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[Music] watching you notice there was a little bit of a technical difficulty but that’s kind of how things go when we stream live but one of the really cool things about these live streaming events is we are watching the chat box that’s how we know you guys couldn’t hear us for sure but we’ll also be answering your questions so make sure to drop in there whatever questions you guys have and we’ll be more than happy to answer them this week there’s three of us on here Manuel and Kim and if this is your first time tuning in to the million dollar case study Kim what’s the million dollar case that you tell everyone okay so we are finding products to launch and sell on Amazon so we’ve already done that in Europe now and we have a huge target to raise 1 million 1 million dollars worth of revenue of which we’re giving the profits to charity and the cool thing is we are showing you every single step of the way over our shoulder all right and manual we are stoked to have you here so give us give us so just a quick one-minute run down a little bit of your background just so the audience knows why we brought on your expertise for this particular episode of the million dollar case study sure take 3 Austria I’ve been living and working in Hong Kong since 2005 I used to work as a buying manager for a large German retailer who sent me a lot to the factories in China so I was negotiating prices developing new profit assortments going to exhibitions and general learning a lot about manufacturing logistics export import and that kind of stuff and yeah in 2014 decided to start my own company initially started out selling to retail but then heard of Amazon and you have been doing my own Amazon business also since 2014 I run a blog website where people can learn how to import from China and big fan of China’s got big fan of the million dollar case study thanks for having me fantastic and we appreciate you we understand we all kind of interrupted you in the middle of your holiday so thanks for tuning in thanks for joining us tonight and I’m sure all the audience is going to be super thankful of it so that being said guys I’m gonna go ahead and share my screen with you I’ve got a couple slides to show you and then after that Kim has some questions prepared for manual and like I said we’ll also be answering any questions you guys have so feel free to drop him in the chat box kind of as we’re talking about this stuff and be more than happy to do our best to help you out so if you have been following along the with the million dollar case study you’ll know last week that Kim chose sleeping bags as her product to launch in the UK so she contacted some factories she got lots and lots of responses back some were good some weren’t we’re gonna talk about that a little bit more tonight but hopefully by the end after she kind of asked me and all these questions that she has tries to get a better understanding of you know which one of these are gonna be the best factories for us then she’ll know you know at least which factories to order samples from and then you know after that be able to like choose which factory we’re gonna ultimately go for so tonight we’re gonna be talking about factory selection and all these are in China we if you aren’t familiar the Million Dollar our case study we’re doing a giveaway every single week you can enter it at jumbo scott comm slash giveaway and you’re able to win a jumbo scott pro extension or the jungle scout web app or you’re also gonna be featured on the website or possibly a t-shirt and if you are watching a replay of this we’re choosing a winner every single week for all of 2017 so don’t feel like it’s too late to enter if you’re just tuning in since we got started a little bit late do the technical difficulties i’m not gonna read these but um if you see your name on this screen our social media manager Amelia’s gonna be contacting you get you hooked up with your free stuff and I always enjoy hearing from like our listeners and our audience who are following along with million dollar case study a lot of them real time launching the products themselves so yeah it’s always a lot of fun for us to kind of read these and you know you guys can pause this and read these because they are very inspirational this kind of where we’re at right now so sessions one in two we did our product research if you are still stuck on product research I would encourage you after tonight’s session to go back and re-watch one or two but um we go into depth you know how we find these good opportunities on Amazon and we’ve created you a blueprint so we can do this time after time and launch successful product one after another last week session number three of the million dollar case study the European edition we started do a supplier outreach feel free to tune there and then today we’re doing you know we’re still continuing on the supplier selection phase and like I said we brought on the expert manual to help us with that so we already kind of gave our introductions if you’re familiar with million dollar case study then you know Kim and I like we said manual gave a great background himself earlier he’s one of the brightest people I know in this particular space so that’s why we’ve reached out to him and said hey man we got to have you on for this session so you can answer Kim’s questions way better than I’d be able to as well as our audiences so today’s session these are some of the things that we’re gonna be talking about and we have some kind of like more in-depth questions that are going to be going over but we’re gonna be talking about avoiding common scams when working with factories I will say like in all my years of experience I’ve never been less scammed and if we look at like all sellers as a whole this would be like a tiny little fraction above a percentage of people that this ever happens to but you know I want to make sure that you guys are aware of them to make sure that that you know it doesn’t end up being one of the tiny little percentage of people you don’t end up being one of those tiny little percentage of people’s Mannie was gonna teach us a little bit more about Chinese culture and kind of like how business works there because it is a little bit different than what a lot of us are used to if you’re only used to kind of like doing business and most of the Western world so whilst we’re talking about some of Kim’s responses what to look for in a good response for us a bad response warning flags negotiating tips and by the end of the session you know Kim wants to understand like okay like how do I narrow it down I’ve got responses from whatever many different factors or whatever how do I choose you know the best few order samples from and ultimately how do I choose that one supplier that I’m gonna work with at least from my initial order to get my product in so with all that being said I am going to switch back so you can see all three of us Kim I think you have the questions prepared is that right you’ve done your homework right yeah I’ve done my homework that’s always [Music] cool awesome so the first one was the first one that Greg mentioned on that slide there and that was avoiding common scam so Manuel personally I don’t know you know how a scam might appear when when trying to find a supplier you know I don’t really really know what scams are out there or what even to look for snow I was wondering whether you could share like any insight on things that you’ve seen and things like definitely to look lookout for an avoid mmm I think these days there are not as many scammers on for example Alibaba or Global Sources come what there used to be because Alibaba does a lot of betting these days Global Sources for example also if you been checking also suppliers there maybe there are still I mean because they for example Alibaba and Global Sources they now ask for business registration copy they even call the offices of that supplier sometimes they even send people there they sometimes request even a factory audit report from a third party so again Ali Baba and Global Sources is doing more and more work on trying to filter out the bad suppliers having said that there are still a few scammers around especially the ones for example if you look on Alibaba that don’t have a gold supplier senior or for example if they have no reports on there whatsoever what you can also look out for for example if if you’re about to pay for example let’s say you’re not ready to place an order yet but usually most suppliers will ask for a simple payment so they set your bank account and sometimes the bank account doesn’t match up with the factory name so that’s really a red flag and a warning signal because it could be that it’s the personal account of that of that sales rep for example maybe the sales rep is it’s trying to scam people maybe the factory is not so make sure that the factory name and bank account name are the same other things are for example if you if you’re inquiring let’s say with five to ten suppliers and that’s the eight suppliers have a very similar price and then there’s maybe one or two suppliers with a very high price that’s usually a very good sign that it’s either trading company or a company that’s really trying to scam you because you can see the average on the prices from most of the suppliers so look out for those suppliers that quote very high prices those are usually the ones that try to rip you off or they are legit companies but they’re trying to make a lot of money from you so I’ll get into this later about the pricing but try not to choose the one with the highest prices and then you can also look up for example if you’re looking on Alibaba usually most of these companies also have their own website so see if the address matches up let’s say the address on Alibaba is a let’s say a street address and then the address on the website is some sort of room or a suite number or anything that’s different so if that doesn’t match up I would also ask the suppliers why it doesn’t match at all it could be a red flag other than that again Alibaba Global Sources they’re doing a lot of betting these days to really make sure that they have legit suppliers on their sides okay cool so it’s like you just got to kind of be a bit of do a bit of investigative work and make sure that everything matches and adds up great yeah and on the note of trading companies and manufacturers so Greg did cover this last in last week’s session as well and one thing that I found whilst I’ve been doing my research is there are actually quite a lot of trading companies on Alibaba or sometimes it won’t be clear and I’ve asked them in my outreach whether they are one way the other and some even in their responses they will say something like we are you know the word it kind of differently like we’re a factory but also a trading company or you know is that something to be cautious of or is that just a language barrier um sometimes the factories themselves they don’t have a export license so they need to use a agent or a trading company to be allowed to export the items I get this question a lot actually everyone’s like oh try only finding manufacturers I actually work a lot with trading companies because there’s a few reasons first of all trading companies still might have a much bigger network so they might find suppliers for me that I could never find maybe it’s because it’s local Chinese factories for examples that I could never again get in touch with sometimes the trading companies also have very good prices because they do a lot of business with these factories so the factories actually give very good prices to the trading companies but not to me and also sometimes they use trading companies because let’s say for example I work with a trading company for a couple of years and I just feel comfortable with him and he’s helping me a lot sometimes I tell him to source an item for me because I know he’ll be handling it well so I don’t mind if he if he makes a bit of a percentage maybe 20 30 cents on top of the product price because I can trust him as opposite to me trying to find a new factory which probably I’m capable of but I save a lot of time and money probably also in the end if if I work through a trading company again having said that it is best to work with factories directly because mostly you get the best price you have no one in between and it’s very unlikely that trade factories scam you directly but again I don’t have anything against working with trading companies just it just needs to be a good match like the communications you just like a little bit slower or like there’s concerns there because you’re kind of like talking through a middleman or have you not really run into that as an issue not so much of an issue sometimes yes but then again some of these trading companies they have a lot of staff and sales rep and if you have a certain volume that you’re buying from this agent you know you get prioritized and I feel my responses or my inquiries are usually responded with in a timely manner and usually very fast it’s not an issue from on my side and and the same sort of things to look out for apply with trading companies and manufacturers in terms of avoiding scams and so on yes same actually okay okay it’s good to know so the next question is less of a question and more of a can you share like sort of your top tips on you know Chinese business culture and you know anything that you’ve gleaned over your years living and working there that it would be really useful to someone like me who’s never even been to China it’s far off place right it’s a lot of people who maybe contact Chinese suppliers for the first time they are scared because maybe they’ve been to a show in the US or Europe and and they’re it’s totally different you get ignored if you come and say I’m an Amazon seller or trying to be an Amazon seller they’ll be like yeah come back when you order a couple of thousand units you know but they’re usually very open to any business as long as you’re not trying to squeeze out any send super-high requirements and then you wanting to order like 50 pieces but other than that they’re pretty open to to any business in terms of top tips I’d say there’s two situations either you are in China or if you’re not in China for example just to the phone or email try a Chinese for example and say me how in the email or if you’re skyping with him or on we chat I mean they really appreciate if you’re just trying a little bit of Chinese maybe um so maybe the relationship gets better then also if you’re in China for example appreciate gifts don’t refuse them because it’s very common from suppliers that the gifts at the beginning or end of a meeting and usually would be tea or some product that they may relate to to the factory and it’s not really a bright and I’m trying to drive you and you don’t necessarily have to bring any business to him it’s just a little thank you for for visiting for example now this is in case if you’re if you go into China always say always address people by the last name I feel like mostly you have maybe mr. Jeff Chen I would always address him as mr. Chen because in in their culture it’s sometimes they offended if you if you address them by the first name unless they really say for example best regards Jeff so maybe yeah just watch out for a bit of etiquette maybe I would say also don’t criticize China or its politics um I also don’t want to get involved or didn’t have any political statement here but you know Chinese are quite proud of the country and their accomplishments so even if you don’t agree with the country’s politics maybe wait until your partner or supplier takes the first leap into criticizing but then I wouldn’t even criticize in any way again maybe if you’re in China don’t be late for meetings it’s not very good design late for meetings other than that I mean Chinese people really open-minded people they’re very helpful from what I find and I think we’ll cover this in another question also but you you’ll get a feeling right away if if a supplier wants to work with you or not I mean there’s no need of trying to do your best just so you can do business with him you’ll get a feeling in your first emails or maybe first Skype calls anyway yeah that’s a really good tip about names as well because we’re you know I’m so used to being very casual and calling people by their first name so that’s a really good tip I’ve also noticed that a few people that I’ve already spoken to have given me like their whatsapp details I noticed you mentioned WeChat as well do you find that that’s the easiest way to communicate if if they’re offering that up as a a method to talk to them right and so for quick issues I usually use Skype or which which I dislike what’s up in China but ten times bigger think it belongs to $0.10 are the power wavin not sure and so they used a lot of WeChat and and Skype also but if there’s anything that I want to have written down like contract wise or or details that I want to fix with my product I usually email them because I don’t know Skype maybe you delete the chat over he doesn’t respond anymore so I usually want important things I want to have written in an email sometimes I just get on a call with them ten minute Skype it’s free anyway and just quickly the things like has the sample been shipped out I usually do through by a reach at and they respond even on Saturdays Sundays sometimes in the middle of the night I don’t think if anything better to do then for the factory these days okay cool and you when you say Skype is that Skype chat or do you actually have like a phone call or video call sometimes I have cause like if it’s an urgent thing and I just want to hear his opinion or is for example if if there’s an issue with an inspection that I have I would usually call him because then he has to give me straight answers right on the phone he can’t really he doesn’t really have time to type on skype and maybe you know formulate a really nice text so it doesn’t look that bad so I usually call them and call them off guard but other than that yeah you sketchy okay cool awesome so you never really get any like pushback they’re usually like more than happy to hop on a quick like Skype call with yeah yeah most of you say they’re like kind of used to that or that’s like it would be fairly typical for them Skype or you know most of these guys have the sales reps they have company cell phones too so I call this cell phones so the usually answer within the first call most pretty cool awesome and the next question actually relates to communication so this was more sort of what to look for in so like as someone who’s never been through this process before when I first get my responses some of them are super short some of them are like send me more details some of them give you like half of the answers that you actually asked and I guess my question is like what what sort of like level of detail should we expect because obviously we want to build a long-lasting business relationship so you know the ones that send like a one-line answer should I just ignore them ignore I mean it it depends also how you formulate your inquiry I mean I get sometimes emails because I’m also a supplier on Global Sources so I’m listed there sometimes I get inquiries hi it’s it’s Tim I need a price that’s it you know so yeah I obviously ignore them I mean he doesn’t introduce himself properly I don’t know what he wants where he’s selling what’s the quantity so I don’t assume that you send such an inquiry but if him if you had a professional approach which I think you had I saw you guys had a template also for the email so that should be good there are a couple of reasons for example if you haven’t structured your inquiry well like maybe you left out a few important questions at the end of an email which can be easily overseen like let’s say you edit something in the bottom that you didn’t see sometimes they have too much work from other customers so just ask again and again because some suppliers is simply overworked I’m sure you’ve seen it they even reply emails and work on Saturdays and Sundays like I said and usually there’s like one sales rep that has 20 or more customers that he or she needs to handle at the same time and just like in any business I mean they prioritize bigger customers first and we are actually we Amazon sells a small maybe not maybe not Greg but maybe I’m a smaller fish but most of the retailers or wholesalers they purchased like 5,000 units upwards so you can imagine who gets priority yeah maybe sometimes they think you’re a low potential client so maybe they just respond with one sentence so like you said so I would just ignore these these suppliers and move on to the next and yes sometimes maybe they are simply not interested in in your business and I would just walk away and and usually you email out to five to ten suppliers anyway and then you narrow them down to maybe three or four and then you get down to two or one so yeah I think it’s a couple of reasons there because there’s a certain amount of like kind of we call like supplier buyer fit right cuz like remember like when I’ve done these factory visits some factories just like huge it’s like whoa I’m surprised you’re selling to me it looks like these assembly lines are just like crazy whereas other factors like a lot smaller right so would you say like the smaller factories those are ones that normally respond to like who they think of as normally smaller sellers or yeah that’s something that you can’t be mindful of I think that’s a good point yeah smaller factories they need to grow so they take on a lot of clients I mean this in any business when I started out I needed to do the dirty work all by myself and hasn’t really took on any client and that’s the same thing with suppliers in China the the downside is they you may easily you can easily work with them but maybe you have to hold their hands for a while you know but while with the larger factories they may have more experience with dealing with overseas clients and logistics and maybe even Amazon clients you know so but yeah tried to look maybe for smaller suppliers also that’s reassuring as well because actually some of the responses I had were like they’d picked out just one piece of information and sent me that so like they picked out all they want a sample I’ll give them the sample price and that was it nothing else whereas others may have sent a one line to say I’ll get back to you tomorrow which is fine and I had one where they had I think just not read the email correctly because they answered all the questions were asked more questions that were already in my initial email so I was just quite patient and sent a response and asked the same questions again basically so I guess you know a bit of patience can go a long way as well I mean one thing you need to keep in mind our local holidays Chinese New Year mid-autumn festival right now the Chinese Environment Protection Agency is closing down thousands of factories I’m not sure if you heard it but for example for if my orders are now delayed because the Environmental Protection Agency is inspecting all the factories in sage’ in the Negro area with the Box factories to rights under like one of my items like the items being made but they couldn’t get the boxes for it or something exactly and if the factory is shut down that means the sales rep is not working either so it could be it could be also a local issue that the factory has no involvement in but yeah patience goes a long way with Chinese supplier symptoms cool awesome and so the next question was I guess we’ve covered some of this already but like any sort of red flags like warning flags and then on the flip side any like particular I know we’ve already covered a few warning flags for any like particular traits there are a really positive sign that you should definitely invest a bit more time having a open communication with the supplier I think you should look out for two positive traits one is for example is he proactive is he reaching out to you like constantly updating you maybe on a sample or on the price maybe he has some issues in a factory and but you know he’s keeping constant contact with you to tell you sorry hasn’t done it today because this is that and I’ll reach out to you tomorrow so that’s a good thing if suppliers are really proactive and especially in the long run when you work with the supplier you want to work with someone who you know constantly sends you new ideas like I have a couple of suppliers they send me I don’t know in their new newest item once a month and you know that’s another way for me to find good products and I still don’t get it because if I’m already developing new products I mean I’d be emailing everyone and spamming everyone with my interest product right and but still some suppliers they don’t do that so try to look for a supplier who is proactive maybe another thing is quite a positive thing is if he’s pointing out things that you may have missed for example comes down to creating a packaging eventually and maybe you forgot to add a label or the made-in-china wording on the under the barcode maybe he’s telling you look you actually missed it I think you should put it there you know try to look for suppliers who who have this positive trade in actually helping you to to succeed in this business um warning flags maybe is he just maybe it’s constantly increasing the price is he just asking for the money for the payment early that would be a thing that would really bother me and I would probably walk away at an early stage if you get the feeling he wants to constantly ask for money or high sample payments or you know maybe a week later he increases the price again on the original price does he maybe reply emails late you know does he let you wait for two or three days I mean we covered this maybe there’s a local issue and that he has no power over but if it’s a regular work day and nothing’s going on and he takes like two or three days to reply a simple question that’s that’s a thing that would you bother me I mean imagine if if you have problems with him in the beginning like if he only answers fragments of your emails or your answers imagine how it would be down the road when you place an order or when you work with him later so yeah proactive suppliers see if the communication is good and his general willingness of cooperation um these are things I look out for awesome my next question and this is the one that I personally are most interested to hear or response to because I know that I am not good at this negotiating tips this is not something that I’ve ever really had to do before so and obviously we want to get the product for the best price possible and at the highest quality as well so yeah it’s I think you have to understand also China isn’t a retail store so you can’t really walk in and say or you know a tailor you can’t really walk in and say I want this fabric and I want my name on it and I want only two suits although his minimum order quantities ten suits so you have to adjust a little bit too because a lot of people think oh I’m gonna order five hundred pieces now from a supplier in China and you know he’s gotta be super happy but that’s not the case because five hundred peeped pieces is usually a hassle for for a lot of suppliers because these days raw material prices increase so they need to purchase raw materials fine in advance to you know get good prices sometimes the raw material suppliers they they have very high order quantities so it’s not even the factory’s fault you know but let’s say you want to order 500 garlic press and the suppliers raw material supplier needs at least 2,000 stainless steel cases for the garlic press so try to keep an open mind and think about it may also be difficult for a factory now having said that there’s a few ways where you can maybe negotiate prices or get lower mo cues for example I often if if I go for a new product I often use a white box because Chinese suppliers you know they used to work with importers retailers and big companies for many many years and these companies they always want color boxes they never ask for a white box so Chinese suppliers often assume that you want the counter box so say alright I actually only want to buy box and I only want maybe a barcode sticker and maybe my name printed on the white box or even a sticker so that usually that way you can usually lower m’excuse down to 500 sometimes it’s a thousand sometimes it’s five hundred that’s one way sometimes if we’re talking about moq negotiation I even agree to higher prices and then most people don’t even ask let’s say the supplier offers you one dollar for for two thousand pieces and you say I can only do a thousand and then they say sorry Emma Q is two thousand but then when you say I’ll be happy to pay twenty cents more many of them say actually all right that’s actually okay but you need to pay $1 35 for example many people don’t even ask that question because they don’t want to pay higher prices but you know sometimes you need to make some how do you say that my compromises with them right yes sometimes remise with them too especially if you’re in a low budget or if you’re just starting out you know you want to test the product you don’t know if it’s selling well I mean of course you have jungle Scout and China Scott tells you it’s a good product but yeah sometimes you just want to test out and you don’t want to invest in a large quantity in terms of pricing I usually keep my final negotiation just up to the point when I placed the order so let’s say I get a price of $1 actually in the initial inquiry I usually let’s say I filter down to three suppliers I then ask him probably okay you voted me a price already of $1.00 for a thousand pieces please give me a price of two thousand units and three thousand units you know then I get different price levels and then I see what the difference could be and how I could maybe use that as a leverage later on in negotiation even though I already know I’m only gonna order a thousand pieces maybe eventually I say to him when I place the order you know I tell him in an email okay mr. Jetley I’m ready to place the order but I can only do a thousand pieces but you quoted me a price of 70 cents for three thousand can we do a thousand units but maybe we can meet at 75 cents and then they usually say I can’t do that but maybe we can meet it 0.85 and then you know maybe you save 15 cents so that’s the point where you tell them I’m gonna place the order they smell the money already they know you want to place an order they know where you want to do business with them so that’s usually the point where they the the negotiation helps the most and then ask for different price at different moq levels and that usually works even if you save five or ten cents I mean could be 50 or $100 that could be another sample payment for a new supplier you know mix makes a difference awesome our suppliers interested in so let’s say I narrow it down to like my top three and my favorite one that takes the most boxes is also the most expensive so maybe I’m thinking about going with a different one like could could I tell them that and say like you know I’ve found a better a slightly better price elsewhere so I think I’m gonna have to go with that what does that work or not yes it’s like when you are in in Istanbul at the Turkish bazaar you know when you do the walkaway trick and then the guy comes running after you okay my friend know best you know you should do something along that line you know you tell him okay thank you very much for the offers to be frank with you I have two more suppliers they have they have better prices at the moment I like your product and I’ll get back to you and you know maybe if the communication up to this point was good and he’s interested in your business he will probably make a proposal on the price or yeah he probably reached out to you if you don’t reach out to him in like three or four days for example and if he doesn’t reach out I would still say okay I’ve I checked with my other two suppliers I like your product the best but the price doesn’t work so if you can’t agree on a certain price level maybe you know you don’t have to squeeze every cent out of him but you know just need somewhere in the middle maybe you and to say alright yeah we can do a little bit better or you say oh I have to go with the other supplier and that usually also helps cool awesome tomato a follow-up question on that real quick you you don’t necessarily do your negotiating before you order this sample a lot of times you order a sample first let me know you’re serious and then you’ll negotiate right before you give them the deposit I do a bit of basic negotiation like for example if I get the price I’d say oh it’s way too high and you need to go down at least 20 cents and if it doesn’t go down at this stage already if of cents then I’ll probably be a bit more careful maybe move on to another supplier but my final negotiation is the order and maybe you’ve seen this Greg when you’re in China and you’re actually meeting people and you’re building relationships it’s a lot easier to to to negotiate prices if you if you’re just talking about a mile or we chat or Skype the other person doesn’t really know you’re right and why would he be willing to to give you much better price than many of his bigger clients who’ve already visited him in China many times so down the line down the road maybe go to China build relationships on the ground thank you and and the the final main question was have into like EU markets as opposed to the US can you repeat that I think you were your picture froze there for a second and do you have any tips for importing for EU markets in as opposed to the US like is there any different to look out for in terms of products or also maybe I’ll cut a bit of both first of all I’d say start with the product that you’re already running in the in the US for example your most successful product in the market that with your native language so you don’t need to do any translation over you know it’s easy it’s in your native language so obviously you should start in the UK and then move on to Germany Spain and so on Europe in terms of regulations importing and that kind of thing Europe is very strict on regulations it’s a very thorough topic I actually just worked on something the last year every product category has some sort of regulations like seee reach rose for childs for toilet products for children’s products so you need to need regulation so before you start importing I would make sure that you research all the the directives the regulations that you need to meet it was a sleeping bag right yeah yeah so I would say for example you need you definitely need a c e you need a reach conformation you need it’s not for kids is it is it’s for adults adults okay so you need a EC DSC and that’s a declaration of Conformity that your product is conformed with all the regulations and requirements so do a bit of research on that and get certificates from your suppliers because often suppliers say ah you know what no customer ever asked me for it so you don’t need it either I will be the one who say what I need and especially because if your product gets seized at customs in in the UK and you have no paperwork whatsoever well it’s a bit too late for that so try to find the suppliers who have either test reports or certificates for the regulations that you need to meet and it’s a lot stricter in the in Europe than it is in the US especially if you ship by sea if you ship by air it could be easier you could go under the radar but I would do it right from the start so look into regulations see II reach and maybe you even want to position yourself a BAFTA competition like there is you know different kind of materials for sleeping bags so some text some material may even have a Kotex certificate which is like a super sustainable way of producing fabrics so since something like this you could even put in your in your Amazon listing like yeah we’ve got a Kotex approved material you know super sustainable and no child labour was used that of course not so not like that but then anything to put yourself above the competition I do the lower with my products none of my competitors actually mentioned any certificate or safety label or safety certificate they have for a product and I do that because especially in Germany or UK people love it when it has some sort of quality seal like in Germany it’s yes for example you means-tested safety and if people see that they’re like oh this must be a good product you know I’m gonna fight it well the other guy doesn’t have it so I’m not gonna buy his product so try to find the regulations that you need to mean try to find a supplier who has maybe test reports and even mention that in your listing on on Amazon I think that will definitely put you ahead of the competition awesome those are really good tips would you would you say as well that so when asking suppliers for if they have this like certification that would be another positive trait early on so I mean maybe I should start asking before even ordering samples to make sure that’s something that they are willing to help with and or already have it definitely I mean I would usually do that in my first email so before I send him an email I research the regulations that I need so like I said in your case I would I think you reached out to the suppliers already right so through to another email and say oh by the way um do you have any test reports for regulation ABC for example you know it’s not a it’s not a KO crit criteria if he doesn’t have any but if he says what we don’t have it but we can confirm a declaration of Conformity that we comply with it that’s a good sign for example but if he’d be like like I said earlier sorry I don’t have it no one asking us about it for it and you don’t need it either that would be a really bad sign I would immediately walk away no matter if you sample or the price is the best if someone’s like that okay cool and a declaration of Conformity is that is that okay is that just as good as having the certificates or well the tech you are you are the Impala right so you need to declare to customs or any authority that may ask for it you need to declare as the importer that your product is safe according to regulations and you need to mention these regulations in the declaration of Conformity and to prove that you would need to get test certificates however this is a very low risk product you know it’s not something the plaque so I would go with the supplier who can at least tell me I’ve got some testing done maybe a year ago on this kind of material it complies and I can also sign you to the declaration of Conformity this would be enough for me so the declaration of Conformity you need for customs you don’t even need to send it to anyone sometimes they don’t even ask for it and what you declare in that declaration of Conformity is that you confirmed comply with Cee reach and oeko-tex for example and to back that up you need certificates or the declaration from the supplier that he complies with them is that somewhat understood yeah is it always up to the factory though to get those like I like for my experience for example like inspecting like baby products for the US generally I would pay you know for those inspections by like a third party are you saying generally for these other ones that are more accepted like in the EU that the factories already have ease and they’re the ones that pay for them in most cases yeah but sometimes if the tests are really expensive like E and seventy one – thirteen four for toys and children’s products usually costs like two thousand US dollar so if they don’t have it but they’re willing to help you maybe you can even say all right look guys I’m gonna I need this certificate because customs is asking me for it I’ll pay half you guys behalf and then you can even say to your other customers in other European countries I’ve got a certificate so maybe that’s a way we can we can meet halfway but in many cases especially for that’s another thing maybe I forgot to mention look for suppliers who have experience in your markets I’ll look for suppliers who who work with Afghan South African or South American customers look for suppliers who have experienced ten fifteen years working with retailers in Europe or retailers in the US or UK for example ask questions in a phone call or an inscribed chat who are his main customers does he deliver to the UK already you know does he have experience with these kind of things then it’s it’s quite logical to him actually when you ask him to give him to give you the CEO certificate they’d be usually if you’ve clarified all these questions and he says yes we are experienced then he knows what it is and he probably has certificates already it’s not a no it’s not a KO criteria if they don’t have any but they have experience with these kind of customers or retailers in Europe it’s just a matter of you know are you willing to invest the money into into these types of certificates or tests Senate there’s a few questions in the chat box just you guys know like these types of tests that we’re talking about these would be separate than like an inspection that you do like during production or you know after productions finish before like you ship it off these would ask to not give those confuse these would be like thought of or at least I think of them as independent Kim did you have more questions in your sheet no and I guess maybe just watching the chat box okay like the most common ones all right maybe well we there’s a lot of questions in the chat box about if I were to summarize all these it’d be like suppliers essentially asking about like the legitimacy of a particular customer so they’ll ask like for their website or maybe like why are you sending this from a Gmail or like what’s your experience with this particular product or like stuff like that I think overall people just wonder like how do I respond to these you know some people are like should I make myself sound bigger and more legitimate than what I really am what are kind of your thoughts around that type of stuff I think anyone should have a professional email address I mean to start with and you can start with Google cheese suits I think it’s $9 a month I think that doesn’t hurt anyone to get a professional email because these days suppliers really look for for where does this come from you know the second part would be you know a one-page website it’s also not difficult to make just with a little bit of our contact form and you know it’s maybe some images of your company or your future product or whatever so have a bit of a professional background I even have a 20 pages PDF presentation of my company that I send out to to my suppliers just to give them a professional image of myself because you know I want all these questions answered and my emails are you know this long in my first inquiry so I need to have a professional image as well so before anyone starts talking to Chinese suppliers early on I said they open to anyone but you should have a bit of a professional background like professional email maybe want h website and that should do the trick if they still ask or say look you only have one page I don’t find any information about yourself be honest don’t try to play it bigger than you are because if they’re asking for more facts or details that you can’t provide and you’re getting caught up in more and more lies that you fabricate it it doesn’t make sense so be honest and you know if he says I’m sorry we’re not interested in your business move on there’s hundreds more suppliers that you can go to and some of them will want my business so it’s really a fact of contacting as many suppliers as possible I mean the ones that are look reasonable be professional be upfront say that you were just starting out but you were really interested in purchasing this product be honest and if he doesn’t respond move on I could just chime in on that as well I noticed on some of the responses that I’ve had already from the template that I sent out that we covered last week some of these suppliers are actually really helpful and you know I’ve already started to say like oh if you thought about this you could add this or you know they’ve tried someone sent me a timeline of you know here’s when you should order by to avoid you know missing out because of holidays and things like that so you know sometimes like you said manual they kept they are really open and some of these suppliers actually want to help you as well and so that’s that was quite a nice thing to have I thought because it’s is nice to find a supplier that would potentially be a partner with you in this rather than just quizzing you on the legitimacy of your business they actually want to help you as well absolutely I mean you want to build relationships with suppliers if you want a good product if you have a long term vision then you need to build relationships and it’s a lot of vetting and going back and forth but it’s it’s worth it I mean I know there’s a lot of people out there who started way later than me and they have a lot more SKUs on Amazon and I usually take three to five months for my next product I mean I have some running out of parallel but I take a lot of time with selecting suppliers and if it’s not in a week then I’m okay with it you know I want to take my time with each supplier with each product good insight do you have you ever any problems before with fake test certificates or do you do anything to ensure the validity of them yes if they are from a let’s say supplier sends you a test report from SGS or TB you can actually check on the the reputable big companies you can actually check the certificates online so usually every test report has a number or a report number you know so you can check those on online databases if there’s no online database let’s say it’s from a local Chinese fine ease testing third party I would give them a call or email them and they actually are they need to it’s their obligation to tell you yes this is our test report you know and if you can’t find information or if you can’t get confirmation that this is a real report from the issuing company then it’s probably fake and that’s a bad sign cool trying to see we have lots of questions in here but I know we’re running out of time trying to look at a few of the the more popular ones there’s been a lot of questions about payment methods do you want to skip like a real quick overview of what’s most generally accepted what they would expect what’s most common just real quick overview of payment methods for these Chinese suppliers mm-hmm credit card is not a payment method I get a lot of questions why don’t they accept credit cards you know I need to use miles for my credit cards okay so PayPal is widely accepted for sample payments but because people is quite restricted in China and there is a lot of fees for the seller it’s it’s it’s not very much liked in China but for most sample payments if they agree for general payments I use a lot of TT transfers 30% down payment and 70% after inspection so that’s like a bank wire transfer it usually costs somewhere between 20 and and $60 something like that and if you have high payments and you want PayPal that fees usually are higher so I would always suggest to call with TT transfer and always have inspections because the supplier is not gonna get 70% of his money if I don’t have a pass inspection report and he has to rework the failed goods for example otherwise he doesn’t get money and he will do it unless it’s I’m really unreasonable like he has to clean up every little stain on a plastic another payment I use for very large payments is LC let’s have credit this is your bank basically sending a letter to the bank of the supplier confirming the bank of the supplier that you have funds and then the suppliers bank can liquidate this letter through the supplier so the supplier can actually use this letter to purchase raw material if he wants to the downsides of I mean this is a very safe way for both because you’re not actually giving money to a supplier until he’s shipping out his goods and you don’t need to make any down payment the downside is LC is usually $600 upwards so I only recommend doing that when you have twenty thirty thousand US dollar payments up and to never use Western Union even for sample payments if someone has someone asks about that if someone only has Western Union that’s probably a scammer because you’re sending money to someone you don’t know he could pose as some supplier that he isn’t he may be hacked an email so never Western Union PayPal for samples TT for smaller orders and let’s have credit for bigger orders um one thing I need to add it gets very important on the road when you when you’re placing many many orders you your liquidity in terms of cash flow so with letter of credits you can actually do 30 days 60 days 90 days and that still is safe for the supplier because he already purchased the raw material with the letter of credit so that’s a good tool to down the road when you have a couple of products to save some money cool alright one last question this was actually for me not from the chatbox what’s been your experience negotiating better payment terms with factories for example like you know not paying the the last 70% till the goods or you know arrived like in the poor in the US or you know just all-round negotiating better payment terms what how much success have you had with that do you have any tips around it only with long-term relationships so it’s not gonna work with the supplier we place maybe two orders or three orders usually this happens after years of business or if you trust if both sides trust each other like I have this one supplier I’ve only placed two orders with him just about to place my third order and I’m negotiating the payment term but you know I’ve paid the sample the moment he sent me the invoice I paid the shipment or the the 30% and the 70% the moment he sent me the invoice I did it immediately you know so you can see I’m trustworthy also I’m not nagging all the time with my suppliers or I’ve had 10 refunds you know you need to replace them for me I’m reasonable you know I’m I say if you have if we have over seven or eight percent defects or returns please give me those as free units on my next shipments but I’m not gonna go there you owe me money right so I try to live and let live you know and if you if you are like this with suppliers they’ll be open to to help you in terms of payment but don’t expect to don’t expect to [Music] negotiate payment terms of 40 50 60 days if it’s the first a second-order cool good in say with that being said we’ve gone about an hour here guys so I’m gonna switch real quick to one last slide you guys know him well enough by now to know she has given you some homework this our kid why don’t you chat about this real quick what you put together yep so there is a do you want me to share it Greg it’s right you can just chat about it real quick okay cool and so in the homework spreadsheet there is a whole bunch of columns that you can fill in so you can start to list out all of the REE all of the responses that you’ve got from this players that you’ve reached out to and I just find this really easy as a way that I can log all of my communications at the beginning and so that I can keep track of what quotes they’ve given me what lead times they’ve given me what sample costs they’ve given me because otherwise I get all their names muddled up and you know all of the factory names are like Chinese words that I can’t remember so I like to get it all down on this spreadsheet so I can look at it in one place and then start to compare and contrast and figure out who I’m gonna order samples from so your homework is to do the exact same and fill out all of your supplier responses and hopefully by next week you can start to narrow it down and figure out who it is you want to get samples from exactly you can find that template I have a link here at the bottom by co-moh Scott comm forward slash session 4 – HW I hope while you guys join us next week we’re gonna be doing it a little bit earlier next week so make sure if you haven’t already done so to subscribe to the million dollar case study mailing list so we can let you know what time we’re doing it you can subscribe at Jungle scout.com forward slash million if you haven’t already please make sure to subscribe to our youtube that way again Kim’s doing these really cool like vlog updates midweeks is in between million dollar case the sessions and that way you guys can stay up to date of what’s going on and what she’s up to maybe well if people want to find out more about you and all the great content you provide where would they do that just real quick there’s a free guide on my main blog in port daughter comm and I just recently launched a new site that that mainly helps with sourcing people that’s ecommerce Butler’s com but you can find me on both sides and I’ll be replying from both emails so it’s either mail at import or TOCOM or mail at ecommerce but rest calm download the free guide reach out to me if you have any questions be happy to answer them fantastic and thanks a lot Manuel for interrupting your vacation to come on and chat with us about this uh the responses in the chat box have been fantastic everyone was saying super nice things about all the tips you gave so we really appreciate it Kim thank you for joining us has been a blast chatting with all of you guys and for everyone tuning in we will see you next week thanks guys the carry

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