These 4 sourcing mistakes have been made by many Amazon FBA beginners. If you are staring Amazon FBA, avoid making these 4 mistakes that could cost your business a lot of money.
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Welcome to the GoodLife Warrior podcast. I’m Yuping. We make sourcing easy, fun, and profitable for your business. This episode was originally aired as a video on my YouTube channel, youtube.com/goodlifewarrior. As always, high-quality, professional sourcing content delivered to you with passion and my unique Chinese accent. Enjoy.
How are you my friend? How’s your day? I hope your day is going well. In the next few minutes, I’m going to give you four tips to help you not to make mistakes that can cause you a lot of money in sourcing.
You know I have many years of sourcing experience. I hope you listen. At the end of the video, I’m going to share with you super exciting news. For those of you who have been wishing for this, I’m going to make your day. Let’s get started.
First, let me share a quick story with you. Many years ago, a friend of mine taught me how to play poker. During one of the poker lessons, he pointed out to me, “You’re paying.” We all make mistakes. The question is, at what cost? Well, as a rookie poker player, I make mistake after mistake, and I run out of my money very quickly.
Well, I wanted to use this poker analogy to point out the mistakes in sourcing, because you have thousands of dollars invested in the sourcing process. You cannot afford to make mistakes that can cost you a lot of money. If you are new to this channel, are you new to this channel? My name’s Yuping, be sure to subscribe. I can help you and I can help to save you a lot of money in your sourcing.
So let’s take a look at the mistake number one. The first mistake is not knowing the total landed cost. How can you commit sourcing money without knowing your total landed cost? In the course, I always encourage the students to do three cost scenarios because your buying quantities could be different.
What is your worst case scenario? How could you even sell a product without knowing your worst case scenario? Some people do that and quickly they find out their selling price is very transparent, it’s public information, everybody knows. The only mystery that they didn’t solve is the total landed cost. So don’t make that mistake. You need to do your homework. You need to do your analysis, making sure you know your true landed cost.
By the way, the product quote you get from your supplier is not your total landed cost. You need to think through every cost elements, you need to include all of them into your calculation. A quick tip here, after you know your total landed cost, you will negotiate better because you know your bottom line.
The second mistake is under estimate the power of 10 cents. What does 10 cents could do for us? Not much. It’s just a dime. But if you multiply this 10 cents with 10,000, 100,000, this 10 cents becomes thousands of dollars. What I’m saying here is this 10 cents could be a very expensive mistake for those big sellers who are already scaling up selling thousands of dollars because their cost is here.
Instead, they could have saved thousands of dollars if they haven’t negotiated by 10 cents down at the beginning. For those of you who are just starting out, I don’t want you to make that mistake. And I wanted to challenge you if your cost, for example, if you are at $4.60 negotiate down to $4.50. Save that 10 cents, knowing that 10 cents is going to multiply itself because you are going to continue to order. You want your cost base to be lower.
You know what you want, how you going to get there? You negotiate, my friend. If you want it to grow, if you are determined to make a lot more money, you will need to learn negotiation. I really hope one day I can teach you negotiation if you join my course. Anyway, this chunk of money, the profit, they all start from this little 10 cents.
The third mistake, blame your supplier. My supplier sucks. I hear this a lot actually. Well, I agree. A bad supplier can cost us a lot of stress, a lot of headache, a lot of follow ups, a lot of losing sleep. And sometime it cost us a lot of money if they’re late or they have a poor quality. The question is, why did we choose this supplier to begin with?
I have to say, choosing a good supplier, it is just as important, if not more important, than choosing a good product. When you choose a good product, at least there’s no money involved yet. When you choose a supplier, there are thousands of dollars at risk.
When we choose a supplier, there are people involved. When there are people involved, things tend to get complicated. That’s why not only we need to know how to qualify the supplier, screen the bad apples out. We also need to know how to write up the terms and conditions to prevent the bad things from happening. Otherwise, we’ll leave the door wide open, hoping that things are going to turn out to be good. That’s why I say it’s a mistake to blame the suppliers when things go wrong. Instead, we could take better control of the situation to prevent the supplier from costing us thousands of dollars.
The fourth mistake, indecision. I have seen so many people, they’re brilliant, they got a great product picked out, they’re hard working, but they seem to be perpetually stuck at the beginning stage of sourcing. They couldn’t make any commitment.
Three months pass by, six months pass by, nine months are gone. Nothing is happening. You do know that this indecision is costing these smart people thousands of dollars if they have launched the product. I hope you’re not one of those smart people who are having a hard time deciding to move forward.
You know what? The market is moving. Opportunities are moving. Market and opportunities never wait for indecisive people. My friend, I’m saying this not to push you off the cliff. That’s why I’m always here sharing with you the best sourcing knowledge to empower you. If you’re indecisiveness is because of your fear of not knowing the complete picture of sourcing, I can help you. You can take my course.
Regardless what you decide to do, don’t let the indecisiveness stop you from making progress because we need to continue to grow and make money. Six months from now, we need to be at a different place.
So to summarize the four mistakes that can cost you so much money, by the way, I’m speaking from years my sourcing experience. Number one, not knowing the landed cost. You are going into sourcing blind. Number two, not negotiating a better price. Even if it’s 10 cents, you’re leaving a lot of profits on the table. Number three, blaming your supplier. Instead of taking control, you are giving away your power to a bad apple. Number four indecisiveness. You are missing out the opportunity to make money.
I look forward to connecting with you and to support you. I’ll see you inside of the course.
Check out the link, the Sourcing Warrior Mastermind link, undertake Sourcing Warrior’s quiz to find out your sourcing IQ. Make it fun, learn something, have a great day. I’ll see you in the next episode.