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#79 How to prep for Amazon UK with Greg Jones – Part 1

Greg has sold on Amazon for about 2 ½ years now so he has quite a bit of experience with selling. Greg saw an opportunity while he was selling. He hated doing the prep work. It took a lot of time and kept him away from what actually made him money, sourcing and working with suppliers. So he started FBA Prep UK almost two years ago as a solution for Amazon sellers.

Why bother with prep at all? Why not just send directly from China or supplier to Amazon?

First of all, things happen to products. It’s more common with air, there’s a lot more handling and a lot more opportunity for packaging to be damaged. From the supplier not doing what their supposed to, then sending it to the plane, loading and unloading from the plane, then to the Amazon warehouse.

Sometimes the products show up without packaging. It may have been repackaged by the shipping company because it was in such bad shape. Amazon won’t accept that. They have very high standards for what they expect and if it arrives damaged, they will not accept it. It will either be removed or destroyed.

To avoid all this, you’ll want the products to be inspected before they go to the warehouse. You can do this yourself but you will soon realize how much time and effort it takes to go through everything.

So what prep do you need to do for Amazon?

Obviously, everything will have to have a scan-able barcode, i.e. EAN or UPC work fine. Most products that come from China do so in a poly-bad or a plain white box with no identification on it. Amazon cannot accept that. They are a massive operation that cannot deviate from their processes. Prep companies, being smaller and working with you directly, have the flexibility to ensure the products are packaged correctly before Amazon gets them.

For the items that come in the poly-bag, can you repack those?

These bags are quite brittle and are too thin so they don’t meet Amazon standards. They have to be sealed or they have to have a suffocation warning label is the opening is more than 5 ½ inches. These aren’t Chinese regulations, so unless you specifiably request this, it won’t be done. Sometimes it won’t happen if you do specify it. Keep in mind that your supplier is likely not to comply with your instructions. There is very little chance of getting your money back should they mess up. Typically the only recourse is a discount on your next shipment.

If you hire an inspection company and everything checks out at the factory, what are some other things that can go wrong?

If it’s in a poly-bag, it’s pretty much ok. The problem starts if you have it in a box that gets thrown in to a shipping container. By sea is better because there is less handling. It doesn’t get handled much until it arrives gets put on a pallet.

Greg recommends contacting the supplier and having them ship extra boxes. Many times some of them will get hit by a forklift and the packaging gets messed up which will be rejected by Amazon. The products are fine but because the box is messed up it becomes unsaleable. If you don’t have extra boxes you have to contact the supplier after the fact. The supplier will likely not send you the extras until your next shipment which leaves you with 10-15% of your products sitting around until you’re ready to order again.

Greg’s standards are whether or not he would be happy to receive it. If he order an item off Amazon, would he be happy to receive it in that condition? If not, he would send it in until it gets repacked. This is also to protect you. Amazon shoppers are picky. They will rate a product low based on the packaging. Even if the product is great but the packaging was awful, they might leave a poor review. So it’s worth it to wait to send it in rather than risk a poor review.

So if you bother with prep, why use a Prep company?

It depends on your circumstances. Whether or not you have the space and means of handling them. Make sure to receive the samples at home so you have a change to inspect them before making a large purchase.

Some people don’t realize how large their orders are. So when you try to prep 100 or 150 units, you realize that you don’t want to be doing that for 500 or 1000. 1000 units, you’re probably looking at a pallet. You have to make sure you have a place to put a pallet.

Greg had a customer call him one time about 2000 piece order that was about to dock and he was told that it was going to be two maybe three pallets. He hadn’t realize how large it was going to be and was planning on fitting it in his two-bedroom flat on the 16th floor. This would not have been remotely possible to do on his own. He had to have the help of a prep company that has the means to handle such an order.

Also, this is almost required for some sellers that do it as a side gig and they have full-time jobs and they do their sourcing and dealing with suppliers in the evening. They have no time to be messing with prep work because they have their full-time job. It’s not feasible for them to do it on their own.

What are the main steps you go through to prepare for Amazon?

  • Check cartons
  • Unpack & Check boxes
  • Inspect outer cartons and items themselves
  • FNSKU barcodes
  • Have a report/structured record
  • Inbound Shipping to Amazon

What are the biggest mistakes you’ve found sellers make with freight that you’ve come across?

The story before, about the guy that didn’t know what he was going to do when it arrived. There is a scam going around where the supplier offers you shipping terms. They offer FOB prices to the port in China and CIF prices Felixstowe.

To clarify some terms, FOB is “Freight on Board”. The Chinese will pay the expenses to get your goods from their factory to the port of departure. CIF, Carriage, insurance and freight, is the exact same thing to the UK ports. So they exported the products, put it on a boat, and it will arrive at the docks in Felixstowe or South Hampton. From dockside, you have to organize onward freight and customs clearance. In Greg’s experience he got the same price for FOB in China and the CIF in the UK. It got to the UK and it seemed like it was all a part of the service, but after talking to he Freight Forwarding partner he was told it was a scam.

When it gets to the UK, the handling agents have to pay the shipping charge. It’s not free, it just gets passed on the UK agents who then pass it on to you. You then, also have to pay your normal VAT import duties, and custom clearance duty fee. He has heard figures of £600-1000 just to release the product. If you don’t pay them, you don’t get your product. They then start charging you storage fees and the costs just start rising.

What are the warning signs to look out for?

The supplier will offer you terms that look remarkably good. “If it looks too good to be true, it probably is.” Ask for prices from other freight forwarders. Even if it just to give you an indication of what the cost might be and if the Chinese guys stack up and looks about the same, you should be fine. But if it’s considerably cheaper, then at least you know what prices you can expect.

What are some basic dos and don’ts of working with a prep company?

The biggest thing is trust. At the end of the day, you’re sending a large investment, thousands of pounds worth of product, to someone you don’t know. You don’t know if they exist. As an entity, they could just be a website and an email address and you end up sending your stuff to them. Make sure your happy with them, call them up, look for social proof. Just make sure you’re real.

Keep in mind they are an extension of you, they’re not the importer on record. They don’t have importing responsibilities, they are simply a delivery point for you. You need to tell your supplier that. Greg has gotten invoices coming in with his name on them. Then DHL, or whichever shipping company will send him an invoice for the duties. He will send that on to the customer, but the invoice is in his name. So that makes it difficult for the customer to put it in their accounts.

Even if you’re out of the country, they will be your delivery point. So it will be your name, your company, at their address. So the invoice will go to the prep company who will then forward it to you. If it’s been agreed, they will pay the duties.

Tell them it coming. As ridiculous as it sounds, inform them of it’s arrival. The worst thing for Greg is to receive six pallets of products and have no idea who it belongs to. All they have is his name on the invoice.

#76 Importing to USA, Brand Building & Email followup: Q & A Tuesday No. 12

Q 1 Corinne

First, I am not an American but want to sell [on] Amazon.com

I have sent a few small packages to Amazon FBA.

There was no issue at all until I started sending 15 cartons.

When I sent this 15 cartons, I don’t have Federal tax ID number.

Thereby I needed to spend US$ 500 to have freight forwarder to help me.

Then I tried 8 cartons through DHL which declared $1200 for the customs. However, it is still got rejected by the customs.

It seems FEIN is required if i want to ship my inventory to FBA.

I am not trying to escape any tax issues, but to get a FEIN number, I would need a legal address in US. I am not in US.

How do you guys deal with this?

A freight forwarder isn’t the same as a Customs Broker in the USA. Some companies do both, like Western Overseas Corporation. But it sounds like what you need is a Customs Broker.

You shouldn’t need a US address to get an EIN as a foreign entity (person or company). But if you need one (you do need a returns address for amazon or should at least have one), google. I used myaddressus.com – pretty cheap.

If you send in goods over the value of $2500, it’s a formal import so you’ll need a customs bond etc. At that point, I would use a Customs Broker, at least for the first time. That’s not the case here, but worth flagging up for future reference. 

Q2 Ben

Here is my newbie experience post #3. So I’ve been selling for about 3 weeks in the UK. Where am I?

I picked a great product. It’s flying off the cyber-shelves. I am about ½ way up page 1 for all my main keywords. I told myself to be ‘happy’ with 5 units a day. I was averaging 10-12 units per day, but have increased my price and now average 7-8 units per day. I have had days of 10+ including a day of 16 units. These are not giveaways, all giveaways were done in the first week. So why did I increase the price?

This first ‘test run’ was 500 units. At the current rate, I’m going to run out quickly. So I’m trying to find the balance between maintaining sales, and not running out of inventory. Am still undercutting some competitors at the current price, but also more expensive than some others.

I believe the reasons it’s going well so far are:

1. Branding. My brand is easily one of the coolest, and as I expand I’ll grow as a brand, rather than as “Bob’s generic stuff” which several of my competitors are doing

2. Social media. Many ‘gurus’ say – avoid social media until you are well established on Amazon. This is not a good move, in my opinion. I have an active twitter and Instagram account, and a new facebook page. OK I haven’t got many followers, but t’s growing and I’m getting a bit of engagement.

3. Branding. I said it again because it’s so important. Branding is everything. Cool brands get bought. Generic crap doesn’t.

Comments

Alex  You are doing well, but don’t talk about brand building. People don’t care. You drive them in your page and they just see information, reviews and price. Just set Ppc automatic. If doesn’t work move on.

Suzi I love to hear that you are growing a strong brand, and that you understand and appreciate how important it is. I cringe so hard when I hear people say your branding doesn’t matter…nothing can be further from the truth. Have you had any issues with counterfeits hopping on your listing(s)?

My response: it depends! 

If you just want to make sales on Amazon short-term (say next 6 months), I think it’s true that brand doesn’t matter much. Initially, customers will not have heard of your brand yet, and they mostly go with good images and price. Also, it is not realistic to expect Amazon to cross-sell your products even if they are in the same niche.

However, if you want to create a defensible business to later sell, you definitely need to create a brand. Also, even if you’re never planning to sell, if you want to create a Shopify store, to diversify and lower the risk of Amazon controlling your business,  you will need to develop a focussed suite of products. If you have multiple niches, you can develop multiple brand sites, but each one needs some unity for credibility.

Also if you do well, medium term even on Amazon, people can start searching for your brand or pay slightly higher prices for it, as long as you have lots of reviews by that stage.

Q3 David

EMAIL OPTIMIZATION: Hey Everyone…just a quick question regarding your post-purchase email autoresponder sequences. I am currently getting 8% and 9% conversion rates for feedback and reviews, respectively. I would like to increase this and was thinking of shortening each email to make more mobile friendly. Have any of you tested the length of copy an how this alters conversions? Thanks!

First of all, if you’re getting 8-9% conversion, you’re doing well. Average for most people I’ve spoken to about this (which was a while ago) was 5%, as it was for me last time I checked.

Regarding testing, I don’t know whether for example Feedback Genius or Salesbacker will do this for you automatically. I use a different system so I don’t think I have that option.

If you want to do it manually, then make sure you test a significantly statistically meaningful number. So I would be inclined to run three variations, one shorter and one longer, and I would try each of them for about 100 sales each.

Re. email follow-up sequences more broadly, I use three emails. Currently the 1st only offers help and a PDF and says thanks/please get in touch if any issues although Kevin King asks “why did you buy the product” which I may change to going forward.

The 2nd, after ben Cummings’s approach, asks the buyer to just hit REPLY and let me know why s/he bought the product. Similar to Kevin King but after the product has arrived. Only a small %age do but you do get replies in my experience.

THe 3rd then asks for Seller Feedback, which I can then follow up on and ask to be changed to review if it ends up being about the product. It’s a filtering mechanism.

THe point of the 2nd email is that if someone replies to that, they feel more obliged to follow through after the 3rd and actually write a review.

In David’s case, I’d be inclined not to mess with what is working too much but tweak it eg longer/shorter.

Or you could change the 1st email in the sequence. Or the 3rd. Test both variations and let us know!

#60 Q& A Tuesday No. 8

Q1 David 

PRICE TESTING: Hi Guys! I have been doing a lot of price testing. Does anybody know if the price changes in the shopping cart? For example, if somebody added my product to their shopping cart as price X, but did not check out. Then, I change to price Y. Does the product, in the shopping cart, change to price Y or does it remain at the original price X as it was when it was added to the cart? Things that make you go Hmm!!!

Michael Veazey David, interesting question. I admit I don’t know the answer.

However I wouldn’t recommend changing price that swiftly or often! I’ve been guilty in the past. Problem is that you can’t make objective statistically significant measurements of the effects of price changes.

Michael Veazey I’ve recently been testing out www.amzsplit.com

Www.Cashcowpro.com also looks promising although I’ve not used it yet. It also does profit calculations to some degree. Hello profit may be better for the latter.

I am tracking down the creators of all of these things for the podcast…

Q2. Anila

So… I went on Jungle Scout to find the niche product 

Started with  Home & Kitchen -> Kitchen and Dining -> Kitchen utensils -> Cooking utensils:

A lot of Silicone spatulas came up as you would expect but what JS ran was a completely different story.

It would seem that there still is market for those wishing to sell Silicone Spatula…

Or am I reading the data wrong

According to Greg Mercer’s guidance:

1st 5 listing have under 50/100 reviews (Further down a few names dominate)

And the revenue for is good for all the top sellers and very high volume of sales

Wade I might be wrong, but I’ve always been sorting the results by rank, and then those are my top 10 ones to look at and assess. Please someone tell me if I am wrong!

Michael Veazey Well, this is the first phase or first filter of any sensible product picking system.

First of all quite a few results are for steel tongs so those need to be eliminated as irrelevant.

Then you need to be aware of giveaways.

Look at the top ranked seller.

With just 23 reviews, I don’t believe they are doing 3000 organic sales a month in this market.

Next and most important, price. At $6.49, you have to wonder what the profit is.

let’s look at ad costs which are frightening with a very competitive keyword.

If we guesstimate PPC costs per click on such a competitive keyword at say $2 per click, and if we are optimistic and say 33% conversion, that gives a cost of $6 as cost per ad driven sale.

Even if say 1/2 of sales are organic that would give an overall average ad cost of $3 per sale.

That leaves $3.49.

I don’t know what the fulfilment fees are but let’s say $1. Referal fee is $0.97 so basically $1.

So that leaves $1.53 to:

1. buy your unit, 2. inspection, 3. freight, 4. duty and customs costs 5. Receiving warehouse in USA 6. Amazon inbound shipping.

Sales can be achieved if you drop the price, spend a lot on giveaways and spend aggressively on PPC.

That’s a good set of launch tactics.

The issue is whether after that, there is profit to be made.

Q.3 Sergei

Hello Amazing FBAers!

How do you pay your freight forwarder to ship your goods to Amazon USA? Do you pay 100% directly before shipping?

I have been trying to get freight forwarders to use Escrow or to pay them 30%/70% through Alibaba’s Trade Assurance but they won’t agree to it….

Is there a way how I can be safe? Because if you pay them 100% of the sum at the beginning, then you are at their mercy and they will not put a lot of effort because they have already been paid

Btw Michael, keep up the good job, one of the best podcasts out there!

Peter Zapf I’ve usually seen the bill/invoice issued right when goods are about to get delivered (this would be US freight forwarders shipping into the US). Not up front before goods are even picked up.

But this is also different than the 30/70 for suppliers. For suppliers, the 70% is the hammer to make sure you get the quality you need, which is why you should do a pre-shipment inspection. I’ve never seen anything like 30/70 for freight forwarders.

Michael Veazey Hi Sergei,

I assume your freight forwarders are in China, is that right?

Are they are very small firm or are they an established large one? Is there a particular reason you feel worried about fraud with them?

Michael Veazey So Sergei, are these FF based in China? And where are you shipping to? US? U.K.? Europe?

I’ve not heard of anyone doing a 30/70 split with a FF. If you’re really worried then I’d suggest

1. Get one in the USA If that is where you are importing to. Or UK or wherever you are based.

2. Find one who will talk through the process on the phone and generally help you avoid newbie mistakes.

Q.4 Ella

Hi Guys – I’m new to this group! I am in the process of arranging shipping from china to FBAI by air express (arranged by the supplier), however after reading a few posts could air freight be an option? I will exceed the $2500 customs threshold so will have to engage a customs broker anyway so will it make more sense/cost effective to go air freight? This is my first shipment so a bit unsure about the whole thing but trying to work my way through it! Additionally when you say door to door (in this case does that mean to FBAI instead of having to engage a FF to move from port to FBAI). Thanks 🙂

Yes air freight could well be an option. If it’s a small consignment it probably won’t save you much over air express but The thing to do is to get some quotes then you can work on hard data.

Air Courier is nearly always the simplest option. Ask for DDP =Delivered Duty Paid. If you get DAP=Delivered At Place (sometimes called DDU Delivered Duty Unpaid which is not technically an INcoterm) you can in theory just have the courier invoice you for the Duty but it is wise to use a customs broker at least first time out.

Ask your supplier what they can get from their air express guys. Then get quotes from several freight forwarders and compare.

#54 Incoterms for Amazon Sellers, Amazon Inventory Forecasting and China Inspection – Q & A Tuesday No. 6

#54 Q & A Tuesday No. 6 Show Notes

Q1 : Gareth [INCOTERMS]

We are in the process of sourcing our first product and we are struggling with what we need to ask for in terms of delivery. Does the term FOB only refer to shipping (boat)? What is it we need to ask for to get air freight delivered to the door to FBAI (or equivalent) in the US? As we seem to be getting different responses from different suppliers?


Incoterms (“International commercial terms” in full) refer to the Freight deal you have with a supplier [aka Vendor=Seller].

There are 9 3-Letter codes denoting the 9 possible agreement types:

http://www.skywaysms.com/inco-terms-2016/


More precisely, it shows how much of the supply chain your supplier [the Seller] takes responsibility for, and at what precise point you as the Buyer take on responsibility for your consignment and any costs of transporting it/dealing with import/export etc.

The early in the Chain the Vendor passes responsibility on to the Buyer, the cheaper it is but the more work you as Buyer need to sort out yourself. Or of course hire someone to sort out.

FOB =Free On Board– strictly only for sea  shipping but Chinese suppliers use this for everything!

This is okay to use to compare quotes if most suppliers give you the price in that way.

However, that is all.

I prefer to get quotes EXW=Ex Works i.e. literally just manufacture with no Freight. However I would never place an order EXW unless using a Freight Forwarder. 

If your supplier will give you DDP=Delivered Duty Paid, this is the most expensive but simplest option. I would always start with this as a new seller unless you have expertise or experience or contacts in the freight/import area.

If you not you could go for the next best thing, Sometimes known as “DDU=Delivered Duty Unpaid”, [which really should be known as DAP=Delivered At Place in proper incoterms, but is known as DDU among some suppliers]

Note the difference between Air Freight and Air Courier. The latter is basically a well known courier like DHL, UPS, Fedex. They have their own channels for clearing customs in USA and are simplest for beginners or if you dislike freight issues!

You can always get a customs broker if shipping into USA – I’ve used Western Corporation Overseas for extra security around USA customs clearance. It will add to your costs but can provide peace of mind on first shipment.

Bear in mind that Chinese suppliers will know more than you (probably) when you’re first starting out but they are not experts in freight. Particularly bear in mind: They are speaking a foreign language! The nuances between “Freight” and “courier”, for example, may not be clear to your supplier – but they are nevertheless real when it comes to Freight. But they will be very used to using Air Express services like DHL.

If in doubt: 1. use your supplier’s courier account; stick to Air Courier; get DDP if possible or the closest you can.

OR use a Freight Forwarder if you want to do Sea Freight (a bit more involved for a first batch of first product in some ways but may be necessary for heavy items) or even Air Freight.

Q2. Chat [Inventory] Forecasting methods/techniques.

How do people project and plan for how much inventory they will need? What is important to consider when planning ahead for growth?

“Feels like you kind of have to guess a lot more in the beginning! Started off at 500 units and down to around 460. Most of those are giveaways though. only 3-4 are organic.”

3-4 units is almost no sales history so don’t try to make any predictions yet.

Get your reviews, start PPC and then after say 100 sales or two weeks or so you’ll have enough data to predict. Get some consistency if possible. If you’re buried on page 5, 10 etc, your sales will be low and also therefore will fluctuate a lot in relative terms.

The basic maths is simple:

weeks of inventory cover=Total units left of product÷weekly sales

e.g. in this case, if in say 4  weeks’ time you have 350 units left and are selling a steady 5 a day average=35 a week, that gives you:
weeks of inventory cover=350 units left÷35 units a week sales=10 weeks’ cover.

If your Lead time between placing an order and actually getting product live on Amazon is say 6 weeks, you will need to reorder at 6 weeks out the latest.  Better to add a couple of weeks for delays.

Bear in mind delays at Chinese ports, delays getting into American ports especially before Xmas, processing at FBA Inspection etc, esp. in 4th Quarter ,  time to ship to Amazon etc. 

  If you have a duff product, e.g., no sales, no profit, you may not even choose to restock it. But if you do have sales and it looks profitable or that it will be next order, then this all becomes relevant.

Q 3: Ben Leonard: Inspection.

OK, so I know inspection is important. However, is it always necessary [?] Here is my situation:

My supplier is experienced, appears professional, stocks a lot of FBA sellers, and is very helpful. They have agreed to send me photographs throughout the process of manufacture, pre-labelling, and during packing of the order ready for shipping. I plan to put in place a purchase order contract which covers all of these.

I have no reason to believe why they’d send me a poor standard of product (samples were excellent), and we have already both expressed desire for a long relationship.

In this situation, would anyone here risk not having inspection?

Perhaps inspect once, and then not again, or not for another 3-4 orders?

Michael: My answer is simple: yes inspection is necessary. Definitely on the first order. No question. The fact that your supplier is responsive and experienced is an excellent reason to work with them in the first place. But that is just good due diligence on your supplier. Inspection is a separate matter.

Listen to the 2nd half of the interview with Manuel Becvar and read notes -it has your name on it! www.amazingfba.com/53.

If it’s a simple product, a man-day (sorry ladies, that’s the standard term, sexist I know) will cost you just 100 USD with Trigo.

Either way there is no reason to skip it and every reason to do it.

If I were you, I would just get that set up and move on. 100 USD is peanuts to have peace of mind and avoid negative reviews.

As Sellers we sometimes don’t consider the sheer expense of one negative review.

If it’s early days and you have say 9 reviews with 5 stars from review giveaways and you get one 1 star review, that means average review drops from 5.0 to 4.6. That could easily halve your conversions. Assuming your Pay per click costs stay the same, that  could easily mean you go from profit to breakeven or even to loss.

You could lose your 100 USD within a week or less and then continue to lose money until you’ve either got rid of your one star review or buried it under new giveaways.

If this happens, just deal with it of course , it’s not the end of the world – but why not just take simple steps to avoid or minimise it in the first place?

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2

#53 China Sourcing for Amazon: Keep money safe, Quality Control and Freight – with Manuel Becvar of Import Dojo – Part 2 of 2

(Part 1 of this interview for more from Manuel)

#53 Manuel Becvar interview – part 2 of 2:

How do you keep your money safe?

When you place order, tell them you’ll send an inspection team when 80% of production is finished, you’ll have to redo the goods and pay for the reinspection, and you’re not getting the rest of the money until the inspection is passed.

So never do 100% upfront payments; always pay 30% upfront, 70% when the goods are passed. 

Even if you just order $1000, please get an inspection; there are companies that will do an inspection with a 20 page report for $100 for one man-day, eg Trigo  if it’s simple. They send someone to factory and send report. 

Others are more like $300 for one man day eg Asian inspection for difficult products like electronics. But no use for say a comb or a brush.

How do you approach Quality Control for electronics particularly? The advice famously is to avoid electronics from China. [I had about 10% defect rate]

Manuel has 17 years’ experience in electronics, knows what certificates are needed and which components to inspect. He doesn’t recommend it as 1st or 2nd product.
But just get certificates, experts in electronics inspection. There is a higher defect rate – Manuel’s is about 4%. Lots of customers just don’t know how to deal with electronics, so they often send it back even though it’s working perfectly.

Is there a way to reduce defect rates?
Take reviews and customer complaints – Speak to supplier – 5/10 of reviews have this issue, can you improve on this? Also speak to inspection company and have them focus on those issues in future inspections.  

But Manuel does all this and still has 4% defect rate. Anything below 5% is okay  in electronics. Above that, consider abandoning the product.

FREIGHT

Air freight vs air courier -what’s the difference?

Air courier means someone like DHL, UPS, Fedex etc. They have special customs clearance channel and they handle the whole process for you. So it’s more expensive. An “All in” solution – where to pick up, where to deliver.

Air freight is same process but it’s usually a logistics company that works with big airlines e.g. China Airlines. There is more paperwork involved and you need to be involved. You need a customs bond, you are the ultimate consignee. You need to know the process.

Manuel has had rates for air courier of $4 /kg and for air freight of $2.30/kg so it can be a $2 difference.

Simplest solution is to ask the supplier about air courier or freight. Or ask their freight forwarder. Give them USA/UK address, tell them you need duties/import taxes upfront.
If supplier has no Freight Forwarder, just look on Alibaba or Google.

If you have to do DDU [Delivered Duty Unpaid], how do you avoid problems?

Suppliers usually have no idea how to deal with freight etc. – they are experts at manufacturing. Manuel works with a Freight Forwarding company DDP [Delivered Duty Paid]-it’s all in. They pick up at factory, they ship it direct to Amazon. He doesn’t get involved in customers clearance or amazon pickup appointments.

In the beginning he had to explain how to book appointments with Amazon.

So you ship direct to Amazon?

Yes. Always directly from China to Amazon warehouse.

What do you do about damage to packaging from Air Freight?

It’s a small %age. Always put a label saying “Fragile, handle with care” – this helps.

How did you train your Freight Forwarder?
They are based in Shenzhen head office. They knew how to deliver to USA -but they had never delivered to Amazon. Manuel chose based on price and helpfulness but had to train them in delivering to Amazon.  He gave them a clear workflow. After 2nd order, no more hiccups. 

So you don’t want someone who doesn’t know about exporting to USA?

True. If you can find someone with great price and knows about delivery to Amazon, even better.  Manuel recommends Dolphin Logistics, based in Shenzhen. Reach out to Manuel if you want more info.

How did you get $2.30/kg air freight price?

$6 for air courier is average. Manuel gets good prices because he ships 28 m3 a month!

To make it simple, give your air freight forwarders a clear business process. Tell them they need to deal with Customs brokers and make appointments with Amazon.

They can set up a Vendor Express account with Amazon to set up appointments (they can’t just turn up at an Amazon warehouse!)

How do you send inventory direct to Amazon from China? I guess you save money with intermediate steps but what are the risks and how to you mitigate them?
Manuel thinks  it can all be done cheaper in China. Get them to put FNSKU barcode on inner packaging, prepare cartons according Amazon requirements e.g. size, send them the shipping labels from Amazon seller central and you’re good to go.

If you have more than 20 cartons, the supplier needs to palletise the boxes in China, otherwise Amazon will give you a hard time!  If you have fewer, it’s okay for Floor Loading.

How else can you speed up your supply chain?

Don’t take care of the details yourself. If you have 10-15 products and have customer service, taking photos, etc etc – outsource everything you can to inexpensive VAs.

Focus on growing your business:  

  • New products
  • Optimising listings. 
  • New eCommerce Channels
  • Retail! Go to local store and ask if they want say 50 units.

Tell us more about expanding business – selling to retailers

Manuel actually started own business selling to retailers (through his time in HK) because he just thought Amazon was another eBay. It’s easier to start on Amazon, built a brand, built a reputation for products then reach out to retailers, DIY stores etc etc to sell wholesale.

Any other tips on the best way to approach retailers?

Start locally. Look into smaller importers that set to big brands at an exhibition & approach local distributors. If you can’t go physically go to exhibitions, go to exhibition websites and check then names of companies that exhibit, check them out and email them!

“My name is X, this is my brand, I’m importing direct from China, are you interested in buying?”
  

Are there other ways other than unique products and high quality to protect your brand against competition?

One thing is to have Amazon brand registry. Other than that, be better in terms of quality. Don’t give the competition grounds to attack you – quality, customer service – try to be an awesome company. Even if first few months not highly profitable, eventually it will pay off.

What is your prediction for competition in the next year or two? How do we protect ourselves?
Manuel had 6 enquiries last month in his sourcing company for a product that everyone is selling! Nobody has any imagination, it seems!

Be unique, have expertise in your product and be creative. Yes, competition is increasing but so is the market – Amazon has 51% of the (USA) online sales. There will always be a customer for [good] products. The USA population is about 300 million people!

CONTACT

How can listeners find out more about you or learn more from you?

Go to importdojo.com – there is a contact us page – or email [email protected].

HOW TO SUBSCRIBE TO THIS PODCAST

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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 away.

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2

#52 Working out UK Import Duty, Using Amazon Inbound Shipping – Q & A Tuesday no. 5

#52 Q and A Tuesday no. 5

Q1 : ANILA: For products coming from China to UK, how do you work out the duty value to put on the boxes to estimate for the taxes? Not a VATable product

MICHAEL:  Basis for duty is Commercial invoice value = Manufacture cost plus freight (if your supplier is handling freight, it will probably be on the same document). AKA Total Landed Cost (TLC). Then put that value into the dutycalculator website. 

Any freight experts here, please feel free to correct and or refine this statement.

If you are using a Freight Forwarder or even just a Customs broker, obviously ask them how it works and check any nuances for your own product.

Q2: BEN: Hi gang! Thanks for your help with my previous question. Here’s another one. I’ll shortly be sending my first delivery to Amazon. I haven’t finished the ‘send/replenish inventory’ section on seller central yet (as I’m not ready to send yet), but when i am, I presume I’ll end up on a page that tells me how to organise delivery with one of Amazon’s preferred carriers?

Otherwise…the Amazon help pages aren’t very helpful in detailing how I actually get my stuff from my house to their warehouse! I understand that amazon’s preferred carriers offer discounts for going to amazon…which I presume I book through seller central, rather than parceforce.com, for example.

MICHAEL:  Yes that’s right. Amazon’s preferred carrier is just the one, UPS. They give Amazon amazing shipping rates. Something like £1 a kg or less. Get a quote at the Post office or from a courier yourself and you’ll realise how cheap they are.

STUART: Unless, I have missed something but my experience of using Amazon’s preffered carrier, UPS, only applies when shipping from within a particular country.

For example, rates are fantastic when shipping from UK to FBA in the UK. However, when shipping from UK to FBA in the US, there are no special rates. I have found using Transglobalexpress to be very competitive, and they use UPS as well as other carriers.

MICHAEL:  Thanks for the hint, Stuart. May I ask why you’re shipping UK to US in the first place? Is it sending stock from UK you already have here in order to test the market for that product in the US?

STUART: That’s correct. I merchant fulfill in UK, and have sent stock to US FBA to test market.

Q. 3 BEN: Guys, I’d be interested in your take on this idea. Especially MICHAEL:  after the last two podcasts… I have heard some stories of people sending off their branding to suppliers to get branded samples, and then when they choose another supplier, the un successful suppliers have gone and made stuff with heir branding and sold it on to other people, or just gone ahead and stuck it on Amazon themselves.

What are your thoughts on getting samples made with ‘test’ branding. e.g. my branding with watermarks over the top. That way I can still see the quality of the printing/branding process and can still see roughly what my branding looks like, but I’m protected…

MICHAEL:  thanks for raising this point. A few thoughts:

yes that is a danger. It does happen.

Firstly, short-term, nobody really cares about your brand yet. So I wouldn’t over worry about it yet.

However, I like your idea in that you are testing the quality of printing but protecting your brand.

For that matter, if all you want to see is the quality of printing, you could use a different brand altogether!

But The only thing I would say is that by doing this, if you decide to go ahead with a supplier, you probably should get another sample done with your actual logo. Which will delay the process.

You could just trust them to do it well and get it done, I guess.

Overall, I’m basically in favour of your approach.

However, I would say this: I’m not sure how much back and forth you’re doing with Suppliers with samples. But it is really important in the PL market now it’s so crowded to move fast when you spot an opportunity in the market.

SO for speed, I would get my 2-3 samples from suppliers upfront without worrying about branding. Just check out the quality of the product. That should take max 7 days from order to having it in your hand.

Then choose a supplier on the back of that.

If you want to then check the quality of the printing of logos etc from your chosen supplier at THAT point, I would then order a proper sample with your real logo. Unless they really mess that up, I’m going to place an order. If there are minor defects, I’ll have them correct it and then send me photos of the corrected sample.

Then get the order placed and in manufacture

Please understand: There is nearly ALWAYS a trade off between speed and quality.

Yes, it’s good to have a professional process in place and yes you should protect your brand (reputation) and IP (Intellectual Property).

However, if it takes you 6 months to get to market with a good, but not amazing product, which is frankly pretty much the same as everyone else’s, the competition will often have killed off the profit in that market.

You’re better off getting your good but not great product to market, learn about the realities of trying to sell, listing optimization, handling Adwords etc etc and get some feedback from customers.

You may then simply choose

  1. to abandon that product, if quality is too low or it’s not profitable OR
  2. you could go back to your supplier and customise the product in response to customer

3, or if quality and sales and profit are all good, just go back and reorder!

Either way, you get MOMENTUM. Do not underestimate the importance of this.

“Money Loves Speed”. Quality, sadly, does not.

An eternal conundrum. My advice (as a perfectionist): “The Perfect is the Enemy of the Good”

Good luck .

BEN:

Thanks for the excellent and in depth response – it really is appreciated.

I have decided that this week I’ll be sending a ‘test’ version of my branding to three suppliers for samples. I expect to get them in 7-10 days, and then I’ll trust the best one to go ahead with the first full order using the real branding.

My ‘test’ version is close enough to my ‘real’ version that I’ll know what it looks like from the sample (it’s basically my branding with a ‘test’ watermark over the top, but in such a way that they can’t remove it’.

MICHAEL: Sounds perfect, good process. I like the thinking.

BEN: Only issue now is finding the guy who is going to design my packaging…wink emoticon

MICHAEL:  By the way, don’t assume that the Chinese will care about the watermark. If they spot a product that will sell, they will be interested. Period. Part of doing business in China. Yes protect your IP to a degree, plus make it clear in your paperwork that they are not allowed to use it. But then you’ve done what you can in practice. Then move on!

Also don’t spend much money on design before you know if the products are worth selling.

First check the sample quality before you invest time money or energy in it.

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.

For iPhone/iPad/iPod listeners – Grab your phone or device and go to the iTunes store and search “Amazing FBA”.

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 away.

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