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Sharing my lifetime experience in export/import. Product sourcing specialist.

Michał Kóska

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Walter,

I know you may not import small quantities at this point, but I'm curious- when I quote small quantites (I want to test the market) they usually quote me $50 for a kilogram.. It is a lot.. One guy found me a deal with local postal service for $19 for KG and $25 for 2KG. I'm still making my first steps and want to consult if this is normal. I'm located in Poland.
 
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Walter Hay

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Hi Walter, thank you so much for the great thread. Took me a while to browse from the beginning but I will review them and take notes!

As for my questions:

1. What can you say about the companies listed in Alibaba's inspection service page?
http://inspection.alibaba.com/1.html

I haven't found the reliable companies you mentioned previously. However, they provide a number of transactions and reviews from clients which is a good indication of their reliability. They are also priced cheaper which is a good thing for beginners such as myself.

The top company there is RichForth and their price is $103 per man day. Their website is http://www.inspectgoods.com but I did a quick search and found richforth.com. It seems to be owned by the same company and they are offering their own products there, which tells me they are into trading as well.

2. What are your thoughts on this? Should I avoid an inspection company that's also a trading business?

3. I asked for their certificate but the only available is a Chinese version. Also, I can't find any certificates or accreditation from their site. Is that a red flag? Even though they are the top 1 listed in Alibaba with tons of transactions and good reviews?

Thank you!
Matt
HI Matt,

You have opened up a very interesting subject. Inspection services in China are multiplying rapidly and it is common on some business forums to see numerous Chinese individuals jumping on the bandwagon and offering their services.

The big question is how well do they do their job, how reliable are they and are they ethical? I will answer your questions first.

1. I find it disappointing that Alibaba's listing of inspection services contains obsolete information. I checked out 4 of the services quite extensively, and found that none have transactions listed later than Sept 2013. This begs the question whether the quality of the services listed has been maintained or has it dropped off?

Also, the charges shown are mostly obsolete. In fact the rates for the ones I checked had risen substantially above the rates show on Alibaba's list. For example, Richforth now charge $180 per man day not $103 as listed.

It is also interesting to note that on Richforth's own site they display a price of $180 on their home page, but still show $103 on some other pages that are clearly well out of date. You are right about inspectgoods.com being owned by Richforth.

They only display one testimonial on their site and being a suspicious person I doubt that it is genuine. I have contacted a friend in Taiwan where the testimonial supposedly originates and will let you know what he reports.

2. I would see the fact that Richforth are traders as a possible red flag, but only if they offer product sourcing for you. It only suggests that either the inspection service or the trading is a sideline.

3. Inspection services in China are completely uncontrolled. Some of the services listed by Alibaba quote membership of bodies that I have never heard of. The whole system relies entirely on trust. Knowing that there is no verification process whatsoever, and that Alibaba will list for a fee any person claiming to be an inspection service does not instil trust.

One of the inspections services listed quotes a rate much higher than that charged by the century old European services, but in the list of reviews the amount charged in each case is shown as $0. Another service listed shows a charge of $253 for a supplier verification!

Summing up, I would suggest you be absolutely sure what you are paying for before you employ any of the services listed. It would probably pay to also get a quote from one of the services I have previously mentioned. I think it is significant that Alibaba's rules relating escrow claims specify that you must have an inspection done by one of the 3 big European Inspection services. (see my post Jan16)
 

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Walter,

I know you may not import small quantities at this point, but I'm curious- when I quote small quantites (I want to test the market) they usually quote me $50 for a kilogram.. It is a lot.. One guy found me a deal with local postal service for $19 for KG and $25 for 2KG. I'm still making my first steps and want to consult if this is normal. I'm located in Poland.
Freight charges on samples are always seen as a an obstacle by new importers, but it is a sad fact of life.

I always recommend asking suppliers to use the postal service unless the sample is needed urgently. Postal rates to the EU are not subsidized as heavily as they are to the US, but it will still save you a lot of money. You can easily check out postal rates for yourself if the item is being sent from Hong Kong, see http://www.hongkongpost.hk/eng/postage/overseas/bulk/

It is not so easy to check if it is being sent via China Post because the site zf.chinapost.com.cn/index.do. is in Chinese, so you will need to sue Google Translate. The rates are quoted in RMB, so you will have to go to somewhere such as http://www.xe.com/currencyconverter/ to convert to your currency.
 

Michał Kóska

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Freight charges on samples are always seen as a an obstacle by new importers, but it is a sad fact of life.

I always recommend asking suppliers to use the postal service unless the sample is needed urgently. Postal rates to the EU are not subsidized as heavily as they are to the US, but it will still save you a lot of money. You can easily check out postal rates for yourself if the item is being sent from Hong Kong, see http://www.hongkongpost.hk/eng/postage/overseas/bulk/

It is not so easy to check if it is being sent via China Post because the site zf.chinapost.com.cn/index.do. is in Chinese, so you will need to sue Google Translate. The rates are quoted in RMB, so you will have to go to somewhere such as http://www.xe.com/currencyconverter/ to convert to your currency.
Thank you Walter! I truly appreciate this information. The first thing they quote is DHL etc. which is the most expensive. After I request a postal service the cost looks much better.. :)
 
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Latest News From Alibaba.

Being registered as a supplier on Alibaba (although I don't list anything for sale) I get all the news from them.

Today's email says:
Happy New Year!
2014 is a significant year to Alibaba Group. Alibaba Group launched IPO in New York Stock Exchange in Sept.2014, next step for Alibaba Group is go global!
Alibaba took down 90 million fake products ahead of its IPO. In 2015, Alibaba will devote ourselves into developing a more trustworthy platform.

This leads to the interesting question: Why did this site that has millions of people relying on it, continue to allow the advertising by suppliers of 90 million fake products until it became necessary to do the right thing so they could list on the NYSE???????

Here is an admission that the platform until now has not been sufficiently trustworthy. Some readers have questioned my attitude towards Alibaba. This may help explain it.
 

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Thanks for the very detailed answer Walter! I really appreciate it!

1. I find it disappointing that Alibaba's listing of inspection services contains obsolete information. I checked out 4 of the services quite extensively, and found that none have transactions listed later than Sept 2013. This begs the question whether the quality of the services listed has been maintained or has it dropped off?

I have not noticed this. You are absolutely right. Now we can't really know if they still provide good service or not.

They only display one testimonial on their site and being a suspicious person I doubt that it is genuine. I have contacted a friend in Taiwan where the testimonial supposedly originates and will let you know what he reports.

I do hope it's genuine. I look forward to your update.

Summing up, I would suggest you be absolutely sure what you are paying for before you employ any of the services listed. It would probably pay to also get a quote from one of the services I have previously mentioned. I think it is significant that Alibaba's rules relating escrow claims specify that you must have an inspection done by one of the 3 big European Inspection services. (see my post Jan16)

I talked to Richforth's support today and they told me it's an error on Alibaba's side. Fortunately, Alibaba will hold my payment until I am satisfied with their service. I assume that the escrow you mentioned is for buying the products and not the inspection service.

I'll spend more time researching on this. I'll also get a quote from one of the services you mentioned.

Thank you so much!
 

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Thanks for the very detailed answer Walter! I really appreciate it!

I do hope it's genuine. I look forward to your update.

I talked to Richforth's support today and they told me it's an error on Alibaba's side. Fortunately, Alibaba will hold my payment until I am satisfied with their service. I assume that the escrow you mentioned is for buying the products and not the inspection service.

I'll spend more time researching on this. I'll also get a quote from one of the services you mentioned.

Thank you so much!
It may take a few days to find out if the testimonial is genuine. I will post any report that I get.

My reference to escrow was a slip. I meant Alibaba's new Trade Protection scheme

The Alibaba rule I referred to is that they require buyers to arrange a pre-shipment inspection in order to be eligible for protection under their new Trade Protection scheme. They specify that those inspections can only be carried out by one of the 3 big European inspection services. See my post on the subject on Page 11.

To qualify for protection under their new scheme they do not appear to allow the use of any of the inspection services on their list of advertisers. That is not a good recommendation, if Alibaba themselves won't rely on them.
 
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Q & A 16. This question is about visiting Yiwu markets but I have included in my answer some comments about using the Yiwu Markets B2B site.

Q. I have heard that Yiwu markets are a good place to buy. Is it worth a visit?
A. Yiwu is a permanent market rather like an oriental bazaar, where thousands of businesses rent stalls. Some are there permanently and some are only short term. A very large number of them do not speak English and this means you need to pay an interpreter.

That puts you at a great disadvantage because you don't know how accurately the translator is telling the stallholder what you said or telling you what the stallholder said. You won't know if they have arranged a commission for introducing you to the seller or for telling you that this stallholder has offered the best price.

The interpreter might only translate properly at those places where he/she gets a commission. Also, many of the exhibitors are traders, and that means you can’t get ex-factory prices.

The Yiwu market is vast, covering over 2,000 acres and you would need several days to even scratch the surface.

A major consideration is that Yiwu stallholders are notorious for selling rejects and generally poor quality. Some dollar store owners visit regularly and they don’t care much about quality or continuity of supply. If you want to establish a reputation or your own brand, Yiwu is definitely not the place to buy.

If you want quick profits and don’t care too much about your reputation, you don’t have to visit China in order to buy at Yiwu. You can buy from the suppliers at Yiwu by using the Yiwu market website, operated by CCC Group, but there are a few reasons why I would not consider that.

Firstly, if you buy good quality products, (and they do exist there), you will certainly pay more than you would if you bought direct from the manufacturers. CCC are acting as brokers and they add a margin, which obviously reduces your profits.

Secondly, because many stallholders have no English, problems can arise in relation to descriptions, specifications, packaging, etc. CCC say they handle that for you, but with thousands of small transactions taking place daily, chances are that such problems will not receive much attention.

Thirdly, product illustrations are not good and it can be a bit of a lottery as to whether the real product will look the way you expect it to.

If you have the time and money to visit China, I would recommend doing so, but you must do your homework first. See my posts Part 1 and Part 2 on Visiting China.

TOPIC HEADINGS PREVIOUSLY POSTED IN THIS THREAD:
■ Introduction. Dealing with myths and misinformation.
■ Some things you should know or do before you start product sourcing.
■ Part 1. Traveling to source supplies. Do you need to visit China? Trade Fairs.
■ The difference between Alibaba and Aliexpress.
■ Alibaba and the 2236 Thieves.
■ Sourcing from countries other than China. Is it worth it?
■ Part 2. Traveling to source supplies. Visiting factories in China.
■ Parallel Imports USA.
■ Do your suppliers use child labor or slave labor?
Inspection Services.
■ Sourcing Agents and Quality Control.
■ Misinformation Is A Wealth Hazard.

■ B2B Scams
■ Q & A 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15
■ Protecting Trademark, Copyright, and Other Intellectual Property.
How to find Unique Products
■ Success Story
 

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Good day Walter. I have a question about payment terms with a vendor in England. This vendor is reputable so I do not have any of the usual concerns that I might by way of China, etc.

In our communications, I have informed them of a large order that I will placing in the very near future. I prefer to give the vendors a heads up in case the size of the order warrants extra preparation. Their response to my inquiry on payment terms resulted in the segment italicized below.

"we would ask for pro Forma payment or I am sure we could work on a deposit and a balancing payment on terms."

My understanding of pro Forma payment is that it is a pre-invoice that lays out the expected cost of the goods. Am I misinformed, as this reads more like a deposit on the order is expected to guarantee delivery of the agreed amount.

Many Thanks,
 

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Good day Walter. I have a question about payment terms with a vendor in England. This vendor is reputable so I do not have any of the usual concerns that I might by way of China, etc.

In our communications, I have informed them of a large order that I will placing in the very near future. I prefer to give the vendors a heads up in case the size of the order warrants extra preparation. Their response to my inquiry on payment terms resulted in the segment italicized below.

"we would ask for pro Forma payment or I am sure we could work on a deposit and a balancing payment on terms."

My understanding of pro Forma payment is that it is a pre-invoice that lays out the expected cost of the goods. Am I misinformed, as this reads more like a deposit on the order is expected to guarantee delivery of the agreed amount.

Many Thanks,
A Proforma invoice should never be altered except by agreement between the parties. Over many years it has become a defacto sales agreement or order confirmation.

You are right in thinking that their response constitutes a request for a deposit in order to guarantee delivery. From our previous communication I am guessing that they will be manufacturing to your specifications, and even a 30% deposit involves quite some risk for them.

The words you have quoted suggest that they may be considering an open account, with payment of the balance being on a 7 day, or 30 day basis. If such is of benefit to you, then I suggest you respond with that in mind. Their response quoted indicates to me that they are very keen to get your business.
 
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Just In Time

I have often been asked is it possible to start importing on a low budget, and strangely enough the figure most often mentioned is $300. Possibly this is because a lot of newbies consider paying $300 to join Worldwide Brands so that they can start a dropship business.

I have had numerous people succeed at this, although as I wrote in a recent post on another thread, that is a slowlane project. Here is how I see it working and it involves my adaptation of big business's Just In Time system.

The small entrepreneur can use my "just in time" ordering system which works better than dropshipping and gives massively better profits.
.
This is how it works:
1. You buy a small inventory from China or another overseas country and start selling.
2. You have happy customers because you can dispatch the same day.
3. Once you are certain you are on a winner you place another order and it is delivered door to door for you via air courier.
4. The huge profit margins include the cost of the air courier.
5. You can increase inventory size or product range using some of the profits.

The key to this system is finding real manufacturers, not the thousands of them posing as manufacturers on popular B2B sourcing portals. In reality they are traders, wholesalers, or resellers who would eat into your profits if you fall for it.

Today I received an email from one such newbie. Here it is without comment from me:

"Ok. From extremely skeptical to successful completion. Credit given where credit is due. I followed the book instructions you laid out. Took my time to double check everything and was able to successfully import an order from China. Not only that but it was also a “sample order” for less than 300.00. A 300% mark up has allowed to get initial investment back and I have 70% of my inventory left. Stop promoting your book. Your encouraging competition for me Many thanks."
 

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Importing can sometimes drive me insane. I've been trying to bring a product in for several months and I'm always running in to quality issues. I've blown cash on orders from 4 different suppliers and have had issues with all of them. There were a couple of them who sent me great samples but when I repeatedly ordered from them with higher quantity, the quality decreased huge. My product is not cheap and it's in the electronics field so quality is superior! I want to brand it as soon as I get consistent quality from a particular manufacturer or two.

Walter, at the stage I'm in I feel extremely demotivated to continue just due to the fact that I wanted a lot of time and cash. I'm trying a couple more suppliers, one from made in China.

The manufacturers which I've dealt with thus far and very well known in the industry and they push out tens of thousands of the same product types weekly. I feel they just want to push an endless amount of products out and reep the cash rewards. Would you deal with a smaller less experiences manufacturer in this case and hope they go the extra mile for their business? I'm trying to think outside the box to better my process of importing actual quality product bc my biz is stagnant right now and I can't go full force with branding and marketing until the product is bullet proof with 0 defect.

Thanks!
 

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Importing can sometimes drive me insane. I've been trying to bring a product in for several months and I'm always running in to quality issues. I've blown cash on orders from 4 different suppliers and have had issues with all of them. There were a couple of them who sent me great samples but when I repeatedly ordered from them with higher quantity, the quality decreased huge. My product is not cheap and it's in the electronics field so quality is superior! I want to brand it as soon as I get consistent quality from a particular manufacturer or two.

Walter, at the stage I'm in I feel extremely demotivated to continue just due to the fact that I wanted a lot of time and cash. I'm trying a couple more suppliers, one from made in China.

The manufacturers which I've dealt with thus far and very well known in the industry and they push out tens of thousands of the same product types weekly. I feel they just want to push an endless amount of products out and reep the cash rewards. Would you deal with a smaller less experiences manufacturer in this case and hope they go the extra mile for their business? I'm trying to think outside the box to better my process of importing actual quality product bc my biz is stagnant right now and I can't go full force with branding and marketing until the product is bullet proof with 0 defect.

Thanks!
I understand your frustration and it is not unusual in the electronics field. That is one of the worst when it comes to consistency and product reliability. In fact it is so bad that I would avoid it altogether. I only know of one of my book readers who is successfully importing electronics and she and her husband are both electronics engineers.

A smaller manufacturer might be the answer, but only if they are not already selling into North America. If you are the first customer they will be much more likely to give you the quality you need. Even if they are only doing small business in North America theyw ill be more keen than the well established manufacturers. One thing that might help is to start off telling potential suppliers that quality is of great importance to you, and if orders are of consistent good quality they will benefit from your repeat business.

Another way is to pay for a quality inspection service to check out the quality. It will be expensive because it will involve product testing.

Taiwan may be a better option for you than China. Prices are likely to be higher, but generally speaking they are more likely to provide consistent quality. Just be aware of the fact that a lot of Taiwanese companies now manufacture in both places. Taiwanese production is for those who are serious about quality, China production for those who are serious about price.
 
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Hey Walter, had a chance to read your other thread where you provide details about how you got started. Very impressive negotiating for a 12 year old kid :)

When you were manufacturing the chemical overseas, how did you handle ownership liabilities for your inventory? I am assuming that you would procure all of the necessary elements for your product and have them delivered to your manufacturer. Where you ever concerned with theft or proving ownership if a dispute arose? I can see it being very difficult to keep track of assets.

Kind Regards,
 

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I got your ebook, do you address and have sources for 3rd party quality inspection in china? I have multi million dollar customers that are getting shafted on their quality on components they are shipping me and we end up dealing w/ the problems and running much higher labor dealing with defective components in our contract manufacturing.
 

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Hey Walter, had a chance to read your other thread where you provide details about how you got started. Very impressive negotiating for a 12 year old kid :)

When you were manufacturing the chemical overseas, how did you handle ownership liabilities for your inventory? I am assuming that you would procure all of the necessary elements for your product and have them delivered to your manufacturer. Where you ever concerned with theft or proving ownership if a dispute arose? I can see it being very difficult to keep track of assets.

Kind Regards,
I sold it ready made in China and other countries, except New Zealand where I licensed its manufacture. The license agreement was a very typical such contract and worked very well. They paid me royalties and that suited me well.

In some cases I subcontracted local formulators to make some of the simpler products for me. Control was just keeping track of inventory in and finished product out. I had to allow for spillages, but that is a fact of life in chemical manufacturing, and knowing the rate of loss in my own manufacturing I was confident that I was not being scammed by the formulator.
 
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I got your ebook, do you address and have sources for 3rd party quality inspection in china? I have multi million dollar customers that are getting shafted on their quality on components they are shipping me and we end up dealing w/ the problems and running much higher labor dealing with defective components in our contract manufacturing.
I have listed them in a post on the subject. You will find it on Page 7 Nov10. Contact details are not listed, but they are easy to find through Google.

If you need more information just let me know.

Regards,
Walter
 

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I understand your frustration and it is not unusual in the electronics field. That is one of the worst when it comes to consistency and product reliability. In fact it is so bad that I would avoid it altogether. I only know of one of my book readers who is successfully importing electronics and she and her husband are both electronics engineers.

A smaller manufacturer might be the answer, but only if they are not already selling into North America. If you are the first customer they will be much more likely to give you the quality you need. Even if they are only doing small business in North America theyw ill be more keen than the well established manufacturers. One thing that might help is to start off telling potential suppliers that quality is of great importance to you, and if orders are of consistent good quality they will benefit from your repeat business.

Another way is to pay for a quality inspection service to check out the quality. It will be expensive because it will involve product testing.

Taiwan may be a better option for you than China. Prices are likely to be higher, but generally speaking they are more likely to provide consistent quality. Just be aware of the fact that a lot of Taiwanese companies now manufacture in both places. Taiwanese production is for those who are serious about quality, China production for those who are serious about price.

Thanks Walter. I know, I've heard it a million times to stay away from the field but that also keeps a lot more away, therefore less competition. I'm at a frustrating point now bc it's been 3-4 mths already and I still haven't found a good supplier..maybe I need to keep at it for a bit longer before I find the right one. The problem is that it's holding me back right now with marketing and branding, that's all on the back burner until I get consistent quality.

One of the suppliers I used does 100+M a month. The subniche which I'm in only equates to about 5% of their total revenue in North America, so it doesn't look like they supply a lot in NA. I have 2-3 other suppliers I want to test, they look promising.

My profit margins are not the highest and the resale value of them are high...therefore, I can't handle too many returns, which is why I need the quality to be perfect. I can see what an inspection service will cost me though and work the numbers. In my initial communication along with my offline skype communications, I honestly repeat over and over about the quality and how it's extremely important.

I just messaged a few places in Taiwan, I'll give them a try too.

On a side note, I tested 3-4 manufacturers last year in the furniture industry and even though everything looked perfect on paper, all test orders were terrible. Missing parts, instructions which make no sense, broken pieces, etc. I'm not sure if a visit down there helps at all to meet face to face, test the products myself, etc.
 

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Thanks Walter. I know, I've heard it a million times to stay away from the field but that also keeps a lot more away, therefore less competition. I'm at a frustrating point now bc it's been 3-4 mths already and I still haven't found a good supplier..maybe I need to keep at it for a bit longer before I find the right one. The problem is that it's holding me back right now with marketing and branding, that's all on the back burner until I get consistent quality.

One of the suppliers I used does 100+M a month. The subniche which I'm in only equates to about 5% of their total revenue in North America, so it doesn't look like they supply a lot in NA. I have 2-3 other suppliers I want to test, they look promising.

My profit margins are not the highest and the resale value of them are high...therefore, I can't handle too many returns, which is why I need the quality to be perfect. I can see what an inspection service will cost me though and work the numbers. In my initial communication along with my offline skype communications, I honestly repeat over and over about the quality and how it's extremely important.

I just messaged a few places in Taiwan, I'll give them a try too.

On a side note, I tested 3-4 manufacturers last year in the furniture industry and even though everything looked perfect on paper, all test orders were terrible. Missing parts, instructions which make no sense, broken pieces, etc. I'm not sure if a visit down there helps at all to meet face to face, test the products myself, etc.
Finding the right supplier in any industry can be something like a lottery. That is certainly the case with electronics. A visit to their factory will usually give a better result, because they will take you more seriously, but if they don't have good QC systems even that is a lost cause.

Persistence can mean costly delays, but it is probably the only way you will find the supplier you want.
 
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Hot Selling Products

It is important to understand that just because you get the best possible price from a genuine manufacturer there is no guarantee that you will automatically be able to sell the product profitably. You may still not be competitive when selling on places like eBay and Amazon. The problem may not be on the supply end, but on the sales end.

There are many factors that must be considered, and it is most important to do your market research before you start sourcing a product.

I appreciate that market research can be time consuming. Occasionally you might find a product that is a good seller, but when you get quotes from manufacturers the prices turn out to be too high to allow a reasonable margin, let alone a high margin.

This can be frustrating, but it is almost impossible to predict, except for the fact that if a hot selling product is selling at what is clearly a very low price, chances are you will not locate a manufacturer who will supply at a low enough price to make you competitive.

The main reason is that hot sellers are often the subject of price wars simply because of their popularity attracting too many sellers. This often begins a race to the bottom, and vendors finish up selling for somewhere around cost, or even lower.

There is nothing to do in such cases except look for another product and start again. This is why I would avoid hot selling products. Some eBay gurus recommend choosing such products, but you will almost invariably come up against the problem of price wars.

If a hot seller is one that is being sourced from dropship suppliers, you can almost certainly find a manufacturer who will supply you at a better price than all those vendors are paying from the dropshipper, but remember that you will still be up against a huge number of vendors many of whom will even be willing to sell at their cost or less, to maintain their rankings.

Unless the manufacturer’s price after all costs added leaves you with a margin that allows you to still do well after competing with those people, you should look for another product. Those costs must include all of the costs of buying and landing the product at your door/warehouse/fulfillment house etc. Those are you cost of acquisition. You also have cost of selling, and that can include packaging, postage, eBay fees, Amazon fees, fulfillment fees, PayPal fees etc. etc., ad nauseum.

There are also many unskilled newbies who beginning selling on places such as eBay without doing all their homework, and they sell at low prices without taking all costs into account. The result is that their very low prices are losing them money, but it also means that sensible sellers will find it almost impossible to compete.

I would go even further and say that if a product is a "Hot Seller", you are probably wasting your time and you would be better off looking for a product that is in far less demand, and preferably not even on the market in your country. I have written in earlier posts about finding unique products in countries other than China.

Occasionally I am asked to recommend suppliers. I am generally reluctant to do so, but when I do, it is usually from my experience with that supplier, so the product categories are obviously limited. I also make it a practice to only recommend that supplier to one person. As a result I am running out of suppliers to recommend.

This is for the same reason that I don't sell lists of manufacturers. It would be so easy to compile lists for various product categories. People who buy lists are seriously hampering their prospects of success.
 

Daniyal Anjum

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How would you decide which products to import? Do you simply see what's popular on Amazon or eBay, or do you
use Google Trends or Terapeak?


What do you do to separate your product from the rest? Do you have a brand, or do you give it a gimmick?
 

Walter Hay

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How would you decide which products to import? Do you simply see what's popular on Amazon or eBay, or do you
use Google Trends or Terapeak?


What do you do to separate your product from the rest? Do you have a brand, or do you give it a gimmick?
I am not an internet marketer. Almost all of my previous business was B2B. I think others such as Ecom Man could probably advise you. See
[AMA] Importing & wholesaling for resale on eBay.

As you will see from my post regarding Hot Sellers, I think that looking for very popular products only increases your competition and reduces your potential profit, and you would be better off finding a unique product. I believe the best way to do that is to source from countries other than China.
 
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GrensonMan

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@Walter Hay

This is a questions more about your personal opinions. It seems that one of the prevailing business models on the forum is to start importing. The typical route seems to be through Amazon FBA etc. There are several members on the forum that appear to be extremely successful with this model. However, do to copycats on the forum, I have noticed that most importers are reluctant to reveal their business idea where as other members that are creating a brand share pretty openly. Does this not expose the major pitfall of importing? If you can get your hands on it, someone else can to. From what I know, although you were technically importing, you were also overseeing the manufacturer and licensing of your product, thus protecting yourself from almost all angles.

If you were just starting out today, would you even bother with the importing model that is so popular here (find a new product, market it on Amazon, get a site setup, work on SEO, etc)? Or rather create a new product and control the entire process? Unless you own the product or the license of the product, it seems unlikely that you could sell your business as readily as someone who has created a brand. Then again, I guess any potential suitors of an importation company would see the value in your contacts and network and that is essentially your "brand."
 
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axiom

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Fantastic thread. I just have a question about B2B product selection.

How would you conduct market research for a B2B product?

Would you target a specific industry, call up some players in that industry, and ask them what would make their lives easier? Then head on over to some sourcing sites and look for a solution? Am I on the right track?

It seems like it is a bit less straight-forward than product selection for B2C which could be good and a bad thing.
 

Walter Hay

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@Walter Hay

This is a questions more about your personal opinions. It seems that one of the prevailing business models on the forum is to start importing. The typical route seems to be through Amazon FBA etc. There are several members on the forum that appear to be extremely successful with this model. However, do to copycats on the forum, I have noticed that most importers are reluctant to reveal their business idea where as other members that are creating a brand share pretty openly. Does this not expose the major pitfall of importing? If you can get your hands on it, someone else can to. From what I know, although you were technically importing, you were also overseeing the manufacturer and licensing of your product, thus protecting yourself from almost all angles.

If you were just starting out today, would you even bother with the importing model that is so popular here (find a new product, market it on Amazon, get a site setup, work on SEO, etc)? Or rather create a new product and control the entire process? Unless you own the product or the license of the product, it seems unlikely that you could sell your business as readily as someone who has created a brand. Then again, I guess any potential suitors of an importation company would see the value in your contacts and network and that is essentially your "brand."
Is Importing and Selling Physical Products a Good Business Model? (I like headings)

I have strong opinions on this very important subject. The whole internet marketing world seems to be full of copycats. I regard this as a manifestation of laziness and lack of courage. For budding millionaires on the Fastlane forum that seems highly inappropriate.

That does not mean that it is inappropriate to join an industry that has a successful business model, but first it is important to be sure that the model really is successful. One of the most popular business models in the online selling of physical products is in my opinion not successful. I refer to dropshipping.

I know there are people who make a good living out of reselling products obtained from dropship wholesalers, but the really successful people in that area are the wholesalers, not the resellers. The industry is littered with unhappy failures, and I am planning on writing a critique of dropshipping at some stage.

As for importing and selling via Amazon FBA, that can be very successful, but without a doubt those who do best at it are the ones doing private labeling. Unfortunately though, there are many copycats in that area too, with supplements being the flavour of the month. A private label does little to maintain profitability if the only difference between you and your competitors is the brand name, and there are hundreds of competitors.

I left a comment in Vigilante’s INSIDERS thread and I hope he does not mind me disclosing what I said. It was that I found a diamond among all his gold, and that gem was Vigilante’s practice in looking for products that have not already been sold on the US market.

You are quite right in thinking that reluctance to reveal import project details exposes the major pitfall of importing. As you say “If you can get your hands on it, someone else can too.” And indeed they do, so the importers who have been importing and selling run of the mill products like everyone else just find themselves on a product selection and sourcing treadmill.

I have previously written about sourcing unique products in countries other than China and the pitfalls of selling Hot Selling products. Even suppliers in China have unique products, but it requires persistence and some extra work. HERE IS A RED HOT TIP: When searching B2B sites, go past the first few hundred suppliers and find ones that have no bells and whistles such as Gold, Verified, 5Star, Premium etc. symbols next to their name. I know this is contrary to what I write in my book, but I am there writing for people with absolutely no idea where to start. This advice will appear in my next revision, so those who read this are getting a pre-release bonus just for being Fastlane members.:tiphat:

Those suppliers you will find by this method are generally the smaller manufacturers, some with little money to spend on advertising or buying status badges, some with little or no experience in exporting, and others just dipping their toe in the water to see if it is worthwhile. They are more likely to be the ones who have products not yet sold outside China. The more difficult it is for you to find suitable products and suppliers the more difficult it will be for potential competitors. (Barrier to Entry.)

But here is a suggestion that might save you some pain: Learn something about safe sourcing before you contact them. I am not just talking about the usual due diligence.

You ask: “If you were just starting out today….” Yes I would definitely be an importer, but not B2C. I would stick with B2B. It may be harder to get those customers, but provided you choose consumable products you can get long term customers who will buy the same product over and over. I would private label everything I offered for sale, even if it only amounted to having my brand on every item just to show that I am a serious businessman, here to stay.

Once established, such a business is very saleable. If you can do it once, you can do it again, so you could make big capital gains by rinsing and repeating.
 
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Walter Hay

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Fantastic thread. I just have a question about B2B product selection.

How would you conduct market research for a B2B product?

Would you target a specific industry, call up some players in that industry, and ask them what would make their lives easier? Then head on over to some sourcing sites and look for a solution? Am I on the right track?

It seems like it is a bit less straight-forward than product selection for B2C which could be good and a bad thing.
The first thing I would do is talk to family and friends who are employed, whatever the field in which they work.

Is there something they use on a regular basis at work but it does not do a good job? Does the product break down in use? Is it in short supply? Is the supplier's service unsatisfactory? Is it exorbitantly expensive? Could the product be improved? Is there only one supplier?

I would be surprised if you didn't find a salable product if you have a reasonable number of friends and relatives.
 

DEM

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It may take a few days to find out if the testimonial is genuine. I will post any report that I get.

My reference to escrow was a slip. I meant Alibaba's new Trade Protection scheme

The Alibaba rule I referred to is that they require buyers to arrange a pre-shipment inspection in order to be eligible for protection under their new Trade Protection scheme. They specify that those inspections can only be carried out by one of the 3 big European inspection services. See my post on the subject on Page 11.

To qualify for protection under their new scheme they do not appear to allow the use of any of the inspection services on their list of advertisers. That is not a good recommendation, if Alibaba themselves won't rely on them.


Walter you contribute so much valuable information to this forum, which I have only been using for several days. Thankyou for giving us this information, it's refreshing for me to read information from a genuine source of knowledge Thanks.
 

Walter Hay

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Walter you contribute so much valuable information to this forum, which I have only been using for several days. Thankyou for giving us this information, it's refreshing for me to read information from a genuine source of knowledge Thanks.
Thanks David.

It bothers me to see so many, mainly young budding entrepreneurs, being fed so much misinformation. A lot of it is published in blogs and on forums as well as in eBooks and video courses. Those who improperly represent themselves as experts in the field are making money while those they are "guiding" so often finish up losing their limited capital.

Regarding part of the post you quoted, which was a reply to a post by @fastattack03 my Taiwanese friend says that the company who supposedly gave that testimonial to Richforth cannot recall doing so. It is always worth checking testimonials, but unless you have good contacts it can be very difficult to do.
 
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DEM

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Thanks David.

It bothers me to see so many, mainly young budding entrepreneurs, being fed so much misinformation. A lot of it is published in blogs and on forums as well as in eBooks and video courses. Those who improperly represent themselves as experts in the field are making money while those they are "guiding" so often finish up losing their limited capital.

Regarding part of the post you quoted, which was a reply to a post by @fastattack03 my Taiwanese friend says that the company who supposedly gave that testimonial to Richforth cannot recall doing so. It is always worth checking testimonials, but unless you have good contacts it can be very difficult to do.


Very true, I have spent allot of money on various courses. I have found a few that have been very very good. I found the genuine courses didn't really have all the sales/marketing hype. I took a course based around selling by FBA . I simply couldn't implement the advice due to limited capital at the time, however what I learnt from his course was the importance of branding/seeking a edge such as changing product design or modifying an existing product and it's flaws and branding your own alternative. It was no hype information. No promises of the good life, just a step by step 'how to' be successful on amazon's FBAprogram. The reality is that you have to be brave to be an entrepreneur and most people are not brave enough to try. It's what Bob Proctor calls a shift in paradigm, a conscious shift from being comfortable(stuck in a consistent rut' to taking an uncomfortable step into the unknown.
 
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axiom

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Walter,

Is lack of experience in a given industry a deal breaker in most situations? I know you had experience with your first business, but it doesn't seem that you went into your second business with any prior knowledge of the industry.

It seems to me that if you have a quality product, acquire knowledge on the industry, and provide fantastic service, it shouldn't matter about your prior experience. Potential customers might disagree however. So in your opinion, how important is it to have prior experience in an industry before you start a business in it?
 

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