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

Walter Hay

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I assume if a manufacturer is making a product for a company with a patent/copyright they would not be able to sell the product to others? (They would have some exclusive deal?)
That is correct legally, but in practice that is often not the case in China.

Infringement of Intellectual Property Rights is endemic in China. The really big brands will police it if they can, but smaller companies don't even become aware of it until they somehow find their patented or copyrighted product for sale in their own country.

You might like to go back a few pages and read my article Sharing my lifetime experience in export/import. Product sourcing specialist.

Sorry, I am not very technically capable and am trying to learn how to post links to other posts. EDIT. It worked!
 
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Butschal

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Hi Walter.

I recently read your thread and signed up for this forum. I took your advice to look for suppliers outside of China, and am now corresponding with a sales associate in the middle east who represents the manufacturer I want to work with.

I've got two concerns, however. My first is that the manufacturer itself has its own brand. Now I know that in the US we have a law of exhaustion saying that I can resell the branded item if I purchase it from the actual owner of the brand, but I'm not sure if that applies to purchases from outside the US. Would I need to sell these items without the brand? (I'd rather sell them with the branding since branding increases sales, as well as your spot in the Amazon algorithm)

Second, the supplier is not verified. They haven't had a 3rd party agency like Rheinland review them, but they are the only people that I can find who offer the product I'm looking for, and it's pretty niche, so I don't think they're a wholesaler or anything. Do you think that in ANY case where the supplier is not verified that you should skip out on that opportunity? I mean, they're not in China so it's not like the typical agencies can come look at them, and they really do have an amazing product line that is currently flying mostly under the radar.
 

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Hi Walter,

I'm trying to import products form China via sea freight but the situation with the west coast ports is a mess. Are you experiencing such issues and if so what are some solutions or alternatives?
 
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Walter Hay

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Hi Walter.

I recently read your thread and signed up for this forum. I took your advice to look for suppliers outside of China, and am now corresponding with a sales associate in the middle east who represents the manufacturer I want to work with.

I've got two concerns, however. My first is that the manufacturer itself has its own brand. Now I know that in the US we have a law of exhaustion saying that I can resell the branded item if I purchase it from the actual owner of the brand, but I'm not sure if that applies to purchases from outside the US. Would I need to sell these items without the brand? (I'd rather sell them with the branding since branding increases sales, as well as your spot in the Amazon algorithm)

Second, the supplier is not verified. They haven't had a 3rd party agency like Rheinland review them, but they are the only people that I can find who offer the product I'm looking for, and it's pretty niche, so I don't think they're a wholesaler or anything. Do you think that in ANY case where the supplier is not verified that you should skip out on that opportunity? I mean, they're not in China so it's not like the typical agencies can come look at them, and they really do have an amazing product line that is currently flying mostly under the radar.
I am assuming you found this sales associate on Alibaba? The location would make me want to check very thoroughly before parting with any money. They may be legit, but a lot of opportunists operate in the ME, where horse trading has been a way of life for centuries.

The first thing you can do is a very comprehensive Google search of the trader's name. You can also search Alibaba's customer forums for any reference to them. If they are registered as a business entity that opens up other due diligence possibilities.

There can be great opportunities in buying from a supplier that is not verified, provided you can check them out satisfactorily. Very few people will even consider dealing with them, so you have a better chance of finding something that is not flooding the market. I would at least ask for background information. It may all be a load of BS, but he may give you something that you can check.

If the product design is copyright or patented, you can't sell the product with your own brand on it.

Regarding the legalities of selling the branded product, the doctrine of first sale in the US requires that you buy from someone authorized to sell the product in the geographical location where they are selling it. See my article on Parallel Imports here: Sharing my lifetime experience in export/import. Product sourcing specialist.

Just beware of the risk if he is only a middle man and will be shipping the goods from China or some other place where he does not have authority to sell them. Ask for evidence of his market authorization.

In cases like this I must add that I am not providing legal advice.
 
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Walter Hay

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Hi Walter,

I'm trying to import products form China via sea freight but the situation with the west coast ports is a mess. Are you experiencing such issues and if so what are some solutions or alternatives?
Fortunately for me, I no longer import, having sold my business some time ago, but I am well aware of how bad the situation is. With about 30 ships anchored off Los Angeles, delays are likely to take up to 2 months to clear.

If you are on the West Coast, or even if your are inland and would usually import via a West Coast port, you only have three options:
  • Estimate how long before delays are likely to be over at the port you would normally use and place your order specifying shipment not before a date that would see your vessel arrive during normal shipping traffic at that port.
  • Find another West Coast port that has a much smaller backlog, and specify that port when you order. This may cost you more in road freight, so get a firm written quote before you order.
  • If the product value and market urgency warrant it, shop around freight forwarders for bulk or commodity air freight rates to your nearest international airport. Others will be doing this already, but it is worth a try. Make sure you get quotes in writing for door to door shipment.
The good news is that the union representatives unanimously agreed to the terms of the new agreement, so it is as near as you can get to certain that the situation will get back to normal soon. You can be sure that the longshore workers will be keen to get lots of overtime (as usual after such troubles) so the backlog will be cleared as quickly as port capacity will allow.
 

Walter Hay

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Q & A 17.

Q. Can your book be used to find dropship wholesalers? The dropshippers I have found on places like Doba and WWB don’t leave enough meat on the bone.

A. Sorry but you are asking the wrong person. For a start I don’t supply lists, I teach how to source supplies direct from the manufacturer. Secondly, I don’t recommend dropshipping as a business model, but because I get so many questions about dropshipping I will explain why. It is a long explanation but it answers a lot of the questions that I am so often asked.

Pros and Cons of Dropshipping

I think that most members of the Fastlane forum know how dropshipping works, but in case Rip Van Winkle is online, here is a brief description:

Dropshipping is a business model that allows you to retail goods without holding any physical stock. Without any goods in your possession you advertise for sale those products that your dropship supplier has in stock.

When you make a sale, you send all the sale details to the dropshipper who then ships the item out on your behalf. Your profit will be the difference between what you charge your customer and what the dropshipper charges you. Don’t forget to allow for your selling costs, including Ebay fees, PayPal fees, postage etc. Some people even have to pay a dropship fee.

Pros:
  • Dropship wholesalers offer a vastproduct range for you to sell.
  • You do not need to outlay money for inventory.
  • Your dropship supplier does most of the work for you, including packing and postage, although you still have to handle the sales and administration work
  • Theoretically your bigger product range could lead to higher sales.
  • You don’t even have to worry about storage space.
  • You can automate the process.
  • Your dropship wholesalers might have photos that you can display on eBay or Amazon.
Cons:
  • You have no control over your own business. That can lead to very unhappy customers.
  • You might keep selling not knowing that the supplier is running out of stock.
  • Your supplier may even discontinue a product line without informing you. That can result in bad feedback that will damage your business.
  • Dropshippers make mistakes, but you get the bad feedback.
  • Those who promote dropshipping boast about their huge turnover, but they don’t tell you how low their profits are. Dropship resellers posting on business forums generally report a profit margin of 20% or less, but there are a few who say they get 30%.
  • Many sellers on Amazon and Ebay use the same dropship wholesalers, so there are often hundreds of sellers flooding the market with the same product.
  • When you buy from dropship suppliers you are engaging in a business to business transaction and in almost all western jurisdictions that means you do not have protection under consumer protection laws. Your customers do. Even if they did not, they still get favoured treatment from eBay and PayPal and credit card companies, which means they can, and do, return the goods for any reason and claim a refund. If numerous customers do that, perhaps simply due to a recently announced product update, you now have an inventory of returned goods whether or not you have the funds to finance an inventory. Your suppliers will not give you a refund unless the items are faulty. Those selling via the dropship business model should not do so unless they have funds available to finance a large number of returns.
  • In order for an item to sell successfully especially on Amazon or Ebay, it has to be either unique, or a very desirable item. If you browse through dropshipping directories you will find it almost impossible to find items that meet these criteria except for those very desirable hot selling products that every man and his dog are selling at ridiculously low prices.
 

Walter Hay

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Here is an interesting comment I read recently in another forum. The thread was dealing with finding genuine manufacturers in China.

“The majority of sellers on Alibaba will claim that they are manufacturers, but they aren't. I have lived in China long enough to know that all the factories have replaceable name plates at the front desk, so that the seller bringing in customers can pretend that the factory is owned by them.”

It may be an exaggeration to say they all have replaceable name plates but this comment shows the lengths to which traders will go to deceive people into believing that they are getting the best deal because they are buying direct from the manufacturer.

This is why I wrote in my post TRAVELING TO CHINA TO VISIT FACTORIES: “ask the factory manager for his card.” If this causes embarrassment or he cannot supply one, it is almost certain that the company that took you to the factory is not the owner.
 

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Hi Walter,

I'm about to make my first purchase, Thanks to your advise and help. I've found dealing with the supplier very easy and straight forward. It's actually making me a little worried.

Price's and postage prices are great, etc.

I'm getting to the payment part of the deal, it's getting me very scared. I think I'll use paypal, as it will do currency conversion's etc.

Also should I ask the supplier about payment of duty and taxes or is this something I need to organise? or will I just get charged this as I buy the items. (please note i'm in Australia, not the US)
 
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Walter Hay

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Hi Walter,

I'm about to make my first purchase, Thanks to your advise and help. I've found dealing with the supplier very easy and straight forward. It's actually making me a little worried.

Price's and postage prices are great, etc.

I'm getting to the payment part of the deal, it's getting me very scared. I think I'll use paypal, as it will do currency conversion's etc.

Also should I ask the supplier about payment of duty and taxes or is this something I need to organise? or will I just get charged this as I buy the items. (please note i'm in Australia, not the US)
Don't worry if it seems too easy. It should be easy now that you know how.

PayPal is a good idea if the supplier accepts it. If possible also use your credit card for PayPal.

Duty and tax should be handled by the air courier if using that service. Don't try to do the Customs work for your first shipment. If you have bought on an FOB basis you should use a freight forwarder and get them to organize door to door delivery including Customs clearance. Make sure the quote is in writing! Remember Chapter 4!

If you have any concerns about the freight side of things just post your question, or for privacy PM me.
 

Awesome Fury

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I asked for Hong Kong post, as I have read good things and I'm not in a hurry. They suggested Australia line(I think they mean australasian line)
From what I've found it seems ok. But not sure about customs, duty n tax.
 

Walter Hay

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I asked for Hong Kong post, as I have read good things and I'm not in a hurry. They suggested Australia line(I think they mean australasian line)
From what I've found it seems ok. But not sure about customs, duty n tax.
They probably do mean AAL, but I would not get the supplier to arrange it. I would still contact a freight forwarder in Australia and I would shop around getting quotes from more than one. The forwarder may choose AAL, but might find someone faster or cheaper or more reliable.

Is the volume/weight to much to ship by air? If so, sea freight organized by your freight forwarder should include customs clearance and door to door delivery.

If the goods are valued at less than A$1,000 there will be no duty or GST payable. For most goods, duty should not exceed 5%, but your forwarder should be able to tell you in advance. You will also have to pay GST at 10% on the total of (price of goods + freight +duty). There will also be a processing charge of between $40.20 and $152.60 depending on method of shipment, value, and method of lodgement of Customs paper work. See: http://www.customs.gov.au/webdata/resources/files/ACBPN201366.pdf

It is possible to pay no duty or GST by arranging for shipment of packages with a value of less than $1,000 but it is important to first check out my book Chapter 3 Rules and Regulations under the sub-heading Another way to avoid a lot of red tape .

NOTE FOR FASTLANERS IN OTHER COUNTRIES: The duty and tax free threshold varies from country to country, but the same principles apply, and you can space out deliveries of shipments below the threshold value. You may incur higher freight costs in some cases and you need to compare savings on duty and tax with the extra freight cost if any.
 
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Shdreams

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Hello Walter. In your professional opinion, What's the safest Payment method to make your first purchase from alibaba? What do most sellers expect? I'm looking to make a purchase in the next couple weeks. Nothing that will break the bank if I get screwed. But I'm committed.
 

Walter Hay

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Hello Walter. In your professional opinion, What's the safest Payment method to make your first purchase from alibaba? What do most sellers expect? I'm looking to make a purchase in the next couple weeks. Nothing that will break the bank if I get screwed. But I'm committed.
The safest is escrow, but not Alibaba's escrow which is full of traps for the unwary who don't read all the fine print. I have done so, and I find that there are contradictions in their rules. Contradictions leave loopholes for clever argument by suppliers or Alibaba.

Whatever you do, don't use Western Union. Sellers will usually accept T/T (more correctly called IMT, but Chinese business have not caught up with the 21st Century terminology). If you pay by T/T, only pay to the business bank account, not to an individual unless the individual named is clearly identifiable as a senior executive, preferably a director, of the business.

Manufacturers rarely accept credit cards or PayPal, but then, on Alibaba chances are you are dealing with a trader or wholesaler, and many of those will accept payment by those methods. If possible use your credit card through PayPal so that you get double barreled protection, but I suggest you read my post Q12 Sharing my lifetime experience in export/import. Product sourcing specialist. because once you sign for a package you could have problems making a claim.

You might also find Q11 of interest.
 
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Walter Hay

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What Do You Need To Learn? This post started life as an answer to a newbie who asked should he buy into a certain importing course. He was impressed with the volume of teaching being offered, and he was particularly worried about the complex rules and regulations of importing.

I decided to give him some idea what he could learn in a matter of a few hours when all he is getting is the facts without repetition, hype, fluff, or huge promises.

I know this will appear very self-promotional, but I hate to see people with limited finances outlaying big sums of money unnecessarily. This is what you can learn in an hour or two .... or three if you are a slow reader.
  • How to buy small amounts at factory prices to try out importing on a small scale.In fact this is what I recommend even if you plan on importing large quantities.
  • How to avoid the many product sourcing web portals that appear safe because everyone recommends them, even in importing courses, but are hazardous to your financial well-being.
  • How to get safe access to reliable suppliers by using the very few safe sourcing web portals that I recommend.
  • In just 83 pages learn how very easy importing can be. Why buy a complicated course that will take you many hours or days of study? You can learn all you need to know in a matter of hours.
  • How to avoid having to learn all the rules and regulations. Use other people’s expertise.
  • You will learn to recognize and avoid the widespread misinformation circulating on the web, including the risky sourcing practices often recommended on internet marketing forums and blogs.
  • How easy it is to import and how to minimize your risks.
  • Customs clearance can be a nightmare but you will find it a piece of cake if you follow my advice.
  • A ridiculously simple trick of the trade to make sure that you get the best prices.
  • I explain that avoiding haggling is an important trick of the trade, but you can still bargain. There is a difference.
  • How to avoid freight rip-offs that could potentially bankrupt you is another extremely simple trick of the trade.
  • Identity of a trade organization that only the “big boys” know about but which is a valuable contact point to help you find reputable manufacturers.
  • Avoid these two big risks when obtaining samples.
  • Licenses – do you need them?
  • Discover the huge profit margins being made by importers.
  • Step by step instructions with a check list of things that must be done when ordering.
  • Why the size of the product can be important.
  • Links to help you locate items in places other than China at even better prices or better quality for the same price.
  • Suppliers will come to you if you use my simple methods.
  • Good reasons why you should avoid drop shipping and deal directly with the manufacturer (The Path to Big Profits)
  • How to be sure you are dealing with a real manufacturer not a reseller or agent.
  • How to get your mail service to handle your Customs clearances at no cost to you, or in some countries, for a small fee.
 
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Ron Dee

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In your book if I remember right you suggest filtering the product search to manufactures with certain certifications. Would this eliminate sourcing from factories that are putting harmful chemicals in there products. Just got me thinking after reading all about Lumber Liquidators and their issues as of late.
 

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Hi Walter, I've read your book last year. Purchased via Jim Cockrum. What's the best method of combining multiple products into the same container from different suppliers? Can't remember now if you answered that in the book.

Thanks
Paul
 
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Walter Hay

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In your book if I remember right you suggest filtering the product search to manufactures with certain certifications. Would this eliminate sourcing from factories that are putting harmful chemicals in there products. Just got me thinking after reading all about Lumber Liquidators and their issues as of late.
Hi Ron,

My book does not directly address that issue, but you will find that one of the safe sourcing sites that I recommend. (My #1 choice) does show manufacturers who comply with social and environmental responsibilities. The envrionmental issues covered are:
- Tool (EPEAT-Electronic Product Environmental Assessment Tool)-Silver or Gold
- Recycled PET Product Conformity Certification (RPET-PCC) (Intertek Program)
- Global Organic Textile Standard
- Rainforest Alliance Certified

Regards,
Walter
 
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Hi Walter,

I am also looking for keychain breatho's to sell in Australia. Where can I source them direct from manufacturer?



Regards
 

Walter Hay

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Hi Walter, I've read your book last year. Purchased via Jim Cockrum. What's the best method of combining multiple products into the same container from different suppliers? Can't remember now if you answered that in the book.

Thanks
Paul
Hi Paul,

It is not mentioned in the current edition of my book but will be in the revision that I am working on. It is due out in a couple of months and as an existing buyer, you will be offered a free download, as with every new edition.

There are numerous cargo consolidators in Western countries and most of them work through agents in China. Some of those agents will receive and store your smaller shipments, but not all, and not all will handle air courier or air cargo shipments, so I am currently having discussion with a number of western consolidators to sort out which might be the best for major western countries.

I will keep you posted. You can expect a PM within a few days.
 
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Walter Hay

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Hi Walter,

I am also looking for keychain breatho's to sell in Australia. Where can I source them direct from manufacturer?



Regards
Hi francois,

I can't post it online because that would not be fair to Jeff Krasnow, who set the whole idea in motion. I have privately given him a link to the manufacturer.

Normally I don't provide sources because I can't spend all my time finding suppliers for individuals. That is what my book is all about, plus, how to do it safely. But... seeing as I have already spent 3 minutes finding the manufacturer for Jeff, and you are in another country, I will PM the link to you.

Just don't think that finding a good manufacturer is the end of the story. You still need to know how to approach them so they don't just ignore you; how to persuade them to supply a small quantity, how to be sure you are getting the best price, how to get them to organize the shipping so that you don't have to bother, what is the meaning of the various shipping terms they use, how to handle payment, how to handle the importing without having to know all the rules, and a few etceteras.
 

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Thanks for this platform. Well a simple one.....what do you say about importing clothing from China.
 

Walter Hay

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Thanks for this platform. Well a simple one.....what do you say about importing clothing from China.
I don't think it is such a simple question. There are many clothing manufacturers in China, and to find the right one can be a long drawn out process.

Some churn out vast volumes for big stores and although they advertise on B2B platforms they are really only wanting big stores as customers.

Sizing is a major problem that can take a big effort to sort out. Even then, consistency in sizing is often not achieved.

I would be inclined to look at Thailand instead.
 

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Any tips to get shipping costs down while selling heavy goods ?

Im currently selling tiles and €100 worth of goods (10kg - 10 tiles) to ship costs me €19.50 domestic, €47.50 UK and €65.50 rest of the world. Which isn't bad since I got the tiles at 1€ each.

But the problem comes if I sell tiles individually say 5 tiles (5kg) which brings me 50€, to ship costs me €14.50 domestic, €42.50 UK, €60.50 rest of the world. Im already at a loss selling outside of Ireland & UK.

But if i sent the goods in multiple packets of 2 tiles (2kg) my cost goes down marginally to €5 per tile EU and €8 per tile rest of the world. But then again its strange to send tiles in multiple packs of 2.

These costs are for standard 5-7 day delivery by the national postal service of my country, not a courier.
 
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Walter Hay

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Any tips to get shipping costs down while selling heavy goods ?

Im currently selling tiles and €100 worth of goods (10kg - 10 tiles) to ship costs me €19.50 domestic, €47.50 UK and €65.50 rest of the world. Which isn't bad since I got the tiles at 1€ each.

But the problem comes if I sell tiles individually say 5 tiles (5kg) which brings me 50€, to ship costs me €14.50 domestic, €42.50 UK, €60.50 rest of the world. Im already at a loss selling outside of Ireland & UK.

But if i sent the goods in multiple packets of 2 tiles (2kg) my cost goes down marginally to €5 per tile EU and €8 per tile rest of the world. But then again its strange to send tiles in multiple packs of 2.

These costs are for standard 5-7 day delivery by the national postal service of my country, not a courier.
I would be more able to help you reduce your inward shipping cost if you were importing, but I am no expert on retail shipment charges.

One thing that I do know is that freight charges as a general rule are highly negotiable. If your carrier publishes a rate schedule, you should expect pay no more than 50% of the published rate. If you are shipping frequently, that could easily come down to 25%. You may have to accept a deal at 25% plus a fuel surcharge or 50% plus a fuel surcharge.

It may take some hard bargaining, but that is how the freight industry works.
 
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Walter Hay

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This little notice that is intended to help readers know what subjects have been dealt with is now getting too big, and is not exhaustive. I will post it here on its own, but I will try to produce a subject index that will direct readers to the page or the date where the subject that interests them is located. Might take me a while, so if any generous reader with appropriate skills could work on an index it would be appreciated.

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.

■ Freight Options
■ 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 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17
■ Protecting Trademark, Copyright, and Other Intellectual Property.
How to find Unique Products
■ Success Story
■ Just in Time
■ Hot Selling Products
■ Where Do You Rank In The Product Supply Food Chain?
■ A Few Hints On Product Sourcing And Importing
■ Straight From The Horse's Mouth (Quoting Alibaba re Gold)
■ What Do You Need To Learn?
 

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