200th Episode & Special Announcement: Seller Sessions Live

Richard Morgan
February 6, 2019

[et_bloom_inline optin_id=optin_3]

Danny talks through the benefits of his Local Sourcing strategy covering the benefits, how to build your bill of materials (BOM), how its not like Alibaba, hassles with small businesses and the reduction in product costs to be achieved.

Target is Local Sourcing

Locally sourced and manufactured in the UK
Parts from UK but assembled in China is a way out but not one Danny took
Target was for UK manufactured and sourced
Makes it faster and can go around and meet face to face to agree terms
Local is not like Alibaba, sloppy and not as professional
It can be infuriating that it’s a merry dance to get business done
Some suppliers don’t like Amazon and see it as a big beast so don’t like working with Amazon sellers

Google Search for Manufacturers

Search on google with exact match search terms including the product name for local sourcing your manufacturers
Use this series of search terms:
- Manufacturer
- Supplier
- private label

Create your Bill of Materials

Break out your bill of materials for local sourcing the components
If your product comes in a bottle, box, tin and has packaging then go and find each of the suppliers for those components individually
This then builds up your bill of materials of costs for these components
In a spreadsheet you then go and build your bill of materials of costs
From this breakdown you can have an estimate of the cost for each of those components
With this you can then reverse engineer and compare the pricing to what your supplier gives you as a cost
With this you can reduce your product costs by taking out the markup on the product
You can then compare your bill of materials to produce the product to the price you’re quoted by your supplier
Helps you compete with suppliers flying in from other territories

Beat Minimum Order Quantities

A manufacturer says you need to do a minimum order quantity of 60,000
Ask for a list of their 3rd Party Suppliers and see if they sell the bottles you are after
You can then negotiate with those suppliers to get the exact bottle you want
A prudent supply-chain resilience approach to source your bottles from multiple suppliers
Also, build-in the extra delivery cost which changes from one party to another
By doing this in he UK means you can respond and source stock more quickly – as in 24hrs

Cheaper in China?

Would it be cheaper to source from China than locally sourced?
Probably but…
You have logistical costs
Inspections
Other aspect that come into play
Ultimately locally it’s a benefit and as long as you are profitable then it’s all good

The 3PL (3rd Party Logistics)

The factory you find, see if they would act as your 3PL
All items are boxed up and ready in stock
Coming upto Q4 you can have it already manufactured and ready in boxes
Savings in not moving stock from one place to another
Ask your manufacturer to hold this stock for you
Search for co-packing, co-packaging or product assembly to find these services

Gated Products

Amazon now calls the supplier direct – takes about 7 days
Instead of ungating as a Private Labeller or Manufacturer, you can ungate as a supplier selling product wholesale
Suppliers in the UK will have their own products and sell in the same category as you
Nothing stopping you from buying their products from them and then listing them for sale on Amazon yourself
Get the commercial invoice sorted with them and so when Amazon calls it’s all covered

3D Renders

See if you can get a really good 3D artist to make up your packaging
Will save you on the photography
A Magic-image service
Get 3D artist to do your bottle and packaging to get the transparent PNGs
Then use a magic-image service to annotate or add life-style royalty free images
Beware as you could find a poor 3D render via Fiverr
A decent 3D artist for this is $100-$250
This is against ToS but it’s very difficult to tell the difference with a really good 3D artist