Serious Sellers Podcast: Learn How To Sell On Amazon FBA & Walmart #524 - How To Source Amazon Products on Alibaba & In Person
Discover the best practices for Amazon product sourcing excellence as we welcome back Kian Golzari, the Amazon product sourcing sage, for his fifth appearance to impart his vast knowledge on mastering the Chinese manufacturing labyrinth. Kian's guidance takes you through the crucial steps from selecting the right manufacturers on Alibaba to conducting effective factory visits, ensuring you return home with more than just souvenirs – but strategies to boost your product quality and cost-efficiency.
Venture with us into his secrets of product differentiation and learn how to stand out in a saturated market by uniquely combining various components and embracing innovative packaging solutions. We dissect the art of transforming the ordinary into the extraordinary, from deluxe packaging to strategic bundling. Furthermore, Kian reveals the underestimated power of packaging in offline sales, sharing insights on making a product pop on the Amazon website and attracting crucial impulse buys.
To wrap up, we get into the strategic intricacies of forging long-lasting relationships with suppliers and the nuances of communication that can make or break a deal. We dissect how to scrutinize supplier profiles and the vital role that understanding your supplier's capabilities plays in aligning with your business goals. Kian and Bradley also uncover the best practices for sample evaluation, navigating the norms of sample payments, and why investing time in personalizing your interactions with suppliers can pay dividends in the long run. This episode isn't just about finding the right supplier; it's about creating partnerships that will sustain your Amazon business growth and success.
In episode 524 of the Serious Sellers Podcast, Bradley and Kian discuss:
- 00:00 - Guide to Factory Sourcing and Visiting
- 02:52 - Insights From Visiting a Factory
- 11:40 - Sourcing and Differentiating Products in Manufacturing
- 13:22 - Revamping Coffin Shelf Market Strategy
- 16:29 - Importance of Packaging in Offline Sales
- 18:20 - Clarity and Importance of Product Filters
- 18:44 - Finding & Evaluating Manufacturers on Alibaba
- 21:53 - Filtering for Top Factory Products
- 25:48 - Importance of Trade Background and Markets
- 28:31 - Selecting Suppliers and Communicating Effectively
- 31:40 - Price and Quality Selection Process
- 33:48 - Strategies for Sourcing and Product Defensibility
- 36:38 - Benefits of Attending the Canton Fair
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Transcript
Bradley Sutton:
Today we've got the world's foremost expert on sourcing, Kian, back on the show and he's going to give us step-by-step guides on how to source on Alibaba.com and an SOP for visiting factories in China. How cool is that? Pretty cool, I think. Are you afraid of running out of inventory before your next shipment comes in? Or maybe you're on the other side and you worry about having too much inventory, which could cap you out at the Amazon warehouses or even cost you storage fees? Stay on top of your inventory by using our robust inventory management tool. You can take advantage of our advanced forecasting algorithms, manage your 3PL inventory, create PO's for your suppliers, create replenishment shipments and more all from inside inventory management by Helium 10. For more information, go to h10.me forward slash inventory management. And don't forget you can sign up for a free Helium 10 account from there, or you can get 10% off for life by using our special podcast code, SSP10.
Bradley Sutton:
Hello everybody and welcome to another episode of the Serious Sellers podcast by Helium 10. I am your host, Bradley Sutton, and this is the show. That's a completely BS-free, unscripted and unrehearsed organic conversation about serious strategies for serious sellers of any level in the e-commerce world. We're going to the other side of the world to Dubai right now for a record breaking fifth time. That's how long this this, this show, has been out there. Guys, like we only have people on there, if they're really good, we'll invite them back. And if they are really good and we invite them back, it's only one time per year. The very first time ever in the history of Serious Sellers podcast, somebody's on the fifth time is the one and only Kian. Kian. How's it going? Welcome back.
Kian:
Oh man, thanks so much. It's a great intro man. It's an honor to be the only speaker to be on here five times and wow, I mean that must mean you've done a lot of episodes as well. So congrats to you to be plugging away. Like, how many episodes have you put out now?
Bradley Sutton:
We're like in the mid-500, like we're about 520 now, like we're in the mid the the five teens around there, yeah amazing, yeah, incredible man. Yeah great to be back and, yeah, really looking forward to sort of diving in and we're going to talk a lot about Alibaba, but before we get into that, I'm actually visiting, for the first time, Chinese factories. Like it's been years since I've even been to China and I've never visited the factories where we make the Project X, project 5K products. So what's some advice you can give me? You know like, hey, should I bring some gifts? You know like maybe some chocolates or something to the factory owners? Should I negotiate? Should I just, you know, talk away, ask about their family, like I usually deal with a sourcing agent? Yeah, and she's going to come with me, my sourcing agent who found these factories, and translate a little bit. But what should I do.
Kian:
Yeah, I mean, first of all, I think your mind is going to be blown Like I think everyone experiences this like the first time you go into a factory and actually see how your goods are made, because you have this idea and you have this perception in your head of, like how you think goods are made. But once you go in and you see the production line and like you know, let's say this is for the, for the coffin items, right? So like you'll see, like the wood, like arriving, you'll see the wood getting dried. You'll see, like the woods, like the bad pieces getting rejected. You'll see it getting sanded and filed down. You'll see it getting sprayed and painted. You'll see it getting cut to size and you'll see it getting assembled. You'll see it getting screwed, like you'll just see in some of the different compartments, and then your head will be like, wow, here's like 20 different processes and steps that this product went through to get made, whereas when I just see it in a store, I just see it like in a shelf or, like you know, online. I didn't think about it in this way. But why that really helps you is that, like you know, if you've got cost challenges and you're like right, I've got this like $8 product and I need to get it down to 6.5, you've got like 20 different places you can go to in your head because you've seen it on the production line, right?
Kian:
You're like well, was that spring really necessary? Are we cutting it in the most efficient way? Can we just do straight edges rather than these curved edges? Was it necessary to have that coating? Like? There's so many different things you can now think about. And then, on the reverse, if you want to improve the quality, you're like here's things that we could do better, based on what I saw and how this product is actually assembled. But you're going there for the first time, right? So, in terms of gifts, I would say it's nice. They'll probably provide a gift for you. If you've been doing business together for like a number of years, then by all means, maybe take something nice. I would say something that represents your hometown, so you could take them your favorite team, like a Lakers hat or something like that.
Bradley Sutton:
Okay, those are fighting words. All right, guys. The fifth and last time that Keen will ever be on the podcast.
Kian:
So you can always and, by the way, Bradley’s the clipper's friend for anyone who didn't catch that but yeah, like you know, anything that represents your hometown where it could be like a hot sauce, it could be like a local tea or whatever like that. Just it doesn't have to be anything expensive. Like for me, I always used to take like a personalized bottle of whiskey because I was coming from Scotland. Suppliers, like really, really appreciated that and just a nice gesture to do. And if you have, like a sales assistant that you've been working with, I would get one for the sales assistant that you talk to and then one for the factory boss as well. Very, very important to get a gift for the factory boss and also to get a photo with the factory boss, because there's always going to be time where you're going to need to ask for a favor, right, and there's going to be a time when, like you know, chinese New Year is coming up and, like you know, your, your goods are getting rushed out and maybe they won't make it shipment before Chinese New Year. And then you say like, hey, please, can you just ask the boss, please can you rush this, please can you push this to the front of the production schedule. Please can you get this out before Chinese New Year? And you're like, who's asking? Again? Bradley's asking which one's? Bradley again, oh, he's the guy that brought you that Lakers jersey. Oh, yeah, I love that jersey. Cool, all right, get the items to the front of the line. So it's always something to like for them to remember you if you get a nice little gift.
Kian:
Now, talking about, like, actually arriving at the factory, I think a lot of people, maybe, if you're going to China for the first time, they have this like fear of like well, you know, google Maps doesn't work out there Like how do I get there? Like your factory will arrange everything for you in terms of transport, and like you've got a sourcing agent there. So so they'll definitely help you out, but you don't need to figure out anything by yourself. Like you can just tell your factory hey, I'm arriving at this airport, I'm flying into Hong Kong, I'm flying into Shanghai, I'll be there on the 19th of March. I'm going to come and visit you on the 20th. They'll just say, cool, what's your hotel? We'll come pick you up. Driver will be there outside 10 o'clock and, like, literally, driver comes out with your name, they'll have a Starbucks waiting for you. Like they really, really take care of you, right.
Kian:
And if you're like, hey, I need to get a train to where you are, I don't quite know how to get there. Like they'll book the train ticket for you, like they're so hospitable, like if you have any issues of like how to get there, or even like you know, when I go visit a factory, I tend to visit like two or three at the same time, like of a similar competing product, similar competing category, and I say, hey, look after you. After a visit your factory, I'm going to see this other factory, can you help me get there? And they're like, yeah, no problem, give us the address, we'll drop you off. Like, even if it's a competitor, if there's there very, very, very hospitable. So, in terms of getting there nice and easy, in terms of like what you're, what you'll learn, in terms of their product development, it'll blow your mind. But in terms of being prepared for your factory visit, like I always before any China trip, whether I'm going to the Canton Fair, whether I'm going to visit a factory, I always have to have a plan for my visit Right, like what is the main outcome I want to achieve from this?
Kian:
Right, do I want to learn how the goods are made? Cool, I'll spend a little bit of time on the production line. Do I need a better price? Because I'm getting price pressure? Well, I'm going to do my research in advance to see. Well, what were other suppliers pricing me? So, like you know, you could get a specification sheet for your product. You could but I'm sure we'll talk about this shortly reach out to the top three, top five suppliers on Alibaba.com, get pricing from them and you can go back to your existing supplier to say hey look, I don't want to move production, but just to let you know this is a pricing I'm getting offered somewhere else. I need you to match it. So, is it better pricing that we need? Are you getting a few too many returns? Or the quality concerns? Is there something? Is there chipping off the wood on the coffin box? Is that something we need to talk about? Then, like, we have the products right there in front of us, like here, let's address these quality concerns. Are you not doing the quality control? Let's check the end of the production line. Let's see who checks it. Let's see who boxes it. Let's see why they aren't picking up on these things.
Kian:
So there's many, many different outcomes that you could have. It could also be we want to develop new products for 2024. Please prepare for us some additional new samples and we can review them together or let's discuss together. So I wouldn't necessarily go into a factory without knowing what I wanted to achieve and like no lie. I've been in factories where I've been there for 10 hours sitting opposite the boss and we're just negotiating, because I'm like I'm not leaving until we figure this out and like, literally Some of the factory bosses like to smoke and I remember like the guy went through two packs of cigarettes while we were talking it. Like I'm not saying that's going to be the case right For everyone, but I knew I had an outcome that I wanted to achieve on that trip, right.
Kian:
Certain times I was doing production for the Olympics and they required certain certifications for the factory and I went to visit factories and didn't have those certificates. So I was training them. This is what this is. A certificate needs to comply with. This is what we need to fix. We were looking at, you know, lighting, fire extinguishers, dormitories, all that stuff. I was like you're the factory I want to work with. I need you to be compliant of this. I'm not leaving until I know you can do this. So there's so many different outcomes that we can have for visiting a factory and like. Those are just some of the things that we need to be prepared for, but, honestly, it's going to be so much fun for you. Like, I'm actually excited for you and I can't wait to see your stories on Instagram to see what it looks like.
Bradley Sutton:
Thank you, thank you Now, right now, let's just say, you know, for that, a lot of people you definitely know suggest, hey, you should go visit the factory. But for a lot of other people you know, they might not have the way to go to China or they might not be able to go to Canton Fair or Iwu or other places, and so obviously the easiest place to to find suppliers would be Alibaba.com. So we're going to try something different today. I didn't 100 percent have this plan, but now I just like thought of it right now I just went to Alibaba, but or I went to Amazon and let's just, we're going to do a pretend thing where I'm which is halfway real, and that is, you know, one of the project X brands we do is not the coffin shell, but we also do egg trays. We have this brand called Geese Chicken Coops.
I just like threw in a keyword to Amazon right now egg storage for countertop. This actually used to be one of our main keywords, but now it's not anymore. And then I'm like trying to find something that looks interesting and these like this, this egg basket that has like a ceramic lid. Here let's just pretend that I'm like, hey, I want to have. I want to go source this from China. I want to look. So first step is what? Just go to Alibaba.com and try and figure out what keyword it might be like something similar to this. So you've got a couple of options here.
Kian:
Right, because, like you have the traditional egg trays, which could be, you know, wood and plastic, acrylic, whatever, and you could just type in egg tray and you could find it right. But for that particular one, for those who aren't viewing, with like a video, like Bradley, how would you describe this? It's like the shape of a chicken.
Bradley Sutton:
Yeah, it's really like the bottom part is this wire mesh like a basket looking thing. And then the like it has, this lid that shape like a, like a, like a chicken or rooster or something like that.
Kian:
here this is a really good example because, like here's a classic example of if you type in like egg tray or whatever on Alibaba, like this product probably won't come up, like we can have a look, but it probably won't come up the way that we're looking at this one, right, but like for you to have more defensibility in your brand, which is really, really important for 2024, you might need to go to another manufacturer which doesn't make egg trays. So you're looking at eggs right now and we don't see that particular product. Right, there's nothing like that. Yep, we could type in like caged basket for you know, holding fruit or holding vegetables or whatever it may, be right, and we could find the bottom part, but for the top part it was like a toy chicken, like on the top right, which is kind of serving as like the protector or the top of the basket, right, and so for that I would go to a toy supplier to be like different materials, right, it could be silicone, it could be plastic, it could be rubber, like I would say like rubber chicken toy or rubber animal toys, right, and you might be able to find this for, let's just say, 50 cent or 30 cent or 75 cent, and we could buy those separately and we could send it to the egg tray suppliers, or we could send it to the basket suppliers, right, and anyone wanting to copy that product wouldn't necessarily be able to, because they didn't know that they have to go to two different suppliers. Right, they didn't know that you could, just because if they type it in, they won't find it and they're not thinking.
Kian:
Right, I'm going to get an egg tray from a toy supplier. So this is something that gives you like, really, really good defensibility. And this is applicable to anyone like, not even people which are looking for egg trays, but, like, whenever I'm looking at a new product, I'm like, well, what other purpose does this product have? Like, for example, right now I'm using a podcast microphone, right With a boom arm or whatever, right, but like, I could also go to a supplier which makes selfie sticks and take the technology of the telescopic pole and use that right, and anyone who's looking to get like a microphone stand or a podcast mic stand is not looking at like telescopic poles. So there's so many different ways that we can look at other manufacturers to fit the purpose of the product that we want to manufacture.
Bradley Sutton:
I like that and that's something that's similar to what I'm actually doing. That's what I'm going to be going to the factory and talking to or, you know, checking out one of the first orders. So, like, what happened with the coffin shelf was that it got kind of saturated. You know, like you know, because everybody watched Project X and everybody started launching, you know, coffin shelves and now there's a million coffin shelves and I didn't want to do, I didn't want to play the race to the bottom price wars. You know, like, there's people now I used to sell the coffin shelf for like 32 bucks and now there's people selling it for like 19. I'm not going to try and compete with that price. So I'm like I'm going to go opposite, I'm going to raise the price back. Like I was selling for like 25. Now I'm going to raise it back to 30. But what I'm going to do is two things. Number one I'm going to buy a really fancy box and it's a box shaped like a coffin, like. So somebody would actually gift it to somebody in this coffin shaped box, and the box itself is almost a product. You can use that as a sock storage or something like that, because it's a really high quality. I mean, it's crazy. It's like almost 60% of the cost of the coffin shelf, you know by itself, but we're still only talking like two bucks.
Bradley Sutton:
And then I noticed in the customer reviews that a lot of people are putting like these little LED spooky little trinkets and figurines right. And so what I did was I also sourced like a pumpkin shaped LED candle and then a skull, like a, just a mini skull, because these are what people are using to display anyways. And so now I'm relaunching the coffin shelf at a higher price point with this box that's super hard to get custom made and from another, a third factory, these LED stuff. And so, like you know, these people who are just trying to make a quick buck and sell coffin shelves, you know, from China for $19, they're not going to take the time or effort to go and source three different things from three different factories. And so now I'm kind of like building this moat around and trying to dominate, redominate the coffin shelf market.
Kian:
I guess you could say that's mega and I'm glad you mentioned that as well because, like so, I was at this show called like global sources, just like last month or wherever, and I was filming a YouTube video, actually just posted it yesterday on like the highlights of that show, and I walked, assembled, into this guy's booth. His name was like Matthew and he had like he was just doing packaging, like really, really deluxe packaging, right. And I go in and I'm like, hey and? But the packaging was like super nice, like it was like magnetic boxes that folded flat, like he was doing it for a Sephora. He was doing like Pokemon boxes, like just high end stuff, right.
Kian:
And I was like picking up different bits of packaging and we were talking about like online versus offline and you know different styles of packaging and one color boxes. And then I was like you know how much is this box? And it was like a really small, flimsy one and he was like you know, less than 0.1. I was like, wait, less than 10 cents. He was like, yeah, it's around like 8 cents. I was like no way. And I was like, all right, what about this one? I picked up this like magnetic one. He's like that's around $1. I'm expecting the dude to say like three. He's like wow. I was like I was like these prices seem a little too good to be true. I was like where's your factory? He's like for Shan. I'm like okay, cool, so it's narrow way. I was like what are you doing this weekend? I was like I'm at the factory. I was like I'm going to come visit you this weekend. I was like cool, so rock up. And then I filmed a YouTube video in his factory. I showed the packaging process end to end, start to finish. All the like he had like machines which cost over a million dollars, like everything, like map finishing, gloss finishing, like everything. So the entire process, start to finish. And talking about like 2024 and differentiating and just what you just talked about. That's key. That's so key to being ahead.
Kian:
Whether you're selling online or offline, you want to win the click. Online, sometimes you show your packaging in the main image, sometimes you don't. But if you're selling it in retail, it's on a shelf. You have to catch people's attention. So if you're selling offline, you really, really have to catch people's attention. If and that's through the packaging, that's the first touch point and it can be catch for attention by color. It can be by innovative design. So packaging is going to play a super, super important role. So I'll definitely connect you with Matthew.
Bradley Sutton:
Awesome, Awesome Thanks, Appreciate it. All right. Going back to our olive oil, let's go to something more traditional, All right, so that's a great way for differentiation. Let's just say I picked something else while you were talking right now, Something that's kind of like all right, this is not something that you necessarily differentiate, Like we always. I think you should always differentiate, but maybe not let's not go to the effect where, like, hey, let's try and get stuff from three or two different factories and let's do fancy packages, Because you know, sometimes when people are just getting started, they want to get their feet wet. You know that might be a little bit too difficult. So then I pick again in the same niche. I hit this keyword egg dispenser on Alibaba, and so you know, for those watching on YouTube, you guys can see this. For those listening on podcast, we'll try and describe it here. But now let's just say that this, this kind of egg dispenser that has this like row, it looks like like a row on the top of eggs and it rolls down to the bottom row. I guess you just pick one and then it rolls down. So let's just say that, for whatever reason, this is the kind of product I'm getting. I just did my very first search on Alibaba. This is definitely the keyword. Next step would be so I start doing using some of these filters and then, if so, what would you suggest?
Kian:
Yeah, yeah. So I'm so glad you're showing this visually online as well, right, because you can look at that image. Right, see the second image. This says $2.50. The second one says, yes, 88 cents. It's the same image, right? So, yeah, this is what. This is where we need to get really, really clear on the filters. Right, because it looks like the exact same product. One is well, the one's three X the price of the other one, and you could see that I'm like, oh, okay, well, I'll go for the cheapest one. But you haven't necessarily done the research to know what already different materials or different sizes or different specifications. Does one hold more eggs? Does one have deluxe packaging? So we don't really know that, right? So you went to Alibaba.com and you typed in egg dispenser, and this is the first thing that came up. So the first point right, I would select verified manufacturers. So that's the first point that you see in the list right. Why this is so important, is that, yeah, perfect. This is where we need to be. The purpose of using Alibaba.com correctly is not to find the cheapest price. It's to find the best manufacturers. Once we find the best manufacturers, then we can start to negotiate the price. So the purpose right now we're just looking for the best manufacturers.
Kian:
So the first thing you did was you selected verified manufacturers. And what's that for? It means any information that they provide on their listing, whether it be number of years in business, how many staff they have, what certificates they have, what patents they have, what products they have, what does their production line look like, the images of videos in the factory. That's all been verified by a third party, meaning intertech, SGS, tuv. One of these very reputable companies have gone in and verified all the information is true, whereas if we didn't work with verified suppliers, then whatever information they want to put there, we just have to sort of take their word for it. So verified is the most important thing to search for first. Then on the left hand side of the page, you'll see trade assurance right. I would always click that as well, and trade assurance just means that your payment is protected. So if you've ordered an egg dispenser which holds 20 eggs and you do the production and you receive one which only holds 10 eggs, then the trade assurance will protect you and it will refund your order because you've selected that right. That's just a little bit of a safety net, important for, like you know, new sellers, right. And then as you scroll down on the left hand side of the page, you'll see something that says management certification, right. And if you scroll down a little bit more, yeah, so you see like BSEI, and you see sedx, you see ISO. I always like to select BSEI and ISO. So BSEI is your business social compliance initiative and ISO is just a really high quality standard and this just basically means these are factory certificates that they have. So BSEI will go in and they'll check, like you know, how many years have you been in business? Do you have, like, fire extinguishers? Do you have adequate lighting, do you have safety exits? Like we've checked the dormitories, we've checked like the canteen where the workers eat. So it's kind of like gives you confidence that you're working for a very, very good factory, right. So now, if we go back to the top of the list, right, we've now we've searched by manufacturers, we've got verified manufacturers, we've got trade assurance and we've got factories which have you know, bsei and ISO certification.
Kian:
So now, as I'm scrolling down the list, like if you zoom in on the company names, like the first word in the company name is always the city or the province in which that factory is located. So sometimes, like the factories like electronics are made in Shenzhen, backpacks are normally made in like Chenzhou. Like furniture, like steel tubing for furniture, chairs is made like Yongkang. So I'm just trying to get familiar Is there an area which specializes in egg dispensers? Maybe not, because it's such a niche product, right, that maybe you could make it anywhere. But as I scroll down, I'm trying to see, like, is there one name that pops up more frequent than others and in that interesting, the area which specializes in that product? But I see Ningbo has probably popped up a few times, right? So yeah, but anyway, doesn't matter. If Ningbo had popped out like eight out of nine times, I would say, right, well, that's the region we need to be ordering from, interesting. Then, as you scroll down as well, I would be like looking at the images as well, to see, like, do I find something similar to what I was looking for, like when we search by products like your first look somebody is specializing in that one crazy basket, one that we looked up earlier, that's crazy.
Kian:
But you know what's wild, though, right, I'm not surprised we found it because we had searched, like the highest level certification, so like that product would have required, like you know, some sort of standard. So it like the purpose of this filtering process is to align you with top factories, and top factories make top products right. And as you scroll down as well, I saw the main image. That was the one we were looking for the white one here, yeah, yeah, right here, that particular one, right. So now if you click on like view profile, we can just there's a couple of like boxes I need to tick of the supplier before deciding is this someone I want to work with? Right? So you see first on the left right Well, actually on the right where you were looking right, If you scroll through those like, you'll see videos of the factory. You'll see like images of the production line and you've seen the top left it says verified. So all these photos and videos have been verified. So like if you know that as the actual factory, because the third party has gone in and verified that's a factory, so you can actually see inside the factory and know that's them right. So we know exactly who we're dealing with.
Bradley Sutton:
They didn't just pull this, you know, like video or something like from stock video or something like that.
Kian:
Yeah exactly Right. So now, like before, without even going to China, I've got eyes and ears inside the factory that I can see what they actually look like. So if on their Alibaba listing they say, oh, we've got 200 workers in our factory, you're like, well, I can see the images that shows you've got 200 workers, right. Or if they said they had 200, but we see a production line with five workers and you're not verified, then we know that you know something isn't right there. So on the left side of that, you see where you have all those blue ticks. So it says, yes, all verified capabilities. So if you click on the bottom where it says, see all verified capabilities, this is everything the factory is verified for. So it says certifications, sedex, bsci. It will say, like you know, material trace. It says like quality traceability, things like that. So if you were like look, I need to know. Like, do these egg dispenser trays come from a sustainable source? We want to use like recycled materials, we want to use eco-friendly materials, then they can tell you yep, cool, we have traceability of our raw materials. We can find that out for you. So just by clicking that, we can find out what are the capabilities which are verified of this factory. And then, as we scroll down, like the main things which are really really important, see that where it says profile right, if you keep scrolling down, right, it's got right. See here so it says established yeah, years in industry 16. That means that they've got like 16 years worth of experience, right, so they've got the. See the audit there under certifications, where it says SMETA. That's part of the SEDEX audit and I know this so well because I was a board member for SEDEX in 2013,. After we did the production for the Olympics, every factory which made Olympic merchandise had to have a SMETA audit, right, and that was like they checked all the smallest details of the factory, right. So that's a really really good sign if they have that right. And then they've got the BSCI certificate. You can see that Now, as you scroll down, we're going to look at their production capabilities.
Kian:
See there it says production lines. They've got three production lines and they've got 18 production machines right Now. This is so important. This is so, so important, right, Because you are, let's say, doing this product for the first time. So they have three production lines means they're like relatively small company, right, so that's good for you because that means that they'll probably do a low MOQ. Let's say you wanted to do 500 pieces trial order, but let's say that production line. Let's say it said they had 250 production lines. You're like this company would never want to work for me. Like, why would like? I just want to do a small order, 300 pieces. They've got 250 production lines. We're not a good fit for each other. But on the flip side, if you're a big brand, if you're doing, you know, 10,000 units a month, then you want that factory which has got 250 production lines. So this kind of sizes you up to be like am I aligning with the manufacturer which is fit for purpose, right?
Kian:
And then the other really important thing to look at where it says trade background and main markets, it says North America 38%. Western Europe 35%. That is so crucial because 70% of their, more than 70% of their exports are going to the US market and it's going to the European market. And what does that mean? That means they're compliant with the latest FDA regulations in America, compliant with the latest like food standard regulations in Europe. Otherwise we wouldn't be able to sell to those markets if they weren't compliant with those standards. So if you're ordering this product for the first time and you know your factory has already got the certification or compliance needed to sell food products in the US market, because they're already selling in the US market. But if we looked at the trade background and it said, you know, 40% South America, 40% Africa and 20% domestic market, meaning China you're like well, you've never explored this product to America. So how do I know that you're capable of passing for FDA standards? So, but this factory, this is like one of the first ones we clicked on right, it's got everything we need right.
Kian:
But it was because of that filtering process. It's because we selected verified, we selected trade assurance, we selected ISO, we selected BSCI, so like it was in touch with the top manufacturer and then, like I'm pretty sure that if you go to the other manufacturers on that list as well, we'll find similar information that is a good fit for us. So that was kind of like the initial research to be like right, let's find a good factory. That's part one, right. Part two is now how do you read, how do you talk to that factory for your first message? Right, Because this is where I feel like a lot of sellers like stumble. They're like right, found a good factory. We followed your process. But, like, right now, what do we say? Like, most sellers go, hey, what's your best price? What's your MLQ? Can? I just heard this podcast? Can I get customized packaging Right? And then, yeah, so, supplier, bear in mind these suppliers are probably getting 50 to 100 inquiries a week, probably more, right, and my purpose with the original message is how do I get my inquiry to jump out at the top? How do I get the supplier reads my message and be like oh, I want to work with this guy, right? So I kind of write my opening message as like a three part.
Kian:
Like it first, introduction about myself hey, this is me. I'm passionate about eggs. I've been farming for 10 years and I want to start my own brand. Right, oh, cool, someone who really, really likes eggs. Right, they'll be a good person for this product. And then you can say, hey, we work with the biggest like influencers in the food space. Because I'm a beginner, right, I'm selling this, I'm ordering this product for the first time. So I don't want to say, hey, I'm a beginner. I want to say like, hey, I'm just ordering this, but here's my leverage. Like, I've got connections with the biggest influencers in the home and kitchen space. I've got connections with retailers that I've done business with before. I'm very, very skilled at selling on Amazon. I've exited a previous business before. I want to say something that gets them excited for them to work with me, not just, hey, what's your price, right?
Kian:
Second, I want to say why I chose that supplier, because all the things we just looked at, like a number of production lines you know 70% exports going to Europe, right, you having this meta audit. So I would say, look, quality standards are very, very important for our company. It's great to see you have this meta audit. I'm so, so happy that you also place a high importance on quality standards. I see that 38% of your exports go to North America. That's amazing because we'll be selling in America as well, and I'm glad to know you're compliant with the latest certifications. That's just me telling the supplier. I've actually read your company profile and I've selected you based on these reasons. I've not just gone into Alibaba, I've not just typed in egg dispenser and just selected the first 10 companies and copy and pasted the same message. I've actually had to read your company listing and I've actually had to write a customized message to send you this so they'll understand that. And then then you're like okay, this is a product that we're looking at. Here's the picture, here's the specification sheet, this is the materials. What would be your best price for this product?
Kian:
Suppliers now thinking I want to work with this customer because they have the ability to sell the product through their experience, through the influencers they have access to. They seem to understand quite a bit about manufacturing because they've told us what they've selected us. This is a customer which I think will go far because previously we've received messages asking for price in MLQ. We supply that and we never hear from those guys again. But this one seems serious. So we've gone through that process and we've found who are the top suppliers and then we've actually crafted a message that makes them want to reply to us. Because suppliers not thinking these are just egg-tracing, these are 80 cent. Maybe you order like a thousand pieces, right, a thousand dollar order. Suppliers not thinking they're going to get rich on this first order. They're thinking how much money am I going to make with this customer over the next three, five, ten years? So as long as you state look, business, partnership long term and this, together we want to grow this big business. You're saying the right things that get them interested to make your trial order first. Even at a break-even, they probably won't make money on the first order because of all the time and effort they have to put into sampling and things like that. They know that and they just want to work for you because you seem like a serious customer which you'll build with over the long term. So those are two really important things finding the best supplier and then communicating correctly with those suppliers as well.
Bradley Sutton:
At what point are you submitting like a RFQ request for a quote?
Kian:
So that's a really good point, right? So you can also do a request for a quotation. And I'm hesitating before I say this, right, because that process we just went through. We selected two of our best suppliers that we want to work with, right, we filtered out the bad ones. But when we go RFQ, we just submit our information one time and then the suppliers receive that request for a quotation and then they write to us. So now I have to do that filtering process again, but I have to filter the ones that write to us, right? So, because you might get an unverified supplier that writes to you or things like that. So you can also do RFQ because you think it saves you time, but realistically you have to go through all those applications of people which write back to you. And another thing I'd be cautious of as well and I'm not saying don't do it, I would just say that it might imply more work. It looks like it's going to save you time, but now you have to filter through every single manufacturer. But we just filtered through those suppliers really, really quickly.
Kian:
But ultimately the main selection criteria that we have to decide is what's the price of the sample and what's the quality of the sample. So once we get that information back, we have to then decide right. Am I happy with the price, does it fit within my target? And am I happy with the quality of sample? Because, as we saw, we might get a price for 80 cent and we might get a price for $3. I have to see the sample right. But by doing this exercise we're going to get a good idea of what is the market price for this product, because we went through that selection process to identify the top manufacturers and now we've got pricing from who we think are the five top manufacturers. So if our pricing is 95 cent, $1.05, 88 cent, like 112, we're like okay, we know it's around that $1 mark. But if I get pricing of like $3.50, $0.62, $4, I'm like this pricing is all over the place.
Kian:
Like I haven't. It's my fault I've not told them the specifications of which I require. I wouldn't just click on their image and say what's the price of that. I would send them a specification sheet of here's a picture of the product, here's the dimensions, here's the material, here's any testing that I need. And they like give me your best price. So they've all received the same information. So you're comparing apples with apples and then, once you see the price that you're happy with, you've compared it to the rest of the market. You see someone that you like communicating with. They have the right certification. You get maybe two or three samples from different suppliers. You compare them right. This is the one. Then here we go, let's place the order, let's go for it.
Bradley Sutton:
Normally? What's the standard as these days as far as factories and samples Like do you always need to pay for the sample 50% of the time? Do you need to pay for the shipping? 50% of the time? 25% of the time? What's your?
Kian:
experience lately? Yeah, so great question. And I would say that it depends on the leverage that you build, right. So, for example, that reach out message like if they think you're sort of wasting time, then they're like right, $100 for a sample, $100 for a freight, paid us $200 invoice and you'll get a sample, right. But if they're like I want to work for this guy, like I think he's capable of building a really, really big business and they'll do all right, cool, we'll just send a sample to you, no problem. Some people might say, right, we'll cover the cost of the sample, you just covered the cost of the freight. So, cool, right, fair. I always say, look, I've got no problem, I'll pay for the sample, but if I place the order, I'm going to deduct the sample cost from the first purchase order. That's always what I go with, right. And they're like fine, because I'm not trying to get free samples, right, that's something suppliers are fearful of. They're like but no one really wants a free sample of an egg tray, right. But if we took an example like a massage gun, you know, when massage guns got popular, everyone wrote to Alibaba manufacturers and said, hey, I want to order 10,000 massage guns, but I need a sample. They send the sample and then they never hear from them again. But that guy just got a free massage gun, right. So that's what they want to avoid. So I always offer to pay.
Kian:
I say, look, I'll pay for the sample, but I'm going to deduct the sample and freight costs from the first purchase order. And that is music to their ears. They're happy to hear that because they know that first of all, you're paying for the sample up front and then if the supplier ends up having to pay for it, will they go and order as a result of it, which is what they wanted all along, right. So that's normally the way I go. Sometimes they just send it for free. I'm like cool, very nice of you, and sometimes, if they charge me, I just always have that in writing. That will deduct that from the first purchase order.
Bradley Sutton:
Are you doing any like other website price matching or looking at like you know? Like maybe going to 1688 or something you know? That was a you know kind of like always suggested back in the day because there's a lot of price differences there and sometimes the Alibaba people, Alibaba factories, would be like, okay, yeah, we can probably go lower or that's not as much of a technique anymore and to be honest, I've always advised against that because, yes, you can.
Kian:
So 1688, for anyone who doesn't know, is like the domestic. It also owned by Alibaba and it's the domestic Chinese website. It's where, like, Chinese businesses buy from Chinese factories, everything's in Chinese. And then I think some people announced that it was a hack, that you could go to 1688 and get cheaper prices. And yes, there are cheaper prices, but that's because those products aren't being exported. So you know the things that we just looked at in terms of like, okay, is this egg tray FDA approved? Well, it doesn't need to be FDA approved because that's not a regulation in China, so they can use it with a different chemical. Therefore, it's a cheaper price. So if you go to 1688 and look for your products, yeah, you probably will find them cheaper, but then if you need them to match regulations of your market, then that's when it's going to make it more expensive.
Kian:
So I don't necessarily look at other websites, like I think you know you could go to globalsources.com, you can go to madeinchina.com. There's also sort of different websites as well, but generally enough, like, there's so many good factories on alibabacom and that definitely improved after COVID as well, because I never used to use alibabacom, like I was just used to go to China. I used to live in China. I used to go to the Canton Fair twice a year and that's where I'd find all my factories. And then, because Canton Fair was out for three years, that's when a lot of those factories started going online and Alibaba was like the first place that they would go. So I would suggest you're absolutely fine with alibaba.com. You can also, if you want to find the manufacturers of your competitors, you can look at importyeti.com, and I would say the best thing you can do for your business is really visit China as well. Go to the Canton Fair, and really because, yes, there's a cost in terms of a flight ticket in hotels to go to China, but I always say that cost more than pace for itself, because you are essentially fast tracking your product development.
Kian:
You're seeing products there for the first time that you'll see them in real life before you see them online from other brands, and now you have to make your own version. You'll be able to negotiate better prices. You'll be able to get better quality products. You'll be able to build better relationships with your factory. You'll be able to get samples very quickly If you're like Bradley actually. So you're going to the factory. I guarantee you, if you ask for a new product and you wanted that sample, that sample will be ready in two or three days and you can take it home with you right? They'll send it to your hotel by the time you leave. But if you reach out to these guys online, you're like, hey, we're working on this new product, we're going to take them two weeks to make it. We can have to send it. It'll take a month. So you can massively and imagine you've got multiple products across multiple brands. You've got a month edge on anyone in the market just by being there. So I would highly recommend. But you know, canton Faire is only April and October every year, so you can visit China anytime you want, but all year round. I would be visiting websites like alibabacom to get an idea of right, who are the best suppliers and what are the best prices, and are there any new products that we just found as well? And then I'd be going to China as well, on top of that as well.
Bradley Sutton:
All right, before we get into your last strategy of the day, how can people reach you if they want to, you know, see your videos or maybe reach out to you for some advice?
Kian:
Yeah, sure, so I'm putting a lot of work into the YouTube stuff. So if you just type in Sourcing with Kian on YouTube, you'll see a lot of cool videos there. I started making a bunch of different videos on this China trip. I went into factories, I went into packaging factories, product factories and filmed videos of like. So actually, brad, I'll try and send one to you before you go as well, just so you could get a little bit of an insight. But, yeah, Instagram as well @kian_jg. I've got a Facebook group of the same name Sourcing with Kian and yeah, it's probably the best way to reach out to me. But I've got some cool stuff planned in the coming year in regards to, like, trips to China and stuff. So, yeah, definitely look out for that.
Bradley Sutton:
All right, what's your last strategy of the day? Maybe a 60 second strategy or around there for that you can share with the audience.
Kian:
I would say like, okay, 2024. Something you want to focus on would be product defensibility, right, Because you know, as you mentioned, with the shelf, like you know, a lot of people copied it. It raised at the bottom in terms of price and we have to innovate on top. So just like sort of three actionable tips. In terms of product defensibility, there's three main things you can focus on An act's getting exclusivity on your product, it's having a particular mold on your product and it's also getting patents on your product right. So exclusivity you can like if we go into a factory and we see a product that we like we didn't innovate it, factory did right, I can still order that product. But I can say, look, I want exclusivity on that. And you can get exclusivity by time. To be like, give me three months, we sell it to me and no one else. You can get exclusivity by region. To say, right, give me exclusivity for Germany or give me exclusivity for USA. Like we can pick a market, not just the whole world, and get exclusivity by that. Or we can also get exclusivity by quantity. To say, I've forecast I will order 10,000 units over the course of the year. If I don't order those 10,000 units, then you can sell it to everyone. So we just got exclusivity on a new product and I did this countless times at Alaska Anton Fair. That's a great form of defensibility.
Kian:
Then, like patents, you know you can patent the product. Supplier might have a patent on the product, but the more. And then oh, by the way, this is such a sick hack, right, there was a particular product that we've been selling for a while. Factory has got the patent on it and then a lot of US brands were copying and infringing Chinese factory, trying to go after those US brands. They write to them and they're like hey, yeah, we're this company, we have the patent. The US brands just ignored it. They're like oh, it's a Chinese company, they're never going to sue us. I said to them look, make our company the co-patent, so we have our US brand. I was like make us the co-patent owner and then we'll go after them. Done Like, we now own the patent of that and then us, as a US brand, using US lawyers, are going after those US brands and are getting shut down left, right and center. So if you have a factory which is patented the product, that's a huge key if you can get co-patent on that as well. And then I mentioned molds as well. Like, molds are expensive. If you're developing a mold on a product, definitely get your logos embossed on the mold as well, so that they can't use that for anyone else as well. So, yeah, those are the key things defensibility, exclusivity, patents and molds.
Bradley Sutton:
All right. Well, Kian, thank you so much for joining us. I'm sure 2024 will be great for you and hopefully we get to hang out at an event or here locally. I've got to get you on my Helium 10 basketball court here. We've been trying to do that for a while, so, hey, I'm ready, we'll anytime we'll settle at once and for all Lakers versus Clippers. I'll wear my Clippers jersey, you can wear your Lakers and we'll see. We'll see who comes out on top.
Kian:
Let's do it, let's do it. Good to see you, bro, and thanks very much for having me and congrats on the 500 plus episodes.