First time importer

[Jambla]

1.5/1.90 that is a pretty slim margin, especially if it is eaten by marketing costs.
Can you do something on the price you are paying for the product. Different vendor/producer, higher volume discount,...?
Sometimes chinese sellers pose as producers, and in reality they are just a man in the middle.
If you have someone locally who you trust, try to arrange that he could visit the factory.
If your seller refuses, he is probably just another vendor.

The worst thing i heard was that there were 3 vendors between the producer and the buyer, almost quadrupling the price.

£1.50 is cost of a click from Amazon PPC, today is it has cost me £.1.80 per click. My margin is £5.50 per unit. The problem is more competition on Amazon and the cost for a paid click on Amazon has doubled.

I have contacted quite a lot of manufactures or companies posing as manufactures on Alibaba, at least 30 I think. This gave me a good idea of the price range. I am sure I could do a bit more work on looking for more manufactures.

@mazo thank you but I have only just started. Perhaps I chose a niche that was too competitive to start. The good thing is that I have come up with more ideas just by learning my niche and being in the space. Im sure I can find a product that will work well. I will carry on selling on Amazon but my next focus will be exploring ways to sell on other platforms, including my own.

 

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[minirich]

If you can't increase your margin by lowering your costs, can you increase your sales price?

Either by setting yourself apart with your brand, or by adding value?
Like an book or video with additional information for better usage or maintenance for a longer life period?

Or a coupon or voucher for some related service. You can try to get a deal with the provider for the lead generation.

These guy have made an art out of it and a business model: http://www.appsumo.com/us/

 

[Jambla]

My first ever sea shipment arrived yesterday, one pallet. Lots of packing to do this weekend
Another 400 units. I do regret ordering this amount. The plan was to hit PPC hard and get up the rankings but since my first batch PPC costs have increased, i cant use PPC and make a profit anymore. I was looking at some data for previous older campaigns and it was costing me on average £0.6 per click and due to increased competition the cost has gone up to £1.80 this week. I will be looking at other platforms to sell these as well.

I have spent quite a bit on PPC but it has brought up another product idea that looks a lot less competition and PPC click is cheap. This will be my next product.

In another exciting news, I was talking to my sister in law toady and she has started a new job. She works for a guy that does ecommerce and is turning over millions, selling on loads of different platforms. Its funny because she was telling me she is learning Amazon at the moment, basically what I am doing. No doubt she will be able to give me advice as she is managing Amazon on a much larger scale. Her boss could be a very good contact as well!

 

[Jambla]

I changed my tactic, dropped my price to the point where I barely break even on a sale. Now I am shifting units and moving up the ranking.

The problem in this niche is Chinese sellers they are able to low ball the shit out of us. Their copy writing is crap but they still sell loads. There is this one seller who has come out of no where and now has a best seller badge. I keep an eye daily on the main keywords - he doesn't even rank for these so I wonder how he get sales. When you look at what he sells its a huge range of non related items.

I am learning copy writing which will help with sales but I am not sure I can compete with these Chinese prices. I will see if I can still sell with decent profit if I change my marketing. Long term I dont think its good to be selling products that the Chinese can undercut.

 

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[Kid]

You wrote that You use Amazon PPC.

Have you tried other PPC providers?

Google AdWords (might be expensive ), and Bing.com (which might be cheaper) come to mind.

 

[Jambla]

Dropping my price has increased my sales.. in turn this has increased my organic ranking… that has increased my sales. No PPC. I won’t get too excited, I am not making much profit. At least I know this product sells at the right price.




Keeping a close eye on keywords. I am certain the first keywords in the product title are important for keyword ranking. I have watched new competitors rank for keywords quickly. I am getting on the first page for some decent keywords now.

I have finished reading a book on copy writing. Why didnt I do this sooner? I realise how bad mine and my competitors copy is. I know I can increase conversion rates. My plan is to write super good copy on my listing and bundle in a free e book. I will then put the price up. The ebook will be related on how to use my product. The ebook is going to be very valuable to the customer. Some customers have already mentioned they wish this information was included. The most bought item with my product is a book on how to use my product.

It’s exciting because the more time I spend on this, the more ideas I come up with, the more I see. I just wish I didn’t work 10 hours a day for someone else, my day job is intense, it drains me. I still find the energy to do a few hours on my own business each night.

I currently only list 1 product. I want to list more. I think having more then one product may increase my sales organically . I have come up with an idea to test out products without waiting for Chinese imports. I will reveal that another time.

 

[JSM]

I plan on doing my first import soon also and I have a few questions.
I saw you mentioned Fedex. Did you use their import services?
What was the buying process like on alibaba?
What payment form do you recommend? Paypal, etc.

 

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[Jambla]

I plan on doing my first import soon also and I have a few questions.
I saw you mentioned Fedex. Did you use their import services?
What was the buying process like on alibaba?
What payment form do you recommend? Paypal, etc.

My supplier chose the courier. It’s really simple. In the UK customs at the airport call you when it’s arrived, you pay import tax and then it’s delivered the next day. Got my supplier to arrange my LCL sea shipment as well, again that was easy.

I have used Trade assurance through Alibaba. I pay a 30% deposit then when the goods are ready I have the order inspected and pay the remaining amount. Your deposit is protected with Trade Assurance but read the terms and condition's, I am sure there is some risk, you have to make the judgment your self.

 

[Walter Hay]

My supplier chose the courier. It’s really simple. In the UK customs at the airport call you when it’s arrived, you pay import tax and then it’s delivered the next day. Got my supplier to arrange my LCL sea shipment as well, again that was easy.

I have used Trade assurance through Alibaba. I pay a 30% deposit then when the goods are ready I have the order inspected and pay the remaining amount. Your deposit is protected with Trade Assurance but read the terms and condition's, I am sure there is some risk, you have to make the judgment your self.

Yes there definitely are risks involved in relying on Trade Assurance. You have done the right thing in having your goods inspected before shipment, but don't forget that as I pointed out in Post No. 2 in this thread, if you raise a dispute Alibaba will insist you have an inspection done by SGS. I also commented on this subject in Post No. 4 above, as well as providing a detailed explanation of Trade Assurance in my AMA.

Walter

 

[DBXI]

@Jambla I'd start looking for products that have some more meat on the bone. Those are some pretty slim margins and you are going to have to be doing a lot of volume to make it worth it. I'd also start hitting up more suppliers to make sure you are getting the best price and try to push to get direct to the factories that produce your goods. Also you'll never be able to compete with the Chinese on price so best to solve a problem with your product, take amazing photography, write amazing copy, and be aggressive with PPC. In order to hit PPC hard though you need enough margin to make it work.

 

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[Walter Hay]

@Jambla I'd start looking for products that have some more meat on the bone. Those are some pretty slim margins and you are going to have to be doing a lot of volume to make it worth it. I'd also start hitting up more suppliers to make sure you are getting the best price and try to push to get direct to the factories that produce your goods. Also you'll never be able to compete with the Chinese on price so best to solve a problem with your product, take amazing photography, write amazing copy, and be aggressive with PPC. In order to hit PPC hard though you need enough margin to make it work.

You're right about the need to work on big margins. And yes, they can be achieved by going direct to the real manufacturers. Most people believe what they read on sites such as Alibaba, but they are living in fairyland.

Going direct will be a big help, but there is a better way, and that is to find products for which there is very little or no competition. Most sellers seem to be too timid to look at a product that is not already selling well by their competitors. If a product is being made and is being used successfully somewhere, but not in your home market, why not find such potential users in your market region and sell to them?

In my first business I found a product that only had one competitor worldwide and their product was near useless. I produced a product that worked and obtained so close to a monopoly that I was laughing all the way to the bank. I outsold my huge multinational competitor in every country where I exported the product.

Be bold. Test the market with something new if you can find it, even if it needs improvement first. In fact, if it does, that's even better.

When running my importing business (2nd business) I never let my suppliers know the real business name. I used a different business name for importing, so they could never find where I was selling, or to whom. Even when making inquiries, when asked, I described a different end use to the one I had in mind. (Not possible with something like a garlic press!) All this greatly reduced the risk of suppliers offering the product to others.

Walter

 

[Jambla]

Thanks guys. A week ago I increased my prices so I am making £3 per unit. Yesterday I sold 15 units with no PPC and I am on course to do over £3k of Amazon sales this month. It seems lowering my prices worked in boosting my listing organically. I am still making my Ebook and I haven't changed my copy so I am excited to see what that does for this listing.

I will be launching another product shortly. I found a wholesaler who I can buy the units from cheaper then my self importing from China. Im even more excited about this product because I know I can sell it a competitive price and get lots of sales.

 

[DBXI]

When running my importing business (2nd business) I never let my suppliers know the real business name. I used a different business name for importing, so they could never find where I was selling, or to whom. Even when making inquiries, when asked, I described a different end use to the one I had in mind. (Not possible with something like a garlic press!) All this greatly reduced the risk of suppliers offering the product to others.

Walter

This is gold right here. I've gotten burned with suppliers going direct to my customers or selling to a competitor a couple of times and I'm actually putting pieces in place to do exactly what you did. Thanks for the tip.

 

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[Walter Hay]

Thanks guys. A week ago I increased my prices so I am making £3 per unit. Yesterday I sold 15 units with no PPC and I am on course to do over £3k of Amazon sales this month. It seems lowering my prices worked in boosting my listing organically. I am still making my Ebook and I haven't changed my copy so I am excited to see what that does for this listing.

I will be launching another product shortly. I found a wholesaler who I can buy the units from cheaper then my self importing from China. Im even more excited about this product because I know I can sell it a competitive price and get lots of sales.

This is proof that you are not buying at the right price or from the real manufacturer. If the wholesaler is selling to you at such a price, they are obviously buying a whole lot better than you are, and that is not necessarily because they are buying huge quantities.

It's a myth to think that Chinese manufacturers give huge discounts for big orders, unless buyers are comparing what they pay for a very small quantity. Set up costs might have to be recovered by the suppliers, and once you cross that threshold prices for larger quantities level out.

Walter

 

[Niptuck MD]

Immense. congrats and best of luck

 

[Jambla]

This is proof that you are not buying at the right price or from the real manufacturer. If the wholesaler is selling to you at such a price, they are obviously buying a whole lot better than you are, and that is not necessarily because they are buying huge quantities.

It's a myth to think that Chinese manufacturers give huge discounts for big orders, unless buyers are comparing what they pay for a very small quantity. Set up costs might have to be recovered by the suppliers, and once you cross that threshold prices for larger quantities level out.

Walter

I suspect you could be right. How would you suggest getting a better price? My tactic so far has been to message different Suppliers on Alibaba and that gives me an idea on prices.

Lets have a look at this example. I can buy a unit for £7 in the UK from a wholesaler.

This is what it would cost me to buy from Chinese Supplier. 1 Unit weighs about 600g, dimensions: 30 x 20 x 5cm
Lets say I buy 300 units and use sea freight.

Unit Cost from supplier £4.52
Customs Duty £0.19
Shipping Costs £1.00
Import Tax Vat £1.14
Total Cost Per Unit £6.85

How is the company wholesaling to me? You're right about bulk saving, the discounts my suppliers offers for bulk orders are not that great.

I have been thinking about flying out to China and trying to negotiate and visits factory's face to face, how do you feel about that?

 

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[Jambla]

Sales are going strong 4k in the last 30 days. Nearly ran out of units at FBA, the volume of sales caught me on the back foot. Sent some units last week but I have experienced delays. UPS simply did not collect on Thursday when they were suppose. All being well the delivery to FBA would have on Friday, but UPS not turning up cost me the weekend as delivery's are not made by UPS on weekends. Today the consignment did not leave the ups depot and I am reading stories on the the seller forum of delays. I could be out of stock for a few days.

 

[Walter Hay]

I suspect you could be right. How would you suggest getting a better price? My tactic so far has been to message different Suppliers on Alibaba and that gives me an idea on prices.

Lets have a look at this example. I can buy a unit for £7 in the UK from a wholesaler.

This is what it would cost me to buy from Chinese Supplier. 1 Unit weighs about 600g, dimensions: 30 x 20 x 5cm
Lets say I buy 300 units and use sea freight.

Unit Cost from supplier £4.52
Customs Duty £0.19
Shipping Costs £1.00
Import Tax Vat £1.14
Total Cost Per Unit £6.85

How is the company wholesaling to me? You're right about bulk saving, the discounts my suppliers offers for bulk orders are not that great.

I have been thinking about flying out to China and trying to negotiate and visits factory's face to face, how do you feel about that?

You won't get far by messaging random suppliers you find on Alibaba. You first need to make sure they are real manufacturers. Don't believe everything you read on Alibaba. Just because they call themselves manufacturers, that's no reason to believe them. Most aren't.

Look for the Assessed Supplier mark and read the whole report. Even many Assessed Suppliers are traders.

Before visiting China you need to be very well prepared. See my article on the subject Traveling To China To Visit Factories Sharing my lifetime experience in export/import. Product sourcing specialist.

It's a big country - internal travel can take a lot of your time - meetings can take hours - lunch can take hours etc.,

Walter

 

[Walter Hay]

Sorry, this was a duplication after my original post got lost when my internet connection dropped out, so I edited it out.

Walter

 

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