Once you have learned How to Start an Amazon FBA Business and have found your product, it is time for you to source the product. Alibaba is the best place to do this.
This post will provide email templates and spreadsheets as well as tips and tricks on how to negotiate and haggle with suppliers. It also includes how to source your product directly from Alibaba, import it from China, and then sell it on Amazon.
The key to success in Amazon’s business is finding the right supplier through Alibaba. Nobody will reveal their source. This is your most valuable asset when selling on Amazon FBA.
All the capital, knowhow and resources you need can be yours. If you don’t have a source of raw materials or a manufacturer you will be dead in the water.
How to Buy from Alibaba and Sell on Amazon
This is the first step in establishing a successful Amazon business or any other business.
Recipes are the foundation of a restaurant, blogs without writers, and tech companies without their programmers and engineers are nothing.
FBA is the same. If you don’t sell a product, you don’t have an FBA business.
This post will share spreadsheets, messages templates and a strategy to calculate which supplier is the best.
You can check out: How to Start an Amazon FBA Private label BusinessPopular: How do you Sell on Amazon for Beginners
Things to Know when Importing from China and Shopping at Alibaba
All items are negotiable when sellers sell on Alibaba
When negotiating with sellers, don’t exaggerate. Your goal should be to negotiate a fair deal and not a great deal.
Be careful, though. If you insist on a low price and the factories believe that you won’t order again without a lower price, they will sacrifice quality to match your price.
They might lower their prices if they have to. If you aren’t very clear about what you want, quality can be an issue.
It is a good idea to compare prices and tell the supplier that other manufacturers offer this product at lower prices. I believe quality and profit margin are more important than getting a great deal.
Since I had quality issues, I learned to not push too hard for price.
To avoid this, it is important to clearly state the quality you expect from the product.
You don’t want to pay more for lower quality products.
I typically offer 60% off the initial price for small orders.
I generally get the best price for my reorders because they believe I will be a long-term client. I usually get 30% off the initial quote.
Instead of looking for middlemen companies, try to locate the original manufacturer.
This was not easy for me, as there isn’t much information available about most companies, so it’s difficult to know who to trust.
Aliexpress was a great place to shop. One of the products I bought had the manufacturer’s information (website, phone number) on the package.
I was able negotiate a significant price drop with the manufacturer for a product that cost $70.
Are you using Aliexpress to test the Amazon marketplace first?
You can do it, but it is not the best way to go.
To find an Aliexpress niche that’s profitable, you must dig very deep. Even then, it’s not easy. This is why I enter markets set up to succeed. This is impossible if I order more than 15 units.
This doesn’t provide enough units for me to run PPC, do giveaways, receive reviews, make custom packaging, or get PPC reports. It doesn’t even allow me to reach page 1. My whole plan is based upon the fact that I will get page 1. If I make it to page 1, I will need enough stock. My hands are tied with 20 units and I cannot be successful.
Here is an example spreadsheet that you can use to access Aliexpress. Ali Inspector is also available (it is a paid program).
Ali Inspector is an excellent dropshipping tool that saves you a lot of time when dealing with Aliexpress.
NOTICE: Ali Inspector is part of AmaSuite 5.
Tip: Find the original manufacturer. Use https://www.1688.com/ rather than www.alibaba.com, you will find mostly factories, and very few trading companies (because who the hell needs trading companies if it’s all domestic? ).
You will see faded white text on the photos. It is easy to Google. Then, find the factory page and then the phone number. It will usually be the factory.
Before you can determine the true value, it is important to get quotes from several manufacturers.
What are you basing the asking price on?
You should also consider the fact that they are also a business. They won’t be able to give you a price that is lower than theirs.
They must also make a profit.
You should consider that the margin you give for them could result in other benefits/perks down the line.
Good manufacturers look to build a relationship with their customers, not just a transaction.
Check out these top-selling products on Amazon
How to avoid scams when purchasing on Alibaba or importing from China
Alibaba users steal ideas, designs and original photos. Source: Imgur
It’s easy to find suppliers, but it can be difficult to find Mr. Right. Remember that Alibaba suppliers can scam you. So be careful and trust your instincts when searching for suppliers.
You might be discouraged from doing business with foreign trade organizations if you are scammed. Even if you do business only with local businesses, fraud is something everyone has heard of.
Although it cannot be eliminated completely, it can be reduced.
You can avoid fraud by being cautious, observant, and knowledgeable. Since a long time, I’ve been using Alibaba. These are the 10 golden rules I follow when shopping on Alibaba. However, they don’t guarantee a safe transaction.
Google the company you are interested and visit their website. Is it legitimate? The search keywords can be modified to include the term “scam”. You might find past fraud cases by this company on the Internet. You can search the export records of these companies if they are genuine. Do you find one supplier is more expensive than the others? They should be avoided if so. Pay attention to their e-mail addresses. Is it “@gmail” or “@companyname”? Is it @gmail or @companyname? An e-mail sent from email@example.com should make you think twice, as special economic zones don’t use free e-mail accounts…See if they are professional. Their quote will usually be detailed and professional if they are a genuine manufacturer. Ask them more questions. Ask for a sample if they don’t respond professionally. If I paid shipping, they provided samples for me. Ask for references from customers if the sample you receive does not match the photos. Although it is rude to ask for customer references in the beginning, they can be provided after they have quoted. You can reach out to the references to find out more about their work. Take a factory tour. You can also ask Chinese friends for their assistance. You could pay them to take videos and visit their factory. If you have the funds and the project is large, you might be able to fly cheap and visit the factory.
It is illegal to buy or sell counterfeit products
Alibaba is not an authorized source of branded products. Alibaba is for generic goods. You should research to make sure that the item has not been patented by any brand.
You should not purchase branded inventory from this site. If you see a product branded by a national brand on Alibaba, it is counterfeit and could land you in prison if they are sold.
For people who are confused, here is an example of sourcing brand goods from Alibaba. This item sells on Amazon for a lot.
This is a fake example of the item on Alibaba, WHICH YOU SHOULD NEVER PURCHASE TO SELL OFF ON AMAZON!
It seems like there are many people out there who have been confused by the “guru courses” that teach them how to source from Alibaba and create a private label product for Amazon FBA.
I’m starting to notice more people selling counterfeit goods. I hope this doesn’t mean you are confused.
This is an example of a product that cannot be private labeled.
This is a fake LEGO product that was made a few years ago. You may have seen it on Alibaba, but you’re trying sell it under your own brand. This is counterfeiting LEGO’s Intellectual Property.
Even though you may be making sales right now, you will likely end up in a big lawsuit. This is true for products like these.
You don’t have to use your brand name on the product. You’re buying counterfeited products from large brands around the world that have trademarks, patents, and licensing rights. And you are trying to sell them as your own brand.
It is not possible to make a copy of an item made by one of the big brands and then private label it as yours, even if that brand has discontinued it.
This is illegal anywhere in the world, including in the United States.
Jungle Scout can be used to generate product ideas even if your products aren’t sold on Amazon. If your item is profitable on Amazon it will also be profitable outside of Amazon. Here’s the Jungle Scout review
What should I do to pay for samples from Alibaba?
Send goods and services using PayPal. They’ll charge a service fee, but it’s okay.
PayPal allows you to make payments up until $2000. Then, start wiring money from your bank account.
Ask if you are able to send money to friends and save money on both PayPal fees after multiple transactions.
The cost of the wholesale product plus 25 USD for the first kilogram and 6.00 per kilo thereafter should be included in the sample.
If the sample is less than 5-6lbs, you should expect to pay around 50.00.
What Alibaba product is Amazon becoming saturated?
A product that every second seller tried to source recently on Alibaba
The garlic press has a newer version. Facebook review groups are a good place to start.
You could also see the latest products and search for patterns.
How can you negotiate with an Alibaba seller?
Send a minimum 10 suppliers a short, precise, and concise question (Write short emails).
Language barriers are very real. This introduction email template can be used:
Hello, my name is Peter Koch, and I’m the production manager at DollarSanity. I need your assistance with the following. We are looking for the best price and minimum order quantity to sell our garlic press. As an example, I’m happy to send you a photo. To make this order possible, we need a target price for $5. If you are able to make this happen, please let me know. Let me know the prices for 200, 500 and 750 runs. Are you located in China? Are you a factory agent, a trading company, or an agent? Please give me at minimum three options for similar items so I can discuss them with my boss. We would appreciate any information about the quality of your products. We need to be provided with quality standards. It is our company policy not to pay for samples, so I will need to verify that you can provide samples. Before placing an order, we need to verify the product’s quality and ensure that we are satisfied with the samples. We are looking for stronger partnerships with new factories/agents. Thank you, Peter Koch
You can also use this template
Dear, I hope that you’re having a wonderful day. My name is Peter Koch, and I’m the DollarSanity buying manager. We are an Importer/Buying Office based in the USA. Today, I write to you to inquire about the product that I saw on your site. This is the garlic press I am interested in. Please give me the following information. 1.Unit price is based on 1000, 500, and 200 pieces. 2.Minimum Order Quantity? 3.Production lead times? 4.Payment terms? What are your payment terms? Please send me at least three additional options of similar products so I can discuss them with my boss. I will then review your items and get back to me as soon as possible. Please don’t hesitate contacting me if you have any questions. Best regards, Peter Koch
You’ll send the second email template to them after they reply.
Lee, thanks for your kind words. I just wanted to share some of our working methods. It is important to establish a working relationship with new suppliers. Before scaling up, we order test orders. It is important to realize that if 500 units are purchased and have problems, it can affect the client relationship. This is how we operate:
We buy 15-20 samples to verify the quality of the product and then pass on our findings to our clients.
It is more challenging if the product needs to be modified or packaged in a special way. Please let me know:
What is the best price for 15 to 20 samples that will be delivered by air to our US address?
Your feedback and thoughts are welcome. Regards, Peter Koch
Template for 3rd email to Alibaba suppliers
Thank you for returning to. For the remaining details of your quotes, I have attached your spreadsheet. I’ve completed the majority of it. Would you mind filling in the gaps? Once I have all of the information, I can schedule meetings with my bosses for further discussion. Thank you for taking the time to respond to my inquiry. I look forward your feedback and thoughts. Regards, Peter Koch
Once all your suppliers have completed the spreadsheet, you can copy it and paste it into another document to begin the process of negotiating a better price.
These forms will be filled out by 80-90% of suppliers, despite the fact that they receive so many inquiries per day. You would think they wouldn’t bother to go through all that…
They either send their quote again and add to an email body or they simply add to an email body.
It is important to assess the relationship thing.
It saves you a lot of time if you have 15-20 suppliers. It is important to understand the culture and shoot the breeze before you go in on what you want.
Always be polite and professional.
It’s an industry that is built on the ability to negotiate the penny of the pound.
Higher order amounts often mean lower prices.
You can have honest people and emotionally reckless people, just as in every other walk of life.
Some people will be able to build long-lasting relationships while others only think about the future. It is a way to get rid of them.
Email is a great way to get feedback before you reply.
My advice is to follow my example. I chose a product that I was not interested in, and spent time with many suppliers until I reached an agreement on the first set of terms.
It was a wonderful opportunity to look at problems and gain a better understanding of how they work.
This was a great experience and I created spreadsheet templates to make it easier.
I went through the entire shipping process for quoting, and found a lot of problems there. It was all very informative. All very insightful.
It was overwhelming at first so I just danced around with it.
It is a great idea to just jump in and do it. This is another product profitability spreadsheet that you should use.
What are some additional questions to ask when negotiating with an Alibaba supplier to buy a new product or import from China?
What percentage of your exports are to the US or other countries you intend to import into? It is important to know if your customers have had experience in selling to the US.
Alibaba is full of scammers, but it also has a lot legit suppliers who would love to do business with you.
You should do everything possible to safeguard yourself against scams, but it shouldn’t be so overwhelming that you feel unable to make the decision. Good luck!
Resources and tools that are useful
These are the tools that I use to run my Amazon private label company.
Full disclosure: I may earn a commission from you if they refer to affiliate links.
Jungle Scout is the most powerful and popular Amazon product search tool. I’m using Jungle Scout and I think it’s a very good starting point for product research and should save you money in the long run by using it to choose the right product!Fiverr: Photography, listing copy, keyword research, logo creation, product designShopify: Your brand should always have an online presence and with Shopify, it is easy to create your own online storeFulfillment by Amazon Revenue Calculator: Check various FBA costs and your product profitabilityGoogle Trends: Is the product seasonal?Xero: accounting and bookkeepingAlibaba: Product sourcingFeedbackGenius: Send out automated emailsIgnite: If you’re looking for a tool to help you optimize PPC, then Ignite is a candidate. This tool will provide suggestions for raising bids, adding negative keywords, moving keywords to other campaigns, and so on. These suggestions were very eye-opening for me.
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A Guide to Selling on Amazon and Buying on Alibaba in 2022: The Complete Guide Dollarsanity.