Okay now that you’ve spent at least a couple of days (ideally a week or more) doing product research, you have identified a few products that are selling well on Amazon. But they still need to have a scope for improvement. If you haven’t found these yet, please check out the Amazon Product Research video on the LivinThatLife channel. Come back here after you’ve watched that video.
The next step after product research is to find a wholesale supplier that can manufacture and ship your products to the Amazon warehouse. This is a very important step because:
- Picking a lousy supplier can mess up your product design or delivery timeline.
- A good supplier will be open to negotiation so that both of you can benefit at the right price point. Otherwise, you may be forced to pay more for the product which will end up in you charging more on Amazon and potentially loosing some customers.
- If your product ends up selling well (touchwood), you will have to maintain a steady supply of stock from your supplier to Amazon. So if you pick a bad supplier, you can end up with a communication nightmare. Or you may have to switch the supplier and face a time lag which translates to a lot of money being left on the table.
So picking a good supplier is very important if you want to be an FBA seller in the long-term. Now, let’s look at some PRO tips to keep in mind while selecting the supplier.
Pro Tip #1 : Apply the right filters on Alibaba
Make sure to check ON the filters “Assessed supplier” and “Gold supplier” while searching on Alibaba. This will ensure that you process only those suppliers who have had proper inspection done and are trustworthy as deemed by Alibaba. This is the first step you need to take for finding a legitimate quality supplier overseas.
Pro Tip #2 : Check the MOQ
Almost all the suppliers you’ll find on Alibaba have an MOQ or Minimum Order Quantity. Usually you can negotiate for a lower price if you order larger number of products but the MOQ is the lower threshold amount for the order. If you’re a beginner, you’re better off going with a supplier who doesn’t have too high of an MOQ. This will ensure that your initial investment is low so that you don’t loose too much of your capital in case things don’t turn out well. The optimal MOQ you want from a supplier can be anywhere from 100-500. But depending on your product, competition and price point, you can even order upto 1000 units for your first product from the supplier.
Pro Tip #3 : Factory Owners vs Resellers
There are two kinds of suppliers you’ll find on Alibaba – factory owners and resellers. Factory owners are genuine manufacturing companies who will produce quality products from ground-up and prefer to deal with bigger players and higher orders. On the other hand, resellers are people who will try to get an order from you and redirect it to someone else for a margin. These resellers usually give you a faster response, a variety of products and are also better at communication. However, you’ll be charged more for the same product which can lead to lower profits on your end especially if there’s a tough competition on Amazon. To find factory owners, you’ll have to search for suppliers whose name seems like they’re a genuine incorporated entity. They also have a lower response rate, higher MOQ and will have been on Alibaba for at least 5+ years.
Pro Tip #4 : Scan for a unique product to eliminate competition.
While going through the supplier’s product listing, check if the same product is being sold by someone else on Amazon. This is more of a common sense tip but surprisingly easy to miss. If you feel that the product is of high quality and has demand, maybe choose a different colour or ask for a variation with modified features. Brainstorm on how you can make your product unique and capture the audience’s attention while making sure it delivers a quality user experience.
Pro Tip #5 : Domestic vs International
Last but not least – Check if there is a domestic supplier that can offer a better product or better price point. Many products like health supplements are better if sourced from the United States than China. Or you may choose to sell rather large products that will cost more if shipped internationally. There may also be higher import tax levied on certain products (like toys). So depending on these factors, you should choose an optimal supplier that reduces your operation cost and maximises profit and ease of operation.
These are some of the essential tips for selecting a good supplier for Amazon FBA. Hope you’ve learned something useful from this article. For a complete step-by-step guide on how to get started with selling on Amazon, check out The Amazon Method course. You will find a lot of testimonials from people who got started with their first product on Amazon and are now making a pretty nice side income of $1000+ every month. So join our exclusive tribe of amazon sellers by clicking the link below.