These days, most companies prefer to ship directly their products that are being manufactured in China to Amazon FBA as that can be a quite convenient option for the companies.
Most businesses find this strategy quite profitable for doing business with Amazon. Although it may not be that much difficult to do this as it may appear to be, however, it can surely be a little more complicated than just asking the supplier.
Let us discuss this strategy of sourcing from China for FBA in a little more detail in this post. Perhaps this is the very common question that crosses our mind of most business people, who want to supply their products to Amazon, which is now the biggest retail outlet worldwide.
What are the options available to you?
The following are the two options that you have for sourcing from China for FBA.
1. Shipping directly from China to Amazon FBA
If you are shipping from China, directly you will need to tell your Chinese supplier for preparing your goods to FBA's exacting standards. This is usually not a problem, but it can be difficult at times. If you prefer to go with this option then the following are the few pros and cons that you may have to face.
Pros:
Quicker transit times. The time it will take for the merchandise to arrive at the warehouse has been drastically reduced. The faster your goods arrive at warehouse, the sooner you can begin selling on Amazon.
You can save middleman costs and the hassle of paying your money to someone and again inspecting your products can be eliminated.
Lesser handling of the products
Cons
Amazon requests that the products be shipped to various warehouses rather than a single site.
Prior to arriving at Amazon, freight and duties must be paid.
The product must comply with Amazon's shipment, packing, and shipping criteria and standards.
Supplier will know that you are supplying to Amazon
Cannot use any partnered carriers
When you should ship directly to FBA from China?
If you are shipping a very small number of products (say one carton) and if it is under the value of $800.
If time is absolutely important for you and your every single day counts.
If you have long experience in sourcing from China for FBA with the supplier (you have already used a certain 3rd party China inspection company) and you have also long shipping experience of sending Amazon FBA your products and it will be cheaper compared to using a middleman.
We think, that if you are relatively new in this business of importing or dealing with Amazon FBA, then you must have your first few shipments sent to your home/business directly if possible. You must personally handle your products at some point.
2. Shipping products through a middleman
Products might be transported straight from China to you or through a third-party broker. After that, you can send them to Amazon's FBA facilities.
There are several such intermediaries who will gladly ship your Amazon FBA products. Pick and Pack, Prep and Ship, and 3PL are some of the terms used to describe them (third-party logistics).
The following are a few pros and cons of this option:
Pros:
Products can always be shipped in a certain consolidated form from China.
You can inspect for making sure that your product will meet the quality
Your sales strategies will remain hidden from your Chinese suppliers
Your shipment is very unlikely to get rejected by FBA
Can use any partnered carrier
Dividing shipments to several Amazon FCs will be easy
Cons:
You may need to pay someone for doing it for you, alternately you need to take the trouble of doing it all by yourself
Shipments may take a much longer time to arrive at FBA
More expensive
More product handling
When should you prefer a middleman while shipping your products to Amazon FBA?
If it is the first cargo from a supplier, so you will be able to check it as well as have it prepped and labelled by an American company.
This way, if you are a first-time user of FBA, you won't make any mistakes that cause your shipment to be rejected and then sent back again to China.
Using a middleman is more cost-effective because of the savings of having a single aggregated shipment transported from China.
How can you ship your goods from China to Amazon?
International freight cost takes a cetain portion of your product cost. You will need to decide how to send your products from China to the Amazon marketplace after you and your Chinese manufacturer have agreed on terms and conditions for sourcing from China for FBA.
There are 4 options for international goods shipment:
1. Express freight
Express freight will be the quickest way to get products from China to any Amazon warehouse in the globe. Express shipping is suited for packages weighing between 200 and 400 kg (around 900 pounds). Whichever is heavier, the gross/ volumetric weight (depending on product + package dimensions) is taken into account.
2. Air freight
Air shipping is the second most expensive and fastest mode of transport. It's about 10%-20% less expensive than your express freight and will be excellent for shipments weighing more than 500 kg. If the weight of your shipment is less than that, we suggest using express/sea freight.
3. Sea freight
The most common method of getting products to the Amazon FBA warehouse is by sea or ocean shipment. The time it will take to ship the products from a Chinese warehouse to, say, the United States, ranges from 25 - 40 days.
It is also the most cost-effective transportation technique, allowing for significant cost savings, particularly when transferring huge stocks. You can choose LCL shipment or FCL shipment according to your product volumn.
4. Mixed
Because the products take more than one month to arrive, it is a good idea to divide your inventory into sections and ship some by sea and some others by express or air.
This tactic not only saves you money and allows you to list your products quickly, but it also allows you to set reasonable expectations for when your goods will arrive utilizing various delivery methods.
Common pitfalls that you should avoid while sourcing from China
The final segment of this piece will go through the most common mistakes new sellers make when directly buying from China factories.
1. Forgoing your product inspection services
Sellers and suppliers alike tend to become comfortable once sales begin to rise your first inventory batch starts to go from the shelves. Without your knowledge, a drop in product quality may quickly lead to irreversible damage with unfavourable product reviews.
For a small cost, you can hire a reputable Chinese product inspection company to go to your supplier's warehouse and inspect the inventory on your behalf. This will keep your supplier always on their toes and helps with quality assurance.
2. Not preparing for any holiday season
International (and also Chinese) holidays signal the start of supply chain difficulties while selling on Amazon. The increased demand has overloaded local Chinese manufacturers. As a result, there will be a delay.
Such kind of scenarios is a nightmare for merchants who are anxious to take advantage of increasing sales, such as during the Christmas season. To avoid shipping problems, check out this from the Amazon FBA Christmas calendar!
Here are the most important ones to be aware of:
1st to 3rd January: New Year’s Day
12th to 17th February: Chinese New Year
4th April: Qingming Festival
1st to 4th May: Labour Day:
12th to 14th June: Dragon Boat Festival
1st to 7th October: Golden Week
Similarly, the supply chain interruptions in Q4 each year catch a lot of new vendors off a surprise (the last quarter which is 3 months of your calendar year).
During Christmas and also New Year's Eve, manufacturing in China comes to a halt. The following are some of the best inventory management methods to use before the fourth quarter:
More inventory is being stored in order to meet client demand.
Setting fair expectations with your supplier.
Creating an advertising budget to take advantage of times when your competitors' products are out of supply.
3. Messing up with product packaging
When it comes to product packaging, remember the golden rule is to follow the strategies of successful sellers in your niche— there is no point in reinventing the wheel. If everyone in your position sells fragile things and uses bubble wrap, you should use bubble wrap too.
Make sure to meet the following fundamental requirements:
Ascertain that all barcodes/labels are properly attached, include the necessary information, and are scannable.
Sets and products with several parts should be packed as a single unit.
Bubble wrap should be taped and sealed shut tightly.
Apply a warning label to polybags with a 5” or bigger aperture.
Six-sided units must be used in all boxed units.
Overweight containers must be labelled with additional information about the type of lift required for moving them around.
Conclusion
Product sourcing for Amazon from China can be nerve-wracking, especially if it is your first chance. There is a lot that may go wrong while comparing multiple suppliers, negotiating the terms and conditions, also overcoming language obstacles. There is no space for errors when ordering inventory that is worth several thousands of dollars.