At the time of the corona, you probably heard that the biggest increase in income came from Amazon and trade through Amazon.
The shortest description of the business would be - make a cheap product in China and sell it in America, on Amazon.
Otherwise, this type of business is widely spread throughout China.
What's more, the biggest Amazon convention so far was held in Shanghai in 2018 in a hall with over 10,000 participants.
How to do business through Amazon, what is FBA, how to open a store, all that is part of another story and we will not deal with it in detail, it is not part of our job.
The role of an agent in China when doing business on Amazon
Amazon always sets high standards for the quality of products sold on their website.
However, many Amazon sellers have discovered a way to sell products imported from China.
And why wouldn't they do it? Chinese products are cheap, the Chinese can make a quality product and the products can be bought in bulk.
However, this is where we come to two big problems!
Besides finding a quality and reliable supplier, another big problem is delivery.
Importing shipments from China to Amazon warehouses is not an easy job.
There are too many complications, but it is still not impossible.
We will introduce you to the basic steps in starting a business on Amazon and we will especially look at our part of the job (finding a reliable factory, inspection and quality control of products).
According to the proposal FBA(Fulfillment by Amazon) the basic steps in establishing your business on Amazon would be:
1. step: Market analysis
• Searching for suitable products in Chinese B2B and B2C markets: Alibaba.com, Global Sources, Aliexpress, Made in China.
• Gathering details related to the production process, approximate production costs, delivery times samples and payment methods.
2. step: Overview and evaluation of the factory
A factory audit is the most effective way to assess the manufacturer's capabilities and the possibility of future cooperation.
Objectives of the factory audit
Assessment of factory management structure:
• How long the company has been in existence, location and interaction between production lines, warehouses and offices.
Evaluation of the competence of the manager (that is, the person with whom you communicate):
• Your manager must have a good understanding of the production process and production techniques in order to be able to respond quickly and efficiently to any potential technical problem.
Checking the main suppliers of raw materials and components:
• This data helps to assess the stability of the inventory and possible deviations in the quality of the finished product.
Factory assessment of internal quality control:
• Checking the presence and effectiveness of the internal quality control department.
Analysis of key markets:
• Checking in which markets and in what quantities the factory sells its products.
• Discovering whether there are differences in product quality for different markets.
Equipment maintenance inspection:
• Availability of the necessary equipment, its age and performance.
Revision of staff competence:
• Verification of staff responsibilities and their qualifications.
3. step: Ordering a sample
A must-have item, since Amazon is looking for quality.
You can order a sample of the product you are interested in to evaluate its quality and features.
This is a good reason to ask manufacturer to send you the samples at their price.
The price of the product with shipping costs you will most likely have to pay, but for later larger quantities the prices would be much more affordable and you can cover the cost of getting the sample later.
4. step: Signing the contract with the supplier
The contract should include the following details:
1. The goods must be produced according to samples confirmed by the customer. The appearance of the model, colors, sizes and all other characteristics must correspond to the product specification and should be specified in the contract.
2. The customer (in this case you) could not accept the defective products during the final inspection. Goods marked as defective must be exchanged for correct goods without damage.
In case of systematic defects, the customer may request rework or refund of the deposit.
3. Tolerances for certain defects and other issues related to the goods. Planned delivery date.
5. step: Quality control inspection
We suggest that the inspection be carried out after the goods are ready for shipment, i.e. before the payment of the 70% part in case you cooperate with the supplier according to the standard payment model (30%-70%).
The advantages are obvious: the supplier does not receives payment until the inspection is done and is motivated to eliminate all defects as soon as possible.
Inspection control quality should include:
Inspection of cartons
• Quantity and occupancy of cartons.
• Presence of required labels and markings.
• Measurements of dimensions and weight of cartons.
Product Review
• Detailed review of one randomly selected item from the lot.
• Random check of items from different cartons for any defects and compliance with Amazon FBA requirements.
Description of detected problems and defects
• Brief description of the main errors and defects.
• Calculation of the total number of defects of any kind.
Logistics report
• Total number of cartons.
• Dimensions and weight of cartons
The control should be carried out during the production of the prototype of both the product and the product packaging, i.e. the cardboard box in which the products are placed, in order to avoid later complications.
6. step: Shipping from China to Amazon
There are two main ways to ship goods from China to Amazon warehouses:
1. Ask the supplier to deliver the goods directly to the Amazon fulfillment centers
2. Use the services of an independent logistics company or agent in China.
The first variant may seem like an obvious choice at first sight:
what is the point of including an intermediary company, if the supplier can arrange the delivery himself?
However, in practice this is usually complicates the delivery process and leads to certain risks and often complications:
• Chinese suppliers usually do not include customs duties in the delivery costs. In most cases, the client (you) does not expect it and you have to face all the upcoming problems yourself.
• Chinese factories are not specialized in logistics, so they use the services of a partner shipping company, often having very vague knowledge about the specifics of the Amazon FBA program.
The language barrier and the peculiarities of the Chinese mentality make things even more complicated.
• Keep in mind that your supplier has no motivation, desire or time to go into details, looking for the best way of delivery in terms of transit time/delivery costs and overseeing all stages transport. It's just not part of their job.
All these factors increase the risks of potentially unforeseen problems. The best way to avoid them is to leave the delivery to a professional logistics company or agent located in China.
Weight Recheck
The situation where the volumetric weight of a shipment from China increases after the forwarder receives and re-measures the boxes is quite common (especially when it comes to express delivery by DHL, UPS or Fedex).
Why is that so?
The sender of goods from China is a user or partner of DHL, FEDEX or UPS.
Invoicing in these global courier companies is a fully automated process and every shipment goes through the "Cargo Scan" equipment.
It is designed to measure the widest part of each side of the box.
The shipping company uses this data to bill for shipping.
If the boxes are slightly wrinkled or deformed leaving the warehouse the "widest part" could actually increase for the robot when scanning the load.
This is why measuring the weight and dimensions of cartons is an important part of any quality control.
This data can be used to protect your interests in communication with the logistics company in order to avoid additional delivery costs.
The most convenient and reliable option for you is to have a professional company handle the inspection and delivery.
Someone who could control the entire process and provide full assistance in solving all possible problems during transportation.
Physical and volumetric weight of the package
1. What do you pay when transporting goods?
Price (costs) depending on the delivery method
• Price per kilogram of physical weight (express, air transport).
• Price per kilogram of volumetric weight (express, air transport). In the simplest terms, volumetric weight is the dimension of the package converted to weight.
• Costs per cubic meter (sea and road transport) FCL, LCL FTL, LTL.
2. Formula for calculating volumetric weight:
(Length * height * width (cm)) / 5000 * number of cartons (in case express mail is used at any stage of transportation, such as Fedex, DHL, UPS).
(Length * height * width (cm)) / 6000 * number of cartons (in case express carriers are not included in the transport).
Physical or volumetric weight is charged, whichever is greater.
3. Formula for calculating cubic content for sea transport:
(length * height * width) * number of cartons = total number of cubic meters.
Amazon FBA packaging requirements.
Product bar code
FBA uses barcodes for identification tion and tracking of goods during the entire process.
Each product that you send to an Amazon center requires its own barcode.
There are two types of barcodes you can use to identify your products:
• Manufacturer barcodes (acceptable barcodes include GCID, UPC, EAN, JAN, or ISBN);
• Amazon barcodes (ASIN or FNSKU).
Packaging requirements
• Each type of assortment, such as size or color, must have a different FNSKA.
• Collapsible products such as products that Amazon would need to assemble from multiple pieces are not accepted.
• Boxes all they must be six-sided, which must have openings or a lid that will not open easily by itself and the box must not collapse when medium pressure is applied to it.
• For products with bags, the thickness of the bag must be at least 1.5mm must be transparent and must have a barcode. Also, the poly bag must not protrude more than 3 inches over the dimensions of the product.
• All boxes of the same product must contain equal amounts of that product in each box.
• Each box must not contain more than 150 items.
• Expiry dates must be displayed in MM - DD - YYYY or MM - YYYY format.
• Marketing materials are not permitted.
• Shipping details listed on your Amazon seller account must match the physical shipment to the appropriate Amazon fulfillment center, including: merchant's SKU (Stock Keeping Unit - SKU is any product that can be distinguished from another product of the same company), FNSKU, condition, quantity shipped and packaging options.
• Boxes that contain multiple standard-sized items may not exceed 25 inches on any side. A box may exceed the 25-inch limit if it contains an oversized product that is longer than 25 inches.
• Boxes may not exceed the standard weight limit of 50lbs, unless they contain a single oversized item that exceeds 50lbs.
• Boxes with jewelry or watches must not exceed 40lbs.
Important note:
Amazon strictly enforces carton size and weight policies.
Sending oversized and excessive cartons to the logistics center may result in future shipments being blocked until you recognize and resolve this issue.
Containers and packaging materials
Approved standard boxes:
• Regular slotted cardboard (RSC)
• B flute
• ECT-32 (edge crush test)
• 200BH (strength-burst strength)( burst strength)
Approved packaging materials include:
• Foam sheets or cushions
• Air cushions;
• Bubble wraps
• Solid sheets of paper (semi heavy kraft paper - best).
Now that you know all this, we believe you understand - In order to save time and money, the help of an Agent is certainly welcome.
Agent's role in China as Amazon's product sourcing agent
Time saving:
It takes a lot of time to deal specifically with suppliers when you are located somewhere around the world and not in China.
In such a case, the difference in time zone makes things worse.
We as an Amazon sourcing agent will help you do everything smoothly, we will explain all the steps and keep you updated regularly during the procurement process, from finding suppliers to manufacturing and shipping the goods.
So there is no it makes sense to spend a lot of time on the product sourcing process, when you can spend it on important tasks like promoting your Amazon product.
Lower product price:
Suppliers found on platforms like Alibaba or trade fairs are mostly trading companies that add their profit margin to factory prices.
On the other hand, agents in China know where the nearest manufacturers of your products are and can get factory direct prices.
These prices are usually lower than what you get on Alibaba and other B2B sites which offsets the service cost of hiring a Sourcing Agent.
Inspection and quality control of products and packaging:
When it comes to quality control, there is nothing better than an agent who is there on site.
Not only will they help you to find your supplier, he will also visit the factory and production facility if necessary and at your request.
In addition, the agent will keep an eye on all stages of the production process to save time and costs.
Similarly, the final inspection is also our duty when the shipment is ready to be sent.
Realistically, you can't just blindly trust the supplier's word, without an agent on the ground it's a very risky business.
Control product quality at all stages of production, packaging and delivery will save you money and reduce complaints to a minimum.
We provide all services in one place, product creation, product procurement, product inspection, labeling services, packaging, so the whole package of procurement services and logistics to FBA Amazon warehouse.
That is our part of the job as an agent in China. We will help you run your business in China from anywhere in the world.
PS
Sorry for the slightly longer text, but we believe you want to find out as much as possible before getting into this business.
Useful links:
Selling on Amazon USA with a Chinese or International Company