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In this two-part episode, we bring in The Sorcerer’s of Amazon to drop some knowledge on what you should be implementing in your Amazon business. As usual, it will be delivered in a no nonsense way where we get to the point and ask the important questions and get answers for you. Kian Golzari, Steve Simonson and Angie Chacon, Amazon big hitters will share with us their expertise.
Attention,keep your ears on the ground
- Things have been very fluid and constantly changing
- Follow Twitter to get insights on foreign policies but take it with a grain of salt.
- US issued a 10% tax on China goods
- It;s moving quickly and there are a lot of changes
- There is massive disinformation and massive mistakes
- People do not understand what is happening with their products.
- What these changes mean: RMB has devalued. So your suppliers are getting more for a dollar.
- Do not go to social media for advice on what to do next.Talk to your forwarders, your suppliers and ask the experts.
- Figure out the best way to have the situation play into your own advantage.
- Try to source from the US and other countries to minimize the effect.
Best way to move manufacturing out of China?
- Source from dozens of countries.
- This depends on the raw materials you need to source
- Once you find one for manufacturing — source as close as you can to the manufacturing site
- But the low cost manufacturing is centralize in China so try to diversify pieces of portfolio like in Vietnam
- Evaluate the category that you are bringing in Some categories tax have gone way up like backpacks for instance
- Some categories are not as greatly effected
- Check how greatly you are effected and check how much the move will cost you versus the savings
- You might not be saving at all if you look closely
- Consider: scale of production, speed of production time, costs etc.
- Before you do, talk to your manufacturers as well. Some China manufacturers are moving their factories to other countries like Myanma
- Consider what country you are importing into
- If the country you are importing to is not affected like UK or Europe for instance
- Check with your forwarder — there may be some grey areas where you can lower cost of goods.
Grounds in terms of negotiating with your factories
- Work on the relationship with your manufacturers
- Remember that what is good for you is good for them
- They do not want you to lose orders just because of the pricing
- You can ask them for a favor but they will no be shy to ask the favor back when the advantage sits with you
- As a result of the low exchange rate — your manufacturers are getting more than they used to.
- Use xe.com in charting your rates and send it to your manufacturer
- Situation: US tariff on China goods is up so China devalued their currency to remain competitive and keep the costs down.
- The bigger your production order is, the more proactive your factory will be.
- Negotiate with them
- See if you can work with your clients yourself about costs
- Change ingredients or work with different options in your product without sacrificing quality
- Stock up on your packaging and items
- Get the distribution partners from your manufacturer so that when you need the parts or bottles you have somewhere to get them.
- Although you still pay a little bit more
Advantages with Government that the West can get?
- Rigid regulatory compliance and QC products
- Even the Chinese prefer western products over China manufactured products like baby milk
- Get a reputable Quality Control company for your outsourced products
- Make sure that whatever you are importing is tested to the highest standards
Getting Ahead of China’s Local Sellers
- Go direct to manufacturers and know who you are dealing with so you get the highest quality
- Play the long term game by producing a high quality product
- Strengthen your brand and your brand story
- Be a product practitioner and a product developer
- test your own and develop your own because you understand your customers
- Constantly develop to be one step ahead of them!
- Encourage a subscription module
- Fix your packaging from someone else, not the same manufacturer so you are hiding parts of your product
Be on the Ground, Go to China!
- Go to the countryside and find one which works for you
- Not all products are in the Canton Fair
- Talk to people and get your feet on the ground in China
- Start with the Canton Fair but expand your horizons
- if you want those advantages then be THERE.
- You need to know what is selling but you need to make it your own: packaging, ingredients so on
- Work with a supplier who can support you in the long run
- What about the component costs won’t it go up?
- Make sure that what you are adding, adds to the value
- Do a tear down on your product
- Work out component costs
- You might be removing something basic and adding something premium with the same cost.
- Understand how your products are made and understand the process so you can transition to something else
- Educate yourself.
- Be careful with “yes we can” from China manufacturers.
- They will make sure to meet your price
- Ask qualifying questions again and again until you know what is happening
- or how it is going to happen
- Start by sourcing out your materials so you’ll know how much they really cost
- Ask your manufacturer if they can get the materials for you for an additional fee and meet you in the middle
- Understand your materials
