Originally published on February 23, 2017, updated July 1, 2020
Sourcing products from China can be very rewarding for Amazon sellers, but it can also present a number of challenges. We hosted a webinar with James Addison, founder of My Asia Office, to discuss ways that working with fractional overseas employees can benefit merchants interested in sourcing from China. Conversation topics include:
You can watch the webinar above or check out the show notes below for the recap and a full transcript.
Many Amazon business owners have the goal of selling their own products. But this can be an arduous, complicated process as you attempt to do business overseas – whether with China or another country well-known for manufacturing.
Some turn to online marketplaces or commission agents. In this conversation, James Addison explores another option.
If you have an online business, it is often easy to think about what you can get done with a few mouse clicks or by sending an email. But working with the factories in China is much more complicated than simply sending a request to ask how much it will cost to make 500-plus teddy bears with a holiday theme. When you start to contact factories on your own, or even through a marketplace such as Alibaba, you are likely to receive irrelevant quotes that just don’t match up with what you are looking for.
China is an enormous country and there are many factories you could potentially do business with. Contacting all of these factories about how to create your item could soon become far more demanding than running your business. Nobody wants to tackle a business task that takes much longer than it should!
Even when you’re successful in obtaining a factory quote, it doesn’t necessarily mean you are ready to get started. A lot of times your factory quote can require multiple changes due to inaccuracies, whether pricing, minimum order quantity or materials used. One change could throw your entire quote off in a way that you don’t expect, and you could wind up needing to look for a different factory to work with.
It’s tempting to do business with the first factory you think is going to meet your needs. But you’ve also got to keep an eye on quality. Your sample could be top-notch and then when the items are created, the quality may be inferior to your expectations. When you have a terrific product that is bringing in 4 and 5-star ratings on Amazon.com, you’ve got to work to protect that. If you start to get a bunch of 1-star ratings that talk about a bad product, it will impact how the item sells long-term.
Fractional employees through a company (such as My Asia Office) have the experience to connect you with the best suppliers. This can save you time, money and a lot of stress and worry.
“[Our employees] are trained to quote a large number of factories quickly and narrow down to the couple of factories we think, and they think, in their experience, will be the best fit,” said Addison. “When you have a fractional employee through My Asia Office, they can pick up the phone, email a large number of factories, eliminate them quickly and get down to a few good potential options.” In this case, you can find a solution in a number of days instead of spending weeks going back and forth in a vain attempt to try to find a factory somewhere in China.
One thing to keep in mind is that the factories in China actually prefer to work with in-country agents. This is in part because the language and time zone barriers are removed. On-the-ground agents also know how to negotiate and how business is done at the factories. Having an agent representing you in China helps your Amazon business be seen as a more serious buyer. You’ll likely receive much better pricing by using an agent representing you in person, as the factory sees you as a genuine customer. Sometimes factories will receive orders online, and they will try to quote them at high prices, simply to see if they can get the bid. They would rather take fewer projects and get paid a higher rate than take more jobs at lower prices.
Keep in mind that every factory is unique. They all have a different way of handling the quoting process. While you can take care of this on your own, there are a lot of things that having a representative will streamline for you. They will know if you need a factory that can produce your items quickly, if this is your top priority and where to find the right type of factory to manufacture your item.
You’ve worked hard to build your Amazon business. Keep your company running smoothly by ensuring that the items you source are manufactured to your specifications.
Liz: James, go ahead and take it away.
James: Thanks Liz. Thanks for the introduction. As she said, we're going to talk about every sourcing 101 and what overseas employees can do for you. So I know a number of sellers currently buy some or all of their products overseas. And if they're not already purchasing, they might be considering purchasing goods overseas to sell under their own brands.
James: And we're going to walk through today, some of the challenges of sourcing overseas with a focus on China. And when we say sourcing, we're not just saying, finding a factory that can make your item. But finding the factory, sampling the factory and developing a longterm mutual relationship.
James: We're going to talk about how you can utilize fractional employees on the ground in China, to help you source your product. We're going to discuss some of the benefits, My Asia Office, compared to simply using Alibaba or a commissioned agent or trading company you might have met online or through Alibaba.
James: We're going to go over the process, how it works with us, the reports you get and how you can track everything, all your projects and what you're working on. We're going to talk about My Asia Office and its particular relationship to Amazon and other e-commerce marketplaces, and what kind of benefits we offer.
James: Then we're going to end with of course, some special offers for first time customers, both from Feedback Five and My Asia Office. And we're going to go over some of the questions you've submitted during this webinar and provide some answers and ideas to help you come up with some solutions for sourcing in China. Liz, take it away the next slide.
James: So there's always a number of challenges when you're sourcing in China and we're going to focus on sourcing without boots on the ground as we say. There are some very simple problems when you're sourcing a product and you're doing it over the internet through Alibaba or over Skype.
James: And one of the main problems is quite simple is, you're looking for a product and you receive hundreds or tens or hundreds of irrelevant quotes, or you're quoting an item and you get a response back and you don't know how to analyze it. At the end of the day you want an item and you know what you want, but you have trouble getting back firm quotes and maybe you do get back some quotes, but you're not sure it's exactly you're looking for.
James: That's the simplest problem, getting started. Then you might find when you're sourcing from China that you've got to communicate all your requirements. And if you're quoting something that say it's a simple wood item, fabric item, you've got thousands of different factories that can produce your item.
James: It's very difficult and tedious to talk to enough of them and communicate your needs to find a partner that's going to work for you. Again, it depends on every company, but you might be price focused. You might need price quality. You might need price quality and a lead time or a mix of any different factors that you need to meet for your business.
James: And again, it can be very inefficient, especially if we're using Skype or email to go back and forth with a large number of potential partners, when you're using a website like Alibaba. Factory quotes, especially when you're using chat or email can often be inaccurate, they might constantly be changing them.
James: They might have difficulty understanding what exactly you're looking for. There's a large number of English speakers in China, especially when you're dealing with sales reps that are communicating with US-based buyers. But that doesn't mean they're going to be familiar with all the things you might need to send them.
James: Whether it's material, they may not be familiar with the exact product. There's just always a language barrier and that can lead to a lot of mistakes or miscommunications that don't have a happy ending. And outside of the initially finding a factory that can do what you need, there's more troublesome problems that make sourcing in China a challenge.
James: You might get a sample that's great and you love it. And then on mass production, you find out the quality is not where you needed it to be, it didn't match the sample, the color didn't match. All of a sudden, you've got thousands of dollars in inventory that you can't sell, or you have to discount, or every 10 you sell you get three back.
James: And that ties into Amazon reviews. If you've got a four or five star product, spent years selling and getting those ratings, all of a sudden you get a couple hundred bad ones. It doesn't take many one stars to ruin a five star rating. And it doesn't take many, one stars to ruin a four star rating either.
James: So quality on mass production batch to batch is one of the most difficult parts of sourcing. And just because the first time goes well, if you're going to be successful with the product you're going to be hopefully selling it for years and restocking every few months. So that is one of the most important parts of sourcing is making sure that your brand, your listing and your ratings stay safe and consistent.
James: Because if your ratings go down, you're going to have to drop your pricing, Amazon 101. Another challenge, and these are just some tedious issues. Every factory is different. There are different business, there are thousands of factories up and down in China. They all have their own process for quoting a product, for communicating with customers.
James: When you're doing it over the internet or from the US, there's a lot of back and forth. It's really tough to make it all work when they're just... they're all different. Some have great communication others might struggle with English. Some might be used to quoting hundreds of items, others might only be able to quote a couple customers a month. They're all different.
James: And then we find this very challenging and people don't realize it, it's communicating packaging requirements to each factory. You don't notice if your packaging is good or not until you start getting returns. And you may not even have a good system to know how many returns you're getting on a particular skew.
James: Amazon's reporting certainly limited in this aspect, but at the end of the day investing a couple of cents and packaging can save you a couple dollars. When you factor in the cost of returns, loss, sales and those expenses that stay hidden until you really dive deep. And you also need to make sure that you're not spending too much on packaging.
James: If you've got a $20 item and say, it's a little fragile, you can spend six or $8 putting foam, bubble wrap, double boxes, whatnot. But if you spend too much money, it's not going be competitive, competitively priced. So you want to get the right packaging without spending too much and making it not competitive because it's packaged so well, but it doesn't need to be packaged that well. And we'll move to the next slide.
James: So here at My Asia Office, we believe an experience fractional employee that we offer in China can really help solve all these headaches and do it in a cost effective manner. When we use our fractional employees, they're trained to quote a large number of factories quickly and narrow down to the couple factories we think, and they think that their experience are going to be the best fit.
James: There's no sending messages every evening and getting them back in the morning, repeating over email and having the time barrier. When you have a fractional employee through My Asia Office, they can pick up the phone, email large number of factories, eliminating them quickly, get down to a few good potential options.
James: And then get their data, put it in whatever form you want or our standard template. And within a couple of days, get you back offers very quickly. So if you want to quote 10, 15, 25 or 50 factories, they could do that in a number of days compared to hopping on Alibaba and sending hundreds of emails and spending weeks on the back and forth.
James: The agent will bring the tools and experience required to identify your most desirable supplier. So on your end, you definitely need to communicate well. What do I care about? Do I need the lowest price possible? And I'm okay waiting 60 days for production? Or do I need a good price and have my factories finish goods like clockwork?
James: It's going to depend on a number of factors, obviously how has your business set up? But there's also product specific things. If you're sourcing large cheap items, you don't want to store them in your warehouse for six months because your factory has a 90 day production time.
James: If you're sourcing small trinkets that you pay a dollar for and sell them for 10, you might sit on half year, a year stock because the storage is nothing, they're not expensive. And the markup is so high that you don't want to ever stock out. So depending on the product and your business, you're going to communicate to this agent.
James: We match you with the right one, and they're going to find a factory that meets your needs. There might only be two or three factories that can make what you're looking for. There might be two or 3000. Good communication and an experienced agent will help you find exactly what you want.
James: Another thing that people don't often realize is that factories in China prefer to work with agents in China. It's easier for them. They speak the language. They can efficiently communicate. They know how to negotiate better. Most of our agents have been on the sales side of a factory and been on the procurement side, so they know the drill.
James: And quite honestly when you have an agent on the ground, the factory sees you as a more serious buyer. All the big box stores have agents and offices overseas to do their procurement. When you have that additional capability and you do use a local employee on the ground to do your sourcing, you end up getting better prices.
James: It's just a fact, you're sourcing like the bigger players and you're getting better prices because the factory sees you as a more serious customer. They know that if they don't give a competitive offer, you're quoting around, you're doing your due diligence. If they don't give you a competitive price, they know you're going to find someone who will. And that's key.
James: Because when you're sourcing over the internet, sometimes they find that they can give a really high price. Maybe they get the deal and they're way better off getting one in three deals at incredibly high prices versus two out of three at their lowest margin. So having that employee on the ground it helps you communicate better.
James: They're more experienced, but it also establishes more credibility for your business and your purchasing immediately. And again, when I say sourcing, step one is finding the factory that can make your goods. The other steps all involve placing the orders efficiently, following the goods from production to completion, arranging the shipments and getting it into your supply chain and repeating this successfully.
James: If you get one, I always say, you don't make money off your first batch or order of a new product. You make your money on all the following orders. And it's great if you get a good item, you get it in. And it's great quality in the first round, but it's worthless if every other time you order it you have delays or issues that cause your business to stock out, or suffer, or lose good ratings that you've worked for.
James: So again, the agent on the ground is not just going to find new items or find current items you're buying for less. They're going to help you manage the entire process. And if you're doing it right, you're buying goods month after month after month after month to meet your demand.
James: And we're going to take a couple... we see a couple of relevant questions that we'll take real quick. We have a question from Mary. "But do you look for suppliers in a specific geographic area of China? Does price differ depending if you find a supplier in a smaller city or rural area versus a big city like Tianjin or Shanghai?"
James: The answer is always, it depends. A lot of the bigger port cities do have higher labor rates, do have a more expensive rent and land for factories. And that would at first suggest the items going to be more expensive. At the same time, they're also right by the ports. The most popular ports have much more volume and they're cheaper quite honestly, and the goods get to the US faster.
James: For an item that's labor-intensive, not that heavy and not that big, you're going to save from cheap labor and an inland city. And the cost to truck the goods from that inland city to the port, because it's a small item and a light item means making it outside of a big city is probably the way to go.
James: I give a good example of baskets, small, light, cheap, home baskets. You'll always make those inland. When it comes to larger heavier items that might require less unskilled labor and more machinery equipment and know how, you're going to find the port cities are still dominant.
James: Big cities have bigger factories too and some of those bigger factories can get more efficiency, regardless of whether their inputs such as labor and rent are more expensive. Another individual named Jeff had a question, "How can you verify quality when you can't see the product firsthand?"
James: That's an interesting question and a good question, and the answer is you can't. But you can do all sorts of things to try to make sure what you're getting is what you expect. This is one of the primary challenges of sourcing. You can start with something simple and every order we facilitate through My Asia Office as fractional employees.
James: At a minimum we provide photos, dimensions and weights. If it's a high value order or you're really concerned or it's a new product, you might want an onsite inspection. Those can be pretty cost effective. We maintain a quality control team at My Asia Office that can go on site. They're based in some of the bigger cities.
James: And if you're in a further out city, we usually have partners. We always recommend not using some of the bigger online quality control websites. Because bribery through those websites is the norm. So the individual inspectors making $50 a day, they show up to the factory to inspect a $20,000 order.
James: The factory gives them a hundred dollars. They overlook a couple of things, take some photos, fill out the documents and the factory basically, you don't catch the fact that, oh, five or 10% of these are not done correctly. They're marked improperly or they're scratched up.
James: So quality control, it's tough. It's a business decision every time. I know that with My Asia Office at a minimum, you get photos and weights and dimensions. And that catches nine out of 10 issues. We offer the ability to escalate. We offer onsite inspections, but at the end of the day, it's always a challenge one that we hopefully can make easier.
James: But it's integral the sourcing that you know. And again, it all goes back to the relationship. If you have a good relationship with the factory and you build trust and you build a longterm relationship, you can eventually trust them more and more to tell you we made a mistake, we're going to fix it. Only send you good product.
James: And when you have a working relationship, you actually do see that. I've seen goods that were pushing the finish on time. They're late. They find out the wrong. They tell us that. And we say, "Glad you told us. Get them done. When you can get them fixed, it's much more important they're done right than done wrong on time."
James: So now let's continue with the presentation. I've seen a number of other questions have come in but we'll get to those shortly. So again, and we covered a little bit of this in the last slides, but I want to go some of the benefits of My Asia Office and utilizing a fractional employee on the ground.
James: First, we're going to connect you with an individual that's doing this all day with other customers. You don't need to... We generally offer minimums of 20 to 30 hours a month of assistance. And your assistant will work directly with you, communicate over email, Skype, whatever you prefer and they know what they're doing.
James: They've managed hundreds of items over their careers and they can add that level of expertise to your business. And more importantly, they're on the ground in China, they've worked with a number of factories in their region. They can do vetting much better, much quicker than you can.
James: When you go on Alibaba for every one factory, there's a hundred middlemen selling from the factory in marketing online. One of the easiest ways to get through the large number of irrelevant quotes is to skip the middleman, find the factory. And that can be really tough. It's very difficult to search factory names on Google.
James: Google doesn't really have much to find in China. So when you have an agent on the ground, they're searching in the local language, they're using the Google of China which is called Biadu. They can do a lot more quick vetting and making sure they're connecting you with the factory.
James: This is probably even more important. The fractional employee works for you. They're not working for a supplier or a trading agency that's going to charge markups. They're going to charge commissions. They might tell it to you for five and tell you that's what they're paying, but then get a rebate from the factory.
James: Our fractional employees only work for you by the hour, they do not do... There's no markups. You're paying the factory directly. They're just there to help you find products and manage them. That's it. Very transparent, very open, no conflict of interest. I've found with Amazon being a very large competitive marketplace, if there's not room for middlemen taking commissions, when you're buying products and trying to sell them on Amazon.
James: If someone's buying it from the factory and selling it to you overseas and marking it up 20%, you have to have a great product to then make a good margin selling it in the US. Because someone can go factory direct and automatically have a big price advantage over you.
James: So Amazon in my opinion, if someone's marking it up between the factory and the importer, that importer is going to struggle to be competitive longterm. Obviously you can have great products and there's many ways around that. But if you're paying commissions, your profit is less than it should be by quite a bit.
James: When you use your fractional agent, we're going to get an idea and that's what our US onboarding team does of what products you're looking for. What do you make? What do you sell? We've got hundreds of factories in our network. We might have a factory that already make similar items.
James: And depending, maybe you're making a textile, maybe you're making a steel product, maybe you're molding plastic. We're going to match you with an agent that's experienced in that product and has a network of factories that can make what you're looking for. So you're already going to be getting some connections and you're already pulling from... you're not just sourcing blind and starting from scratch.
James: There's plenty of reputable factories that if you have a plastic product, they might be willing to set up the mold for free, because they know they're going to get business and they get a lot of business currently.
James: Another thing you'll get, and we've touched on this a little bit before is you get the real time communication between your employee on the ground, in the factory. When you're sourcing an item, we see that one of the biggest pieces of time spent is the back and forth, with the factories and the agent.
James: To make sure that everything that they're saying is true, that we need to get additional information. I know that we always need before we can evaluate a product, we need to know how big it is, we need to know how heavy it is because that drives our FedEx spin. That drives Amazon fees. You can't make a decision without that information.
James: When our agents are sourcing, they know what to look for. They hop on the very popular live chat in China. It's not Skype, it's called QQ. Most factories have it. They're just talking on the phone messaging back and forth. There's no multi-hour delay or multi-day delay between your response and their response.
James: They can ask hundreds of questions in a short period of time. That means what used to take 20 days to negotiate before you even started talking about sample, could now take two hours. And again, factories quoting products prefer to talk with agents on the ground. They know they're more likely to get a deal, it's faster, it's more efficient.
James: If they know that if I give this agent the right price and all the information today, I could have an order. I could have a sample request tomorrow and an order in seven days. There are obviously can give that priority and focus over a random email inquiry from a customer that doesn't seem to have anyone on the ground and is relying on Alibaba.
James: So you think about the employee dynamics, the sales related dynamics of these Chinese individuals at the factories, they get paid based on their volume. Where do you think their effort goes? Where do you think the best quotes and the most time spin is? It's negotiating with local agents purchasing on behalf of the US-based company.
James: So that ties into the next piece. Your on the ground employee has greater negotiating powers. And we're in the US, we have one of the highest wages in the world. In China, the wages they are lower. You can get a lot, you can get a high qualified, intelligent, hardworking individual.
James: You can get them on the ground and get that better negotiating power, that leverage and that experience. And ultimately you're saving a lot of money and time overdoing it in the US. It is in my opinion, more efficient in every way. And that's why we've built this program and we believe for an Amazon seller, it is critical to remain competitive that you're working with an agent on the ground.
James: And again, my job as agents when you're ordering 50 or a hundred skews, and you're ordering every two or three months, they really simplify that process. They handle making sure that your goods are finishing, they get loaded on containers. They're staying on top of your quality.
James: I mean, they're literally working for your company on the ground and there's simple things, say I got a container finished need to book it with my forwarder. Or I've got three orders that make up a container in Ningbo. I want to ship a full container because that's significantly cheaper.
James: You don't need to figure that all out and communicate with your forwarder and all three factories and make plans. You tell your agent financial office, here's what I'm trying to do. Contact the factories. Here's my forwarder's information in China, because all your forwarders have Chinese offices that they're going through, make it happen.
James: You'll find that what used to take eight hours a lot of headache, it's done same day. I mean, it's the preferred way for forwarders to work. It's the preferred way for factories to work when it comes to consolidating orders. And it's just so difficult to do from overseas. And it's so much simpler for an agent on the ground to do it.
James: So let's look at a couple more questions that are relevant to this response. So we got a question from Sarah, very relevant. "Do all fractional employees offer through your company, My Asia Office speak English fluently?" Yes. All of our agents are university educated and they all speak English.
James: And if they're doing in My Asia Office, we generally have, depending on the tiers at least a year or two of experience working with English purchasers overseas. So we don't hire anyone that does not speak English because our customer base requires it. And again, the overseas labor rates are very competitive.
James: So for a rate that would be outrageously low in the US, you can get an English speaking, experienced university educated graduate to manage your sourcing program in China. Another question by Kevin, "How do things like quotes and other things work in terms of factories that only speak a Chinese language? Do the fractional employees translate?" Yes.
James: All of our sourcing agents speak English fluently. They're all Chinese nationals. So they speak the language. Most of the time they're communicating with the factory in Mandarin or Cantonese and they're going to translate it. And for you, what's relevant and they'll send it to you.
James: The way I always recommend working when you're looking for a new item, or you're looking to quote a current item is we have a few standard templates. You can obviously use your own. You complete it, you send it to your agent that tells them what you want. They'll do all the back and forth. They'll have occasionally questions for you.
James: And then your template they'll submit the proposals. You might get three factories that they found that have maybe one has a thicker metal, one has a better price, one's got a higher MOQ. But again, your fractional employee is going to speak the local language and English fluently.
James: And then one last question from Tim. "I'm assuming you do, but will you help us work with a company, we've been working with for three years? I have a good relationship with him now, but we want someone to randomly show up at the factory to show presence and check quality."
James: Absolutely. If you work with a factory for a couple of years, that's great and you're building a relationship and that's important. It always makes sense to randomly show up, to inspect, to peek in on them and see what they're doing. They might have staffing changes someone that's managing your account.
James: It's a five star employee might be replaced with someone that doesn't get it and is not familiar with your item. But really in my opinion, you want to work with your current factories every year. You should be requoting your top sellers. You might find that your factory have got good margins and got complacent.
James: They might've had an employee that went or a company who was buying from them went bankrupt and now they have to raise their prices to cover their costs, and they're going to be above market. And at the end of the day, depending how often you're ordering it's convenient and easy for your US administrative staff to have someone in China doing all the work.
James: Arranging the PIs, arranging the bookings, following up on finished dates, being there to help, getting photos. So you don't just need them to show up and randomly inspect, but you can absolutely benefit from just administrative tasks on having an agent on the ground. Okay, we're going to move to next slide. And I see there's more questions building up that we'll cover shortly.
James: And I see a number of questions about this and hopefully we'll cover it and then go back to the questions. How does it all work? So the first step is going to be a call with the US-based rep, and I'll probably be on the call with Kiersten. Who's going to be managing all of our inbound requests that are recommended from e-comm engine.
James: And we're going to figure out what are you looking for? Are you buying a hundred items and you just constantly need to stay on top of cost? Are you selling 10 items and looking to add 10 more this year? What type of items are they? Are they big and bulky and heavy? And you want to be doing just in time inventory because the storage is outrageously expensive compared to your margin.
James: Or are they small light items that the quality needs to be perfect, but you're buying once or twice a year and you don't need to time the inventory. You're more looking to make sure the quality is good and that everything looks nice. It's a high markup item. You can't risk that five star rating.
James: You want someone to go onsite and inspect every unit. There's plenty of customers that actually do inspect every single unit, especially if you're selling toys or large expensive items. Where the 10 or so, since the cost to do a check overseas is worth it. When the item cost you $40.
James: Every time if it's 2% error rate, you make money by inspecting every single one because the unit cost is so high and the cost to check it's so low. So after we get your needs in place, we're going to make recommendation. We're going to match you with a dedicated sourcing agent.
James: And we're going to see if you're managing a hundred plus skews and you're buying $200,000 a month across 60 orders, you're probably going to want a dedicated agent. That's a full time person that you're working with all the time. You know him, he answers to you and you really need him all day.
James: And he can pull from additional resources if you've got a month where you say you're seasonal is... you're spring seasonal. So you need him full time and he needs help. He can pull it during that peak period. And then the rest of the year, he's just he is managing other projects.
James: Maybe you don't need a dedicated agent. Maybe you're looking to add 10 items next year. You could basically commit to a minimum each month on an annual basis. And you're going to get usually the same individual and they'll do what you need when you need it. And when you source three rounds and you're done, you have them do a little administrative work.
James: But when you don't need them, you're not getting charged for them because they're working with other customers. And there's something in between where we might recommend, okay, based on your needs, we think you need about 40 hours a month. And if you need more, you can go under, over, there's no penalty.
James: And again, you'll get the same agent for that period of time each month. And again we'll discuss with you, determine your needs and make a recommendation. And ultimately, it's your decision. Once you start working, you basically have an agent. So you email, you Skype them.
James: What are you looking for? Are you looking for new items? Do you want to requote some of your current items? I mean, what you're currently doing to source product, all of it would ideally go to your new on the ground agent. That's what they're there for, they can do it more efficiently.
James: And they're probably less expensive than US-based staff for this. Depending on your product and I saw this was related to a question. You might need an NDA to make sure that they're not making it for anyone else. Part of My Asia Office, they're never combined sourcing requests.
James: So say you source an item that we make for another customer. Your agent can help you on that. It's just... there's no way that we can offer one product to one person, then sell to another person in that circumstance. That doesn't really happen that often. If you've got something that you're holding close, you can actually get an NDA.
James: So you request that through our Chinese, our US office, we'll validate it and then inform your Chinese sourcing agent of the appropriate way to handle the confidential quote request. Again, once you get out to your agent and you tell them what they want, go out to factories, pull information and then they'll submit proposals to you.
James: You might get one, you might get three, you might get 10. It depends on how long you want them to spend on this request. What kind of volume do you expect? If you're going to spend $10,000 a month on a product, you're going to have them spend more time quoting than something that you're buying $400 a month of.
James: And in their presentation to you, they'll show you what your options are. You can have them go back and negotiate price quantity. So always negotiable. They'll generally negotiate a lot upfront, but if you come back to an order and with an order in hand and say, "Hey, offer this factory 500, but I need them to be $12 I can't do 12.50."
James: That happens all the time. Once you have an order in hand, they'll get it through. We generally recommend sampling. You can have your agent sample it and take photos for you, or they can mail it to the US, you can do generally do both. But they can help you through that process. I always recommend it, some people don't.
James: It just depends on the product and the type of product and then what your initial investment is. Or if you're currently selling something that rates five stars, you absolutely want to sample and you probably want to inspect the first batch. If you switched to a cheaper factory, because the risk of messing up your listing is too high.
James: Your MAO, your My Asia Office agent will follow projects until they're complete. You don't need to be following up. If you have five orders one week, you don't need to email five different factories and try to communicate and wait for their PI. A lot of our customers will email their agent and say, "I need 500 QA, 200 is QB, 300 is QC, 400 is QD and a hundred is QE. Please get me all the PIs and make sure they're correct."
James: Two or three days later, they've got all the PIs. They sign them, send them back their agent and they make the bank transfers to their factories. The MAO agent gives them the finished dates back and they move on. Again, it depends on how you're ordering what kind of system you're working with, but they really take the headaches out of it and they save you time.
James: That's definitely the way to do that. You don't want to be emailing five different people and just having to get it all and collected. I mean, just you all get 10, 15, 20 emails by the time you've actually got the PI and sent the bank information and wires to those five individuals. Why would you do that?
James: You send the five wires, you send copies to your agent, your agent takes care of the rest. And again, our dedicated employees start at $10 an hour, depending on how much volume you commit to what you're looking for and based on your needs. So we're going to take a couple more questions. These will try to be related to the process.
James: So Izzy asked, "How are your charges being calculated, 8% of the PO?" As I mentioned before, we do not take commissions. It is an hourly rate. That's it. MAO the idea is that for the fractional employee offering that we eliminate all of the adverse incentives and we're cutting out the middle man.
James: You're only paying an hourly rate. Another question from Maria, "Do you impose an MOQ before your agents will search for the products?" No, we don't. You definitely... we strongly cannot say this enough. Definitely want to give an accurate MOQ when you're communicating with your agent.
James: It can be a range 200 to 400. This is the opposite of when you're searching on Alibaba. You're searching on Alibaba, you want to put a lofty thousand, 10,000 piece MOQ out there to get interest and then trying to negotiate the price and the MOQ down. That is not how sourcing the right way works, especially when you're working with individuals on the ground.
James: You want to be very clear what you're looking to buy in your MOQ. If you're going to buy a 10,000 of something a month, or you're going to buy 200 of something a month, there's definitely a factory that's better depending on the volume. There are very efficient factories that won't take MOQs under 10,000 a month.
James: And they might have great pricing, but it's because of the way they operate. Then there are factories that are much better about handling one off smaller orders. It just depends on the factory, its location and its current customer base. So we always recommend you be very honest with your MOQs.
James: That being said, the agent works for you. If you want him to look for a hundred items of this or that they'll do it. They might tell you, I can't find it at a hundred but I know a factory that will do 200. They might be able to find an MOQ of 50. At the end of the day, they're doing what you want, we only charge hourly for their services. We do not take a commission.
James: So it doesn't matter to us whether you're ordering a hundred thousand or 10,000. As long as you're communicating well with your agent, you're going to find that in most circumstances, they can cast a very wide net. And find much more than a US-based sourcing team can find.
James: Both from an MOQ's perspective, from actually finding exactly what you're looking for and from a pricing perspective. One more question. "If we use a fractional employee, are we completely off Alibaba? How would the transaction take place in that case?"
James: So no. You can use Alibaba all you want. We've had overseeing thousands of items, we found Alibaba very inefficient. Buying as a US buyer, buying from the US from China, we've never liked it. It just doesn't work well. It takes a ton of time and there's too many errors. I used to have a metric in my head.
James: If I buy something off Alibaba without doing due diligence, without any assistance, one in four times it's going to be defective. It may not be defective where you can't sell it, but it's going to be three stars. Article came out recently, Amazon doesn't want anyone selling things that rate less than three and a half stars.
James: I agree with that metric. It's hard to sell at a profit low rating items and Amazon has made it very clear what their floor on quality is. And according to that publication, it was really three and a half stars. They haven't done anything formal about it and they never will. But the ranking algorithms definitely focus on quality.
James: But anyway, how would a transaction take place in that case? You do not need to change any ways, any of the way that you do business. You're using a forwarder, or using Alipay, fine, keep doing it. Your agents are just helping you find factories. All the factories are going to be on Alibaba too.
James: So if you wanted the agent to find the factory negotiate, you still want to place the order through Alibaba, easy. You just say, "Okay, for this factory, can you get their Alibaba information and help us put the order in through Alibaba?" I don't think it's necessary, but hey, you do business the way you want.
James: We're just recommending agents on the ground to help you source. That's all we're offering. They can integrate to your supply chain and your operations, and you don't have to change the way you do things. And that's critical for this model. Everyone does things differently and we're just looking to help you have staff that can be as effective as possible for the sourcing piece of your business.
James: That being said, I think we're going to move to the next slide. We're running low on time here. So when you do get information back and forth from your agent, you're going to get details on how they spent their time and what they did. And we broke it into a couple of different tasks.
James: You can see live chat with factories, searching for vendors, sending inquiries and studying products. You can get reports. We recommend putting a number in a nickname for everything you're working on. So you look at the graph to the left, you can see how much time they spend on each task.
James: You can see there's a gym mat, a balanced trainer, a spool mini mega rack in this example. So if you've authorized your agent to look for these items, you're going get detailed records on how they spent their time, what they spent it on and what particular projects they spent it on.
James: And that's more of your billing statements. So you have an idea and very good records of how they spent their time, what they spent it on and then you can say, "Okay, you spent 10 hours in this project. You found a good offer. You don't need to keep looking." Or, "You only spend an hour and we'd like you to spend more because we think we can get a better price."
James: So you get a lot of visibility and you put a lot of control through the billing platform. Let's move to the next slide. So this is one of the things that we're most excited about at My Asia Office, that people don't really think of. Every thing that you're buying through our agents by default are going to be packaged according to what we call our e-commerce specifications.
James: Not to get too technical, but everything going to Amazon needs barcoding, certain markings, certain packaging, it needs to be taped shut. If it's got a suffocation, it's got a polybag, it needs a suffocation warning. If it's sold as a set, it needs sold as a set.
James: All those extra things that they charge you extra fees and you don't do, your agent through their sourcing process is going to make sure that they're packaged that way. Factories don't really charge any extra to put things in bags and tape them shut. So by default, as part of the process, everything will be packaged Amazon ready.
James: We have packaging and box standards. These will cut your return rates significantly as much as you can. Because ultimately people are going to return from buyer's remorse. But we have box and packaging requirement protocols that they're by default going to use that will be compliant with Amazon size restrictions on things going to FBA.
James: And we'll also make sure that goods arrive packaged correctly. If you're buying really breakable things, slate glass items, you get a select from an agent that has experienced with those items and they'll make packaging on those as always a product by product basis. Because some things are really fragile and others won't be, especially for e-commerce.
James: So they can advise you on that as well if you're buying really fragile products. For select customers, we also can offer container consolidation. There's an additional fee for that. But if you've got 10 cubic meters of goods in Ningbo. You don't want to ship LCL because it costs a fortune and more things break depending on as long as you have good volume and you work with My Asia Office, we do have solutions.
James: Where you'll be put on a 40 foot container or a 40 foot high cube with other goods. Again, there's a fee for it, but it's significantly more efficient than shipping LCL. And again, depending on your needs and your volume, we also offer US and China warehousing. Again, it's separate from your agents hourly rate, and it depends on your needs.
James: But we do have additional solutions available through My Asia Office, typically for larger customers or customers that need help with or want help with the forwarding process to get it from the port in China or the factory in China to their US warehouse. Or if they want us to store it at our warehouse and ship it to Amazon on their behalf.
James: Again, there's some volume requirements on that and there are additional fees but it's available. We're going to go to the next slide and we'll take some questions at the end. So again, the next steps you can or setting up a call with your US-based account manager. We're going to find a way that we can help you in the most efficient way and make recommendations.
James: You can book a time slot to talk with the account manager. We have a very efficient link. You can book.me, very simple. You go to it, you pick a time, it sends you a reminder. We'll follow up with you and you can take a quick call whenever you're ready. We can answer all your questions, all your specifics and figure out what solution we think is best.
James: You can email us new partner, myasiaoffice.com and give us an idea of your needs. We'll make recommendation of the email or set up a call. I would recommend one of those two methods, the most efficient way to get started, but you can also call 1-800 number or you can visit our site and plug in an initial request.
James: So if you're looking for a thousand of this, yada, yada, yada, you can put it into the website. Someone will reach out to you and you can start the process that way. In the next slide, we've got some coupons and specials. So Feedback Five is offering some specials to people that attended this webinar or watched it.
James: And we're offering anyone that spends a hundred dollars will get 10 hours free. Just need to mention e-comm engine on your initial consultation. I'm going to pass it to Liz real quick before we do a final round of questions.
Liz: Okay. Thanks James. Wow. What a lot of great information you shared. That's awesome. So we are offering a 30 day free trial for Feedback Five and RestockPro just use the codes that you see on the slide that you see. We usually have a 14 day free trial, so this is an extended free trial.
Liz: And then for our product research tool it comes by, we have 150 free credits for you. So if you have any questions about that, don't hesitate to reach out to me, but there are several questions. So I'm going to turn it back over to you James so that you can get to as many of your questions as possible.
Liz: If you don't get your question answered, please contact me and let me know if you'd like for me to send your email address to James and I can take care of that too. I'd be happy too. So James, back over to you.
James: Hey, so we've got a couple of other different questions we'll go over. We'll try to be a little bit quick and again, if you don't get your question answered reach out to Liz, reach out to me, we'd be happy to help. So Ruman had two questions. "How do you pay the Chinese factory for your order and who will take the product through customs?"
James: So if you don't have a forwarding relationship with China, My Asia Office does offer another solution where it's different. It's not hourly, and there is a markup. But if you wanted an item quoted delivered to your door in the US, we have another program that will offer that.
James: So if you're not buying from China yet, and you're not really comfortable with it then you might want to talk to us about some of our other options, or just tell us that on the call. If you're buying by the container, an hourly agent is probably going to be a good solution for you, because if you're buying one container every month or every three months.
James: That it's a full container, you probably can figure out the customs especially with your agent helping you. "Are agents available during US time?" Again we make them available. You have to set up appointments, their hours will overlap a little bit. And it depends whether you're on the East Coast or the West Coast.
James: Generally prefer most communication through Skype or email, they can be made available a couple hours a week on your time. But you got to realize too, if an agent's working during US business hours, China is closed. So there's not much they can do other than answering your questions. And that was from Kapil.
James: Krishanta asked, "Do you support UK based countries, companies or other countries?" Absolutely. So we are providing agents to source product for you in China. It doesn't matter to us where they ship. One exception if you're buying children's items, we will only ship those currently to the US.
James: So as long as it's not a certain product type, it doesn't matter where the goods are exporting. If you're bringing it to Europe or if you're bringing out of China to somewhere but the US and Canada, you're generally going to be responsible for the freight forwarding. So we can get it on the container, but you're responsible for your local customs and delivery.
James: But realistically, it doesn't matter where the goods are going for the most part. We are just helping you find factories that can make the goods and follow them through shipment on your behalf. Obadiah asked, "What are your minimum hours per month to hire somebody?" We don't usually have a minimum, but if the service truly works, if you're getting the same person we recommend 40 hours a month.
James: Depending on your needs, we'd have to discuss if you wanted to get less maybe you have a certain time of year. You need a lot of work. So we don't have a fixed minimum but we would generally say 40 hours a month. And again, you could go 20 hours one month and 60 the next.
James: But generally we like to see 40 hours because if you're not using that much work to source the manager orders, you got to make that limited, or that level of commitment in our opinion to stay competitive in e-commerce. And if you're only ordering one or two skews, and it's from the same factory year after year after year after year.
James: You only need three or four hours a month, definitely not something we can offer. So there's no fixed minimum and there's all different programs we can offer. But I would say if you're going to use a fractional employee, you probably want to average about 40 a month.
James: We had another question from Tim, "Do you work in Dongguan City?" Absolutely. We have our... we recommend Ningbo. Our most agents are there, but we do have presence in Shenzhen and we literally source from all over China. We have local inspectors that are based in some of the major cities.
James: And we have partnered inspectors that are from the further way of provinces. So regardless of where you're looking or where you're currently buying or where you're looking to buy, we can offer a solution, as long as it's in China. Another question we had and again, it's similar for Maria, "Will you ship to Canada?" The answer is yes.
James: So it's going to Canada. We can help you with customs and forwarding if you need. And we'll talk about that at initial consultation. But again, you can really facilitate all countries. It just depends on what you need. And I think that that covers most of our questions and I think we're running out of time. So I'm going to pass it back to Liz.
Liz: Thank you James. That is...
James: I've seen one last question.
James: Averages on cost for new product search. As always it depends, but we're finding an average of about 10 hours to properly vet entry-level project, get it quoted and get two to three proposals back. So you say about 10 hours to do the due diligence and get a couple quotes on a standard product.
James: But I've seen them done in two and I've seen items that we've might have spent 20 hours on that never got a great offer. So it varies about budget 10. And passing it back to Liz.
Liz: Actually James, you had one more question from Obadiah. "How do you deal with the bribery issue?"
James: So we try to avoid it. You are not paying your agent directly. So when you have an inspection, you're paying the factory directly, our office does not see a dollar of that. So there as much as possible, not going to benefit from giving you different information. Our inspectors, we do bonuses and have very high performance standards.
James: We have templates they have to fill out with photos. And at the end of the day, if they send us a inspection report that passes then we find out it doesn't, we're going to fire them. So by using the same quality control agent and hiring them full time and paying them a bonus, if they take a bribe and they pass goods that shouldn't pass inspection, we're going to find out pretty quickly.
James: Because we're not working with this guy once every eight months, he works at our office full time and he's traveling around the country. So we try to in-house as much as possible. And we again have a very honest, reliable network of quality control assistance. Liz?
Liz: Great. Thank you, James. That was great. If anybody's got any questions, please feel free to email me or contact me. If you want me to give your contact information to James, also there will be a recording of this emailed to all of you. So it has James' contact information on it and you can contact him that way.
Liz: I appreciate everybody coming to the webinar today. I appreciate James so much for all the great information. We'll see you guys next time.
Originally published on February 23, 2017, updated July 1, 2020
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.