn’t use Jungle Scout or ASIN inspection so much. He subscribes to relevant product websites. newsletters, goes to trade shows. Also looks at Kickstarter and Indigogo for product concepts.
Manuel doesn’t look into creating a huge brand in one category. Tries out one product in a niche e.g. coffee press. If that takes off, build into that niche. If not, don’t go into say grinders, filters etc.
Coffee press now selling about 20 a day.
How do you beat the competition?
you need to stand out to beat the competition. Tries not to copy the competition. This is his approach. Will Tjernlund does copy the competition, but Manuel is more interested in creating unique products and building a brand.
How can we make a product unique in a simple way?
Example 1: Blue tooth speaker-
The sample looked bad, plastic finish, bad sound, packaging horrible.
The finish rubber instead of plastic was 20 cents more but immediately looked better. Then looked at components, sound was bad, different driver sounded much better and cost just 50 cents more. Used photographer to get better photos.
He turned a $10 product into a $30 product but only cost him $2 more.
Focus on finish, minor improvements etc.
Example 2 – Coffee Press
There are lots of stainless steel finishes, but no copper finish. So Manuel had that done and added in extra filters etc.
Look at the little things you can change.
Tell us about working with suppliers. What’s the best way to approach your supplier about this?
Introduce yourself including company presentation –
Create an excel file or word doc about the product- include bullet points, this is where it’s at, this is what i want instead.
Also point out that if you improve the product, they will make more sales with other customers as well. so they are more willing to make changes with costs.
So you’re not trying to get an exclusive deal with them?
Amazon sellers are mostly a small part of a suppliers’ business. if Manuel does say $10,000 a year he’s a very small fish. that may be 0.5% of their turnover if you work with a big factory (this is true for his own coffee press. They also work with Tesco’s who order $1m a year)
How do you get an exclusive deal for amazon rights?
He has set up an agreement with the Purchase Order which says – “My plan is to order 10,000 units. Are you willing to give me exclusivity for a year. If I don’t reach 5000 units within 6 months, we can cancel this agreement. “
This give Manuel 6 months to figure out if he wants to place more orders and it means the supplier can make more profit too after 6 months.
Manuel is okay with that because he would have a head start, maybe 100-200 reviews already. It’s okay to have competition. It’s not all about one item only.
Manuel is happy if he can do 6 months of excellent sales on one product. That repays the time and money invested already.
Greg Mercer was saying if you get 6 months’ head start, you can defend your product against competition. So you agree with that?
Yes, that does work.
Where do you go to look for suppliers?
Manuel has collected over 1000 business cards for suppliers from previous job being a product manager, when he went to China every 2 weeks.
Manuel also works with a lot of trading companies. He will sometimes be willing to pay say 50 cents more and use a trading company, similar to agent. Some of them work as if you are working with factory, for example if factory doesn’t speak English, don’t know about country requirements eg CE (European Union), FCC (USA), FDA (Food & Drug Administration, USA) approval, doesn’t have experience exporting to a country, etc., etc.
So working with a trading company can make a lot of sense.
Alibaba and Global Sources Manuel does use if he can’t find anyone through his network – you can verify and vet the suppliers. You can still vet them by checking their certificates, asking who they work with, Which markets they export to etc.
For example, If Manuel asks “where do you export to?” and they say, “Middle East” and you want to export to USA, don’t bother. He wants a supplier
It’s also good to know a few names in the industry eg small supermarket or worked with an Amazon seller before. Check business certificate.
What are the big does and don’ts for selecting a supplier? Assuming Alibaba, Global Sources or HKTDC and someone who is new to the process.
There is a lot of filtering you can do. e.g. a microwave on Alibaba, filter by Gold Supplier, trade assurance, 3rd party verification.
You can also filter by region – say 10 different provinces of China.
Let’s say Guangdong have 5000 suppliers and another has just 10. That shows you where the main factories are for this kind of product.
If a region specialises in making those products, they have the resources and the infrastructure.
Say in Jeijung province, with 10 supplier results, they probably don’t specialise in that.
There are many other filters you can use.
Send out enquiries to 10 suppliers. 3 or 4 get back to Manuel with and answer all his to Qs
Email out “vendor profile”, asking for:
- 2 customer references for customers
- markets. Has he exported to this country before?
- business certificates, and certificates for prods
- no workers; when company established; annual turnover.
- do they do R & D? Have their own engineers? how many product lines?
You get a gut feeling after a while.
This is included in import dojo ebook as a downloadable document.
Import Dojo is actually a 60-page book which is a bestseller on Amazon! It is free at the company’s site.
What’s next in your process?
Get a soft copy of any certificates needed – prove he has it!
IF that’s okay, then ask for a sample from at least 2-3 suppliers. Same process with all suppliers. If all samples are equal, go with most responsive/proactive and helpful supplier, even if price is a little higher. Then place an order.
So you’re okay with higher prices?
They need to make profit too, they work hard. The factory will be business partner, it should be a fair biz relationship. As long as profit is built into your price, it’s fine to pay a little bit more.
If you have individualised products and with good product price, you can afford
If you’re building a brand, if you squeeze in cheap products, it won’t help.
I guess it depends on whether you have customised products vs. commoditised products sold en masse?
Yes, I’m building a brand, so selling cheap products to make a quick buck is not part of my strategy.
What is the best tip for negotiating on product price once you have verified that the quoted price is in the fair region? Should simple customisations really cost that much more?
There shouldn’t really be a big difference. Unless the supplier has to invest money into a new tool or a new mould. If it’s just a colour difference, it shouldn’t be much.
To find if it’s reasonable, ask at least 3 suppliers for a quote. IF one is way off on price, he’s either incompetent or trying to rip you off!
To contact Manuel, click here for the Import Dojo contact page.
In Episode #52, Manuel gives details on keeping your money safe, getting quality control for Electronic Products, simple ways to start with Freight, overall process and predictions for the future of Amazon. Stay tuned!
HOW TO SUBSCRIBE TO THIS PODCAST
A podcast is a free downloadable audio show that enables you to learn while you’re on the go. To subscribe to my podcast for free, you’ll need an app to listen to the show from.
This will help you to download the free Podcasts App (produced by Apple) and then subscribe to the show from within that app. Every time I produce a new episode, you’ll get it downloaded right on your iDevice.
For Android listeners – Download the Stitcher Radio app (free) and search for “Amazing FBA Podcast.” Or, if you have already downloaded a podcasting client, follow the directions in the next sentence.
For podcast enthusiasts – If you already listen to podcasts and have a podcatcher that you prefer, the feed you’ll need to add is: http:// amazingfba.com/feed/podcast.
For those who don’t have a mobile device – You can always listen to the show by clicking the audio file at the top of this page.
If you have any queries, just go to www.amazingfba.com/ask.