Unlocking Amazon FBA Success: The Ultimate 6-Step Guide (Part II)

Unlocking Amazon FBA Success: The Ultimate 6-Step Guide (Part II)

amazon fba sourcing strategy
Chapter Title Key Points
4 How to Issue the Perfect Purchase Order To Your Alibaba Supplier Tooling Purchase Order, Product Purchase Order, and “Golden Sample”
5 How to Inspect And Ensure Product Quality Four Stages of the Inspection Process, What To Watch For?
6 How to Arrange Shipping And Save Money Three Shipping Options, Key Tips for Smooth Shipping

The world of Amazon FBA

Greetings once again, I’m Yuping Wang, your trusted sourcing expert. As we continue our deep dive into the Amazon FBA universe, I’m here to guide you through the next phase of this exciting journey.

The world of Amazon FBA is vast and ever-evolving. While we’ve already explored the foundational steps in Part I, Part II promises to delve deeper, uncovering advanced strategies and insights to truly help you succeed.

In this segment

In this segment, we’ll navigate through the advanced stages of the Amazon FBA process – from issuing the perfect purchase order, inspecting your product to the highest quality standard, to arranging shipping to save money. Every piece of advice, and every strategy shared, is a culmination of years of experience and expertise.

So, without further ado, let’s dive right into Part II and unlock the secrets to scaling and sustaining your Amazon FBA business.

Onward and upward!

Chapter 4: How to Issue the Perfect Purchase Order To Your Alibaba Supplier

Video Tutorial: Watch Here

Why Purchase Orders Matter in Amazon FBA

The act of issuing a purchase order is more than just a formality. It’s a commitment, a significant step where you invest your money. But, if not approached correctly, it can lead to product discrepancies, disputes, and even financial losses. So, how do you navigate this crucial step?

Understanding the Types of Purchase Orders

When customizing products, you might find yourself dealing with two distinct purchase orders:

  • Tooling Purchase Order: This is specifically for the customized tooling your unique product might require.
  • Product Purchase Order: This is, as the name suggests, for the actual product you’re sourcing.

For the Tooling Purchase Order, remember a couple of things:

  1. Always negotiate the payment terms. It’s not advisable to pay 100% upfront for tooling. A balanced approach, like a 50% down payment with the balance due upon production sample approval, is more standard. However, in the Sourcing Warrior Mastermind© course, I teach members how to negotiate tooling payment terms. The best payment term is to amortize the entire tooling cost over a period of time so that you assume minimum risks in case the tool is not designed well, or the product produced doesn’t meet your specifications.
  2. Since you’re investing in the tool, it’s your property. Ensure your supplier understands they can’t use it for other clients. This should be spelled out in your tooling purchase order terms and conditions.

When it comes to the Product Purchase Order, there are a few more intricacies:

  1. Before anything, have a “Non-Disclosure, Non-Compete, Non-Circumvention Agreement” (NNN Agreement) in place. This is especially crucial if your product has unique intellectual properties.
  2. Your product’s specifications should be crystal clear. It’s this specification that will be your reference for quality checks and any potential disputes.
  3. As with tooling, negotiate your payment terms. A 30% down payment is standard, but there’s always room for negotiation. If you want to learn advanced strategies to negotiate better payment terms and product prices, check out Sourcing Warrior’s Negotiation Masterclass©.
  4. Clearly define terms and conditions in the P.O. related to warranty, late delivery, and failed inspections. This clarity will save you from potential future disputes.

One game-changer in this entire process is the ‘golden sample‘. This approved, signed, and dated sample serves as the quality benchmark for your product. It’s a tangible representation of what you expect from your supplier.

Sourcing for Amazon FBA is intricate, but with the right knowledge, it becomes a smooth journey. By ensuring clarity in your purchase orders, you lay the foundation for a successful sourcing process.

If you haven’t already, I highly recommend checking out the free Alibaba Supplier Webinar. This is a golden opportunity to uncover the Ultimate Secret To Discover The Best Alibaba Supplier. Join the webinar today to completely change how to search for goods suppliers on Alibaba.

Charter 5: How to Inspect And Ensure Product Quality

Video Tutorial: Watch Here

Quality inspection is a crucial step in the sourcing process

According to the Toyota quality system, inspection is considered a waste of resources. Why? Because quality should be inherent at the source. In an ideal world, suppliers would produce high-quality products every single time, eliminating the need for inspections. But we all know that’s not always the case. One negative review on your product listing can cost you sales, making inspections indispensable.

Breaking Down the Inspection Process

The inspection process can be broken down into four stages:

  1. Planting the Seeds for a Successful Inspection (4-5 months ahead)
    • Start with a clear product specification. This document should be shared with your third-party inspection company so they understand your expectations.
    • Use photos and videos to further define your product specifications.
    • Ensure you have a golden sample signed off by both you and your supplier.
    • Stick to standard payment terms. Ideally, never pay more than 50% upfront. This gives you leverage if the inspection fails.
  2. Pre-Inspection Preparations (7-10 days before product readiness)
    • Choose an inspection service company that’s close to your supplier’s factory to save on commute time and costs.
    • Understand the costs involved. The average per man-day cost ranges between $150 to $300.
    • Book the inspection date and communicate it to your supplier.
  3. The Actual Inspection
    • Inspectors will check the number of units, ensuring the order quantity matches.
    • They’ll assess workmanship, product fit, form, and function.
    • On-site testing will be conducted based on your product specifications.
    • Carton measurements, labeling, and other essential marks will be checked.
  4. Post-Inspection Decision Making
    • Understand the results. If the inspection fails, don’t panic. Understand the nature of the defects – are they critical, major, or minor?
    • Make informed decisions. If defects are minor and fixable, you might decide to proceed. If they’re major, you might need to renegotiate with the supplier.

Remember, every inspection that finds a defect is a step towards a stronger product. It’s better to discover defects before the product reaches your customers.

Thank you for being with me on this journey. I’ll see you in the next Chapter where we’ll discuss arranging shipping for your Amazon FBA business. If you want to learn more about sourcing and Amazon FBA, I highly recommend you join our free webinar, “The Ultimate Secret To Finding The Best Suppliers On Alibaba”. This webinar will teach you how to find the best suppliers on Alibaba, how to negotiate, and how to get the best prices. You can register for the webinar here.

Also, consider joining our Sourcing Warrior Facebook group where you can connect with like-minded individuals and learn more about sourcing and Amazon FBA.

Stay tuned for the next Chapter where we will discuss getting samples, which is the most important step to validate a product before committing to purchase orders.

Chapter 6: How to Arrange Shipping And Save Money

Video Tutorial: Watch Here

Let’s dive deep into a topic that many find intimidating – arranging shipping for Amazon FBA

If you’ve ever felt overwhelmed by this process, you’re in the right place. I’m here to simplify it for you.

Shipping is a crucial aspect of your Amazon FBA business, especially when dealing with suppliers from China

Whether you’re a seasoned seller or just starting out, understanding the intricacies of shipping can save you time, money, and potential headaches.

3 Popular Shipping Options/Incom Terms

  1. EXW (Ex Works):
    • The seller makes the goods available at their premises or another named place (factory, warehouse, etc.). The buyer is responsible for all transportation costs, duties, and insurance from the seller’s location to the destination.
    • Responsibility: The buyer bears all risks and costs starting from the seller’s premises.
  2. FOB (Free On Board):
    • The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. Costs and risks are divided when the goods are actually on board.
    • Responsibility: The seller is responsible for the goods until they are loaded on the ship. After that, the responsibility shifts to the buyer.
  3. DDP (Delivered Duty Paid):
    • The seller delivers the goods when they are placed at the disposal of the buyer, cleared for import, and ready for unloading at the named place of destination. The seller bears all costs and risks involved in bringing the goods to the destination.
    • Responsibility: The seller is responsible for all costs, risks, and duties until the goods are delivered to the buyer’s location.

Now, you might be wondering, which option is better? The truth is, it depends on the total landed price you pay with the product price plus shipping cost per unit. Regardless of the option you choose, there are certain things you need to be aware of.

Key Tips for Smooth Shipping

  1. Shipment Visibility: Always get a tracking number. Whether it’s an air shipment or an ocean shipment, having a tracking number ensures you can track your products and ensure they’re on their way.
  2. Beware of the DDP Trap: DDP (Delivered Duty Paid) means the supplier is responsible for delivering the product to your destination. However, sometimes, suppliers might not cover all costs, leaving you with unexpected fees. Always clarify this with your supplier.
  3. Use Your Own Freight Forwarder: Establish a relationship with a freight forwarder. They can provide you with tracking numbers, shipment status, and more. Plus, they can verify costs and ensure you’re not overpaying. If you need the Sourcing Warrior Recommended freight forwarder who can provide you with good price and service, click here.
  4. Understand Incoterms: Incoterms determine who’s responsible for what in the shipping process. Familiarize yourself with terms like DDP, Ex Works, and FOB to understand costs and responsibilities.
  5. Know the Weight and Dimensions: This information is crucial for getting an accurate shipping quote. Ensure the information is as accurate as possible.
  6. Know Your HS or HTS Code: This code determines your duty. It’s essential to know this to calculate potential import duties.
  7. Provide Accurate Addresses: Ensure you give your freight forwarder the exact pickup and delivery addresses.
  8. Know Your Shipment’s Ready Date: This helps in getting an accurate quote and ensures you avoid peak shipping times, which might be more expensive.

Remember, shipping doesn’t have to be complicated. With the right knowledge and resources, you can navigate this process with ease and confidence.

Final Thought: Take Your Amazon Business To The Next Level!

For those who are truly committed to building a million-dollar business, the Sourcing Warrior Mastermind© is your ticket to success. With the Sourcing Warrior Mastermind© course, you can launch products faster, save precious time, and speed up your business growth. And rest assured, we stand by the quality of our course with a 100% money-back guarantee.

For a limited time, when you enroll in the Sourcing Warrior Mastermind©, you’ll also get access to the Negotiation Masterclass© and Quote Master© at no extra cost. This is an unbeatable offer that amplifies the value you receive. Don’t miss out!

The path to Amazon FBA sourcing mastery is an ongoing journey, not a mere endpoint. By grounding yourself in the fundamentals, honing your negotiation skills, validating product choices, and leveraging sophisticated supplier strategies, you’re paving the way for enduring success. The world of e-commerce is ever-evolving, and the mantra to thrive is simple: keep learning, keep adapting, and always stay a step ahead.

For more questions and inquiries about how to find the best Alibaba supplier and how to take control of your suppliers, please contact Yuping Wang.

Frequently Asked Questions (FAQ)

How to Issue the Perfect Purchase Order?

What is a Purchase Order?

A Purchase Order is a formal document that outlines the terms and conditions for the purchase of goods or services.

Why is it important?

Issuing a Purchase Order is a commitment and a significant step in where you invest your money. It helps in avoiding product discrepancies, disputes, and financial losses.

How to Inspect and Ensure Product Quality?

What is Quality Inspection?

Quality Inspection is the process of checking the goods or services to ensure they meet the specified quality criteria.

Why is it important?

Quality inspection is crucial to ensure that the products meet the quality standards, thereby preventing negative reviews and loss of sales.

How to Arrange Shipping and Save Money?

What are the shipping options?

  1. Supplier Handles Everything
  2. You Handle Shipping

How can I save money on shipping?

Understanding the intricacies of shipping can save you time, money, and potential headaches. Always get a tracking number, beware of the DDP trap, and use your own freight forwarder.

About Yuping Wang

The passion for sourcing runs deep in my blood otherwise I would not have done it for 20 years. My suppliers would say these 3 things about me: Yuping is a tough negotiator, a strong relationship builder and a tenacious profit finder.

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