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from manufacturer to amazon? Yay or Nay?

Discussion in 'Product Creation, Inventing, Importing, Sourcing' started by mosdef, Mar 16, 2017.

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  1. mosdef
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    mosdef Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    So guys, Should one ship directly from manufacturer to amazon FBA? Or to me and then i ship it to amazon? The latter is going to cost more off course...
     
  2. Longinus
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    Longinus Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    A) You ship straight to AMZ.
    + You save time and money.
    - Amazon knows where your product comes from and can cut you out.
    - Your manufacturer knows you are selling on Amazon and can cut you out.

    B) You ship from manufacturer to prepper, and from prepper to AMZ.
    + Amazon knows nothing (Do they?)
    + You manufacturer knows nothing (Do they?)
    - You lose time and money.

    Remarks:
    There are stories, but I sometimes doubt if Amazon really puts energy in just hijacking products from its own sellers. Maybe if it's one huge successful product, but not a product that sells 15 units/month.
    Your Chinese manufacturer probably also knows where you're selling. My manufacturers sell their products per container, will they put energy in some FBA-business? Just one search on Google on my brand and they find it. (But dude! They don't have Google in China! :clench:)

    Conclusion: the less they know, the better. Probably depends on your product and manufacturer.

    It's also the reason why it's so important to build a brand and business and not just putting a few products online.

    Example (fiction):

    iPhone from Apple

    or

    Iponio from Zappul?

    Let's say Zappul is the brand from Foxconn who makes the iphones from Apple, but they started selling the exact same product at 1/5 of the price of an Iphone, but with a different brand.

    Would people buy it?
     
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  3. Walter Hay
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    Walter Hay Legendary Contributor Speedway Pass LEGENDARY CONTRIBUTOR

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    Well said @Longinus. I particularly like your conclusion.

    I know many cases in which Chinese manufacturers, having sold large quantities through a distributor in Canada or the USA, have gone to the trouble to set up their own branch operation, cutting out their distributor.

    Some have given up on the venture after a year or two because they can't achieve the sales level that their distributor was getting, but that's small consolation for the person who put in a huge effort and lost all that he had built up.

    My advice to any who read this is and are contemplating obtaining a distribution arrangement is to never let your supplier know who your customers are.

    Walter
     
  4. DCDeuce
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    DCDeuce Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    @Walter Hay @Longinus,

    I'm talking to a supplier presently about a few products they offer that I plan on branding and then selling on amazon and the supplier, literally out of nowhere, said that they can ship the products for me to Amazon FBA at no charge. At first, I was a bit surprised but then grew skeptical as I want to inspect the items before sending them to Amazon via the FBA route.

    If either of you are still in the import/resale business, do you either of you find that suspicious?
     
  5. Walter Hay
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    Walter Hay Legendary Contributor Speedway Pass LEGENDARY CONTRIBUTOR

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    I suspect that they are already holding inventory in the US. If that is the case, you will probably have competitors already well-established.

    They might just be quoting you CIF Amazon, which effectively means the shipping, insurance and associated costs are included in their price. It won't include duty and tax unless they specify DDP.(Delivered Duty Paid.) That is rarely done.

    Walter
     
  6. Valor
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    Valor Silver Contributor FASTLANE INSIDER Speedway Pass

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    This.

    Never A. Sometimes B.

    Build a brand that extends beyond the product itself, and you greatly reduce, or even eliminate, the probability of Amazon or the manufacturer cutting you out of the equation.
     
  7. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Here is the issue nowadays. I would say that most Chinese manufacturers know about Amazon. If you have them put your logo/brand on the packaging with an Amazon barcode, they absolutely know where that inventory is going even if you ship it to your house first. All they need to do is google your product name and brand and your Amazon listing will show up.

    Honestly, with my manufacturers these days I would not have a problem letting them ship directly to FBA. It's not like I hide the fact that I sell on there. In fact, they send me links to Amazon products now saying that they can make this or that and that it's a hot seller.

    I don't even bother hiding it anymore. They can calculate the exact profit margin based on Amazon's calculator. The only thing they don't know is the shipping and prepping costs once it leaves their factory.

    In fact, I sometimes use this to get my price lower. I tell them what the competition is selling for (send them Amazon link) and how much I get selling at that price after all Amazon fees (send them Amazon calculator link). Then I make up a shipping cost and end up with $2 profit. I lay all the numbers out and say I can't order this just to make $2 and they many times will drop their price. :)

    I have one manufacturer send me their list of tips on how to rank high on Amazon, lol. They sell on Amazon and they know I sell on Amazon. We are competitors. Yes it's an odd situation. It's no secret anymore.

    -----------
    Here is their email to me:

    Hello ,
    Nice day.
    We double checked your listing on Amazon for the XXXXX:

    We have some advices to recommend to you.
    1) For the XXXXXX, it has two good functions (one is XXX and the other one is XXXX), we recommend you updated the title with the two functions included.
    2) We recommend you low the unit price first so that it brings more flows. When it brings more flow, you can rise the price.
    3) You can ask your friends to buy them and leave good remarks on it. You can ask them leave good remarks with video included that will have better effect.
    4) We recommend you updated the product pictures so that it looks better.
    Hope our advices will help you. Any further information, please feel free to let me know, thank you. Looking forward to your reply.

    ----------
     
  8. proper
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    proper Contributor Read Millionaire Fastlane

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    I always send directly to Amazon FBA. I never had any issues for the past year.

    If the sales/sourcing agent is interested in offering you a quote, she/he will normally do some background checks first, including your company, brand etc. There are some online courses to teach them how to properly do it... They even use archive.org or Google Maps etc to check if you are a legit business and where you are selling. @biophase the email you've got is one of the ways the sales agents were taught to help the customers grow their business to gain trust and build relationships.

    Amazon training is a very hot topic in China, especially in Shenzhen. A lot of manufacturers send their sales team to get trained to sell on Amazon. The price of the courses can be between $500 to $5000 depending on the level of difficulty. I attended one of the popular courses last summer. It was quite eye opening. Brand building is very popular too. Shenzhen government even pays cashback for every US brand registered. Most of the startup sellers I've talked to are just like sellers everywhere, trying to build a sustainable business on Amazon. They hate hijackers and can sometimes call to get them off their lists. All of the students were offered to purchase VPN routers for their factories or offices, so they can use Google, Facebook & YouTube etc.

    So my point is that I wouldn't worry too much about the manufacturers competing with me or knowing where I'm selling. Because they are already doing it anyway. You can not keep it as a secret unless you do not make any sales online.

    My major concern is the business itself. A Chinese seller may be happy with an item selling for a net profit of $1. I can not live with that sort of profits in London. I am still working on ways to differentiate myself... @biophase mentioned a mold with his logo on is a very good solution in my opinion.
     
  9. mosdef
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    mosdef Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Thats the main reasons i asked this question. It seem that there are two camps here.

    @biophase Do you ship your items direct from manufacturer to Amazon FBA? I live in Sweden and last year we couldnt sell things on Amazon, now we can. So this is a new market for me... But since i cannot compete with shipping times when selling to Uk, Germany, US and so on i have to use FBA. Would save alot of money if shipping directly to Amazon FBA.
     
  10. Insaint
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    Insaint Bronze Contributor FASTLANE INSIDER Speedway Pass

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    I'd love to send direct to FBA, but I'm worried about 2 things:

    1. They start shipping lower quality products. You wouldn't notice anything until bad reviews start coming in and returns skyrocket.
    2. They screw up some paperwork and Amazon rejects the shipment because they refuse to pay import fees for example.

    I guess both of these are less of a problem if you trust the manufacturer and/or use an inspection service for every shipment.
     
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  11. proper
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    proper Contributor Read Millionaire Fastlane

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    You need to have inspection done before paying the full amount to the manufacturer. The manufacturers normally wouldn't bother to change anything afterward.

    You don't have to get the manufacturers to send the products to FBA. There are loads of companies in China who can ship to FBA for you, either by air or by sea. They can pick up goods from the manufacturers, inspect and pack. The benefit is that you can communicate directly with them regarding import fees, custom code etc during this process.
     
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  12. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    No I don't because I have a warehouse and Amazon storage fees are rising.
     
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  13. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Yes, this could be a problem. I like to inspect my shipments before I ship them to FBA. Plus when I order 5000 units, I like to ship 100-200 at a time to FBA.

    Sometimes I find issues when I open up a box and am glad that it didn't go to FBA. Can you imagine 5000 units with the wrong barcode?
     
  14. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    You've got me thinking now, here's a general question for anyone:

    If I ship EXW terms, does the supplier even know where the shipment is going? Is it possible to just have my freight forwarder pick up the goods, and leave the manufacturer in the dark about the shipment's destination?


    This would make shipping to FBA a little more appealing.
     
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  15. biophase
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    biophase Legendary Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    They wouldn't know. But I wonder if they ask the truckers, if they would tell them the port or country of destination.

    But wouldn't your products have labels on them? Couldn't they just google the product name and figure out where it is selling?
     
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  16. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Yeah, I suppose it really wouldn't be too hard to figure out.

    I haven't had a product where shipping direct to FBA made sense, just trying to think through it out loud.
     
  17. mosdef
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    mosdef Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Dont you guys have to pay shipping twice by first shipping to your own place first?
     
  18. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Amazon significantly reduces inbound shipping to their fulfillment centers through using their UPS account. So yes, but the 2nd ship is almost a negligible cost, depending on the size/weight of your product.
     
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  19. Walter Hay
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    Walter Hay Legendary Contributor Speedway Pass LEGENDARY CONTRIBUTOR

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    This has been a very important exchange of ideas. We need to remember that the OP is not in the US, so his options are slightly limited. For those based in the US there is a lot of help in answers posted so far.

    The OP can't do a quality check himself and is dependent on either an inspection service in China, or finding a fulfillment service in the US with reliable inspection as part of the deal.

    Here's what I get so far from the posts above:
    1. Build a brand. Private labeling with value incorporated.
    2. Decide whether being hijacked by supplier or Amazon is a real risk. I believe that if successful, it is. Amazon is actively assisting Chinese suppliers to sell on their platform, but surely it's worth trying to avoid having them do take your specific product market from you.
    3. If unable to fulfill personally, find a reliable fulfillment service. I agree with @biophase that many are very sloppy
    4. Consider a Chinese service that will inspect and pack for shipment to FBA. I'm wary of that option. @proper might be able to suggest good companies to check out. @biophase made a valid point about the consequences of errors, plus the high storage cost of sending large shipments to Amazon.
    5. EXW shipping won't avoid the problem because all shipments must have destinations shown. EXW would work only if going to a Chinese service as referred to by @proper.
    6. Shipping to FBA from a US fulfillment service is a relatively low added cost, but the fulfillment service charges aren't.
    7. If possible incorporate your brand in a mold. There are alternatives and I'll comment specifically on this subject next.
    Branding.
    • Incorporating a brand in a mold will minimize the risk of copying, but it's sometimes a simple matter to superimpose a brand over one that's molded into the product.
    • Barcoding and simple labels can be attached by a fulfillment service.
    • High quality labels for branding can be employed post-production. This avoids having the supplier know what brand you sell under.
    • This might not help the OP, unless done for him in China. (See 4 above).
    • If US sellers can't get it done in China, they have two options: a) Find a fulfillment service that can and will do it. b) Ship to a label producer that will attach the labels, then have them ship to either their fulfillment service or direct to FBA.
    • There is a lot of tunnel vision in relation to labeling.
    • Labeling and branding can take many forms, ranging from low cost adhesive paper labels to high class metal labels and a whole lot more.
    • I will very shortly be publishing my new book dealing with the subject. It's called CREATE & SOURCE POWER LABELS FOR PRIVATE LABELING PROFITS. Meanwhile try thinking outside the square regarding how to brand your products. This book deals with 23 different labeling and branding methods. Sorry about the self promotion but this is relevant.
    Walter
     
    Last edited: Mar 17, 2017
  20. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    You provide so much value here... I don't think anyone's going to complain about you doing some self promotion.

    Sounds like an interesting book!
     
  21. proper
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    proper Contributor Read Millionaire Fastlane

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    They don't have to know the details of your shipments in particular. They monitor all of the related products on Amazon and other websites in general, to decide what products to make or add into their catalogs on Alibaba. That is how we as sellers find those products on Alibaba in the first place.

    In general, I wouldn't worry too much about manufacturers knowing where I sell. Quality control is much more important to work on.

    ------
    On a side note, I find the sourcing agent or manufacturing business is much less risky than the Amazon FBA business. The return on FBA business is higher for sure. But I find myself constantly invest a lot in new inventories and spend a lot on advertising and storage fees. I have to liquidate if Amazon suspends my listing for whatever reason...

    Maybe it is just me, but one of the manufacturers I work with was just starting 2 years ago. It is a family business running by a couple. I still remember them complaining about how hard to find customers a year ago. So they were willing to work with me on small quantities and a new mold. This year, they just moved manufacturing into a massive plant, bought a new house and a new Mercedes GLE...
     
  22. Walter Hay
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    Walter Hay Legendary Contributor Speedway Pass LEGENDARY CONTRIBUTOR

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    What you are describing in your first paragraph is the general, universal problem faced by all online marketers. I would venture to say that a big percentage of the members here who are selling physical products online are doing exactly that. Chinese manufacturers with an eye to expansion are no different, so yes, all should be aware that competitors are prowling their listings.

    I still see benefit, if at all possible, in preventing suppliers from knowing where and for how much you are selling. The random, more universal searches will find you sooner or later, but why provide a short cut for them?

    Regarding your side note: Sourcing is a great business model, partly because you don't have to outlay money for inventory. In effect sourcing agents are selling their time and knowledge. I am constantly refusing requests to source products. It's dead easy for me and could be very lucrative, but the service I provide by way of my book and forum posts is far more rewarding for me intellectually.

    Early in my importing I encountered a two person business that impressed me so much that I broke my own rule regarding dealing only with manufacturers. They served me well and over the years I gave them millions of dollars worth of business. They now employ over 6,000 people, but because of our long association, my franchisees continue to enjoy privileges such as retaining molds for much longer than the norm, supply of small quantities, and a monthly account with no deposit required on orders. Relationships are important.

    Walter
    P.S. My former importing business (and all those franchisees) is still operating successfully, but I no longer have a stake in it.
     
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  23. proper
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    Totally agree. What you are working on is the fast lane.

    Thanks a lot for sharing your in-depth experiences in this area! It's very informative and helpful.
     
  24. mosdef
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    mosdef Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    riight. So much harder for us living outisde the US. I was to order the products to my home and then ship them to FBA in England, Germany, US from Sweden would basically take out all the profit.
     
  25. mosdef
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    mosdef Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    @Walter Hay Regarding the quality check i could always order first a batch of 10 directly to my place to check the quality and only when i my batches get bigger start to ship to FBA directly. That way i would at least be able to se the product before starting to sell it.
     
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