Kian Golzari joins us again in another session and discuss with us why staying on top of China developments is a must for successful sellers. Listen to the podcast as he shares with us what are the key questions to ask and factors to consider when choosing a supplier to ensure a successful partnership. After all: the quality of the questions you ask,determine the quality of your results.
Why you should stay in touch and on top of China
- There are constant changes that you can use to your business advantage
- There is a growth in the middle class of China so there are a lot of people with disposable income.
- Raw materials and labor costs change in some provinces.
- There are a lot of Western establishments popping up in China and this affects the young labor force options of working in a factory or in these establishments.
- As a result, factories move towards the inland; rural areas.
- Consumer habits are changing and China is a growing market.
- Investors are changing their investments from factories to real estate.
- Government regulations can affect your business. Factories get shut down due to government imposed legal and environmental restrictions.
- Stay on top of the exchange rates.
- Go to www.xe.com to monitor your exchange rate and send it to your supplier to let them know you are on top of your business..
- Build up relationships so you can negotiate with your suppliers.
- Just show that you are aware of the exchange rate and your suppliers may extend a goodwill deal to you for the little extra they have received from the changing exchange rate.
- The best time to ask for discounts and deals is just before shipment.
Cultural Aspects of Doing Business with Big China
- Make friends with your suppliers and be consistent in your transactions before you ask for discounts.
- Present your requests in such a way that it is beneficial for both parties and not trying to take advantage of the other party.
Three pillars of Amazon Sellers
- There are three pillars: beginners, intermediate and advanced
- Beginner: sourcing from Alibaba and Global Sources.
- Take note! Not all good suppliers are listed on Alibaba.
- Intermediate: Canton Fair, this is the biggest exhibition in the world and you can find any product. This happens twice a year.
- Advanced: You have a presence in the factory and business is booming.
- It is fine to have sourcing agents – but they would own the relationship with the factory. Not you!
The quality of the questions you ask,determine the quality of your results.
Ask your prospective suppliers this questions:
- Are you a trading company or a factory? The answer does not matter. You can get great prices from both but it pays to know.
- Trading companies have an advantage over factories: better products, export licenses.
- Where is your factory located? Have an idea of where they are located. Office and factory address may not be the same.
- Which port do you ship from? This will help you in consolidating your container from different suppliers if they ship from the same port.
- How many workers do you have in your factory? You’d want to have a picture of who you are dealing with and how they can adapt to your needs.
- Explain why the MOQ is at that level? Ask why the MOQ is high or low. Ex. the MOQ is high because the item you ordered is this pattern but you can get lower MOQ on another pattern.
- Which markets do you supply? You can get a gauge of your competition by asking this and your possible markets.
- Which brands do you supply? You can get to know the quality of their product.
- Who is your biggest customer? This lets you gauge the quality that the factory is able to produce.
- Have you ever supplied big retailers or department stores? You can place a request for piggy-backing on the orders of this big stores.
- Are you familiar with Amazon and do you sell on Amazon? Get to know if you will be competing with your own supplier. Nothing wrong with that – just have a background.
- VERY IMPORTANT: Has your factory completed any third party audits or testing requirements? Make sure your factory is up to the standards: no child labor violations, fire safety, work environment etc.
- Which product does your factory specialize in? What is your strongest item? Core strength of your factory?
- Do you have in-house testing? You can have your own third party testing but factories that have in-house testing will work to your advantage.
Note: you can only ask this if you’ve had a long term relationship with the factory.
- Which new products have you been working on? Be in the know and stay ahead of the curve.
- Asking for exclusivity for this new items.
How to warm up to your China suppliers
Before you ask them these questions:
- Build rapport. Contact them through WeChat and send them things you do outside business.
- Send them photos of you over the weekend and chat or ask about what they have been up to etc.
- Make sure to get your pre-production and pre-shipment samples.
- Make sure to compare your pre-production (approved) sample versus your pre-shipment sample and make sure they are the same – IF NOT then cancel shipment and get it fixed.
- Get corrections BEFORE shipment to save on costs.
- Negotiate Free Samples OR Free Cost. Pay the freight cost and have the factory cover the samples cost.
- When shipping samples from China, place on the document: NO COMMERCIAL VALUE and cost at $1.00 value
- Pre-shipment samples are also called Gold Seal samples.
Connect with Kian Golzari
Facebook: Sourcing with Kian
Connect with Danny in HongKong on the 27th-28th!
AMZ Masters event coming up on August 25- 28!
- If you are struggling or doing just OK then you are in luck. Join this bootcamp and scale up your business.
- 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
- Speakers in this event will help you gain insights on starting it right or how to improve your Amazon account performance .
Find out more and see if AMZ Masters is the right fit for you! Join the AMZ Masters HERE!