Amazon Products Sourcing: An 8-Step Guide to source products in ChinaSheng
Today, I’m going to show you step-by-step how to source products in china as an Amazon beginner. These are the exact tactics I’ve used to help my customers for more than 10 years.
The best part:
I’m going to show you how I did it with:
No idea what product to choose.
While working a full-time job.
Ok, let’s get to the point.
Step1: Find the right products
When you decide to start an Amazon business, it’s great if you already know what product you want to launch. If you have not found the right product yet, start by checking the Amazon product catalog for ideas.
There are some categories that are not suitable for small sellers to start with, such as the following:
Amazon Business/ Amazon TV/Amazon Music/Echo & Alexa/Prime photos and prints/kindle e-readers & books/fire tablets
Obviously, these categories are owned solely by Amazon.
The following categories are also not suitable for new sellers:
App store for android / books and audible / movie music & games / home services / credit & payment products
Well, now let’s take a look at what categories are left:
Home, Garden & Tools
Sports & Outdoors
Automotive & Industrial
Toys kids & Baby
Closing shoes & jewelry
Electronics & computers
If it’s still difficult for you to choose a category to enter, please keep reading.
Now, please take a pen and paper and write down what’s the first product in your mind after you see the name of each category.
Home, Garden & tools: Sofa
Sports & Outdoors: Tent
Automotive & Industrial: Car cleaning tool
Toys kids & Baby: legos
Closing shoes & jewelry: T-shirt
Electronics & computers: Earbuds
This list is not a standard answer, everyone should have his/her own list. Now just look into the category you are interested in and choose the products to sell.
Following three recommendations will help you make a better decision:
1, Choose your favorite product / familiar product.
2. Choose creative products, rather than daily consumer goods
3, Select a product which easy to private label (meaning, creating your own brand)
Step2: Do the math
Whether it is operating a coffee shop, or selling things on the Amazon, the essence of business is always “buy and sell”
Profit = Sell price – Cost of goods.
If you want to know what the cost really is, here is a formula to help:
Cost = product cost + packaging cost + shipping cost + Amazon fee
(If you are a FBA seller, you also need to consider the FBA costs, which we will talk about in a future post)
Assuming you want sell product A, the product cost you purchased from a supplier is $10/piece, but the products comes in bulk, obviously you need a box to pack the product and the cost for box is $ 0.1/piece. The shipping company will tell you that according to the weight of your product, they will charge you $2 per shipment.
OK, so far, the cost is: $ 10 + $ 0.1 + $ 2 = $ 12.1
We all know, Amazon will make commission from your sales, the amount of commission is based on different categories (Please refer to the following link https://www.amazon.com/gp/help/customer/display.html?nodeId=1161240) Here we assume that every sale of a product Amazon will charge $ 1.5
Well, now we now know the total cost of product A = $ 10 + $ 0.1 + $ 2 + $ 1.5 = $ 13.6
In other words, you are profitable only when the listing price higher than $ 13.6.
With this formula, when you see the price your competitior listed, you can also know what is his/her estimate sourcing cost is.
Step3: Choose a right channel
It is no exaggeration to say that 90% of the world’s products are from China, although in recent years, China’s manufacturing industry is moving to Southeast Asian countries, but China is still the best source for all products.
So how do you get in touch with the Chinese suppliers? There are currently two ways: online platforms and exhibitions.
As a online business beginner, exhibition is not affordable. So online platforms like alibaba.com/aliexpress.com is the best choices.
Step4: 3 things to prepare before starting your journey
Before you start a sourcing journey, you need to prepare these things:
1, A brand new e-mail address (if you have your own domain name,just create a new email address, if not, you can use Gmail and other popular mailboxes)
2, A company name (of course you do not really have to register a company until you sell, but a company name will make your inquiry response rate has been greatly improved)
3, A job title (Chinese suppliers are more familiar with the job titles like: Sales Director / Buyer / Director / Sales Manager / Sourcing Manager etc.)
Remember, do not use personal mailbox as the registration mailbox of these platforms, it will be a nightmare.
Now you can go to aliexpress or Alibaba.com to register your business account (purchase account). This process is similar to all other sites. After the registration is complete, you can submit a sourcing request, please fill out as much as possible because the more detailed, the higher the accuracy rate of the products received..
Step6: Quotation Analytics
Once you submit your inquiry (if well written) you should receive quotes shortly, if not, please wait 3-5 business days and you will receive much more.
A good quotation not only includes product details and price, but also covers all the concerns of a buyer, such as product packaging, transportation, delivery, quality assurance. Save these quotations.
Price is always a vital factor, but good service is just as important as price. The supplier who willing to make a very detailed quotation, they will usually cooperate with you very well once you give them the orders.
Step7: Keep contact the suppliers you did not work with
After selected a supplier to work with, 99% of buyers will stop to contact other suppliers, that is bad business, be that 1% of buyers, continue to keep in touch with them. Tell them that for some reasons, you can not cooperate with them this time, but you will give priority to them for next orders. Keep the best suppliers around you, it is the best way to save your time for future orders.
Step8: Place order
After you have an agreement with a supplier, you can have them send you a PI (Proforma Invoice) or SC (Sales Contract).
When you sign or stamp this document above, the contract between you and supplier will take effect. The supplier will produce the product according to the order.