hello I'm really excited that you have
chosen Michaels to learn how to source
products for your business as you will
learn the possibilities with Alibaba are
endless so if you are ready let's dive
right in I'm going to show you the exact
process I used to source products from
all over the world but before I do that
let's take a step back and review some
of the fundamentals starting with what
is Alibaba
well Alibaba is a global platform where
anyone from anywhere in the world can
buy and sell products in fact Alibaba is
bigger than eBay and Amazon combined
now even though Alibaba is a publicly
traded company in the United States it
is on an operator out of China which
does come with some complications but
don't worry this course will help you
overcome some of those challenges that
come with dealing with international
suppliers and finally Alibaba is nothing
more than a giant marketplace that
connects buyers and sellers and that's
what this course is for it's connect you
the buyer with the right seller so you
can source products for your business
let's move on to more important topic
that is how do you make money using
Alibaba to answer this question let's
look at the following example let's say
that you wanted to start your own
business selling sneakers it wasn't that
long ago that in order to start your own
business you should find best suppliers
then you would need a lot of money to
buy shoes at a wholesale price the
supplier might even require you to prove
that you're a real business and that you
have good credit and that's not only the
half part because you still have to sell
those shoes and if you can't do that
your art of thousands of those not to
mention the fact that you start with
bunch of shoes that no one wants to buy
the capital investment involved along
with the high level of risk alone were
good enough reasons not to start your
own business but today all that has
changed because now you have companies
like Alibaba which have eliminated all
the barriers to entry here's how the
process look today you start by finding
a supplier on Alibaba the supply sells
you 50 pairs of shoes for $50 each you
then turn around
and sell those shoes for $75 each giving
you a $60 each net profit per pair of
sneakers
what are how you sell them is up to you
you can sell them on sites like Amazon
eBay or on your own e-commerce site or
you can sell them wholesale to another
business in fact if you go on Amazon or
Ebay or a small e-commerce website you
will find that the people selling
products aren't big businesses they are
ordinary people like you and me who are
sourcing products from China and other
countries and selling them for a
substantial profit on the different
platforms which are available to
everyone and that's what makes Alibaba a
game-changer they have eliminated all
the barriers to entry and made it so
that anyone can start their own business
you don't need a lot of money you don't
need a credit or even a real business to
get started with Alibaba all you need is
a willingness to learn and to try now I
can help you with the learning path but
it's up to you to try for yourself this
course is broken up into all having
sections and I have ordered them in a
way that will start will helping you
understand the basics and fundamentals
and conclude you with being able to
place an order through Alibaba with high
level of confidence I have learned
created several templates and resources
which you can find in the course nodes
located on the course home page also if
you have already joined our group that's
great if not there is a Facebook group
for which a link is available right to
you once again my name is instructor and
I am glad to have you here I created
this course to learn from my experiences
as well as from my mistakes I hope you
enjoy the cost and benefit from it
before we explore the Alibaba website
there is one very important thing that
you have to understand and that is the
b2b or wholesale business model to
explain I'll use this very simple
example when you purchase a product from
a store you are engaging in b2c
transaction which is basically business
to customer transaction that is the
store sells your product in a single or
small quantities for a fixed price for
this example we will say that the
to a solji a product for $20 but they
still need to make a profit so obviously
if the sole your product for $20 they
must have got it for is less lot less
actually in order to get a discount the
store buys their products from their
supplier in a bulk or a wholesale this
is called b2b or business-to-business
transaction model in this example the
store will buy products in large
quantities for $10 each
meaning they buy it for $10 and send it
to you for trial which gives enema $10
profit or a hundred percent profit per
product when you use Alibaba you're
talking or taking a role of the store
which means that you are buying products
in booked direct from supplier and
selling them in smaller quantities to
your customers I want to stress this you
cannot buy a single units of products
from suppliers at Alibaba the reason why
stuff is so cheap at Alibaba is because
you are buying them from wholesale in
large quantities no supplier would want
to sell your products in small
quantities every one of them is
expecting that you are going to place an
order of multiple units now depending on
the product you could be ordering five
10 15 or if it's something like iPhone
cases you will be expected to order
hunters if not thousands of the products
at a time Alibaba is not a b2c site it
is a business-to-business website your
product or your buying products
wholesale okay
so now that you have covered the
business-to-business and wholesaling
models let's go ahead and take a little
tour this is alibaba.com simply put if a
product is made manufactured or
assembled anywhere in the world you can
find it and buy it on Alibaba comm now
the first thing you want to do if you
haven't already done so is to create an
account I recommend doing this right
away in order to start building your
profile even if you are not ready to buy
anything it's a good idea to create your
account right away to do that just go to
the top left corner here
click on the giant free barn and follow
them stringent sections one thing you
will note in that is that when you are
filling in the phones you will be asked
to provide a business name don't worry
if you don't have one at a time but just
make one ad for a simple sake
you also get asked if you want to be a
buyer or a seller on a boat and here you
will just say that you're a buyer I
would also recommend using a
professional email instead of your
personal email but it's not a
requirement the reason I say that is
because you will come off as being more
professional and also you will
understand in undated with a lot of
females with a promotion and discounts
which you can ignore because there are
no such thing as discounts or promotions
at Alibaba once you are all signed up
you're basically ready to use the site
and start looking for products ok so now
I am back at Alibaba homepage and as I
said at the beginning of this sections
that if product is for sale anywhere in
the world it's for sale on Alibaba as
well now you can sort through products
by looking in categories and you will
find hundreds if not thousands of
different categories if you already know
what you're looking for just go ahead in
the search bar up here and type it in so
in our example we said we are looking
for men's polo shirt so I'm going to go
ahead and type it in and as you can see
there are thousands upon thousands of
results that you get back now obviously
I'm not going to sort through 50,000
different products and suppliers instead
I will start using these search vehicles
to help me narrow down my research now
obviously I am NOT going to sort to
50,000 different products and supplies
instead I'll start using these filters
to help me narrow down and I can specify
what it is that I'm looking for in my
products so I'm going to say that I'm
looking for a polo shirt with
materials made out of organic cotton and
as you can see I'm already narrowing
down to the field next I'll say I'm
looking for an OEM service which means
I'm looking for suppliers who actually
make the products themselves rather than
using and at the factory to source it it
also means that you can customize the
products
I'll explain Who I am in the following
sections which are coming next
definitely any short sleeves so I am
going to check that I am going to use
the sample or the field because it saves
only 75 suppliers will make a sample but
I know falling from my experience just
all about the suppliers that make
samples mostly into the field especially
in the textile industry because the cost
of making samples is very low so you
have to exercise a bit of a caution here
and using these filters because if you
are if you use too many sometimes you
are going to filter out really good
supplies which we obviously don't want
now these are the two most important
fields such area and trade type even
country every country actually has
something that's specializing or
manufacturing and exporting for example
since I'm looking for polish shirts made
out of organic cotton I know that the
countries that's specialized in textiles
and apparel of China Bangladesh Pakistan
Turkey India chances are most of them
sell clothes by owning them even if you
own a really expensive brand-name
sweater that might have cost five
hundred dollars
chances are it's made in our one of
these countries for about $20 and if you
search long and hard enough you'll find
that sweater and supplier on Alibaba I
can tell you how many times I have
randomly picked up products and just for
the fun of it they've managed to find
where that product comes from actually
who the supplier is and who is it's made
for or from now if I were looking for
electronics and not clothing I would
start by looking for electronics in
Japan and Korea not necessarily in China
if I wanted premium quality ladder I
would
starting to look for it in Italy what
products similarly in Vietnam I think
you got an idea what I'm trying to say
here it goes without saying that most of
the suppliers on the Alibaba are from
China but many are also from other
countries especially from the developing
world before you start importing
products from our familiarize yourself
the vir products are made and get a
sense of what each country specializes
in exporting so be sure to look at that
and don't be afraid to look outside
China let's continue with our example of
the polo shirt for simplicity sake I'm
going to select my supplier from China
last thing is the most important you're
in a search for supplies that I'd call
suppliers I'll explain what that means
in Section three but the gist of it is
that Alibaba have verified that these
suppliers is who they said they are they
have inspected the business I'll get you
to the gold suppliers and traced
assurance in Section three but for now
I'm going to select this gold supplier
so as you can see after applying the
various filters I have significantly
trimmed down the field to a very
manageable number now on the product
page here you can find all the
information that you need the supplier
name where they are located
I can email them by clicking on the
contact supply version or I can share
with them if they are online by clicking
on this boogieman icon right here this
is called Alibaba trade manager it's
their internet chat system as a buyer
obviously the thing you are most
interested in is its price and quantity
which you will find right here the
supplier in this case is selling for all
polos for around 3.5 dollar per shirt
which can obviously ready if you can see
other examples don't worry I'll get it
in that avails later in section 3 well
I'll walk you through pricing and
minimum order sizes and how all that
stuff looks I'm just gonna click on the
supplier page here and now I'm taken to
their individual page where I'll be
finding everything related to the
supplier if you are completely new to
Alibaba I recommend taking a few minutes
to explore
look at different suppliers get
comfortable searching for products don't
be overwhelmed with all the information
and all the different terminology
because I'm going to
walk you through what all that terms
mean and how to contact suppliers and
get into connections in the following
sections thank you as I mentioned in the
intro of this course Alibaba is based
out of China and while there are
suppliers out of the United States
Australia Europe and Canada for the most
part most of the suppliers are from
China as well as a few other countries
including India Pakistan wait now
Bangladesh amongst others needless to
say doing business with international
suppliers can sometimes be confusing
stressful and a bit of a culture shock
if you are not used to it so I have
created what I call the golden rules of
Alibaba these are the things that you
always need to keep in mind when
ordering products from a supplier in
China or anywhere else in the world that
is not from your local control the first
rule of Alibaba is one that we have
already discussed Alibaba is for
wholesale purchases only you cannot only
you cannot buy a single of small
quantities of products you're buying
product in bulk of wholesale and as a
rule of thumb the product per order the
cheaper the price per unit since you
have already discussed in a great amount
of detail the concept of wholesale
buying let's move on to rule number two
which is Alibaba is not Amazon what I
mean by this is when you purchase a
product from Amazon you can be sure that
the item you order will arrive on time
and in perfect condition and exactly as
described if not you simply contact
Amazon and they will refund or replace
the item for you even if you buy a
product from your local store wherever
you are in the world it comes with some
sort of guarantee or production from the
buyer that's not always the case with
Alibaba if your product arrives and it's
not your liking you are pretty much out
of luck because you are not getting your
money back even if the product is
defective or damaged is unlikely that
you will get a refund
Alibaba offers what they call seller
protection and I'll explain what that
means - later on but as a rule of thumb
it's up to you to do your due diligence
and make sure your supplier understands
exactly what you need in section 9 Alex
what to do if your product arrives and
it's not exactly as per spec but
regardless you should go in with your
mentality that expires be rare you
should have the mindset rule number
three everything on Alibaba is
negotiated irrespective of was written
on the page or despite what the supplier
might tell you the price is never find
the minimum part of the quantity is
always negotiated and so true are the
shipping costs any number that you see
on av Baba is pretty much meaningless I
have had supplies tell me that the price
of a product is hundred bucks with a
minimum purchase quantity of five
hundred and I can tell you that I have
successfully negotiated with that same
suppliers a price for $50 with an order
of just 300 units so don gets scared off
and you see high prices and high minimum
order of quantities because everything
is negotiated one rule number four
always always are the samples never take
the word of your supplier that the
product you're ordering will arrive
exactly as described that's never the
case in Section six I'll walk you
through the process of negotiating
samples with your suppliers but know
ahead of the time that never order
products without seeing what you're
ordering especially if you're ordering
large quantities rule number five think
long term supplies on Alibaba are
looking for customers who will become
lifetime clients
the reason McDonald's give you toys to
kids at an early age is because they
want their kids to come back McDonald's
and supplies in Alibaba have this common
that in there they are it for the low
long haul a supplier is more likely to
offer your favorite table price as well
as other incentives as well as better
service at the field that you will come
back and order more products from them
in future so knowing that be respectful
video suppliers be patient and them with
them and you are communicating with them
and sound professional even if you don't
have a business
let your supply know that you are
looking for a long-term partnership they
are more likely to offer you better
prices finally the bonus rule don't
respect when doing a Chinese suppliers
you don't contact if you are in contact
will be someone with an American
sounding name usually it's something
like Betty or Steve know that you're
probably speaking to a teeny
whose only job is to translate what
you're saying for their factory manager
don't get wrong wrong daddy and Steve
are of course that's not their real name
are really nice people it's just you
have to realize that the person you're
talking to understand or doesn't have
any influence over the price or the
quality of your product his or her job
is to take your messages and translate
them from their factory managers for the
effective managers who could be
somewhere else in China it also tells or
it also can goes without saying that if
your product arrives defective or not to
your satisfaction
it's pointless complaining to battier
Steve because the only thing you are
going to do is translate your message
and give it to their bosses frequently
asked questions do I need a real
business to use Alibaba no you don't
need a real business as you saw during
the registration process if you're asked
to provide a business name make one up
it's not like they can verify it in fact
I would recommend even if you do on a
business not to share your name with the
suppliers because you will be in undated
with emails not to mention the fact that
your company name is being associated
with the supplier that you have never
worked with easily by the safe there's a
lot of misinformation out there about
protecting yourself
when using Alibaba in fact I have been
suggested that you shouldn't trust your
supplier or what they say but there is a
difference between trust and safety
Alibaba is very safe they are always a
few bad apples but generally speaking
the supplies you deal with at Alibaba
are not looking to scam you I never had
a supplier that take my money and not
deliver the product it has happened that
the product I order wasn't to my
satisfaction but that's the business and
call it quantity issue and that has
nothing to do with the safety is
everything on Alibaba made in China no
but many of the products are if you're
buying a Ford automobile even though
it's an American car many of them
components come from China as well as
other countries but since the final
assembly is in the United States they
can stamp the made in USA label on it
the same holds true for most other
products that required assembly the good
thing is you can find the supplier of
all these products be it a Ford car or
an authentic
Italian luxury wallet you will find our
suppliers on Alibaba how much money do I
need to get started there no no member
fees or subscription or anything else
that you need to pay to use Alibaba
everything is free animal violently Baba
makes come from the supplier the only
time you need money is to pay for the
products that you are vistur and you
don't need thousands of dollars to do
that a few hundred dollars to order a
few samples to get the ball rolling is
more than enough to get started thank
you and stay tuned but now you know that
Ali Baba is for wholesale purchases only
but now the question is what should you
wholesale or what should you buy there
are three types of buyers at Alibaba and
each uses distinctive business model
they are retail arbitrage private
labeling and product customization all
three are very different and before you
start ordering products through Alibaba
it's important that you decide which
business model suits your needs let's
start with the easiest one with the
elaborate rate retail arbitrage
basically means you buy products from
China and somewhere else in the world
and basically flip them for a profit for
example you buy a blender from China
through a supplier on Alibaba and you
pay $30 for that blender and of course
you buy more than one so let's say you
buy 20 for a total of $600
you then turn around and flick those
products on Amazon or Ebay for $40 each
giving you a $10 net profit per sale if
you sell all 20 you just made $200 it
really it's really really amazing right
it's really easy that there isn't much
more to it so to summarize arbitrage is
really easy to do there are no barriers
to entry the places where you can sell
these products are somewhat limited
and because arbitrage is so easy anyone
can do it and as a result we have plenty
of competition meaning that your earning
potential is fairly limited arbitrage is
a good way to start but if you really
want to get serious about starting your
own business and building a brand
private labeling is definitely the
way to go private labeling sounds hard
but it's really simple it's basically
consists of putting a label on a product
that already exists the only difference
or add the added layer of work that you
have to do is that you have to create a
logo and send that to your supplier then
he will put that on your product and
your packaging once your product arrives
you can do the same as you would do with
the arbitrate you can sell it on any
platform you want but now you can also
sell it under your own brand on your own
website if you go to Amazon you will
find that many people are selling the
exact same product but the label of the
brand is different that's because
they're using the services of a private
label you are selling the brand and not
necessarily just the product to
summarize private labeling is not
difficult it's just extra work namely to
create a logo and communicating that to
your supplier you will find that in
addition to selling on platforms like
eBay Amazon Etsy and others you can also
sell on your own website because now you
are setting a brand not just a product
if you find the right niche your
competition should be limited and as a
result you will make more money the
final model we'll look at this product
customization people use a leap over to
source products but they all also use it
for find suppliers who can manufacture
products for them this requires a little
bit more experience because you have to
work closely with your suppliers to
define exactly what you need once the
design is final and this is obviously
require some of the hard work and some
communication back and forth the
supplier manufactures the product and
ships to you what's the product line you
can sell it on all the different
platforms also you can sell these
products to department stores or giant
retailers or you can sell it wholesale
to other businesses product
customization is not easy especially if
you are a builder but once you get it
done you can sell it anywhere you want
your competition should be virtually
non-existent or very limited and as a
result your profit margins are much
higher compared to other business models
so before deciding that what to so the
first thing you want to do is pick the
right business model for your needs if
you like business experience then start
with arbitraged and you will learn
plenty quickly and pretty much it takes
a run a business and how the supply
chain works although I jumped into
proverb labeling as it's the best way to
build a brand and release double
yourself in online training once you are
comfortable with product sourcing and
supply chain management look for ways to
improve products through product
customization finding products to sell
is not easy sometimes the product looks
good on paper but when you try to sell
it you find that there is too much
competition or not enough demand or it's
just too expensive and you don't have
the money to buy the inventory what
should I sell there's the question I
asked far too often and in this section
I'll try to answer it the most important
part of a product is to understand what
an itchy about product is initial
product is one that tag is a very
specific group of people for example
take this Toyota Camry a very
traditional family sedan popular all
over the world and compared it to this
Ferrari both are costs both have engines
steering wheels and four types but
that's where the similarities end the
family sedan appeals to everyone but the
both the supply and demand for this
vehicle is high especially when you
compare it to the Ferrari well the
family sedan appeals to the masses the
Ferrari is not for us very specific
group of people namely automobile
enthusiasts with a lot of money who
don't mind paying a hundred thousand
dollars for a car the Ferrari has far
less demand and even less supply than
the Twitter the Ferrari is therefore an
issue product whereas the sedan is a
mass product niche products are in
limited supply because there is less
demand the target a specific group of
people and for the customer they are a
bit harder to find if there is one thing
you remember from this
it's this don't sell mass products sell
initiate products only why sell misha
products to answer this question that's
using more practical example say you
wanted to buy sunglasses if you live in
the united states chances are you would
stop or shop at one of these places but
what if you wanted good glasses for
sunglasses where would you buy those
amazon has a few suppliers but walmart
target sunglasses hat
they don't sell wordclock sunglasses why
because what sunglasses are aneasha
product the demand isn't high enough for
these places now think about it from
Sally's perspective if you wanted to
start a business selling sunglasses
traditional thinking suggest that you
pork a product that everyone wants to
buy the problem with this is that if you
sell products that everyone wants you
are going to have loss of competition
and the last thing you want is to have
to compete against a big national brand
who has millions of dollars to spend on
marketing and inventory but if you were
to sell wood sunglasses your competition
would be very limited and therefore you
would profit margins would be higher
also you wouldn't have to work as hard
to get customers because they would come
to you since they don't have all the
other alternatives I can tell you
firsthand that I have tried to sell mass
products and after a few months I found
that the profit margins were too low and
it took too much work to sell the
products and I eventually gave up but
when I started selling nishapur lakhs
it was a lot easier because I didn't
have to work as hard to find customers
and the profit margins made the world
worth it when you start out I would
recommend looking for products where you
can earn a thirty to fifty percent
profit margin and eventually work your
way up to hundred percent profit margin
in the course notes you will find the
link to profit calculator I suggest you
use that see how much money your product
can earn so how do you find these
products this can be a bit challenging
and requires a bit of our research
generally speaking I look for a product
that is really popular and trending and
then I try to find variants of that
product
case in point regular sunglasses and
boots and glasses regular sunglasses are
popular mainstream product and route
sunglasses target a very specific group
of people who are looking for an
alternative I also use these three tools
to help me do research
k-dubb defined her Google Keyword
planner and Google Trends let's try kW
finder to see how it works now I am NOT
going to show you the details of using
these tools I just want you to give an
introduction to them I've used the
examples of cars and sunglasses let's
look at another product yoga pants' yoga
is really popular activity these days
and lots of people are buying and
selling all things yoga is related to
let's research yoga pants so in the
search bar here I'm going to type in
yoga pants and the tool tell me there
are about 3,000 people searching for
yoga pants in the United States every
month and the average cost to advertise
for your co-parents is about one point
$50 per clicked now if you're not
familiar with PPC advertising and how
search marketing works I recommend you
take some tone to learn the fundamentals
of digital marketing and search
marketing after this course for now this
is very crude example to give you an
introduction to the basics so your
thinking your parents are a good product
to sell the demand is really high
the industry is trending problem is
everyone sells yoga pants including
Walmart Target and even Nordstrom's but
what if you sell a variant of yoga pants
how about maternity yoga pants
the demand for maternity yoga pants is
almost nothing compared to regular yoga
pants but 3,000 people is still
significant and I can capture even 1% of
those 2,000 people that's almost a sale
a day not bad for a new business finding
a shoe product isn't easy if it were
everyone would do it so take your time
and use tools like kW finder and Google
Trends to help you do the research
you'll find tons of free tutorials on
using these tools and I'll provide some
information in the groups or the chart
sessions in addition to selling Isha
products look for complementary products
what are those
you have choosen the piss before it's a
Big Mac one of the world's most popular
foods it cost McDonald about $2 us to
make a Big Mac it cost McDonald's about
$2 years to make a Big Mac and the CPA
or the cost per acquisition of a Big Mac
is about one point $80 the CP is all the
stuff McDonald's has to do like
advertising to get you to come in to
their restaurants so on a four dollar
Big Mac McDonald only makes about 20
cents but McDonald is one of the world's
most profitable companies so how do they
do it the self complimentary products
the Big Mac meal which comes with fries
and drinks is what allows McDonald's to
make millions the cost of production of
a Big Mac meal is about 3.75 dollars but
the CPA is about the same one point $80
because you are already in the
restaurant and they don't need to do
much to get you to buy the complementary
products namely the fries and the drink
so why McDonald's only make 20 cents of
a Big Mac when you order the fries and
drinks McDonald makes a whopping one
point $95 per customer x multiply that
by million of people who eat at
McDonald's every day and that's a lot of
money so how do we bring this back to
Alibaba and apply it in our case simply
don't look to buy and sell products that
sound like they make a lot of money for
example everyone knows iPhones are
really popular and they provide a lot of
brand new revenue for Apple you can sell
iPhones for many reasons but that
doesn't mean you can write the iPhone
wave and sell the complimentary products
that go with the phone like earbuds USB
cables and colors you can sell an entire
car but you can sell car parts the car
company and the car dealer have done all
the hard work they have treated the
market you just need to piggyback off
their success here are some tips on
product selection we have already talked
about how you should look for the niche
product and complementary products
remember
don't sell the bigmack saw the fries and
drink another way to find good product
is to go on Amazon
calm and look at their bestsellers that
will give you some idea but don't stop
there read the product reviews and look
for opportunities if customers are
complaining about a specific feature of
a product find the supplier on Alibaba
and ice temp to address this issue also
keep a notepad on you at all times and
write down ideas and continuously review
and devise your list I guarantee you if
you do this long enough you'll find at
least a dozen really good ideas next and
this is important when you are starting
out with Alibaba pick a product that
fits in a shoebox why because smaller
products are easier to import and sell
as you will learn shipping costs can be
quite high so when you are starting out
keep it simple and look for products
that have low shipping costs that are
easy to store and easy to manage
generally speaking if a product fits in
a shoebox it will satisfy these
conditions finally avoid these products
at Alabama anything for the baby's food
and beverages safety equipment
electronics licensed products and
name-brand products are not sauce baby
products because if something goes wrong
I don't want to be responsible for
putting a child's life in danger nor do
I want to give anyone food poisoning or
be responsible for equipment failing to
someone's head these products come with
strict guidelines and quantity quality
requirements that need to be met and I'm
not trusting my supplier with that
information I don't really have the
knowledge of expertise to verify what my
supplies is claiming to be safe I don't
sell electronics because electronics
have been notoriously low profit margins
I don't sell licensed products because I
don't have a license and I don't trust
that my supplier has one either
and finally I don't sell name-brand
products because Alibaba suppliers don't
sell name-brand products and finally I
don't sell name-brand products because
if a supplier at Alibaba tells me that
they are selling authentic night shoes
or real Apple iPhones that are
knock-offs
or they are scams so don't be fooled by
that aside from that everything and
anything is fair game now that we have
covered the fundamentals gets ready to
look for suppliers as we saw in the
previous videos searching for products
on Alibaba is pretty straightforward
process
but as I'm sure you have noticed there
are a lot of ignoramus and different
terms on the supplier page in this
section I'll go through what those an
acronym mean as well as other vocabulary
from the Alibaba supplier page let's
start with the two most important points
fop and mo q mo q stands for minimum
order of quantity which means in order
to buy from the supplier you must order
at least this many products
remember Alibaba is not for single unit
purchases if the mo q is 100 then you
must order 100 units at least in the
case of the supplier the mo ki is 300
don't be alarmed if you see a high mo q
remember everything on Alibaba is
negotiate able fo b stands for fright on
board that's the price of the product
per unit but it doesn't include shipping
in the case of this ships supplier the
price of the shirt is between 3.30
dollar and $12
the reason the supplier doesn't give a
fixed price is because the fo B depends
on the size of the order remember the
greater the quantity the lower the price
of a unit in this example the 12 dollar
price is based on you are ordering 300
units meaning the total price of the
order for 300 polos would be $3,600 u.s.
if you were to increase the size of your
order then the supplier would drop the
price to as low as 3.30 dollars how many
units do you need to order in order to
reach that price you have to ask I
should point out that you shouldn't take
the f OB and moq too seriously it's more
of a guideline you will get the true
price and the mo q when you contact the
supplier cold supplier a gold supplier
means that Alibaba through a third-party
inspector has verified that the company
is legitimate the problem is it's not
that difficult to become a gold supplier
you just pay a fee and an inspector will
come scope out the factory we don't
really know how this is done and what
kind of inspectors are we Bob are using
so we just have to take their word for
it
also also we know that in some countries
an inspection just means giving someone
a bribe now I only source products from
gold suppliers even though I don't fully
trust it it does offer some sense of
security and sometimes it is better than
nothing also to become a gold supplier
does a cost considerable amount of money
so it's not like anyone can do it trade
assurance
unlike becoming a gold supplier Tara
surance is it available to everyone so
far I have only seen suppliers in China
offer this service dat assurance means
that Alibaba guarantees delivery of your
products or your money back
now Alibaba is making an effort to boost
confidence for international buyers but
they still have to long way to go
remember rule number two Alibaba is not
Amazon getting a refund from them is a
long and drawn-out process
nonetheless as a buyer it does offer an
added level of security so when you are
sourcing products from China look for a
supplier that offers trade assurance
supplier ability the supplier ability is
how many products a supplier can produce
in a month here it is that the supplier
can make fifty thousand polos per month
but as we know members on Alibaba don't
mean anything and given the right
incentive the supplier can make more if
needed payments here are all the ways
you can also pay the suppliers mostly
you have four options a leap a bank wire
transfer Western Union and even though
it doesn't allow but sure it is paper
I'll cover payments in depth in another
module this area is for the supplier
assessment badges the check mark with
the little circle means the third party
has verified the legal status of the
factory and the icon with the little
house means that Alibaba has inspected
the facility this applies to suppliers
to China only although it's just a
matter of time before the service is
extended to other countries as well in
both cases you can click on the icon to
view the inspection reports the last
icon is a link to supplier promo video
if you care to watch it one very
important thing you want to look for is
the OEM or
'i'm label om stands for original
equipment manufacturer basically it
means that the factory is authorized to
make the product and they don't also
suction odium stands for oriental or
original design manufacturer which means
that the supplier not only manufactures
the product they also design it it means
that they can estimize it for you if you
want many audience use audience to
manufacture the products because they
don't have the capacity to handle the
volume but I have found that on Alibaba
om and Odeon basically mean the same
thing most OEM suppliers can also
customize the product for you if you
want if you don't see or am written on a
supplier page it could be a sign that
they are buying Adhan and not a
manufacturer you don't want to deal with
a buying agent because they are just
middleman and once you pay them they
don't really care what happens to your
order also why would you pay a middleman
when you can go straight to a source
here are few additional terms that you
should know and these are in specific to
Alibaba they are used industry wise lead
time lead time is the time it takes a
supplier to complete production of a
product if a supplier tells you that its
lead time is 10 days it means that it's
going to take him 10 days from the time
you confirm the order to complete
production but it does not include
transit or shipping time that's extra
pay attention to lead time between
September and December as those tend to
be busy time for the Christmas holidays
also very important China basically
shuts down for the three weeks for
during Chinese New Year's and Chinese
New Year's falls on the different date
every year it goes according to the
lunar calendar so in 2017 Chinese New
Year was in late January in 2018 is
going to fall in mid-february
and in 2019 it will be in late February
make sure to get your order in well
before Chinese New Year response rate is
how fast supplies tend to respond to
quotes and Bank requests generally
speaking suppliers are eager to respond
to your emails if you contact them
during normal business hours expect an
immediate answer otherwise email should
be returned within 24 hours or 12 hours
at least
and finally QC or quality control QC is
the process of how suppliers inspect
their products some industries require
very strict QC standards for example iso
9001 is the global standard of quality
if a supplier meets iso 9001 standards
they will be sure to include it on the
supplier page so those are the most
important terms that you need to know
when looking through products and
suppliers on Alibaba don't worry you
don't have to memorize them there in the
course notes and once you start talking
to suppliers these words will come up
over and over again and you will get the
hang of it in no time so far we have
covered the rules of using Alibaba and
we have explored the different business
models we also discussed how to find the
right product and we learn what all the
different terms means so by now you're
eager to start talking to suppliers but
before you do that I have just one
additional piece of advice and that is
before talking to suppliers know your
product a common mistake people make on
Alibaba is that they rely too much on
their supplier for information remember
that one of the rules of using Alibaba
is to form long term relationships
you always want to give your suppliers
the impression that you are a seasoned
veteran people who own business know
their products it's okay to ask
questions but how what you ask is a
strong indicator of your level of
expertise so before talking to suppliers
I recommend research share products
learn the different names and acronyms
for example if you are sourcing polo
shirts you should know all about the
different materials that are available
do you want a shirt that's made out of
cotton or polyester if it's cotton what
GSM or grams per square meter way do you
want do you want 5% lycra or 10% also
what kind of stitching do you need it's
important that you have a working
knowledge of the products that you want
to buy if at war a supplier and you came
to me and said I want a PK polish shirt
made out of 70-20-10 split of court and
blister and lighter and it has to be
pre-shock I am thinking this person
really know what is
asking about I better up providing the
right answers as opposed to if you came
to me and said I'm looking for polo
shirt and ask you which material what
weight and you can answer I as a supply
won't take you very seriously
you should have always a sense of the
market price and demand of your product
your supplier will no doubt code to the
highest possible price when you start
negotiating if he or she senses that you
don't have much experience or that you
don't have a good grasp on the
technicalities they are less likely to
negotiate lower prices and they may even
try to predict that advantage of your
lack of knowledge and finally be
prepared don't rush to talk to suppliers
have your research ready and review the
important details think of it as a
preparing for a job interview you need
to know your stuff where you should also
research the company you are
interviewing for in our case take the
time to review the information on the
supplier page know who their customers
are and understand their pricing and moq
models if you find bisque apprentices on
their page such as moq be sure to note
it down and bring it up when you are
negotiating remember you want to be a
professional suppliers want to deal with
people whom they trust and who they
think will become a long-term client one
of the challenges of working with
overseas suppliers is that you may not
be accustomed to their style and culture
what may seem strange and usual in one
country may be acceptable in another for
example if I were a store or in a United
States or Canada and a customer asked me
what time my store opens I would say 8 9
or 10 Ian I wouldn't say depends on what
time I get up but the later hunter us
quite common in some part of the world
in fact I asked that very question while
vacationing in Asia and there's the
exact response that I get to him the
store owner the concept of 95 seemed
very strange thus the reason I'm telling
you this is because I find that my
understanding and appreciating the
differences in cultures it makes the
better relationship between you and are
your supplier so if you are in United
States or United Kingdom Canada
Australia wherever and you are used to
doing things in a certain way at a
certain pace
you need to be open-minded when working
with suppliers from other parts of the
world know that what's acceptable to you
may not be to your supplier and vice
versa now in the Western culture we are
used to work nine to five work day and
we mostly work in casual environment
where calling your boss by his or her
first name is perfectly acceptable
we are also driven by data and metrics
things like revenue profit and sell we
are of utmost importance on the other
hands in place like China and Japan the
work environment is very formal in fact
it would be disrespectful to call your
boss or for that matter your elders by
their first name also in many of these
countries is less of a nine-to-five
workday and more of a work until the job
is done I have received emails and text
messages from suppliers in China at two
o'clock in their morning their local
time I'll expand to the Chinese culture
in just few minutes finally if you're
working with the supplies in the
developing world or in the Middle East
you will find that the work culture
tends to be very laid-back and
slow-paced also from experience I find
that if you want something done you just
have to pay for it if you want your
supplier in Pakistan or India to live
with their products faster you have to
pay for it if you want a custom logo you
will have to pay for it they have or
they can have advantages or
disadvantages depending on how you look
at it when dealing specifically with the
Chinese suppliers here there are few
things to keep in mind as I mentioned
China has a formal work environment so
when you start talking to suppliers
don't be alarmed if they come off as
being somewhat rigid that will change
very soon also don't just send an email
asking suppliers for a price and then
expect them to give you a discount
from my personal experience I find the
Chinese to be incredibly hardworking and
driven so you can expect your suppliers
to do everything they can to meet your
requests given that they're reasonable
one thing you can't do on Alibaba is
threaten your suppliers with legal
actions you can't say I'll sure or I
will show you that for a file a
complaint it doesn't exist so it's
pointless threatening legal action if
your products and I've defect
Hippolyte your best bet is to have a
good relationship with your supplier so
you can resolve disputes together now
here is the twist in China many
companies especially suppliers on
Alibaba are getting training on dealing
with American culture and sometimes it
can be quite funny for example after you
have completed a transaction you may get
an email from Patty or Steve saying
something to the effect of dear Bob when
you purchase product from us we became
friends and as friends I invite you to
our factory or you will get a random
email saying dear Jennifer this weekend
I visited the country and picked fresh
fruits here are some pictures what do
you think this is just your supplies way
of making an effort and showing you that
they want your business if that happens
know that it's a good thing and don't be
confused oh and one last thing about
China it seems that no one has told them
that the world
dear doesn't mean sir sometimes you will
get an email that starts with dear we
are pleased to submit this code if you
want play along and respond with thanks
thanks honey sometimes thank you so far
in this course we have spent most of our
time focusing on theory we have
discussed the fundamentals of Alibaba
and how to use it we have talked about
the different business models and how to
pick the one that suits our users your
needs if you don't already have an
existing business and you are unsure of
which products to buy and sell I
provided some tips to find profitable
products and finally in the last session
we saw how to find and evaluate
suppliers beginning with this section we
will now transition to the practical
part of the course starting with how do
you reduce yourself to suppliers and
establish communication we will then
move on to working with suppliers and
getting corpse after that I will show
you how to negotiate and get samples and
finally I'll show you how to pay for
products handle shipping and close the
deal so let's get right into it
once you have a short list of suppliers
the next logical step is to reach out to
ones you like but before initiating
contact here are a few things to keep in
mind know what you want we already
discussed this and talked
about the importance of having a working
knowledge of the product you are looking
to source you want to come off as a
professional who knows what he wants
when you initiate contact with the
supplier don't give away too much
information too soon you might be
tempered to start discussing specifics
like talking price and moq but remember
suppliers would be more cooperative and
willing to negotiate if they feel you
are serious buyer who's looking for a
long-term relationship this is optional
but I find that in some cases it helps
if you don't tell your supplier that you
are the owner or a solo owner of the
business you can just say that you're a
buyer or a manager the reason being 1
you give the impression that you are
really company and that your sauce
products before - it can close the deal
faster if you are a supplier or if a
supplier doesn't want you to get
approval from your boss sometimes they
will just give it a certain demand there
is also psychological aspect of doing
this but I won't get into that kiss keep
things simple stupid this is the thing
many people have trouble with when you
start talking to suppliers remember to
keep things simple the goal is to
introduce yourself and establishes
rapport
also remember that English is the third
or fourth language of a person you're
speaking to so use words that a grade
school student would understand and
finally before initiating contact with
suppliers if you don't already have it
download whatsapp it's an instant
messaging app for your cell phone there
will be a lot of back-and-forth between
you and your supplier and while an
important details go in an email it will
save you time and if the day-to-day
communication is done by text messaging
most applies in China as well as other
countries all use whatsapp it's a free
tool and it's great way to stay in touch
and get updates from your supplier so
knowing that let's take the first step
towards reaching out to suppliers so
once I have a short list of possible
suppliers I'll take the next step in the
evolution process and that is to
reintroduce myself and ask for a little
bit of information remember that what
you see on the supplier
isn't necessarily up-to-date the prices
and mlq could change on a daily basis so
it's important that you talk to
suppliers and get the latest information
now what I like to do is rather than
sending an email and going in cold I
usually communicate with the Alibaba
chat system this way the supplier will
know who I am before I send them an
email and it's also a really good way to
build or a start relationship just
remember that there's a time of
difference between where you are and
your supplier are so sometimes like if
you are in US you might be having to
communicate during the evenings when
it's regular business hours in China so
let's look at a live example here's the
exact process that I use I'm going to
find my supplier and I'm going to click
on the chat icon when they are online
and I'm going to say cancel or no to
this pop-up basically it's asking me if
I want to share my information with the
supplier if I say yes they will have my
email and that's going to get shared
with thousands of other suppliers as
well so I don't want to do that right
now
and I just want to do a quick intro give
them my name where I'm located and say
that I'm looking for a new supplier now
sometimes the supplier will apply with a
generic greeting or in other cases like
this they will get straight to the point
which I prefer so I don't want to waste
time I'm just going to state exactly
what I'm looking for part of this
person's job is to be a gatekeeper so as
you can see right away they asked me for
many pieces I need if I want ten they
won't take me seriously so I'm going to
say 500 even though I have no intention
of ordering that many units to begin
with at least and there she is she says
great now my goal of doing this expects
Assizes to simply introduce myself and
capture and email address and that's
exactly what I have accomplished
remember you have to do this with 10 to
15 suppliers so don't waste time getting
into specifics if the supplier asks too
many questions
just say you will provide a for all
information in an email in the next
lesson I'm going to show you exactly
what you want include in an email and
what to our suppliers for now all we
want to do is create a short list and
introduce ourselves the overall process
of selecting a supplier looks something
like this you start by chatting with 10
to
suppliers based on your preliminary list
of candidates this is what we did in the
previous sections of those ten to
fifteen we select a few and send out an
RFI or a request for information that's
what I'm going to cover in this lesson
after the RFI you asked for detail code
and from there you start negotiating so
let's look at the RFI if you recall from
last session I got the suppliers name
and email address through the Alibaba
chat system that was step one where I
introduce myself now I am at step two I
need more information
the email I'm going to the Sen looks
something like this this is a template
that's in the course notes and you are
more than welcome to copy but if you
prefer to use your own just make sure it
has all these elements the RFI starts
with an introduction that states your
goal which is to form a long-term
relationship even though as we discussed
that's really the suppliers goal I also
include a link to the product that I
want and a picture as well now here's
where I got into the details I asked
them to give me a quarter of 500 pieces
even though their mo key was only at 100
the reason I exceeded their moq is
because I wanted to start negotiations
at a lower price point for example if I
asked for 100 units they might quote me
$20 a share but by asking for 500 they
caught me $15 if my target price is $17
it's actually easier to reach that
target by making it seem like I'm the
one who is compromising and agreeing to
pay more during negotiations I can say
you want $15 for 500 units how about I
give you $70 and you lower the mo q I
make it sound like I'm the one who's
compromising because I'm paying more and
all I did was lower their mo Q this is
an old negotiating trick that come in
handy all the situations moving on I
also asked if they can make samples
sometimes supplies can be very of making
samples especially the other size is
small and that's just another reason why
you should start with the
mock you I also provided a financial
incentive and make it clear that I am
willing to pay for a sample the next
part is really important more suppliers
have a product catalog which they don't
always share on Alibaba
the catalog is up to the deep which
latest products so always ask for it
most of the time I find the products I
want not to the supplier page rather
through the supplier catalog and I
finally in every email I like to create
a sense of urgency to support the
supplier basically this is to motivate
him so here I can say we are in rush but
I could also use something like we are
in process of choosing a supplier and
would like to make a final decision soon
it's just another little extra
motivation to give them to the next step
now I'll close the email with my contact
info and my whatsapp number this will
help speed up things when she sends her
catalog and I see something that I like
rather than sending her an email I'm
going and going back and forth is razor
rather easier just to send a text
message remember you can discuss
anything on what self but the final
contract will be on paper how to
evaluate supplier responses your
supplier should respond your IFI pretty
quick when they do here are three things
to look for does their product catalog
contain Missha products remember good
suppliers make one thing and one thing
only if I am speaking to a colon
manufacturer then that's all I should
see in their catalog there shouldn't be
any toys or electronics if you see that
don't bother moving forward a supplier
such an early stage should not be
pushing you for payment especially by
Western Union or bank transfer if all
they were asking is for cash payment
types then move on to the next supplier
they don't share too much information
about their clients if the supplier has
a marquis klein it's okay that they
mention it for example if they are
supplier for the gap Polo Tommy
high-flyer that's okay that they mention
it and I can clearly really not verify
anything but they shouldn't devalue
something too much or give away too much
information either like products photos
or design specs I once had a supplier
show me everything about one of their
clients artists it just happened to be
one of my competitors
and if they do that to them they will
also do it to me meaning I can trust
that supplier we now enter the final
phase of the code process which is to
get a detail code we started the code
process by selecting 10 to 15 suppliers
and sent out an RFI the purpose of the
RFI is that we wanted to let suppliers
know that we are interested in them it
didn't contain any specific details it
was basically a testing or feeling-out
process and the key thing that we got
from the RFI was a product catalog and
some general pricing after talking with
a few suppliers to email and chat we
should be able to narrow down the list
between 3 and 5 suppliers and these are
the ones from whom we will request a
formal or detailed code up to now we
have been kicking tires we never gave
hard numbers we never shared product
details but now it's time to put the
cards on the table and tell the supplier
what we will really want to request a
former code are you this template and of
course we you are more than welcome to
copy it as well I start by reframing the
relationship even though I have done
that this before in the RFI it's really
important that you look for the supplier
and understand that you are looking for
a long-term partner to a link to the
technical document this is a document
that you create which contains all the
specifics of your dot product don't
trust your supply to understand what you
want
you cannot leave anything to chance I'll
talk more about the technical document
in a moment the third element is to ask
about pricing and moq in the previous
email the RFI told the supplier I wanted
500 pieces I did that to get their
attention but I'm not ready to commit to
that many units just yet so I'll say I
only want 200 pieces or whatever the moq
is in fact you can go lower than the moq
if you want just remember the lower the
quantity the higher the price per unit
but if you feel that the suppliers moq
is too high don't be afraid to ask for a
number that fits your budget next I
clearly state how many samples I want
remember never order anything without
seeing samples first now I can combine
all this information and ask them based
on my technical
and might advised moq and the request
for samples to confirm the following one
can be actually make the product based
on the information I provided to the new
price based on my revised mo kio
including shipping 3 that they can add
my logo of course you don't need to do
this if you are not creating a private
label for the costs of making the sample
including shipping for the lead time or
how long it will take them to produce my
order and 6 I asked about which payment
methods they accept I closed the request
just like my previous email by
emphasizing that I'm in a rush the
technical document this is the document
that everywhere buyer must make it
doesn't have to be fancy I use Google
Docs to create mine basically the
technical document is a details best
sheet that contains all the information
that you want in the product you can
make your however you want just be sure
to capture every detail you have to
assume that unless you specify you want
something
your wasp liar don't do it if you could
order a red polish shirt you need to
specify which shade of red you want or
else you could be in for surprise this
is specially important if you are
creating a private label product I have
had product sent to me where the logo
was in the wrong location the color was
incorrect and the material wasn't that I
asked for I learned the hard way for
that supplier won't chase you if they
are unsure of something they will just
do whatever is easiest for them here is
a sample of my technical document I
start by providing a link to the product
so that there is no confusion I also
provide a picture which is just a
screenshot now even though I say I want
a blue shirt I still ask for a color
swatch because there are over a thousand
shares of blue and I want to make sure
that I get the right one here I ask the
different sizes and I pointed out that I
want American sizes there is a big
difference between a US large and a
Chinese large but even that's not good
enough to be hundred percent safe
I even provide my amends I give them my
logo and tell them where to put it
believe it or not I have had suppliers
send me shirts with logos on the back
because I didn't tell them to put it
the front as you can see there's no
detail that's too small if you think
your supply can make a mistake make sure
to point it out in the document if there
is a possibility that the supplier will
misspelled evolve make sure to spell it
out for them
if you want a certain material write it
down it's easy and better to be safe
than sorry when you are done provide a
PDF version of this document in your
request for a detail code so to
summarize the best way to get a code is
start with a friendly chat and request
general information from at least ten
suppliers
ask for the product catalog and chat
while whatsapp to ask as many questions
as you want through the process of
elimination
select t25 suppliers and request a
detail code in your detail code be sure
to include following how many pieces you
really want the price of the product
based on your revised moq and the
technical document which provides all
the specs of the product you are looking
to be sourced review every response
carefully if you have questions or need
clarifications ask your supplier by
email or whatsapp if the price is
reasonable and you feel the supply can
delay and start negotiating with regard
to selecting a supplier I will be I will
leave this with you note don't go
overboard searching for a supplier it's
easy to get lost in the details the fact
is there is no perfect supplier at some
point you have to take the plunge and
trust your gut instinct bind requests a
buyer request is a way to get the
supplies to come to you instead of
chasing after them it basically
automates the search process for example
if you wanted to source polish shirts in
the previous lessons I showed you how to
manually filter for suppliers and
contact the ones that you are interested
in the way above my request work is
you're simply post an RFQ or request for
a quote on Alibaba and any supplier who
sees your post can submit a code
it's like posting an ad in the
classified section to create a buying
request simply go to Alibaba calm and in
the upper right corner you should see a
link that says one request multiplied
codes just click on that and you will be
redirected to RFQ page
if for whatever reason the link doesn't
appear on your homepage you can get the
RFQ page by tapping in RFQ or
alibaba.com
as you can see it's a pretty
straightforward you can submit a request
compare coats and talk to the supplies
you like also Alibaba recently added
these features urgent buying requests
and extra course I wouldn't recommend
using these features if you are new to
Alibaba it's really more for bigger
sized orders and they do charge you a
small fee to use the service to create
an RFQ you simply click on any where it
says try RFQ or submit code and from
there it's really simple now when you
create an RFQ be sure to include
keywords in your title supply see
thousands of buying requests every day
so you want to make sure you use a title
that sounds out and lets suppliers know
what it is and what you are looking for
in the example of the polo shirt it's
not good enough to say looking for polo
shirts I need to be more specific so I
say looking for men's organic cotton
polo shirts this eliminates ambiguity
and halsell Pryor's sought through all
the different codes that they see in a
given day for moq you want to use a
number that balances out quantity and
quality if you enter a number that's too
low you won't get a good response rate
and if you get too high you will get a
lot of codes but from companies who
expect you to place a large order so use
a number that's enough to get their
suppliers attention but not so high that
you set unrealistic expectations in the
example of the polo shirt if my goal is
to start by ordering a hundred units
output in moq of 500 and negotiate that
number down later on if I put 5,000
suppliers won't bother working with me
when I tell them later on that I only
wanted a hundred now this area is
reserved to enter details about your
product you need to provide enough
information so that suppliers know what
you want but don't give away too much
don't get into the specific details I
state that I am looking for men's polo
shirts made from organic cotton with a
200 GSM and shipping to the United
States
I'll throw in which color and style I
want but that's really about it that's
enough information for suppliers to give
me a quote you don't want to provide any
more details until you have a short list
of suppliers to choose from which we
cover in the requests for detailed quote
soon in terms of other requirements I
normally leave this plan but it's up to
you you can provide other information if
you want also you can enter a price
range but if you put a number that's too
low it made it as some suppliers from
submitting a code I again normally leave
this blank now I usually leave the
payment set to the default value here's
its DT which stands for bank transfer at
this point it doesn't really matter what
you select because you are going to talk
about payment terms as we discussed I am
NOT going to select the value added
services and that's pretty much about it
once you are done you can click Submit
and you can expect to receive quotes in
about 12 to 24 hours as you can see the
buying request process is pretty
straightforward but I personally don't
use it too often the advantage of using
this service is that you can save time
and occasionally you find good bargains
you save time because in theory your
code request is blasted out to thousands
of suppliers who go through all the
details that you provide before they
submit a code but in reality what really
matters is suppliers based their code on
the title without reading all the
information so from my experience close
to half of the all submissions turn out
to be junked now you can get good
bargains because suppliers do submit in
RFQ are actively seeking new clients
which could mean that you are willing to
negotiate on favorable terms but if I
find that I use the buying request the
people who provide quotes aren't always
on a mochi supplier many times they are
buying agents that being said don't let
my personal experience deter you from
trying a buying request remember the
best way to learn is through experience
and since it doesn't cost anything go
ahead and give it a try the buying
request process is it all that different
from the manual way of searching after
you receive a few quotes is different to
follow the same process after you
receive a few quotes it's important to
follow this
process start by asking for more
information in the form of an RFI then
filled out the suppliers and asked for
detailed codes once you find two or
three suppliers you like bargain
negotiations which I will cover in the
following sections negotiating you found
a product collected codes and now you're
ready to make your first purchase but
before you do that you need to negotiate
a final price with your supplier as
buyer we always want the lowest price
but sellers will always try to get us to
pay more so how do we find a balance in
this lesson I'll give you the exact
strategy I used to negotiate the lowest
possible price for any product now
before we start I should point out that
the only way to get better at
negotiating is with experience it takes
practice and patience to become a good
negotiator and there's no right or wrong
way to do it so I encourage you to use
these tips but also to craft your own
strategy one that you are comfortable
with these are the rules I follow when
negotiating on Alibaba the first rule is
one that I mentioned numerous times
everything on Alibaba is negotiate able
there is no such thing as fixed pricing
if you see a product or supplier that
you like but the FO b or the mo q on the
product page is too high don't be put
off by it because you can negotiate the
FO B or mo Q along with everything else
you see on the product page rule number
two never fail or never fall in love
with the supplier because there's always
someone else who sells the exact same
product I can think of a single product
category on Alibaba for which there are
current hundreds of suppliers so never
think I have to buy from this company
because they are the only ones who sell
this product it's also worth mentioning
that you shouldn't ever feel pressured
to buy from a supplier if at any point
if you can uncomfortable simply walk
away because the supply is always
greater than the demand rule number
three don't be intimidated by that I
mean they won't worry about offending a
supplier with an offer what's the worst
that can happen they say no at which
point you make a counteroffer or find a
different supplier also if you are not
the owner of an established business
don't worry about being ousted
the famous saying is intrapreneurship is
fake it til you make it
rule number four negotiating is not set
it and forget it
in other words don't think that
negotiating a final price will happen in
the course of a few minutes it really
requires a lot of back-and-forth with
your supplier and both parties need to
be compromising and a little bit rule
number five before you're standing over
sharing have a target priced in mind you
should write down three things the f OB
and moq you want therefore B and moq you
think you can get and therefore B and M
will Q you are looking to accept them
letter being the maximum price you are
willing to pay for a product when you
being negotiating or begin negotiating
you start by asking for what you want
and work your way up for what you are
willing to pay I'll explain how to do
this with a real example in the
following lesson
rule number six and this is fairly
obvious
what goes up must come down the
relationship between ml q and f OB is
inversely proportional the more products
you order the lower the price per unit
but if you wanna order less products you
have to pay more per unit rule number
seven the other supplier this is the
oldest trick in the book and even though
every seller knows about that you're
bluffing when you say the other supply
is offering it for less it still works
the key is to turn this line so it has
maximum impact you don't want to use
this too early because it's too obvious
the trick is to save this line until
there are very end after the supplier
has invested in his or her time talking
to you and negotiating and finally rule
number eight use the wait-and-see
approach a good way to judge how much a
supplier really wants to make you an
offer
and see how it long it takes them to
respond and how often they follow up if
they respond to you every may email and
message immediately either they are
great at customer service or they are
not busy you can tell if a supplier
wants you as a customer if they send
multiple emails and text messages after
you make a firm offer I once had a
supplier send me four emails in seven
text messages in a two or window when I
didn't respond to an RFQ I received
later I leveraged this information to
drive down the price of my order so now
that we have covered the rules of
negotiating on Alibaba let's
on to the next session where I'll show
you how to negotiate the supply using a
real example now that we have covered
rules of negotiating let's see them in
action I always say that negotiating
with suppliers in China or other parts
of the world is like a heavyweight
boxing match it's not always that the
first person that wins it's the one who
can outlast his opponent by wearing them
down if you don't mind paying full price
or don't have time to hangul then
negotiating is simple the supplier will
make a new offer and you would take it
or leave it them or give him a
counterproposal but if you are truly
want the best price you need to be
patient persistent and have the stamina
to all-class your supplier the
negotiating process can be broken down
into four stages stage 1 stage 1 is the
initial offer this is where you and your
supplier threw out unrealistic offers
and hope for the best stage 2 stage 2 is
where you actually exchange several
offers but the text message or email or
come to an agreement
stage 3 we're negotiating the sample
price and finally in stage 4 this is
your leverage the sample to lower the
final price I'll show you how each stage
works in the following example here we
have a supplier who's listed moq is 200
pieces with an F Obi of $12 meaning that
you're gonna pay $12 per share if you
are the 200 shirts for a total of 2,400
dollars plus shipping the 350 dollar you
see here is the price per share if you
order more than 200 units in fact that's
probably the price of your order if you
order two thousand shirts now if you
follow the steps from section 5 your
supplies should have provided you with a
detailed code with numbers that that are
quite different from what we see here
now this is real case study from one of
my purchases through Alibaba the product
was different but the fo b and mo q were
almost identical that's why I choose
this ik product as an example so you can
use this as a blueprint when they go
sharing with your suppliers the first
thing I did was wrote down three
combinations of fo bees and mo cues
remember you always want to have a
target in mind when entering
negotiations the first was the price I
was hoping to get a hundred piece for $6
each basically I look what the supplier
was offering and cut it in half
ambitious absolutely but you have to
start somewhere
so might as well aim high a load
depending on how you look at it next I
wrote down my target price at 12:1
20-piece $4 9 each I based this on two
factors first I shopped around and found
comparable products and suppliers and
basically took an average second any
research showed that I'll be able to
sell this product for around $20 I'll
take it
so if I am paying $9 per product after
factory the cost of shipping innovative
advertising I would end up close to 100%
profit margin and last but not least I
wrote down my upper limit or maximum
price this was the absolute highest I
was willing to go with this supplier in
125 units for $10 each before you start
negotiations I encourage you to write
down three prices in a similar fashion
best-case scenario or lower limit your
ideal or target price and maximum or
upper limit price remember never enter
negotiations without having a set price
in mind one thing I forgot to mention in
the rules of negotiating is that however
all else suppliers care about one thing
and one thing only and that's revenue
you can play with the F OB and I make
you all you want but at the end of the
day what the supplier wants to know is
how much money they will make in the
deal in this example the supplier was
asking for $12 for 200 units giving him
a total revenue of $2,400 had I offered
him a dollar for 300 units they would
accept it immediately because their
revenue remains constant so when you are
coming up with the different pricing
models for your upper and lower limit
always base your numbers on how much
revenue the supplier will make let's see
how are we near impacted negotiations in
the case study the supplier kicked off
negotiations with an initial offer of
$12 for 200 units giving him $24 under
$1 in revenue I countered with my lower
limit $6 for a hundred pieces
a total cost of $600 to me as you can
see we were worlds apart
of course I knew there was no way he
would accept this offer but the trick to
negotiating is to start low and to work
your way up
once we exchanged initial offers the
supplier and I basically became texting
buddies
we began messaging through whatsapp and
talked everything from kids to work to
what life was like in China we started
to from a friendly relationship
he made his next offer at $10 for 200
units but now the supplier has invested
his time in me we had build the
relationship and he felt confident that
I would place a large order in the
future this is where I introduce the
other supplier and countered with the my
offer which was 150 units for $9 I let
him sit on that for 24 hours I didn't
respond to emails or text I just hold
told him I am really busy and they are
so later I messaged him to let him know
that I was a will available to talk and
that's when he made his final offer a
165 unit for $10 each which amounted 16
hundred and fifty dollars I accept it we
had a deal now if you notice I was still
exceeding my budget my goal was to spend
no more than twelve hundred and fifty
dollar to get a 125 units but here I
just agreed to spend an extra $400 the
reason I accepted this offer was because
one I felt confident this supplier would
meet my standards and I was okay paying
a little bit extra for quality - I still
had one more crack at hitting my target
after I received my sample up until now
all I did was negotiate the price if I
went ahead with the order that's a big
if remember one of the rules of using
Alibaba is to always order samples
before placing a large order do not I
repeat do not pay for products until you
seen a sample in this case and for every
after other I have order products
through Alibaba I agreed to the price
and quantity in principle but the
payment is contingent on me approving
the sample product I make it clear to
supplier I agree to your price but I
will pay after I see the sample
negotiating samples
in the lesson I will show you how to end
how much to pay for samples the first
thing you know about our example is that
supplies need making them for obvious
reasons there's a cost associated with
making samples especially if you're
ordering things that require tooling
dyes malts or special assembly there's
also the risk that in the end the
customer may not even our end up
ordering the product so it goes without
saying that if you want a sample you're
going to have to pay for it and
oftentimes it can be costly if you're
sourcing off-the-shelf products such as
shoes clothing sunglasses toys and etc
then the sample cost isn't too high for
example if the negotiated fo b and moq
for these shoes is 100 pairs for $20
each
then the sample cost of ordering one
pair will be anywhere between 20 to $30
because the supplier doesn't have to do
anything they probably have a bunch of
extra shoes lying around that they can
use for samples but if you are creating
a customized product where the supplier
has to invest time resources and maybe
even buy a special equipment then the
cost can get out of the hand quickly
take for example his ladder backpack if
I ask my supplier to customize it for me
by adding additional pockets changing
the zippers getting a special colored
leather the supplier has to buy all
these things and more often than not
they have to buy them in bulk so of
course they will pass cost on to me
which is only fair
so even if I negotiate an mo kio 500 and
an fo B of $100 for my custom bag the
supplier will charge me a premium to
make a sample in situations like this I
have paid two or three times of the fo B
price which is totally worth it if I'm
going to spend thousands of dollars on a
product I will happily spend a few
hundred more for a piece of mind now if
you are sourcing products that are
inexpensive to produce and you are not
sure how much to pay for assemble a good
way to find out is by asking your
supplier if they have an Aliexpress
store if not you are not familiar with
early expert is basically a spin-off of
alibaba.com but unlike Alibaba where you
have to buy products in both Aliexpress
is for single unit purchases like any
other e-commerce site
suppliers sell on Alibaba and Aliexpress
so always ask you supply if they have an
Aliexpress store and if they don't want
to tell you then just browse for similar
products on Aliexpress and use that as a
basis for negotiating the sample price
on a side note if you're sourcing or
considering ordering products for
Aliexpress be prepared to wait it's
taken me anywhere between one week to
three months to receive products and
remember Aliexpress or Alibaba is not
Amazon if the supplier sends you the
wrong size you can't send it back I
should also point out that many times
you will see knockoffs products on
Aliexpress a products that our supplier
is not really authorized to sell I once
ordered a sample to Aliexpress and the
supplier sent me my competitors product
it had their name company formation even
their packing now if they were me I
would be furious my competitors sold
this product for $100 in the United
States and I just ordered it to
Aliexpress for $40 of course if you are
safe shopper this could work to your
benefit but whenever I create a custom
or a private label product always add a
clause in my contract that forbid the
supplier from showing my product to
anyone or selling it on Aliexpress and
even that is not foolproof sampler are
always always free what I mean by that
is you will be credited back whatever
amount you spend on samples for example
if you're sourcing shoes and you agreed
in principle to order 100 pairs for $20
each the total value of your order is
$2,000 now we learned in the previous
lessons that F will be moq and the total
price is agreed upon in principle it's
contingent on the sample now if you
supplier is asking for $50 sample and
here are the four samples that's a total
of $200 that $200 will count towards
your bulk order meaning you will all be
over 18 and $1 instead of the full
$2,000
cost of shipping and samples shipping is
expensive there is no way around this
when you order bulk products you have a
few products and few options but when it
comes to samples don't complicate things
use DHL is the fastest most reliable way
to get your products most often you will
receive the product in three days no
matter where you are in the world it's
in its
an expensive matter but you don't have
many option at this point
oh and in case I didn't mention it
before shipping is never included in the
sample price so in the example of the
shoes your supplier will charge $50 for
the sample and anywhere from $20 $200
for shipping shipping shipping can be a
buzzkill
far too often people can overlook the
cost of shipping only to found out at
the last minute that even though they
got a great price for a product the
shipping cost will catch up their entire
profit margin take this whole boards for
example the listed moq nfo B is 10 units
for 150 $5 for a total cost of 1500 and
$50 but the ship 10 Hoover boards is
expensive in the vicinity of $500 to 7
at all so after taking into account the
shipping costs the true price per unit
for these hoverboards is around to $25
per unit that's a big difference from
one $55 to 2 to $55 now if this whole
board is retaining or retailing for $300
on Amazon then instead of earning a 50%
margin now you will only make around 28%
taking into account Amazon fees and
other costs your profit margin will be
closer to 20% so it's important that
whenever you evaluate a product for
profit ility make sure to take into
account the cost of shipping I mentioned
earlier that when you're starting out on
Alibaba big products that fit in a
shoebox one of the reasons I said that
is because of shipping costs generally
speaking products that fit in a small
box have manageable shipping costs both
in terms of your receiving the products
from your supplier and also for sending
them to your customers when it comes to
shipping products from suppliers be it
in China or anywhere else
you basically have only two options ship
by air or by sea shipping by sea is
ideal if you are buying products on
large quantities I'm talking hundreds of
thousands of units at a time of course
when you ship by boat the lead time tend
to be much more longer compared to the
air usually in the vicinity of 20 to 30
days also it's not reliable as shipping
by ear if you are ordering smaller
quantities then you are better off
paying for express shipping but
here is quick easy and reliable and it's
essentially hassle-free the product
leaves the supplier Factory and it
arrives at your doorstep within a few
days let's look at ocean free an option
in order details we have seen this term
before fo b stands for fried on board if
the price you pay per product including
the transportation cost of the product
to the nearest shipping port or airport
but it does not include the cost of
getting the product to you that is
separate for example if you order
products from a supplier who's located
in Shenzhen China the supplier will need
to get the products to the nearest port
which may be several miles away it may
not be even simple operation that's mean
that means they will need to drive it
there or have a company pickup for the
products and take it to the port the FO
B includes the cost of getting those
products to the port but it does not
include the cost of transporting abroad
a ship or pipeline if you want the total
price of shipping include the cost of
transportation in delivery to your
location then you need the D AP or
delivery at applies price this is the
total cost of shipping
including the fee onboard the ship and
the land delivery for example you
purchase one thousand units of product
for a ten dollar each
the supplier arranges delivery of the
product from their factory to the
nearest port so for the FO B covers that
cost but now it needs to be put on a
ship and sent to Los Angeles and from
Los Angeles it's put on a truck and
delivered to the final destination let's
say it's settle United States the second
leg of that trip from shipping port to
the final destination in settle is what
you the buyer are responsible for paying
that is the D AP price in order to
calculate cost of shipping you need
three pieces of information from
supplier the first is sweet and it's not
the weight of the product but rather of
the entire package in which the product
is being shipped in util e weight is
measured in metric units which is
kilograms the second thing you need is
volume and once again it's the volume of
the entire package not the product most
products are shipped in a square or
rectangular boxes so the volume is
simply length times width times height
of the product and again is standard
practice to use metric units which four
volumes in meter and could be
meter and finally you need to know the
port from where the package is being
shipped to where it's being received
most products from China heading to
United States start in Hong Kong and
arrives in Los Angeles or Miami and then
they make their way to their final
destination once you have all this
information you can start the process of
getting calls from Shi shipping by sea
if you choose to ship by sea you have
three options like the supplier take
care of everything
hire on file for any company or user
ababa logistic services the first option
is to let your supplier handle
everything and it's probably the easiest
method if you want the all-inclusive
price of a product including shipping
then remember you need to ask for the da
P or delivery at place price and not
just the F OB f OB doesn't include
shipping you also need to make sure that
your supplier knows how to fill out all
necessary paperwork for customs I'll get
into customs in the SAC section you will
need a bill of landing from your
supplier the Bill of landing is the most
important document when shipping by sea
is basically a received that containers
or contains all the information about
your shipment including what's in it the
value and the materials very important
with our Bill of landing the carrier or
the port will not release your shipment
when it arrives and finally I always
recommend this regardless of shipping
method always ask your supplier for
pictures of the shipment not the product
packaging but the actual box it's being
shipped in that's the exact that way you
know the condition of the shipment
before it leaves the factory and if you
are not satisfied with alwey everything
is bad you can ask for the
reinforcements the second option is hi a
fried forwarding company a frightful
raiding company is that handles all the
logistics of shipping including finding
a carrier doing the paperwork and
arranging for pickup and delivery if you
go the frightful trading route then make
sure you hire a reputable company I have
learned the hard way that there are
thousands of fried forwarding companies
in every country and just like on
Alibaba
you just agents an actual supplier so be
sure to hire the company that does the
work themselves without subcontracting
out to someone else to find a good fried
forwarder ask a local business who
use don't trust the reviews you see in
directories because they are all fake
finding your own fire forwarding company
can be a bit tricky especially if you
are inexperienced in the field and
alternate to finding your own carrier is
to use early Baba logistics services
basically Alibaba has a list of carriers
that they work with you simply enter the
details of your shipment and Alibaba
will give you a quote if you like the
price you sign up and they handle the
rest
the service is easy to use but as you
can see it's not cheap and it's not only
available to suppliers in mainland China
of course you can use the service to
collect quotes and then negotiate better
terms when the shipping company contacts
you so those are the 3 or 3 main option
for shipping by sea my recommendation
avoid the hassle and let your supplier
handle shipping in terms of cost the
general rule of thumb is that you are
going to pay anywhere from $100 to $200
per kilograms and sometimes you may get
stuck having to pay extra fees for
docking storage and clearance that's
just another reason to use a reputable
company who knows what to do if your
shipment is held hostage by the Port
Stanley banks for door-to-door delivery
can be anything from 20 to 40 days if
you want to learn more about ocean
freight use these links which are
provided in that course notes now the
alternative to shipping the sea is to
ship by ear
it's most expensive but it's faster and
more convenient when shipping by air
you'd basically have two carriers to
choose from DHL and if your supplier is
in China China Post DHL is like FedEx or
UPS but they specialize in international
shipments not domestic cause depends on
weight and volume and can be anywhere
from $40 to $50,000 typically delivery
time for DHL shipment is three days
door-to-door DHL is very reliable and
they provide full tracking they also had
all the paperwork for customs if you
have to pay duty to Texas they will pay
it for you and then send you the bill
with all the transparent paperwork now
if your product is coming from China you
can have it shipped by china post or
sometimes referred to as a post
this option is available for small
packages prices range from $5 to $10 for
packages that weighed less than 10
pounds or $20 to $40 for slightly larger
shipments
transit times go anywhere from seven to
thirty days and while it is cheap China
pulse is not that reliable you don't
even get a tracking number
they don't really handle customs
paperwork to learn more about China Post
visit this site finally I will leave you
with this tip on shipping if you are
ordering products from different
suppliers consolidated all use products
at a central location for example if you
are getting box is made in one city and
parts in another use a domestic carrier
to have everything shipped to one
factory so they can send all the product
at once you can even have personal items
shipped to a factory and just ask them
to pack it together with your shipment
domestic shipping in China is really
cheap use a company like SF Express to
handle domestic shipping it will save
you a lot of money the most stressful
parts of sourcing products from
suppliers on Alibaba is the payment
process everyone no matter the
experience level has some level of
apprehension when it comes time to pay
for products the concerns are what if I
pay and the supplier fails to deliver or
what if they did understand what I was
looking for or did it understand
actually then I just waste all my money
I can tell you right off the bat that
there is no such thing as a hundred
percent fail proof method for paying
suppliers however in all the years that
have been sourcing products Raleigh Baba
not once has the supplier run off with
my money in fact I've been scammed more
times in my own City and country than I
have ever been scammed on Alibaba have
there been disputes yes of course but I
have never had to report theft or fraud
of any kind when it's time to pay your
supplier you have four options
Alibaba escrow or Ali pay people TT or Y
transfer and Western Union Ali pay is
always my first preference but
unfortunately it's only available for
Chinese suppliers I'll explain how it
works shortly but basically you use your
credit card to pay suppliers like you
would on any other ecommerce site Ali
pay also offers a guarantee that the
products would be delivered on time and
as advertised
if you can't usually pay then the next
best all mode of payment is to use
people the good thing about using PayPal
is that it
be linked to your bank account or credit
card and Israeli safe to use the third
option is tt which is another way to say
bank to bank wire transfer Y transfers a
simple and banks charge a flat fee to
use the service so it's ideal for large
soldiers the final option is to use
Western Union which I recommend avoiding
it should only be used as a last resort
if your supplier can't accept a leap a
PayPal or your bank doesn't allow wire
transfer to certain countries how alipay
works if you wish to pay your supplier
with a credit card then the best way to
do it is to use le pay start by
negotiating the final price of your
product including shipping once you have
agreed on all the terms simply ask your
supplier for an LEP or Alabama invoice
they will send you a link to page that
looks something like this from there you
simply put in put your credit card and
follow the on-screen instructions it's
not much different from shopping on a
regular ecommerce site the difference
however with a li pay is that your
supplier won't receive their money right
away it's actually going to sit in an
escrow account here's how it works
after you make a payment using your
credit card Alibaba charges your card
but it keeps the money in their bank
once you receive the products Alibaba
the supplier will send you an email
asking you to release the funds once you
approve it Alibaba will then pay that
your supplier the benefits of escrow and
pretty obvious it's fast easy and
convenient you don't need to do anything
other than a valid credit card it also
comes with a guarantee of non-time
delivery and equality but I use the term
currently very loosely in terms of
drawbacks
Alibaba charges suppliers a 5%
processing fee which inevitably is
passed on to you the customer so on a
$5,000 order you can expect that the
supplier will ask you to pay the to $50
payment processing fee or they will just
build that into the price of the order
the other downside of using any pace
that it's only available to suppliers
who are based in China so if you have a
supplier in another country this system
is not available to you and finally even
though your money is held in escrow and
Alibaba provides a satisfaction
guarantee
getting refunds or holding on to funds
in escrow is not easy even if you don't
authorize the release of them
the supplier will get paid and it will
be up to you to file a dispute I'll
provide more information on this in
section 9 for now let's move on to the
other payment methods
starting with people if you wish to pay
supply using people you can send them a
direct transfer by email or simply
asking them to send you an invoice most
suppliers on Alibaba accept people even
if they don't deserve it or advertise it
I mean people is convenient and safe to
use but a supplier is charged a fee for
using the service in people's case it's
around 3% that means on a hundred
thousand or 1000 order you supplier or
your supplier will be charged $30 and
most of the time they will ask you to
cover those fees unfortunately PayPal is
not accepted in all countries
it works in China but not in other
places like Pakistan and Bangladesh I
usually use PayPal for smaller orders
usually with a value of less than $5,000
and also almost always use people to pay
for my suppliers or samples DT which is
an abbreviation of telegraphic transfer
basically it's a white wire bank
transfer most bank charges between forty
to sixty US dollar for doing a wire
transfer now since it's a flat fee you
can use this as a bargaining chip in
your negotiations for example if you are
placing an order of $5,000 and you use
any pair paper that would cause the
supplier to $50 and fees but if you use
a bank transfer you are paying the wire
transfer fee and saving them money so it
makes sense that they give you a small
discount now to $50 on a $5,000 order
may seem insignificant but think about
it this way the $200 to $50 can cover
your duty or tariff costs with the
exception of few places you can wire
transfer money to just about anywhere
all you have to do is to go to your
local bank and give them your suppliers
bank name and account number and a
routing number the best use for the wire
transfer is for large orders when you
are starting out I recommend you use a
lipe or people and once you have
established a relationship and you have
ordered from your supplier a few times
then you are ready to place a large
order and it makes sense to use bank to
bank wire transfer the final payment
method is my least favorite and that is
Western Union all suppliers no matter
where they are in the world
except Western Union it's like paying
cash I award
Western Union because there is no real
proper trail and is the choice of many
Asians and low-level suppliers however
in certain countries they don't accept
LEP or people and bank transfers so you
have no choice
now regardless of which of these payment
methods you use just remember there is
no assurance or insurance there is no
refunds and there are no real guarantees
so with that said here are a few tips to
Mesa 8 the risk if your supplier
is in China and incites you that you pay
using Western Union walk away all
reputable suppliers in China except
PayPal or a leaping at the minimum they
accept a wire transfer in other
countries like Pakistan and Bangladesh
payment options are limited so it's ok
if they ask you to pay using Western
unions otherwise it's still not a good
sign all suppliers require 100% payment
before the ship your product
no one will ship products before they
are paid in full in other words you
can't say that I'll pay you half now and
half when I receive the products it
doesn't work like that on Alibaba but
that doesn't mean you should pay
everything in one shot when negotiating
with your supplier always break up
payments in three stages and let them
know you want to do this early on oh you
really give a 25% down payment to start
production then pay 50 percent after I
see pictures of the product and I pay
the balance when the products are ready
to ship this way if I see that there are
any issues along the way or I just want
to cancel my order
I don't lose all my money of course your
supplier won't like this they always
want hundred percent payment before they
start production but remember one of the
rules of using Alibaba is that supply is
always here to then demand so if your
supplier doesn't agree to this find
someone else who will and finally get
everything in writing the white
surprises make sure you and your
supplier have a clear understanding of
pricing before you make your first
payment if you make a mistake of paying
for everything up front in one shot your
supplier might come back to you during
production or prior to shipment and
asked to cover additional unforeseen
expenses
always get the absolute final price
including all fees and surcharges and
shipping and writing before production
starts so with that said we wrap up the
section of shipping and payments in the
following section I'll explain how duty
in tariffs work and in the next module
Alex
to combine all this information to close
the deal now if you have any questions
please ask on a private group I do my
best to answer right away but by posting
questions you also benefit other course
members tariffs in lesson 7 point 1 we
talked about how shipping costs can
significantly lower your profit margin
even if you get a great price on a
product the same price goes for tariffs
if you're not careful duty which is
another word for tariffs will not only
eat away all you imagine you may even
end up taking a loss so what is beauty
duty the form of tax which your
government imposes on you when you
import products from another country why
did they do this to answer this question
let's say you lived in New York City in
the United States and you want to start
a t-shirt business you have two options
buy local or buy from abroad your first
option is to buy custom-made pieces from
a supplier in China for $5 each the
second option is to buy a similar
quality t-shirt from a supplier in Los
Angeles for $7 each if you're ordering a
thousand t-shirts
chances are you opted for the Chinese
supplier because you had save around
$2,000 this is where your local
government steps in and charges you
attacks for choosing an international
supplier over a local source the common
wants you to buy local products because
great it creates jobs keeps the money in
the country and they collect more taxes
let's look at the breakdown of the true
cost after you pay duty if you were to
order tea shares from China with an Mo
Kio of 1000 for an fo B of $5 each your
total cost would be around $5,000 say
shipping is another $2,000 so now you're
up to fifty two hundred US dollars now
fact place duty which is for your
product which will cost your own $800 so
your grant order the $6,000 now let's
say what happens if we're to source a
product a comparative or a comparable
t-shirt from United States at $7 each
since the domestic shipping is cheaper
and there is no duty your granddaughter
would be around 700
which could be going farther to the
$7000 certainly you're not saving as
much money as you were before and the
question is do you want to save a
thousand dollars or do you want to
charge more for your products and
promote the fact that you sell made in
USA t-shirts so as you can see Duty is
there to level the playing field and
give local companies a shot at
competition with international suppliers
so how's the tariff calculated every
country has a unique formula for
calculating duty but for the most part
it depends on three factors the country
of origin of the product the type of
product you are importing and the total
value of the goods you are bringing into
the country the country of a region
plays a large role in the calculating
tariffs a t-shirt from China will be
taxed differently than a t-shirt from
Bangladesh you gamma negotiates tariffs
with other countries based on their own
treaties for example under NAFTA the
North American Free Trade Agreement the
United States has an agreement that most
goods flowing in from either Mexico or
Canada are duty-free meaning if you are
in United States and you're importing
deserts from Canada you wouldn't pay any
guys that's not the case if you're
importing t-shirts from China or
Bangladesh tariffs are also calculated
based on the type of products and the
materials that are used to make the
product a plastic toy from China could
be taxed at 5% various leather boots
from Italy could be taxed at 7% again
the local government decides these cost
pays on a number of factors so before
you import products make sure you have
an idea of how much you would be paying
in terms of theory use this website to
get an estimate but just remember it's
not a hundred percent accurate
here are a few tips for working with
tariffs your supply can tell you how
much duty you have to pay since they
don't know which country and the stock
tax laws you are being followed or
applied at you for the most parts duty
is hit or miss on small orders you may
have war attack being taxed but on
larger ones it's almost certain that you
will be if you have to pay duty you will
get a bill from your carrier or you will
have to pay at the port of Rio do your
homework know what you're importing and
understand which materials I used to
make the product if you are importing
teachers
you would know and you should know that
the material is cotton or polyester
since a cotton t-shirt could be taxed
differently from a polyester one you
should also have a working knowledge of
your country's import laws for a type of
product you're importing check your
government website all the information
should be there it is thoroughly a free
shipment because the total value of your
shipment is a major contributor for
calculating duty some people instruct
the supplier to put a lower value of
shipment in order to avoid paying taxes
now there is no mathematical formula for
calculating the true value of the
product so if you say the value of your
t-shirt is $3,000 instead of $5,000 then
you probably won't get much resistance
from the person inspecting your package
but if you say the value is only $1000
the customs agent will probably reject
it because it's unreasonable and you may
end up paying a penalty you need to be
careful when you declare the value of
your product use common sense use a
reputable fright forwarding or shipping
company I mentioned this in the shipping
lesson if you're shipping by sea make
sure you use a company that has an
experience and can help you fill out the
paperwork and provide guidance on things
like duty in tariffs if you ship by ear
then DHL is really good at the sins they
are specializing and specializes in
exclusively international shipping and
finally in the example I provided on
duty I demonstrated how sometimes the
difference in ordering from an
international supplier may not be as
beneficial as opposed to ordering
locally but I should mention that while
in theory it sounds nice to say that I
sell products that are made locally in
reality research has shown that most
people don't care where the product is
made from for products with a similar
level of quality price is always the
driving force behind people the decision
to buy so don't think that buying and
selling local you'll make more money
always go for the cheaper option even if
you have to pay duty if you are saving
money go the international Road in
module 8 i'll show you how to combine
all the information we have covered in
modules 1 to 7 to close the deal but
before i do that let's take a moment to
recap what we have covered up to this
point now I've structured the course in
such a way that it will
from a ground up I started with the
fundamentals and I want to end with use
having the confidence to place an order
with your supplier with minimal risk if
you haven't followed the order that's
okay because the information we covered
in relevant no matter how you apply it
I started the course by asking you to
pick a business model so that you have
an idea what how to sell products next I
showed you how to sell Misha products
remember anyone can buy and sell but if
you want to run a successful business
then pick products that target a
specific customer base next I showed you
how to find supplies in module 5 and how
to negotiate with those supplies in
module 6 I then took a slight detour in
module 7 to explain how shipping and
payment works I did that so that when
you are ready to close the deal you have
all the information you need including
how to pay suppliers and arrange for
delivery now before we move on to the
next section I want to quickly remind
you what the typical or optimal buying
process looks like again you don't have
to follow this method it's just a way I
do things and I have had success with it
I start by picking a product and
identifying a few suppliers from there I
go through the RFI and RFQ process RFI
is request for information I asked for
the suppliers to provide me with this
some basic stuff like general pricing
moq and some technical specs
I then narrowed them with my list of
potential suitors and request an RFQ or
request for court here I tell the
supplier what I want
how many pieces and hike I try to get an
idea of realistic fo B once I filter out
75% of the coats I picked three to five
suppliers and make my initial offer next
I start negotiating with the suppliers
who are serious and are willing to work
on my terms once I reach in tentative
agreement I request and pay for samples
and this is kind of where we left off in
module six in this module I'm going to
cover the final stage of the buying
process which is to negotiate the final
price and close the deal evaluating
samples and for asking for extras in
module six I showed you how did he go
she ate with suppliers the product I use
is an example was men's polo shirt my
target price for the product was 125 moq
at $10 fo B I ended up agreeing in
principle to an mo kio of 165 at an fo B
of $10 which is around 4
more than I wanted to spend but if you
recall the had a clause in my contract
that deal with contingent on my approval
of the sample I also said that I had one
last crack at lowering the price after I
received the cent I went ahead and paid
inflated price to have a few samples
made I used PayPal to pay the supplier
and had the shirt shipped to me my 3d
expressed delivery using DHL
in the end the suppliers charged me $15
for each sample and shipping was an
extra $50 total now of course you don't
have to follow my methodology the
important lesson is that you always need
to order samples before placing an large
order you then use the sample as
leverage to lower the price of your so
you receive your sample no what you
always need to thoroughly inspect your
sample and note down everything that
needs to be corrected or adjusted no
detail is inconstant canceled in
consequential actually here is a
real-life case study of a hockey jersey
i ordered from a supplier in pakistan in
case you were wondering these jerseys
retail for about $65 to $70 each my cost
per unit was $20 including shipping when
i started working with this supplier i
created a very detailed technical
document i took about 30 pictures
created graphics showed him different
website and a lot more but despite my
best efforts Uprising lee when i
received the sample the GRC was kind of
a mess so here's what i did to ensure
the supplier fixed everything that
needed to be corrected and highly
recommended that you do the same instead
of telling the supplier in an email what
needed to be fixed
accredited we will talk with visuals
remember English is not your supplies
first language so use pictures and
graphics whenever possible it's true
what they say a picture speaks a
thousand words as you can see here the
logo on the back of a Jersey was in the
wrong location so I showed him exactly
where to place it the number was too
high and too wide this was my default
because I assured him given exact
dimension in my technical document I
didn't think it would be a problem but
as you can see it was for some reason he
didn't understand that I didn't want a
link of my website on the front of the
Jersey also the logo wasn't in the right
location
it was protruding on the collar collar
you could think their quality control
would catch these mistakes but the math
that but he must have been asleep now
this was a major problem the sleeve were
too short so I had to tell him to
elongate them by one inch I took a
picture and used an arrow to show where
the sleeves shouldn't here's something
that was strange now the supply used
black stitching everywhere except on the
collar there is no way I could have seen
this coming
I mean why would a supply use a
different tread color in just one
location there are a few other things
but as you can see no matter how hard
you try mistakes happen that's why it's
important to always get samples imagine
I ordered a thousand of these jerseys
what would I do there is no way my
client would buy them in addition to the
sample technical document I also create
what I call as the supplier report card
basically this is the assessment sheet
that creates all my suppliers now I only
order samples from one supplier so the
others that you see here are completely
made now in fact this whole document is
completely fierce the only reason I
created it is so that I can give the
supply the impression that I am
negotiating with multiple manufacturers
now one last thing before you make your
final offer to the close the deal and
that's the extras if you plan on sending
products on Amazon or on your own
website or through a catalog you're
going to need a few things for example
if you sell watches then you need boxes
for the watch
you will need packaging you will also
need your good quality pictures boxes
packaging pictures sound like small
expenses but trust me they are up and
they are extremely expensive if you get
them done locally save yourself time and
money get all this done from your
supplier I should mention you should
only get the extras like boxes and
photography if your supplier is in China
otherwise their quality is really poor
here are a few tips for product
photography when asking your suppliers
to take pictures for you make sure that
they use a professional photographer in
a proper studio with samples natural
light asked for high resolution shots
from all angles and asked for close-ups
to capture product details also if you
are selling products that require an
action shot like watch then ask them to
hire a professional model it may cost
you $20 extra but that's a small price
to pay considering how much you would
pay for more locally and finally always
our suppliers to take pictures against
clean white background Venusian that way
you can easily edit the pictures and
Photoshop them as needed the other extra
you should get from China is packaging
and boxes chances are your supplier
won't have custom packaging so just ask
them to find a local supplier who can
make custom boxes and packaging or find
you own supplier for packaging through
our abhava and have them ship the boxes
to your primary supplier the point is
try to think ahead in account for things
you need to sell your products be it
boxes or photography just remember stuff
is cheaper in China closing the deal the
time is finally time to combine all the
information we have covered to close the
deal and order your products remember
negotiating is a marathon not a race you
need to outlast your supplier until they
meet your demands if you followed my
process then it means that your
successfully negotiated a price in
principle you received your sample and
you asked for changes or adjustment and
now is the time to make your offer final
your final offer letter should look
something like this of course you will
find this template in the course notes
and once again feel free to edit change
and use the elements you like and
discard what you don't think you need my
final offer starts with a simple
introduction that reinforces our
relationship thank you for making my
simple I have carefully inspected it and
I am satisfied with the quality there
are a few things that need to be
corrected or improved a few things that
need to be corrected or improved must be
mentioned later next I gave them a
feedback on the sample however - the
document that shows details of all the
things that need to be corrected before
we proceed with the order please review
it and tell me if you can make these
changes now the next part is optional
assuming your sample wasn't perfect you
should ask for a second sample but
instead of having this one shipped to
you you can ask your supplier to take
pictures and send them to you for your
final verification of course if you are
placing a large order then you should
fluff initely ask for a second sample to
be shipped to you so here I say please
make a second sample and send me
pictures you do not need to ship it but
I need to see many pictures to make sure
it's okay
notice that the English is a bit broken
I did that intentionally to keep things
simple as I have mentioned several times
English is not the first language of
your supplier next and this is the most
important part I make my final offer I
say I may also attach our supplier
revolution report
as you can see you are the best rated
supplier however another supplier has
agreed to lower their r4b to $10 and moq
to one $50 can you make this offer so as
you can see here's where the supplier
report card comes in handy
I made my offer and I point out some of
their mistakes in the sample and at the
same time I let them know that I have
another supplier on standby also I don't
ask them to be done as supplier just
match their offer this way I prove to
them that I really value them as a
long-term partner most of the time the
supplier will agree to your final offer
as long as it's reasonable not asked for
a 50% discount but if if 5 percent or 10
percent discount is reasonable finally I
invited it starting my final offer and
tell them that I am ready to pay
immediately if they agree if now it's a
supplier to decide if should accept my
offer or they should reject you should
give your supplier at least 24 hours to
respond and in that time we don't send
them any emails or messages one of the
three things will happen the first is
the best-case scenario you supply
accepts your offer and you close the
deal or your supplier says no at that
point you have two options you can go
back to the previous offer negotiate it
or you simply walk away if you don't
want to spend more time negotiating
simply email your supplier I'll tell
them you are willing to accept the
original terms if you choose to walk
away nine out of ten times the supplier
will send you a follow-up email or
whatsapp message with a counteroffer if
you like the offer accepted and close
the deal otherwise if you don't hear
from them within twenty 72 hours
send them another email and accept the
previous offer once you and your
supplier agreed on your price and mlq
it's time to create the final contract
to close the deal now I say contact but
in reality it has no local authority
it's more of a consolidation document
that serves as a point of reference for
you and your supplier your final contact
should include the following elements
the price and the quantity product
specifications this should be your
technical documents and sample
evaluation shipping information and your
variety here is an example of what the
final contact should look like I like to
keep the final contract really simple
and use bullet points where possible so
I say hi buddy I'm really happy that you
are will be our new supplier for polo
shirts I am looking forward to working
with your company for a long term here's
the procurement and improvement details
product price and moq as agreed please
proceed in making 150 quantity of polo
shirts the
my unit is $10 us and the total prices
product specification attached is a
separate document in the product
specification the document name is and
to your file name
I'm also tells the document I created to
evaluate the sample you sent me it's
called the name of your supplier
volition document I have also attach the
document you sent me to show me the new
sample with all Corrections you made
this should come from the supplier it's
the document that contains all the
pictures with the sample second sample
shipping as agreed you will ship their
product where DHL three days shipping I
will pay the cost of shipping which is
$200 or whatever it is for customs you
will say that the value of the shipping
is whatever value you want you will
carefully pack all the documents or
products in extra pairing you will send
me pictures of the product when they are
packed
please ship to enter that payment as
agreed you will send me an ollie pay
invoice please provide the link to the
invoice and include this document as
well as all technical documents in the
invoice or another example is as I
agreed you will send me an invoice and
I'll pay you our people
my paypal email is for example the total
price I would pay is as a great price
that includes the price of the product
shipping and extra pictures warranty if
the product are defective or damaged I
will return the shipment at your expense
all the products must be in perfect
condition if the shipment is damaged our
products are affected or done with the
requirements you will have to return
payment now don't be surprised if your
supplier objects to the last part about
warranty and shipment they will probably
say that they will send you pictures of
the shipping box or container but if
it's damaged in shipping its the
carrier's responsibility aside from that
congratulations you have just placed
your very first order from wali baba it
may have taken a while but I am sure you
will find it's worth and it will be
worth it third party inspectors so far
the material is the in this course is
based on the idea that you are new to
Alibaba and you're working your way up
to making full-scale purchase I'm check
talking a few hundred or even a few
thousand polo shirts shoes bags however
both sunglasses whatever your niche is
there is a difference between spending a
few hundred dollars as opposed to
investing thousands or tens of thousands
of dollars if you are placing your order
then I would highly recommend hiring a
third-party inspector to check the
entity and quality of your products
before they leave your suppliers factory
so why should you hide third-party
inspectors well if you're advertising
that you will solve wood products made
from sustainable forests forestry or
plastic models there are people your
load free well then you better make sure
that your supplier isn't taking any
shortcuts that's just one of the many
possible reasons to use an inspector an
independent inspector can help you
validate the quality of your products
your supplier in their facility
furthermore inspectors can check to see
if your products meets worldwide
standards like ISO 9001 which is a
global quality standard if you're
selling medical equipment or any other
product that needs to meet manufacturing
standards then it's really important
that you verify that your supplier is
adhering to these standards and finally
large orders mean that you're shipping
by sea and not by air if you recall from
article 7.1 when I spoke about shipping
sea freight is more complex than
shipping by ear so it's important to
have a reputable fridge forwarding
company but you should also consider
hiring a port inspector which or who can
help the paperwork ensure that the
shipment leaves the supplier port on
time the time inspection companies
should also work with the flood
forwarding company to handle logistics
and verify the contents of the shipment
when it arrives at your local port the
inspector can carefully examine your
products to ensure nothing was damaged
during shipping the cost of hiring
inspectors varies from as little as $100
all the way to a feel a thousand dollars
if you're important polish shirt and you
if you are import important policies and
all you want to do is make sure that the
manufacturer didn't screw up the size
color material then something like that
shouldn't cost more than a few hundred
dollars but if you want the inspector to
look into the factory their
manufacturing methods how much they pay
their employees etc then obviously the
price would be much higher since
additional sources will be required as a
rule of thumb your inspection cost
should be around three to five percent
of your local cost actually the total
cost so if you're ordering 5,000 units
at a price of $10 a unit your local cost
is $50,000 so an inspection fee between
1500 to $2,500 is reasonable again keep
in mind the more things you need
inspected the higher the price so how do
you hire inspectors and a surprise
here but Alibaba offers inspection
services through their website otherwise
feel free to use Google to find your own
company here's an example on how to use
the Alibaba inspection platform now
whether you're using Alibaba or other
services you're going to need to provide
the same basic information the location
of your supplier including the city and
the province
then dusty they serve the language they
speak and they're more important the
language of the paperwork and the type
of inspection that's needed do you want
a product inspection effective
inspection or both and of course you are
going to need to provide all the
technical information about your product
if you hire an inspection company
through Alibaba then simply follow the
same process as mine products start by
requesting information then get a detail
code then negotiate aggressively until
you reach an agreement when you close
the deal pay the inspector to LEP or
people just like you did then you audit
your products and remember get
everything in writing how to handle a
dispute in in a perfect world every one
of your products will be in perfect
condition when they arrive but the
reality is as hard as the supplier tries
they will never make a perfect match the
laws of manufacturing state that for
every lot of product made a small
percentage will contain some defects if
you order a thousand polo shirts is
perfectly normal that three or four
shelves will have some minor defects and
one or two may have significant flaws of
course you hired a third party inspector
then it's their job to read out these
defective parts otherwise you have to
accept that there is no such thing as
hundred-percent perfection perfect
manufacturing when your products are
right the first thing you need to do is
inspect every single piece now if you
place the large order then it's
unreasonable to check every order in
that case inspect at least 10% from a
random sample size so that means you
need to inspect ten units out of every
hundred make sure to inspect the
packaging before removing the content if
the packaging is damaged suck down open
it send pictures to your supplier and
ask them for an explanation
you should also count all the pieces to
make sure that the minimum order of
quantity is correct a large order of
thousands or tens of thousands of pieces
it's easy for a supplier to make a
mistake you should also consult your
technical document to make sure all the
product specifications were met that
size material color placement of logo
exit
and finally if you do notice defects
make sure to take plenty of pictures for
your records now as I said if you see
one or two defects from a lot of
hundreds that nothing to get concerned
about but then happens when you notice
more than just a couple what if then
twenty or thirty percent of the batch is
defective or non confirming then what do
you do if you recall from the rules of
using Alibaba refunds are basically out
of the question
once the supplier has your money they
are going to fight tooth and nail to
keep it that being said you do have a
couple of options if you sol share
products through Chinese supplier and
use all you pay to pay the supplier then
you may be able to recover some other
cost because a VP is funds
it's where funds are held in escrow and
they are only released once you approve
the quality and the time delivery of the
product in order to file a dispute with
Alibaba you need to make sure you have
all your paperwork in order if you
notice that from the sample you tested
that more than five percent of the
products are defective then go ahead and
inspect every single product if you can
next double check your technical
document and make sure you capture the
exact details which are in question so
for example if you are the red polo
shirts and the supplier sent you maroon
or dark current well you need to make
sure that you clearly stated in your
technical document which chair of the
red you wanted otherwise it becomes your
word against the supplier the Alibaba
end may end up siding with the supplier
the third step is the most important
before finding a dispute try to resolve
the matter amicably send pictures of the
defective products and ask your supply
to replace them for free if they
disagree most likely they will make a
Schmidt sure make free concessions Mike
offer to pay for shipping the part is
that isn't everyone's best interest to
avoid filing a dispute because it ends
up taking forever and it often leads to
both parties being upset now if all else
fails and your supplier is being run
reasonable then it's time for Forge
escrow and file a formal distribute with
Alibaba this is where it pays to use
trade assurance and grow suppliers since
Alibaba guarantees your purchase but I
should warn you it's not like Amazon
where you press a button and you get an
instant refund to resolve the issue may
take weeks or months and in the end
Alibaba may side with the supplier and
you'll get nothing to file a dispute
simply use the URL to file a dispute
too busy alibaba.com in the case where
you've order products from non Chinese
suppliers simply follow the same process
but remember there is no trade assurance
for non Chinese suppliers so there is no
chance that you will get a refund if
your order products from supplier in
Pakistan Bangladesh or any other country
other than China your best source of
action is to ask for a discount and
replacement order so for example if you
order 1,000 polo shirts in hundred K
more defective are the supplier to
replace the under defective for 50%
discount it may or may not work again it
comes down to your relationship with the
supplier if it's built on trust and
integrity they are more likely to work
with you over the long haul if you send
a scratching email tell them how badly
they screwed up they will simply ignore
you private labeling I have talked about
private labeling throughout this course
but I haven't really discussed it in
detail because private labeling is
really a topic on its own now that you
have a solid understanding of how to
research products and find suppliers
through Alibaba it's time to take the
next step and really put your knowledge
to good use buying and selling products
using arbitraged is okay when you are
starting out but if you really want to
build or grow your business then private
labeling is your best option it's good
simple and cost effective if you can buy
products from supplier in China or
anywhere else in the world then you can
create your own private label let's go
back and start at the beginning what is
private labeling or someone as it's
referred to as rightly being private
labeling is taking an existing product
and putting your own logo or packaging
on it that's it you may not realize it
but private labels are everywhere if you
buy groceries from a supermarket or
electronics from a big-box store or just
about anything of amazon chances are you
have purchased the private label product
here's an example i'm sure you're
familiar with if i ask you to name the
most popular laundry detergent brand in
the world you would probably think of
type if you buy your laundry detergent
from Walmart Target Costco or any other
retailer you have no doubt noticed the
store brand detergent which was can
click easily be identified by the
inferior packaging a low price laundry
detergent is one of the many examples of
commonly sold private label products if
you shop at Costco you have no doubt
seen their ticklin branded products
which is caustic oh all
level and their cell everything from
laundry detergent to breakfast cereal
otherwise labels brands you may be
familiar with include Kenmore E which is
Sears private label great value belongs
Walmart and insignia is Best Buy's brand
what do cost eco Walmart Best Buy Target
Amazon all have in common they all use
the services of a private label company
to sell products and that they are named
so when you see the store brand laundry
to set in at Costco is not like Kosta
co-owns a chemical factory somewhere in
Washington that pumps out gallons and
gallons of detergent and fabric softener
no there was supplier whose only
business is making laundry detergent
from other people other companies now
that supplier will make laundry
detergent for Kosta Co and probably ten
other companies using the exact same
formula the only difference is the
packaging the manufacture of the laundry
detergent will sell their product re
different reasons for a set price say
five dollar those retailers will then
turn around market the product for a
huge profit so why am I telling you this
because it wasn't long ago that if you
wanted to use the services of a private
labeling company you need several
thousand dollars to meet their minimum
order quantity but today thanks to size
like Alibaba the entire private labeling
industry has turned on its head because
with Alibaba you now have direct access
to thousands of suppliers from all over
the world who are competing against one
another for your business this means you
had no longer need thousands of dollars
to start your own private tipping brand
if you hundred is more than enough to
get you started so what you can label
privately simply put if a product is
made manufactured or assembled it can be
duplicated and made into private label a
common example on a question I asked is
his private labeling legal and dancer is
absolutely yes you are allowed to copy
products so long as the product product
isn't pretended and you are not creating
an exact duplicate furthermore with
private labeling you not the one
creating the product you are just
reselling it why should you create your
own private label product and why do you
want to what to do with it as I have
started if you are serious about
starting a business then you should be
selling products and a year on brand
name but why I mean why would someone
buy your product when there is so many
good other options available to answer
this question let's look at
if a lookup SmartWatch which is a really
popular tan these days I will find
hundred different watches including
those made up by pretty big companies
like Apple Samsung and people but if I
scroll down the page now I start to see
some other brands ones that are not
familiar with these are the private
labels the companies selling this
smartwatches
doesn't actually make it they use a
supplier name of somewhere in China
Korea who makes this watch and slaps on
the company's label the fact is the
demand for product is greater than
supply size like Amazon it's say IB need
people like us to feed them products the
same applies for brick-and-mortar stores
you need you may not realize it but but
retailers like Nordstrom mrs. Kardos
Target Walmart are always on the lookout
for new products and suppliers and it's
not just the big companies smaller
retailers also need new suppliers and
products so that they can offer their
customers more variety so don't think
that because you are new business
without a big downtown traffic or office
that you can't sell your products online
to the retailer's so why do people buy
non branded products well price is an
obvious reason generic products tend to
go to 10% to 30% cheaper than their
branded counterparts but it's more than
just pack price in fact if you plan on
competing on price alone you will go out
of business pretty quick brand value is
all about perception
just because you sell a private-label
product doesn't mean that you are
selling a more inferior product in fact
it could be very opposite ever walk into
a giant retailer and ask an employee
about a specific product most of the
time the person you're talking to knows
absolutely nothing about the product
they are selling but if you can offer
the same or a similar product but do is
better job of explaining the specs of
our better pictures product reviews
provide more technical details or just
do something the mainstream products
aren't then you are providing value to
your customers and they will see your
product and your company in a completely
different way now you have no longer
need to be knockoff brand now you are
the brand that really understands what
customer wants that's why private
labeling works is not just price to be
successful at selling private labels and
private label products you need to offer
better value there are few things
creating a private label
isn't much different from sourcing
products for retail arbitrage starting
by selecting a product which I converted
in module three and I'll repeat it again
as a refresher after selecting a product
finance apply then design a logo I'll
explain how to do that at the end of
this tutorial
order a few samples validate the product
and finally when you know you have a
viable product order large quantities
the goal of every private label product
company is to offers customers an
alternative to the mainstream brand and
to build your own private label into
reputable brand on its own in order to
do that you should pick a product where
you distinguish yourself from your
competitors as well as add value for
your customers now value is the eye of
the beholder and generally speaking it
doesn't take much to win other customers
if you antenna the suppliers are selling
the same product but your product has
better pictures more information and
better following or a larger falling on
social media guess who the customers
will buy from here you see 10 blenders
and the same model but all different
colors which one catches your eye which
one has a perceived higher value chances
are if you are a customer you will click
on a product which shows the application
of how to use this product my point is
don't think that you need to reinvent
the wheel to offer better value to the
customers it's the subtle things that
make it a big difference and finally
here is a tip for finding a good product
to private label go to amazon.com and
look at their bestsellers category then
read the product reviews and look for
the opportunities for example this
fidget toy is a really hard selling item
on Amazon but if you had read the
reviews it's obvious some customers are
happy with the quality they are
complaining what their bearings and the
parts are coming loose well this may be
an excellent opportunity to find a
supplier for this product and ask them
to address the loose part issue now when
you sell it into your own private label
you can advertise better quality and
tell the customers that the bearings and
other parchment come loose I have
already explained how to source products
through our ababa so I won't go through
all the tails again I will just give the
quick summary let's say I was looking to
sew smart watches for a private labeling
so I'll go to Alibaba type in SmartWatch
in the search bar and instantly I get
thousands of different smartwatches from
suppliers from all over the world now
for the private labeling
what I'm looking for is an OEM or
Original Equipment Manufacturer
that kind of a supplier this means that
the supplier can customize the product
if I need and they can add my logo here
they even make it point to say that now
just to be sure I'll open a chat window
with the supplier and double check so
ask can you place my logo on this watch
and of course immediately she responds
and says yes how many pieces do I want
and it's really that simple the finding
the product and asking supplier if they
can match my logo on the product I just
created my own private label here are
few steps for creating your own private
label product when selecting a product
to privately we'll make sure you pick a
niche product don't good for the big
products don't do cell phone cases or
TVs or any other electronics pick your
product that caters to a specific market
next create a national oh go I will show
you to do this how shortly negotiate
crawl aggressively remember the larger
the size of the order of the cheaper the
price per unit but never ever order
large quantities of product before you
see a sample be extras will have small
units made next and this is important
when you create a private label product
instruct your supplier not to share your
logo or your company information with
anyone oftentimes suppliers will use
leftover stock as samples for their
customers I once ordered a sample
product and the supplies shipped me my
competitors product including their
packaging they even told me how much
they paid for unit
how many pieces they order per year and
a lot more information that I'm sure my
competitor didn't want me to have and
finally never dropship products to your
customers or Amazon
unfortunately drop shipping is becoming
a popular practice by many online seller
and it's a cause for concern
since the chain chances of receiving a
defective product is fairly high you
should only start drop shipping to
customers or to Amazon after you have
placed several orders with the same
supplier and you aren't oppressed in
confident that they won't make a mistake
how to create a logo for your private
label product you know the famous saying
always judge a book by the cover well
not quite but let's face it we all do it
same for products people tend to buy
products with nice logos and packaging
they stand out more if you have the
budget then I would recommend paying
between two hundred to four hundred
dollars to have a professional logo and
packaging we at 299 designs
is your best option because you said the
requirements and dozens of graphic
artists will submit their ideas to you
you get to pick the one you like the
best a more economical option is to hire
a graphic artist rob hook up FERC is the
world's largest freelancing site where
you can hire people to do just about
anything from web development to filing
your taxes to web design you can pay a
graphic artists anywhere between 3 to
$3,200 for a custom logo if you want
something quick and cheap try fever
I had the ecommerce MVP logo made on
fear and it cost me just 5 bucks but
careful with fever because often times
you get what you pay for and finally if
you want to design something yourself
try canva it's an online free tool that
enables anyone to create high quality
graphics and logos without any
experience once you select a product and
a supplier all you have to do is send
them your logo and tell them where to
place it and that's it congratulations
you just get it your very own private
label product I want to take this
opportunity to thank you for watching
and participating in this course when I
started teaching people how to use
Alibaba I made a few short videos and
posted them on YouTube it was throw your
questions and inquiries that I decided
to make this course I tried my best
incorporate my personal experiences to
help you start or grow your own business
by sourcing forex to Alibaba I'll remind
you again as I did in the introduction
that one course is like mine and a great
resource to help you they are not so
substitute for actually doing the work
yourself you don't need to implement
every single detail that was covered in
this course rather pick and choose
elements you feel apply to you but don't
be afraid to try different methods of
experiments with different strategies
but whatever you do don't wait take
action the best way to learn is by doing
chances are you first ordered the Rolly
bubble will have some unexpected results
or consequences don't let that deter you
the fact is there are no such thing as
the perfect supplier or the lowest price
or the best quality it takes time and
practice to prep master the art of
sourcing products and without
reiteration order you will get better I
learned something new every time I talk
to a supplier or to another people who
are using Alibaba so don't wait start
now
before you know it you will be an expert
before we end I have a quite quick risk
request the first is if you haven't
already done so please join our Facebook
group if you have any questions and need
help you're gonna ask him that group and
I'll personally answer your questions
also I want you to learn from you I want
to know what works and what doesn't but
but posting your experiences in the
group you will be helping me and
everyone else to become better at
sourcing products
the second thing is I will really
appreciate if you could take one minute
to answer a quick five questions are we
your feedback will help me improve this
course and keep it up to date with the
relevant information finally and I
promise this is the end if you need any
extra help sourcing products or just
need advice on starting and growing your
e-commerce business high profile
affordable personal coaching services to
help you with everything from sourcing
products to crafting a marketing
strategy if you're interested in
learning more please contact me for a
free consultation you don't need to sign
up for anything and at the very least
you will get some free advice thank you
again for watching and I wish you best
of luck