The steps FBA sellers should not skip when buying in China [video]
By Renaud Anjoran
Except you have been staying in a cave for a few years, you have certainly noticed the very strong trend of companies buying products in China and selling them on the “Fulfilment By Amazon” (FBA) model.
What is tragic about many of these companies is, they have everything nicely in place on the marketing side, but they know next to nothing on the China production side. They can find a wealth of tutorials on “how to sell on Amazon and get rich in 6 months” but not much on what to do with Chinese suppliers and ensure product quality.
We shot a video about this (hosted on Youtube.com). Watch it if you are not sure you are doing everything right!
This guide is for Amazon Sellers looking to source standard products from China with the intention of making small changes to the product in order to make it their ‘own’ brand (Private Label Product) and ordering a value of 5,000 USD or more per purchase order.
This video is structured in 4 separate phases.
Phase 1: Product Selection [we are not going into details on this one]
Phase 2: Supplier Selection
With the B2B directories like Global Sources, Alibaba, and others, people think this process only takes a few clicks. Unfortunately, the problem is not solved yet.
These directories only facilitate the first step of the sourcing process (identifying potential suppliers, but not really screening or auditing them). Learn what needs to be done to vet potential suppliers in this video.
Phase 3: Pre-Production
During the pre-production phase, you need to be preparing everything ready to start production.
- This includes conducting a site visit factory audit that will confirm one way or the other the data you collected in the previous phase about your supplier.
- This phase also involves generating a control plan which details what you require the supplier to do and when to do it. The contract is obviously a legal document and needs to cover all the important requirements (we recommend you seek the advice of a lawyer.)
- NEVER place orders for products that have not been sampled correctly! You should have production intent samples from both the main and back up supplier at this point.
- When it comes to the purchase order, again you should include all the key details including any specific requirements to ensure you comply with Amazon’s TOS.
- Once everything is in-place and you have sent the PO, it is now time to get serious and pay the deposit. Make sure you do NOT pay 100% with the PO, the general rule is 20-30%.
Phase 4: Production
- Make sure you are proactive and follow up with your supplier. This could be through email, Skype or even WeChat. Whichever way you choose it is important to have regular updates from the supplier regarding the production progress.
- One of the biggest mistakes Amazon sellers make is NOT getting products inspected before they are shipped yet it is one of the easiest and most logical steps to take. Having a third party inspection company inspect products while they are at the factory allows issues to be identified and fed back to the supplier so that corrective actions can be worked on.
- When it comes to compliance, as an Amazon seller, you are the importer of products, therefore you are legally responsible for ensuring all products meet the required regulations before they come into the country you intend to sell in.
- You as a seller are also liable for any safety issues (hover boards exploding is a prime example here).
- Product approval is about approving production before it is shipped. Once you have approved and signed off production it is time to pay the balance and get the products shipped to Amazon FBA.
We hope it's helpful!
Renaud Anjoran has been managing his quality assurance agency (Sofeast Ltd) since 2006. In addition, a passion for improving the way people work has pushed him to launch a consultancy to improve factories and a web application to manage the purchasing process. He writes advice for importers on qualityinspection.org.
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