This is a guest post from Amazon merchant Greg Mercer who has been incredibly successful at sourcing products from overseas to resell online. He is also the founder of my new favorite Amazon seller software, JungleScout. Although JungleScout is referenced a couple times herein, you don't need it to get good use from this article.
There are tons of profitable products you can source from overseas. It just takes a little digging around. Short on time? Try using JungleScout to help you; it saves an incredible amount of time.
I wanted to help you all with the next step in the game, which is contacting and choosing a supplier. I was motivated to write this after I heard a horror story about someone getting totally scammed by a “supplier” in China. Don’t worry, that won’t be you if you follow some pretty simple precautions.
Something to remember before you contact any suppliers is the cultural differences that exist when you’re buying internationally. China in particular (and most of Asia), the business culture is a little more formal than ours in the United States. Also, the primary thing these suppliers are looking for are long term, mutually profitable relationships. You’ll hear them say it all the time.
That’s why I’m going to share the initial email that I use to make first contact with potential suppliers. I think this can help you to avoid some of the common pitfalls that trip a lot of people up.
You may notice that I’ve signed the emails (below) as if I am not a one-man-show but rather that I’m a “Purchasing Agent.” You could also call yourself “Director of Business Development” or even the company secretary. The reason that this is important has to do with who will be reading your email when it arrives. Your email won’t be sent to the President of the company but likely a salesman or secretary. If you were to contact this person as the owner of your company, it would give the impression that you are a small company with little purchasing power. Even though this is probably true, we don’t want them to know this.
Also, it’s nice to be a low man on the totem pole if you’re still learning the ropes. Any time you need to ask a question that might make you seem less than savvy, you can do it without making them think that the entire company doesn’t have it together. If you aren’t happy with the samples or the price, you can preserve your relationship by blaming things on your boss. “My boss said the price is too high.”
Your goal with this initial email will be multi-faceted. First, you want to get a sample sent to you as soon as possible. Second, you want to see how they are about contacting you back and their English skills. See how long it takes them to get back with you, keeping in mind that there is a significant time difference that can delay communications. If they are able to get back to you in a reasonable amount of time, that’s a positive sign that they’re a professional and well-organized company. Take note on how their English is. Don’t expect it to be perfect but does it seem like they can understand all your questions? Does it seem like you will be able to communicate effectively with them? Lastly, you want to set the tone for a professional working relationship based on mutual respect.
You’ll additionally want to establish some initial agreements for your working relationship. You’ll want to make sure that they can send you smaller orders at first,
because you want to make sure you can sell the product at a reasonable rate and that the product is up to your standards before you start buying huge quantities. You need to make sure that you can put your brand on the product and get an idea of their shipping fees and policies, and how long it’s going to take for them to manufacture your product after you place the order.
Don’t forget about the big time difference between where you are and China. Stateside, many of us will be 12 hours different from our suppliers – keep this in mind when judging their responsiveness. The holidays are different in China as well, so be prepared for that! China has seven national holidays when most businesses will be closed. Chinese New Year is usually around the middle of February, and that is their long holiday – many businesses will be closed for two weeks. In early April there is Qingming, usually two days off. Tz(May 1st) and some companies will even take up to three days off for that one. There is Dragon Boat day in the summer and Mid-Autumn Day in the fall. National Day is October 1st and many businesses close for several days.
Free Template: First Contact
My name is [first and last name] from [company name]. Our owner asked me to contact your company about working together in a potential lucrative business venture. We’d like to introduce ourselves and express an interest in creating a profitable partnership between our two companies We are planning to purchase [product] to add to our product line. After a lot of research, we feel that your company could be a great supplier of this product. We would like to get some more information,
and we have a few questions.
1. May we get a sample of the product, and how much will you charge, including DHL Express
shipping to the United States zip code [your zip]?
2. How long will it take to receive the samples?
3. Can we pay for the samples via PayPal?
4. Can we brand the product with our label?
5. Can we change the xxxx of the product? (color, additions, changes, etc.)
6. What is the cost of this product per unit including shipping via Air Express to the United States
zip code [your zip]?
7. Do you accept escrow payments or PayPal for the full order?
8. How long does it take to manufacture once an order has been placed?
I would be grateful if you would contact us with the answers to the above questions as well as your shipping and other policies we may need to know. Can we discuss a sample order of three pieces of the product?
We hope that we will be able to start a mutually beneficial relationship.
[First Name Last Name]
Judge Your Supplier’s Email and Respond Back
You will want to send this email template filled out with the correct information to as many suppliers as possible. I often contact as many as 15 to 20 possible suppliers for one product! It is a lot, but you will only benefit from having more options and it doesn’t take long to copy and paste this information into each contact form. You might want to create a spreadsheet to keep track of the quotes and information that you get back.
When the supplier contacts you back, pay attention to how they answer your questions. If you get a response that is terse, like “Yes, we can do that,” and that’s it – you probably don’t want to do business with that supplier, go ahead and just hit the delete button.
Be sure that their English is good enough that you can communicate without confusion.
Now, and only now do I ask about the MOQ (minimum order quantity). If you discuss the MOQ in the first email, some companies may right away flag you as a small company that they don’t want to work with and not respond. If I like the seller’s response to my email, I will reply back with this email:
Free template: Follow Up Contact
Thanks for your response! My boss requires me to follow a few company procedures that I wanted to make sure were OK with you. First, he likes to build strong relationships with new suppliers slowly. We normally start with a sample order of 3 units. The samples are used to inspect quality, and, if approved to take pictures for our catalog and website. At that point we usually start with a test order of around 300-500 units to gauge feedback from our customers. If our customers approve the product and quality then we usually move production to around 1000-4000/month.
Until we build a relationship, I am only allowed to pay with Paypal and Escrow. Unfortunately this rule was written after my company experienced problems with theft overseas and is non-negotiable. After we establish a good relationship then payment methods are more flexible.
[First Name Last Name]
I send this email to make sure they’re OK with a small MOQ and double check they can use my required payment terms. This is a good time to follow up with any questions that arise from the response to the initial message. One thing to note is the messaging system through Alibaba isn’t great, don’t be surprised if they respond to your Alibaba message and send you an email. After this, it’s best to switch communication to email. I would also recommend communicating through skype messaging, 99% of them are used to doing this and it’s a way to have quicker communication. If you do choose to communicate through skype messaging, keep in mind you’ll probably have to work late to sync up with their business hours.
Throughout the early stages of the relationship, watch how they respond, because this will be an indicator of the future relationship and how it will be to work with them on a day-to-day basis.
Remember, only pay for your samples and first order with PayPal or through an Escrow service. Even if you have to pay the fee’s associated with it, it’s better than getting your money stolen overseas.