Not unless you have spent a few years in a cave, you probably know about how companies are buying products from China and selling them on the Fulfillment By Amazon FBA model.
The most unfortunate thing is the fact that most of the FBA sellers mentioned above have everything figured out when it comes to the marketing department but have totally no idea about the China production side. They go to the extent of getting tutorials that show them how to sell their products by Amazon FBA and make so much money in a period of six months and forget to ensure that they know how to deal with Chinese suppliers and make sure that they get high-quality products.
There is a topic mainly for two types of Amazon FBA sellers:
- Those sellers who import standard products from China with the aim of rebranding them by making minimal changes (Private Label Product).
- Then there are those sellers who spend 5000 USD or more per purchase order.
The crucial steps are composed of 4 different phases, which are going to be discussed step by step in this article.
Phase 1: which is Product Selection.
When selecting the ideal products to sell by Amazon FBA, you need to go for those that have high demand and low competition. This ensures guaranteed success in terms of minting profits. Low demand and low competition or low demand and high competition mean no money at all.
Phase 2: which is Supplier Selection.
Nowadays, there are so many B2B (business-to-business) directories like Alibaba, Global Sources, Made-in-China, and many others. As much as most people think that this procedure only takes a few clicks to get through, which is not the case, there is still so much involved.
What these directories do is that they help you identify potential suppliers but do not really screen or audit them at all. According to our articles before, it is very important to have a specification sheet. This is important because the supplier gets to know what you specifically need and does not leave any loopholes for errors.
To be able to properly and accurately vet your potential suppliers, you need to make a comparison chart that has different attributes that you require as a buyer. Make them as specific as you want. Once you do this, you will be able to shortlist suppliers. The moment you get a final list of suppliers who meet most or all your requirements, send each one of them an official request for quotation.
The good thing is that you remain in control of the process of selection and you can easily negotiate the prices. From there, the next step is to take time and do a background check of the supplier to confirm whether or not they are bankrupt and their track record (look at previous customer testimonials and research on how they offer their services.). The supplier that meets all your needs is the one you will work with.
(Check more about Factory Audit Service)
Phase 3: which is Pre-production.
This is the phase whereby you need to set up everything that is needed in order to start production.
This preparation involves paying your supplier a site visit so that you can audit their factory and make sure the data you actually collected in the previous phase is correct.
The pre-production phase also entails creating a control plan which clearly specifies what you expect the supplier to do and when they should do it. It is very important to seek the advice of a lawyer since this control plan is a contract and it needs to cover all the crucial requirements.
If at all products have not been well sampled, do not place an order. By the time it gets to this point, keep in mind that you should have received product intent samples from the main and backup suppliers.
It is important to make sure that you comply with Amazon TOS by including all the key details like specific requirements on the purchase order. By now, all is set and the purchase order has been sent. You are now ready to pay the deposit. Never ever pay 100% with the purchase order, the rule that is approved and that should be adhered to allows at least 20-30%.
Phase 4: Production follow up
You have to ensure that you are always proactive by following up with your supplier time and time again.
You can easily do this via email, Skype, WhatsApp, or WeChat. The moment you decide which means of communication you will use, ensure that you get regular updates from the supplier about the progress of production.
Having products inspected before shipping is very easy and logical but Amazon FBA sellers tend to forget or neglect this step. Having a third-party inspection company inspect the products while they are still in the factory is essential because in case any issue is identified, the information is fed back to the supplier and from there, necessary actions are taken. All corrections should be made perfectly. (More about: What’s the role of a QC inspector to help importers sourcing in China?)
The fact that you are an Amazon FBA seller makes you legally responsible for making sure that all your products meet the accepted standards before they actually enter the country you want to sell them in. (More: How to use AQL sampling to determine if goods are acceptable or not?)
As a seller, you are also liable for any issues regarding safety. A good example being hoverboards exploding while they are being shipped. Product approval is all about production being approved before the shipping process begins.
The moment you as the seller acknowledges and approves that all is well, sign off production. From there, you are now allowed to clear the balance that was remaining and get the products shipped directly to Amazon FBA.
All the best!
We hope that this article has been insightful and helpful for all readers.
AQI Service as a professional quality control service company in China specialized to provide a complete range of sourcing and quality inspection service for importers, buyers, retailers and sellers.