In this episode Kian Golzari talks about how the tariff wars is affecting Amazon sellers and ultimately changing the sourcing landscape. Kian maps out how you can navigate the new terrain and reducing surprises that can cost you.
Live from China Magic
- US has increased the tariffs for goods coming from China.
- Know your HTS codes.
- Seek advise from experts – don’t just get if off online. Speak to your forwarders, talk to experts.
- https://www.gov.uk/trade-tariff go there to get your code.
- Ask your manufacturer
- Ask your forwarder
- Some codes are ambiguous.
- Change your material slightly to get lesser tax.
- Know your product and maybe you can change the category.
- Talk to your supplier about reducing the price/ cost and explain how or why you need that done: how much is the tax now and so on.
- If you are massively affected – delay your shipping, ask your supplier to store your goods until you think you can have them shipped or tax has corrected itself.
- Ask supplier to absorb some of the costs – applies if you have good relationship with your manufacturer.
- Change the costs on the goods – WARNING: be mindful to answer when customs will ask about the price change.
- Find a new market – go to a market that is not affected by the tariffs. Like EU markets.
- Ask your supplier what their strategies are: like they are building factories in other countries. Sometimes, they will not tell you if you do not ask.
- Add or remove material on your product: converse shoes – add fluff on the sole so it gets cleared as slippers at 0%; backpack with hard shell at 0% so add a hard shell.
- READ Kian’s Blog: https://www.helium10.com/blog/turn-trump-vs-china-your-advantage/
- When sourcing from another country: analyze their delivery, shipping, and performance.
- Do a cost analysis!
- Shipping to Canada will not save you a lot. IF you have high duty rates.
- Ship to another country and fulfill it from there.
- You can also ship partially completed products BUT you need to have a trusted partner in the other country if you are planning to do this.
How to Talk to Manufacturers
- I don’t like 1688, but that platform is for those who are planning to sell locally.
- Coming to China is the next best step when growing your business.
- Alibaba is also like a middleman market place with a lot of re sellers who list products and resell them later.
How to Use Alibaba – Tips
- Find good suppliers FIRST.
- Discuss MOQs and pricing later on.
- Filter by gold suppliers and trade assurance before further searching.
- Check out number of years they have been on business.
- Look for 5+ years
- Look for certificates
- Look for products sold, look at the core products– not scattered.
- Look at the business address – not the 29th floor but industrial areas.
- Design and register your product in your home market. Consider that to fend off copycat.
The Canton Fair: Your Questions
- What got us here. Won’t get us here.
- Always level up in your business.
- DO NOT DISCRIMINATE BETWEEN TRADING COMPANIES or FACTORIES:
- Trading company understands your consumers, use trading companies if you can not travel to China more often.
- a lot of factories do not have trading certificates – this is where trading companies come in.
- WHERE ARE YOU LOCATED? Make sure that the office and factory are located together.
- WHAT PORT DO YOU SHIP FROM? You can consolidate your shipping/container.
- HOW MANY EMPLOYEES DO YOU HAVE? There is no right or wrong answer. Bigger factories are less lenient with MOQs.
- HOW MANY UNITS CAN YOU PRODUCE PER MONTH? Ask why the MOQ is the MOQ? Why xx pieces?
- There is a way to get lesser MOQ – like if you ask for the material they have on hand and not customized and so on.
- WHAT COUNTRIES DO YOU SUPPLY? This is so that you know the quality.
- REVERSE ENGINEER: Tell them where you sell, what you sell and what you are looking to sell.
- Have a back up plan: have a back up manufacturer.
- Have your factory completed third party audits?
- Know that you still have to do it for your brand.
- What is your strongest item?
- What is your core item?
- What machinery do you have in your factory.
- Do you have internal or in-house testing?
- What products are new?
- Ask for exclusivity – ask for time-period, ask for specific market exclusivity.
- Ask when is the best time to visit.
- Ask for a quotation and specifics via email after the fair or TONIGHT.
- take good quality notes, too.
- Get photos, machines and location, so on.
- Pick up samples at the fair rather than having it shipped and so on. Ask them at the fair or when you could pick it up.
- Go to many booths, show your experience – understand the product you are asking quotation for, get a specs sheet.
NOTE: You must establish a good relationship when asking the questions below:
- WHAT BRANDS DO YOU SUPPLY?
- WHO IS YOUR BIGGEST CUSTOMER?
- DO YOU SUPPLY BIG RETAILERS OR DEPARTMENT STORE? You can ask (once you built a relationship), maybe you can piggyback on their orders.
- HOW MANY YEARS HAVE YOU BEEN SUPPLYING?
- Do you supply a brand on Amazon?
- What products are you working on?
- 3 Step Approach
- Development sample
- Pre-production sample
- Pre-shipment sample
- Have these checked so you will make sure that quality is consistent.
- Some manufacturers will ask you to pay for samples – if you are willing to pay then it shows that you are sincere. So definitely pay for it when they ask.
- Have a terms and conditions agreement with your manufacturer.
- Book in advance, give deposits as well.
- Explain who are your customers so they will understand what is going on.
When you improve the leader, you improve the business. Invest in yourself and upgrade your habits.
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