Welcome, this is Tomer from Sourcing-Monster.com. If you’re new to this channel, I am into sharing how to sell on Amazon in a very simple way, I will share the experience and the information that I’ve gathered in the last year and a half.
In my first year of selling on Amazon, I started from zero to $10,000 profit a month, in just one year!
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Today we’re going to talk about contacting suppliers.
Previously, I shared how to find a good product, how to do the product research and get all the information you need to determine whether it’s something that you can enter the market.
Your products must bring value to the market.
Here I am going to share how to contact suppliers, how to validate the price just to see that it’s matching the profit margins that will be calculated.
Process on how to contact suppliers, and how the whole process works.
What are the rules and terms you need to know to save time and source fast?
When I started I just found myself spending so much time talking with suppliers and doing all of that communication that took so much time. It was an exhausting and frustrating process- it seemed to be a very very slow process.
So as time went by and the need to add more products arose, I tweaked the process and made it very simple and productive. That way I can save time and contact as many suppliers as I can.
Key terms that you should know when talking to suppliers
Most terms that we will cover very are important when you communicate with the supplier so that they know that you know what you’re talking about because it’s very easy to them to really sense that you’re a beginner and they can take advantage of you, but if you know the simple basic terms, there shouldn’t be any reason why they will take advantage of you.
Also when they are using these terms, you will understand them and not come and look like you don’t really know anything and ask them.
MOQ – Minimum Order Quantity
“What does MOQ mean?”
MOQ is an acronym which stands for minimum order quantity, and refers to the minimum amount that can be ordered from a supplier. For example, if a supplier advertises a MOQ of 1,000 units, you must be able to purchase at least 1,000 units to be able to deal with that supplier.
So those are some very basic terms. We’d cover five to 10 terms so you can get the basics and understand when you actually start to talk with suppliers.
Ex-works (EXW)
“What does EXW mean?”
Ex works (EXW) is an international trade term that describes when a seller makes a product available at a designated location, and the buyer of the product must cover the transport costs
Freight forwarder
“What is a freight forwarder?”
A freight forwarder is basically a company that is only doing shippings of their own, that is their specialty.
They can get you the best rates, they can help you with logistics and getting the products from the factory and picking it up.
In some cases, they will do inspections, you have to talk with them while in some cases they will offer other services.
So for example, I had big orders for a product that they sell a lot and I don’t want to ship everything to Amazon warehouses because that means spending a lot on storage fees.
I want them to keep some of my inventory and then when I’m getting low, I give them the okay to ship the goods to Amazon warehouse. So, in my opinion, it’s very important to get freight for them because you will get good rates.
DDP
DDP is a very important term that you need to know, it stands for Delivered Duty Paid. When you talk with the freight forwarder or with the factory because I like to ship with a freight forwarder.
You don’t want to bring the goods or the products that you source to the US and then get a bill from the customs telling you, “Oh, you owe another $1,000” and you wouldn’t know ahead of time, what would be your total cost?
That would put you in more control and also less work. So I always source or do shipments that are DDP.
The shipping costs to the freight forwarder is giving you EXW which means the seller makes a product available at a designated location, and the buyer of the product must cover the transport costs
It does not include shipping through your freight forwarder. That’s the price that you get when they make the product and you come to pick it up.
You or someone on your behalf like the freight forwarder obviously, we are here in the USA or all over the world and not in China.
So you can do it all like a ‘one-stop-shop’ and ask them for a quote to include the shipping costs in the unit price that they give you.
But in my case, I don’t like to do it because most of the time they will make a profit on the shipping as well and they will pay you $7 but you can actually get the shipping cost per $1.5.
So they will make half dollars on top of you for the shipping as well. I like to get the price for the product itself normally. So I eliminate that.
That shipping cost is their opportunity to take advantage of me and add more cost to their product price.
For more terms that you will encounter along the way, if you are interested in learning furthermore, you can Google it.
There are plenty of websites that give you all these terms, but in my opinion, these are the most important ones.
We’ll also talk about samples after you agree about the price, you want to get a sample and actually check the product.
The last thing will be a priority in replying to messages. Also, we have to have the mindset that you need to prioritize things and always think when someone replies back to you, how you can reply to the first, so we save time as you don’t want to reply to all of them at once.
There are five, six hours if you could do it before, because at that time of the five, six hours, maybe they could get back to you with an answer to a question that you asked.
So it’s all about doing the whole communication process, very efficient and fast.
And I’ll also share the template that I’m using here so you can start sourcing. That’s a template that I came up with and tweaked and made it very right to the point so it will save me time and show them that I’m serious.
So let’s start with the first point. What are the rules that you need to follow so you can do that communication and talking with suppliers, communicating with them and negotiating with them in a very fast and productive way?
Prepare a message template when contacting suppliers
First of all, all your questions must be in the first email or the first template?
What do I mean by that? So if for example, we’re going to go buy a product, if we are interested in getting this product and asking suppliers for this product’s price and starting the sourcing process, then we would want to come up with the template as the following:
“Hi, I’m interested in your product”
So you tell them right away what you’re interested in when you actually go to Alibaba to source.
That’s actually applicable to any sourcing platform that you have out there like Indian Mart, Alibaba, Global source and all of these.
The same rules apply to the same concept.
We must put all the questions together. You can start with something like:
“I’m interested in the windows car shade. I need about 8500 units.”
You can then go to write down, what are the terms that you need?
Do you need a cheeping? Do you need packaging? Do you need anything else? What is your price? Try to put all your questions in your first email and that will save you a lot of time.
I figured out by doing it the wrong way. Just tell him I’m interested in that product and then we would go back and forth. We just ask a simple question of “how many you need” and then I will tell them how many I need and they will get back to me after a day. Okay, that’s the price.
So you should put all your questions. Once when you actually started the process. That will save you a lot of time.
“It’s very important that we keep it easy, keep it calm.”
Be nice. When you talk with them and you communicate, try to be very respectful. Try to be very nice in order not to rush the process. Don’t push them too much.
That’s something that I learned because from the beginning I was very aggressive and pushed them. I’m like, “Okay, you answer you don’t care”, we don’t want to give them the feeling that we run after them.
We want to give them the feeling that they are after us and they want our business even though we are interested in the product.
Let them think that they are in charge and they want to sell, they want to sell us the goods. And we should be very patient and provide a way to conduct you back.
In the template or first email, give them your WhatsApp number and give them my WeChat ID so they can contact you back easier.
WeChat is like WhatsApp in China. It’s their messenger or a way to communicate very fast.
You don’t want to do it through Alibaba messenger or through emails, because that will be a very slow process. It’s not instant compared to WeChat or WhatsApp, you can talk with them.
They will see our response and it’s very fast. So it’s important that you include your WeChat ID as most of them have Wechat.
Use WeChat to connect with suppliers quicker
If you don’t have a WeChat, you can install it on your phone. They also have a desktop version for that. When you install the WeChat app, you have an option to share your QR code and they will only scan it and they can find you as a contact.
So I like to contact my region, that way, you will sometimes see that you sent messages at your nighttime or evening and they are in the morning so when you wake up you see that people added you on WeChat so that’s very time saving, like saving you a lot of time.
Instead of you talking with them on Alibaba and only after a day or two you ask them all you have WeChat.
This will save you time and we’re all about speed and productivity.
You don’t want to find yourself spending a week on something that you could figure out in a day.
So that’s how I approached communication with suppliers. These are the basic rules that we can observe and how you should communicate with them.
Once they add you on WeChat the communication will flow swiftly and they can start asking you, “What is the MOQ?” The first time I contacted them and they mentioned that it was very confusing for me.
Some of the factories work with mass quantities and their way to offer you very good pricing is to agree with their bulk order quantity or MOQ.
Some will not sell 2000 units, they will have a minimum quantity order of 10,000.
In my experience, you can easily source 500 units, and that’s what I go by these days. At least with 500 units, you don’t want to go with a higher amount because that will suck all your cash flow.
When I started I did like 700 or 800 units and these days because I want to spread my cash flow smartly and evenly on as many products as I can.
I always try to order 500 units. So instead of having one product which would be 1000 new units, I can save the same time by doing 500 here and 500 here.
I will share more about how to launch products in the next blogs. I always use the template here indicating that I need 500 units.
I’m looking to order 500 units, test order and when I said test units, it gives them the feeling that they just wanted just a test to see if the market reacts to it.
Getting the samples
First of all, we want to be productive. So samples are something that you have to do before you can even solve the problem. And you get a sample only when you understand the product.
It might be that I’ll only get samples from the factory with the price matching my target price and that the communication between me and them is very good.
In some cases when I wanted to source a product at the price I like and would be debating between two or three suppliers and then among them there’s one that offers a very good price compared to the others.
But if something within me felt not that good about communicating with them and they didn’t really reply fast I may feel uninterested. It’s something that is very important in my opinion, when you deal with suppliers.
You want them to reply quickly to you. Because if they don’t reply quickly or fast enough when you’re actually interested in their product you lose the momentum.
What would happen after you don’t hear from them when you really need their help?
Now, when is the order ready, you coordinate between them and the freight forwarder to pick up? When do you need help from them?
“Can you package it in a special way?” If they don’t reply to you fast enough before you source that product, then it’s a very red flag and alert to me dealing with them because what can happen at the later stage so I pay attention to that.
So it’s not just about the price when you actually decide to work and how to deal with when you source a product and when you deal with suppliers and factories in China and in all over the world.
Let’s say you decided on a supplier and you feel that they meet your requirements, you confirm with them, okay, “I needed it to be 10 inches wide, four inches long, and it needs to be from that material.”
Your letter needs to be with specific fonts, you give them all the requirements and you confirm that they can meet their requirements and the prices mentioned your target price, then it’s time for you to get the sample, just validate that the product is good.
Also, by the way, I always recommend that you get at least one or two of the best selling products on Amazon from the products that you are looking for. So for example, we want a certain item, I would order a sample from one seller, and I will order another one from another seller.
That way, when they get the product, I can confirm, play with it and compare it to the sample that I got so that I know what I’m talking about.
This is very basic because if you are going to a market, you want to make sure that your product is much better than what is in the market. Do not just sell something without checking other competitors for comparison. That is the professional way of doing it.
So after you decide on the price, ask them to take a video of the actual product and have them measure it by putting it beside a ruler and showing you the measurement.
There are many cases that I got the samples but it didn’t match the requirements so you want them to confirm it to you before they ship it.
You don’t want to get it after a week or 10 days or 14 days and then realize not doing it and wasting time. You must insist on getting the video to satisfy your requirements.
So again, If it’s 10 inches wide, you want to see it with a ruler. If it’s the thickness, you want them to show you the thickness. If it needs to be certain or do certain things about the product that I don’t know then you must ask them also to send you a video on how to use the item.
It will save you a lot of time. I wish I knew about that at the beginning when I started to source products because it will save me a lot of money since shipping is expensive.
Time is money, so don’t be cheap on samples. It will cost you $30-$50 for DHL Express or UPS FedEx Express shipping it and will be like 2 to 5 days to arrive… You can spend two or three months or something on a product and then realize it’s not good. So it’s okay to spend a little money getting a class to it.
You can be very proactive and move ahead to pay for shipping and samples. About 99% of the time you only have to pay for the shipping. You can tell them that we can get the samples but of course, we will pay for the shipping and the sample fee regardless of the amount.
Most of the time they will agree or give it to you for free which is good since they are really confident about their product and that they are serious about doing business with you.
If they tell you to pay $60 per product plus $2.00 for the shipping, you can easily tell that there is something fishy and would move to a different supplier or factory again because shipping shouldn’t cost more than like $30 for a standard item and more if it’s a bigger and heavier item.
I don’t like the idea of an item being the size of a mouse for example that would cost more than $40 on DHL Express.
Make sure that they’re not taking advantage, at least it’s something that should alert you and tell you that they are ripping you off on a sample like this.
Scenarios like this are not a straight way of doing business so I will check them as well and try to get samples from other people as well.
Should you prioritize replying to every message?
That’s something that I mentioned on the first day. It’s the rules that you should follow and the mentality when you source products and again, always be on top of suppliers.
Communication is important and you don’t want them to wait for your answer.
Sometimes, I would wake up at four in the morning to go to the restroom and I always check my phone for updates coming from the supplier so that I can respond immediately.
Obviously now I don’t do that anymore. But in the beginning, if you’re eager enough and you want to make it, you have to do this.
If you see a response coming from a supplier, you must reply to them immediately. This will put you in a mentality of how bad you want if you want to do it or not.
If the response time is good then it should not take more than one to three days to find the right supplier.
If you want to talk to them about the price and you noticed that they haven’t replied to you within two to three days then maybe they are not the right people. You don’t want to deal with them if they are not responsive.
It will only take them a day to respond to your Alibaba message so if you haven’t received any response then it should tell you that something is really not working here and just move to a different supplier which response to messages.
Let’s go over again on this sample template. If you want to copy-paste you have to edit some of the details. Say, “I’m interested in your product” then you’re gonna replace the product here with your product that you’re interested in. “We are high volume, Amazon seller and I’m looking to order 500 units for test order.”
We covered why we put that on there. So we’re giving them the feeling that we’re not only after like 500 units, and if they’re received well by the market, we will be a repeat buyer and the large volume buyer for this product in the future.
So you let them know that it’s again, that’s the order and we want to see how well it’s being received by the market. And if it will be received well, would you give them a motivation to bring in good quality and you will be a large volume buyer in the future.
Please let me know your price. It needs to be competitive. Otherwise, we will not do it with you.
I want to be straightforward and let them know that they need to be competitive. So when they give me the quote, they’re keeping in mind, our target price is the target price.
In the previous blogs, I showed how to calculate the price, the target price. And after you talk with them, let’s say they’re telling you something like some price that is close to the real target price that you figured out. And then you do 1688.com method that they showed in the previous video and you’ll see that you can get it for they’re sending it between them for $2.
You want to tell them that “Oh, I signed in at 1688.com and actually it’s only for $2. Can you get it for me for $2.25?”
In a nutshell…
We communicate and negotiate with suppliers. We ask them what we need and provide the details to meet our needs and we adapt to their language and connect or use the medium of communication they prefer.
Very simple, very straightforward. Follow these words, just be productive. Always.
Keep it in mind, you want to do things in a fast way. Because Yeah, maybe now it’s your first product, but you want to build your good habits.
So in case you want to scale, you must do it in a very scalable way. You can even teach and you can show it to anyone and even yourself when you do it in a very systematic way.
So hope again, you got value from this blog.
If you have any future videos or topics that you want me to talk about, please leave them in the comments.
I will appreciate you letting me know what you want me to talk about in the next articles. Also leave a comment if you have any questions and like it, share it if you got again some value for me. Thank you for staying in my channel. I appreciate you watching it till now and take care.
Good luck.