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Suppliers are a HUGE part of your business success. A great manufacturer can mean the difference between awesome and awful product quality, miniscule and massive margins and even arriving late to Amazon. Your manufacturer is NOT married to you, act accordingly and be constantly on the lookout for better opportunities, prices and setups to help grow and scale your Amazon business. It’s FBA the playa way…
Today We Cover
- Why breakups are inevitable in business and life
- How supplier struggles add Amazon issues
- Ways to boost profitability and passiveness of Amazon
- The reason I’m shopping around for better factories
- Why I want to simply my manufacturing and logistics
- The reason I’m not a retail arbitrage fan
- How it works with Alibaba, sourcing agents and manufacturers in production
- Why Amazon businesses are safer with supplier backup plans
- Why you MUST care about making money above all else
- The shipping savings on breaking up with your supplier
- Why it’s never a bad idea to get new product quotes
- The cashflow connundrum Amazon entrepreneurs face
- How to find and source a great private label product – FREE Workshop
Reasons for Sourcing New Suppliers
- Product Quality Issues
- Better Unit Costs
- Simplifying Logistics
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Matt, love the podcast and great that you had a chance to live in Hangzhou to “date” some suppliers. You learn a lot once you’re on the ground as I’m sure you’ve seen. I’m based in China and have been sourcing here since 2008 and thought I’d weigh in.
Great analogy to dating (I use it myself when describing this process). You’re absolutely right you shouldn’t immediately commit to one supplier for life if there are serious problems that can’t be fixed. On the other hand, changing suppliers entails a lot of work also. Not only do you have to reestablish relationships, but it also means vetting the factory, production, and quality, renegotiating pricing, order fulfilment, communications, shipping, payment terms, etc. It’s like getting back in the dating game again which can be fun but can be tedious especially when you want to focus on growing your business and sales. Sometimes it makes more sense to “work out your differences” because you are in it for the long run to benefit each other – better payment terms, lower pricing, better feel for your needs, easier communication and work styles, etc.
Another point I’d like to comment on is with product pricing. In China as as a general rule “you get what you pay for”. Once you’ve done your due diligence you will have a feel for what the market price is. If one of the suppliers is quoting way lower that’s a red flag in my book. There’s a strong chance that they’re cutting corners somewhere (quality, management, worker safety, etc) or they may be out to scam you. Just saying buyer beware as a warning to your audience when negotiating pricing as it’s one of the important factors but not the only one.
Good luck with the 7 figure exit! I’m working towards the same goal myself… Gary
Agreed on every point man. It’s all about balance.
The article is useful, thanks for sharing