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Steve Simonson is an 8 figure Amazon Seller with us talking about the trump tariffs, his ideas around negotiating with suppliers and how mitigating against the on-going USA and China trade war has helped his business weather this storm.
- Shipping 150 containers a week
- Been doing ecommerce a very long time
- Reached into multi-channel
- Team is managing around 125-150 containers a month
- Maybe 300 containers in the order process
- Just customs takes 3-5 people
- Marketing and other parts with different teams
Trump Tariffs
- Import tariffs on product imported from China to reduce people buying from China to hurt them
- Not ideal for Amazon Sellers
- Made a couple of strategic moves to prepare for it – some right moves, a few have gone wrong
- Looked to mitigate it for section 201
- What can they buy in USA, CAmbodia, Vietnam
- Massive parts of manufacture are still in China – see this as chest thumping from Trump and China to strike a better deal
Mis-steps
- First one was tariffs on big industrial things – most people didn’t notice
- Hit a bunch of stuff with Sept’s section 201 tariff
- First phase hits Friday and then January 1
- Immediately bought a bunch more containers to beat the 15% Jan tariff
- Had massive inventory for 3 months as Trump delayed the tariff in the end
- Then got a little complacent perhaps
- Steve did not anticipate this escalation in recent weeks going to Section 201 being full 25% and going after a further 300 billion worth
- China is also ratcheting up so expecting more pain to come for an Amazon Seller
- Hoping it gets resolved in the next 2 weeks or it could go nuclear
- Have over the last year moved a lot of the supply-chain to avoid it
Share the Pain with Manufacturers
- A major hit to margins eaten up by this tariff
- This could have wiped out your margins as an Amazon Seller
- Steve implores Sellers to have margins to begin with
- Several factories in CHina that are desperate to keep buyers and they will take the tariffs hit and get China gov subsidies
- Time to go an re-negotiate where you can to make it a more fruitful long-term relationship by them sharing this pain
Trade Cold War
- Must consider risk mitigation going forwards
- Very complex issue and not going away any time soon
- A trade cold war
Negotiating Terms
- You need to be buying enough volume to generate leverage
- Need 4 things
- Peg the currency at a point where you agree on the price
- Always get terms – speak to Steve in London
- Product liability from the manufacturer (not an easy one)
- Ask for Help on tariffs, anti-dumping or counter-weighting duties
- These are the main components along with quality and time
Seller Sessions Live in London
- Steve is coming to London
- Traveling coach for a good price
- Love entrepreneurs and helping them out and hanging out
- See you there
