The Trade Wars
- Current status: negotiations ongoing
- How it affects imports: Tax in UK 2.67% versus US 17%before but now at 42%
- What to do: Shippings are on hold for China suppliers
- Alternative route, find other suppliers in Asia: Vietnam, Myanmar.
- Issues: Customs may question the costing, if you decide to change cost or go that route.
- What China manufacturers are doing: Set-up factories in other countries in Asia
- Other countries are becoming more strict on goods coming from China: Ex. Myanmar and their customs fees may go up
- Things may change any moment so stay in touch with your suppliers.
- Talk to your manufacturers – they have inside news.
Lower Pricing Strategies
- Make sure to maintain quality despite the low pricing
- Strategy #1: Imitate and Innovate – find out what products your manufacturer is really good at and innovate on that product.
- Note: if you develop a product from scratch – you are paying factories development cost and development time.
- Lesson: Take an item that is already working. Change color/ dimension/ improve
- Strategy #2: Compare apples with apples – Get the specifications of the product that you want to import and send it to four different manufacturers and compare their pricing.
- Note: Once you get the pricing back then go to the highest priced manufacturer and say you have a lower bid from another, and ask if they will match the pricing.
- Strategy#3: The favorite supplier – when you choose a supplier, you choose them for the long term.Make sure it is someone that you get along with. Build that relationship through WeChat or actual visits.
- Strategy#4: Let them know if you supply internationally. Chinese manufacturers can adapt to your pricing request if you let them know why you need a lower pricing. Ex: I am supplying Europe, Japan etc.
- IMPORTANT: Don’t go too hard on price because China will give you any price you want. They will take shortcuts on quality if you drive a hard bargain to reach your price.
- Educate yourself on the market price so you know the correct price they should be offering you
- Strategy#5: Upsell quantity – Let them know if you are planning to work with them long term. State that when getting your first order, they might be willing to lower the price for a lower MOQ.
- Strategy#6: Create good credit – You can let them know of the deal you have with a big client but that you are financing that order for 90 days or so, you can also ask them to lend you credit for landing big customers.
- Strategy#7: Overstock – Ask your customer what they are holding in stock like a previous customer cancelled an order and they have that in stock.They can give you half price for that material or stock.
- Strategy#8: Monitor the exchange rate
- Strategy#9: Location equals rebates
- Strategy#10: Build Relationships – Visit them! You get better deals, exclusive offers, discounts, credits, information and orders are prioritized. Listen to why relationships are important on this previous podcast HERE
- Strategy#11:Learn the process –When you visit the factory: check the manufacturing process from start to finish. You might be paying for excess material which can be saved from being wasted and reused for other products.
- Strategy#12: Compliment your staff in front of others. Praise in public goes a long way.
Connect with Danny in HongKong on the 27th-28th!
AMZ Masters event coming up on August 25- 28!
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- AMZ Masters is the A to Z of Amazon selling and will cover topics like:How Ranking Works & Launching, Shipping, PPC – doing it yourself; and Sourcing
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