A-Z of Amazon

It’s hard to beat Alibaba when sourcing products. Alibaba are a Chinese ecommerce juggernaut – they’re a wholesaler, Amazon and eBay all rolled into one. In China, its Tmall platform is modeled on Amazon, and its Taobao platform is an eBay clone. ( Oh, and it also owns or has stakes in Juhuasuan ( a Chinese version of Groupon ),Alipay.com (PayPal), Sina Weibo(Twitter) and Youku Tudou (YouTube)). Founded in 1999, it handles 80% of China’s e-commerce and has over 500 million active users. That’s up from 400 million last year.

Alibaba is also where buyers in the West can find suppliers (wholesalers and manufacturers) in the Far East. More than ten million suppliers sell on Alibaba and there’s an almost endless list of products you can buy.

But there are pitfalls too. Remember you may technically be the client , but most suppliers want to be reassured you’re not a fly-by-night operator and are likely to place future and larger orders. Your first email of introduction is crucial.

Here’s an example:

Dear sir/madam

I am the owner of a company.

We are currently looking for a reliable suppliers with which to do long-term buisness. Having researched numerous products, we have been particulary impressed with your genuine leather (cowhide) handbags.

Are you able to produce bespoke versions to our exacting needs? For Example:

• Different colours.
• Adding our Brand.
• Different catching.
• Etc.

If so, i will provide exact specifications upon receipt of your email.

Also,just so we know, how much would 1,000 units of your current design cost(FOB price)?

I look forward to hearing from you. Thank you in advance for your help.

All the best

Ned Browne(Author)

In this piece of communication, I have :

• Stated that I want to become a long-term buisnes partner.
• Paid them a compliment.
• Asked about customizing.
• Reaffirmed I’m serious by suggesting a 1,000 order.
• Been polite.

Note: Free On Board ( i.e. once they’ve shipped the product it’s your responsibility to pay the VAT and import duty).

I tend to say I’m the owner. However, others advocate claiming to be the “Purchasing Manager” to make the company sound bigger.

The trick is to start a conversation.Once they have replied to your initial email, it’s far easier to keep things going with timely replies of your own.

If I have a new product in mind, I tend to senf my initial enquiry to 10-15 possible suppliers. This will helo you choose the right one.

If you are serious about building a brand, you should register
your trademark. A registered trademark is usually a
combination of your company name and logo.

The main advantage of having a registered trademark is that
a can then use your brand without your permission. It
also allows you to put the & symbol next to your logo. And, in
the future, you may even be able to sell or license your brand

You need to register your trademark within the category with
which it’s most closely associated. If you envisage entering
associated markets, it’s worth including them too. Although.
the more categories the greater the cost.

The registration process takes about fours months, assuming
that no one objects. Registered trademarks then last 10 years,
but the renewal process is little more than a formality.

To register your trademark, click on this link:
https://www.gov.uk/how-to-register-a-trade-mark

Note: Registering your trademark in the UK only protects your
brand in the UK.

Top tip: It’s worth checking already-registered trademarks
before you decide on your final brand. After all, you don’t want
a third party to use their trademark registration to try to
prevent you selling and marketing your products further down
the line.

Importing goods from outside the EU

Al importers need an EORI number to clear customs. EORI
stands for Economic Operator Registration and Identification.
When you’re applying for your VAT number you can apply for your EORI at the same time. (If already have a VAT number
(VRN), your EORI number will be GB + Your VRN + 000 (i.e GB012345678000).)

Remember, these will remain in place post Brexit vote. The
United Kingdom invoked Article 50 on 29th March 2017 -this
means that the UK will quit the EU by 29th March 2019 at the
latest. However, the current system will, most likely, remain in
place until early 2019 (and, in reality, probably for many more years to come).

The bigger problems caused by Brexit are the collapse in the
value of the pound and uncertainty. Before the referendum. £1
bought you approximately $1.50. As of July 2017, £1 buys you
$1.28. As almost all imports from lower-wage countries are
priced in dollars, this has hurt many FBAers. As for
uncertainty, maybe that’s an opportunity? As Warren Buffett
once said, “[be] Fearful when others are greedy and greedy
when others are fearful.”

For importers who choose not to be VAT registered, you can
still get an EORI number: www.gov.uk/guidance/eori–
supporting-guidance

If you need to register for VAT, Google “registering for VAT” or
go to:
https://online.hmrc.gov.uk/registration/newbusiness/busine
Ss-allowed

You also need to ascertain your product’s Commodity Code.
Commodity Codes are used to establish your import duty.
According to the World Trade Organisation, non-farm imports
to the EU attract an average tariff of 4%. However, the rate can
range widely depending on what you’re importing. So, do your
research before placing your order.

All Commodity Codes are listed here: www.gov.uk/trade–
tariff/a-z-index/a?country=&day=2&month=9&year=2015
If you’re still unsure, ask the manufacturer and they should be
able to provide you with the correct code.

Many online FBA “gurus” advocate “flipping” products on
Amazon. In other words, buy in bulk from Chinese wholesalers
or manufacturers and sell for a profit on Amazon. But here’s
the rub: anyone can copy you. Worse still, people with bigger
buying power can negotiate a lower cost-per-unit price, and
are thus able to undercut your price. Furthermore, if you end
up with a bestseller and that product is available “off the shelf”.
Amazon will start selling it. After all, they know what’s selling
well and they will always win the price war.

Unbranded products also sell for less. I know, no one knows
your brand. It’s brand new (excuse the pun). But that doesn’t
really matter. Research has shown people will pay up to a
third more – even when they have never heard of the brand.
It’s amazing what a brand name and a cool logo can do. And
creating a brand is much easier than you think. Philip Knight,
who founded Nike, famously paid Carolyn Davidson just $35 to
design their now-famous Swoosh logo. And, thanks to the
Internet, it’s much easier now.

Branding is especially important if you’re thinking about an
“exit strategy”. Unbranded products are easy to copy, so
what’s your company worth? I would suggest not very much.
Creating a brand will give you far more options down the line,
including the ability to sell your products through offline
channels. And, of course, it will make your company more
valuable if you ever come to sell your business.

In very simple terms, a brand is a name and a logo. That’s the
start point anyway. Down the line, it will become associated
with your products, your advertising and your company
values. But, to start with, you need a name.

Continue reading “The importance of branding”

Someone once said, “Do a job you love you’ll never go to work again.”That’s true FBA too – choose products that you would buy yourself or ones that you feel passionate about.That way it will keep your interest and you’ll be far more likely to understand your customers. A friend of mine is a yoga nut-he sells yoga equipment online. Makes sense.

Problems are a great source of ideas. If you can’t find durable gardening gloves, the chances are that you’re not alone. Make
a list of these and ask your friends too.

Flick through newspapers and magazines – they are awash
with product ideas. And, if you can bear it, shopping channels
will give you an insight into the kind of things people are
buying.

You can also find out what customers are searching for on
Amazon’s website by typing in the start of a search. When I
typed “pillow”, the following appeared: pillows, pillow cases,
emoji pillow, travel pillow, pregnancy pillow etc.

Product bundling is worth considering too. It’s a tried and
tested technique across a range of industries and used by
everyone from car manufacturers (Ford + insurance) to the
fast-food industry (McDonald’s Happy Meal) and from games
consoles (PlayStation + free game) to fine foods (Fortnum &
Mason’s hampers). The key advantage is that you can create a
unique listing using off-the-shelf products. And you can charge
less per item. For example, you could fill a wash-bag with
toiletries, rebrand, barcode etc. and suddenly you have a
unique offering. The reason you can charge a lower price is
simple: Amazon’s fees are less as they’re only selling and
shipping one item. It’s also harder for competitors to copy
your inventory.

Note:There are some Amazon rules regarding bundling. For
example, BMVD (Books, Music, Videos, and DVDs) product
bundles must be defined by the publisher or manufacturer and
have a single ISBN, UPC or EAN.

Continue reading “Other ideas to help you decide what to sell”