How Do You Find the Best Suppliers for Amazon FBA?
To start selling on Amazon, you will need to find a supplier first. Choosing a supplier is a critical process and you must be extremely careful. So, how do you do it? It is important for you to manage your product’s quality.
When the products you ship to Amazon are poor quality, your business will be in trouble. Having too many product returns and bad reviews is never good. Amazon can remove all your listing privileges or cancel the listings. This will take you back to where you started, and you will hardly sell any products.
For this reason, you cannot just work with the first supplier you come across. You must find a factory that not only makes quality products, but also delivers on time. You need to get good prices for the products and lowest possible number of defects. There are three main factors to consider when picking a supplier. Check them out.
Option 1: Going to China in Person
Going to a China market or trade fair is an amazing option if you have the money for it.
If you get an opportunity to attend the Canton Fair (China Import and Export Fair), you will meet so many different suppliers. You will also get a great chance to browse and see any new available products as well as get ideas for products you may want to buy or create.
Take a trip to Yiwu Market (Yiwu International Trade City) and check out the thousands of booths with various wholesale items. There are different kinds of mass market, non-technical, inexpensive items. The idea of going to China may not make sense for some Amazon FBA sellers, financially.
This means searching for suppliers online—more specifically, Alibaba. Option 2: Searching for Suppliers on Alibaba. For online Chinese suppliers, Alibaba is the best place to look. Many Chinese factories do not create websites.
If you find one with a website, the web presence will be greatly limited. A Google search, therefore, may turn out to be fruitless. Although there are good Chinese factories with a strong web presence and English-speaking staff, their prices may be too high for small Amazon sellers.
When seeking suppliers on Alibaba, make it a key rule to source from “Trade Assurance” suppliers or those that have no problem accepting “Alibaba Secure Payments”. Factories like these guarantee their work in that they don’t get payments if they ship substandard items or fail to ship on time.
Option 3: Working with Sourcing Agents
These companies help sellers locate product sources.
They are a good option for new sellers who don’t have manufacturing experience. Their payment is catered for by a percentage of the buyer’s order.
Sourcing agents will save energy and time. However, you should seek to know all about the product you are selling before depending on an agent.
The Best Option for You
If you don’t have the budget to go to China, Alibaba is a good option. The most important thing to consider is quality.
Many FBA sellers prefer to source their products from overseas. It is the most sensible option as far as pricing and supply are concerned. As an FBA seller, you know that the Amazon space is competitive. You must seek advantages that make you competitive and put you above your competitors. There are many ways through which you can be competitive and one of them is by having better margins.
You will be able to price your commodities competitively and win the buy box. How can you achieve better margins? The fastest way is by negotiating with your suppliers for better terms. Check out the following areas. Negotiating product costs is a direct and obvious way of saving money. Note that you should always negotiate the best prices even before you start working with the supplier.
However, some suppliers will not give you the best price until you work with them for a while and start ordering in large volumes. As a matter of fact, you should use this as a trigger for negotiating prices. Whenever you increase the volume of your order, try to get a better deal from your supplier. Most suppliers will agree to this because large volumes help them as well.
They also want to nurture a relationship with you. When your cost per unit drops, other cost savings will become evident like overall duties reduction. Reducing your Amazon prices also reduces FBA seller fees and you will end up maintaining the same margins with lower prices.
This is how high-volume sellers always win the buy box and maintain a high bestseller ranking. If you are a beginner… Getting volume discounts may not be easy for someone who is just starting out. This, however, does not mean that you can’t negotiate for great prices. When buying for the first time, use these negotiating tips:
- Get several quotes and make a shortlist.
- Consider the product quality.
- Consider product packaging and manufacturing lead time.
- Use quotations from other suppliers to negotiate.
In some cases, shipping costs may exceed the product cost. You can choose to arrange the shipping and manufacturing of your product separately or find a factory that will transport the finished items to an Amazon warehouse. If you decide to arrange the shipping yourself, gather multiple costs. Also have the following in mind:
- Does the shipping deliver to the warehouse or your door?
- Are customs fees and customs brokerage included in the shipping cost?
- Check out the different types of shipping.
For the sake of your business’s financial health, you should negotiate payment terms. You cannot afford to exhaust your cash on invoices. Payment terms could also offer security. When making upfront payments, aim at putting as little money as you can get away with for financial security. Set your payment terms at milestones or intervals. Sample orders are an exception here, but they are usually very small. The main point here is to protect your cash flow.