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80/20 Sourcing – Page 6 – Are you frustrated sourcing from China? Do you find communicating with Chinese suppliers daunting? As Amazon FBA and PL sellers, online sellers, and small business importers you know that time is at a premium. By applying the 80/20 rule, I will teach you how to effectively and efficiently source from China. Learn best practices from the pros, avoid common mistakes, and find out what NOT to do so you can build a 7-figure business
Are you frustrated sourcing from China? Do you find communicating with Chinese suppliers daunting? As Amazon FBA and PL sellers, online sellers, and small business importers you know that time is at a premium. By applying the 80/20 rule, I will teach you how to effectively and efficiently source from China. Learn best practices from the pros, avoid common mistakes, and find out what NOT to do so you can build a 7-figure business
It may still feel like summer as we approach the end of August but if we peek at the calendar, you might be surprised to find that Black Friday is less than 100 days away!
As you may know, Black Friday is one of the biggest shopping days of the year and it’s especially true in the online retail world and this year it falls on November 29th.
In fact, Amazon sales account for over HALF of all online purchases in the US so if you’re selling on Amazon now would be a great time to plan for the busiest time of year for online sales.
So I’d like to share 4 quick tips to plan ahead and maximize your 4th quarter sales:
1.Perform an inventory forecast and place reorders of top sellers
How can you have a killer Q4 if you don’t have product in stock?
TIP: Inventory forecast your top sellers and place orders from your factory now to make sure you have them in stock during the busy holiday shopping season. You can base this on historical sales if you have them or make an adjustment based on your current sales.
You can also use product research tools to help you estimate sales.
If you’re like me and you have some slow moving inventory in stock consider ways to sell off these “dogs”.
If you’re like me and you have some slow moving inventory in stock consider ways to sell off these “dogs”.
A smart seller once said that the worst thing to do is to let products sit and not sell. Instead consider slashing prices and giveaways to sell-through the product.
This way it will also help free up your cash flow so you can invest it back in your business.
3. Consider adding holiday products or variations
Take for example Starbucks and their Christmas Coffee Blend. This is a variation of Starbucks coffee that is only available during the holidays and many of their customers look forward to it and gladly open up their wallets.
TIP: Consider what can you offer your customers in terms of a holiday edition?
4. Consider premium GIFT packaging
The holidays are the season of GIVING so make things easy on your customers. Consider packaging your products in a gift box which your customers can use to gift it to their friends and family.
This can increase your products’ perceived value and the price you can sell it for as well!
Now it’s your turn.
I’m curious what’s your #1 tip to maximize your online sales in Q4? Comment below and let me know.
Last week President Trump tweeted that on Sept 1st, 2019 the US will slap a 10% tariff on the $300 billion dollar of goods imported from China that have not been covered yet. This may have been the grinch that would steal Christmas for many US ecommerce sellers who imported their products from China.
This week, in a surprising about-face, the Trump administration announced it will delay the 10% tariff on a number of categories of products in the $300 billion package including toys, apparel, electronics, laptops, and more until December 15, 2019.
This means that many of the critical categories of imported products from China that consumers are craving for CHRISTMAS will not be affected.
Meanwhile talks continue to be planned between the US and Chinese counterparts.
You can find the exact list of products covered in the delay here.
Secondly, in a sign that e-commerce growth continues to outpace offline retail…
I’m confident that if you’re an ecommerce seller or Amazon seller then you are on track to capitalize on this growth as retail continues to shift online and offline stores continue to be left out in the cold.
We are in the dog days of summer and the trade war continues to heat up.
As you may have heard, last week President Trump announced that the remaining $300 billion (List 4) of products imported from China will be slapped with a 10% tariff starting Sept 1st, 2019.
According to Macy’s CEO this is “the big one” and will have consumer impact.
Many categories including smartphones, electronics, apparel, shoes, and toys are included in the $300 billion list.
This means you can expect higher prices this Christmas.
The list of products included in last year’s trade tariffs contained fewer consumer goods.
On the other hand, this year’s 4th quarter is promising to look grim for many retailers and ecommerce sellers as the trade tariff grinch could be stealing their Christmas!
They reacted by announcing a halt to US agricultural imports among other products.
Moreover the Chinese Yuan or RMB has dropped to the lowest exchange rate in a DECADE as a response by weakening to 7.05 RMB to 1 USD
If we were to look at the past 12 months, this is a 3% drop from 6.83 on August 5, 2019 to 7.05 on August 5, 2019.
What can you do?
Now may be the time to renegotiate prices with your Chinese suppliers given the weakening Chinese Yuan.
Thinking of sourcing away from China?
India has become a viable alternative to China – Checkout this masterclass Meghla Bhardwaj gave on How to Source Products from India. She is also leading a sourcing trip to India in Oct. And you will get a $200 discount for being a loyal reader.
With the US-China trade war still in affect, it feels as if there’s tremendous INSTABILITY out there. Will these tariffs go away eventually? And what if all the products from China are taxed at an additional 25%? Does that spell the end of sourcing products from China?
Many of you have asked how can one source AWAY from China?
First things first. In my view, I don’t believe that sourcing from China is just over yet. Few countries can match the product selection, manufacturing prowess, smooth logistics, and export experience that China offers.
Also what happens in the future of the trade war scenario is anyone’s guess.
It’s not as simple as shifting your entire supply chain to another country. You will deal with a new set of sourcing, communications, shipping, and quality control challenges that may be beyond the capabilities of a one-man or one-woman show. This is why big players like Walmart and Target have sophisticated supply chain teams that manage this.
HOWEVER, it is smart not to put all your eggs in one basket. One possible solution is what we call a “China +1 strategy”. Many of the big players have been doing this for years as China’s wages have increased, environmental regulations have shutdown tens of thousands of factories without warning and increased costs, among other reasons.
This China + 1 strategy means that rather than shutting down production in one country entirely and shifting all your products to a new country, you choose a portion of your products to be sourced from a new country to test the waters.
One of the key alternatives to China is India.
India has a seemingly endless labor force with wages cheaper than China, they are not privy to the trade war tariffs, and most everyone in India speaks English!
Sounds great right? Not so fast…
There are some important differences and challenges that could sink your ship before it ever sails if you’re not careful.
So to show you how to successfully source products from India, I’ve invited my good friend Meghla Bhardwaj to show us how. She has over 18 years experience sourcing from China and India, she is Indian herself, and she is culturally fluent in doing business with India.
In this free 63-minute masterclass, you will learn:
What are the TOP products you can source from India
Where to find Indian suppliers Online and Offline
What’s the best way to communicate with Indian suppliers to save time and avoid misunderstandings
What types of suppliers you should NOT consider sourcing from
The most common rookie mistakes
And Meghla is leading a guided trade show visit in India this October and she is offering a special discount to our readers.
You don’t need to spend $3k to $5 on a trial order
Scratch your own itch – Ana couldn’t find affordable swimsuits that she loved so she sketched a bikini design and sourced it from China
Be quality focused – Gavia made sure there were no wardrobe malfunctions with her bikinis so she included special features to prevent these slip ups. “I wouldn’t sell anything I wouldn’t wear myself or be happy with,” she says.
A 15 Year study of 5,000 entrepreneurs reveals what successful entrepreneurs are more likely to do
“Those who kept their day jobs were 33 percent less likely to fail in their new venture.”
Entrepreneurs such as Phil Knight from Nike and Sara Blakely from Spanx kept their day jobs for YEARS while working on their businesses on the side until they built them up to a level where they were comfortable they could quit
-Gary
PS: Many of the students in my video course “80/20 Sourcing Essentials” started their businesses as a side hustle while working a full time job… even if they didn’t live in the US. Some were parents working on their businesses after putting the kids to bed. If you’re looking to stop spinning your wheels and start building a profitable Amazon Private Label business, join today!
One of the keys to success among ecommerce entrepreneurs is that they NEVER STOP LEARNING.
So to help you stay ahead I’d like to share four of my favorite podcasts.
Why podcasts? Because I can listen to them while driving, working out, or running errands. It helps me learn and stay ahead while getting other things done that don’t require my 100% focus.
Also I’m always curious what people are doing OUTSIDE of the ecommerce space because you can always apply best practices from one industry and transfer them to another.
Seth Godin is a marketing genius. His book “Permission Marketing” is essential reading if you’re doing any sort of email marketing.
In his podcast Akimbo Seth doesn’t interview anyone but rather gives a short class on marketing strategies and how we can change culture using real life case studies. I learn something new from every podcast I listen to.
Andrew Youdarian digs deep into the real of real world ecommerce seller challenges and successes beyond just Amazon. Topics include Running successful Shopify stores, Scaling your business, and his annual State of the Merchant Report to get a pulse on what’s really working (and not working) for 7 figure ecommerce sellers today.
This podcast is for real entrepreneurs. Andrew Warner is arguably the Charlie Rose when it comes to interviewing entrepreneurs. He asks the tough and uncomfortable questions that most interviews are afraid to ask (How much revenue are you making? Even questions about marriage and relationship problems and suicide!)
But he’s not just an interviewer as Andrew co-founded an 8 figure business in his 20’s and then decided to create entrepreneur interviews that he would love to have learned from. Scratching his own itch!
His “4 Hour Workweek” was like running the 4 Minute Mile for the first time. They said it couldn’t be done… until it was. Now people are creating their own variations of lifestyle entrepreneurship. Tim continues to lead the pack with his deep dive 2 hour long interviews of top business and social leaders including Arnold Schwartzenegger, Ariana Huffington, Jamie Foxx, as well as lesser known successful entrepreneurs. I also love the experiments he runs.
I’m curious what’s your favorite podcast and why? (doesn’t have to be business related)
Yesterday we learned about the Top 3 Product Selection MISTAKES sellers make.
Today we will learn 3 ways to come up with profitable product ideas away from the crowds.
But you might be asking… WHY? Can’t I use product research tools and filters to select products to sell?
Well I’ve noticed that most sellers are doing exactly this. But the problem is if you start out at the same place as everyone else then you end up at the same place as everyone else.
Most people generate product ideas using the same tools out there. While I’m not against product research tools, in fact they are EXCELLENT in reducing risk when VALIDATING product ideas, I do not recommend using them to COME UP with product ideas.
Because you and several thousand other sellers are looking at the same item. And what looks like a lucrative product opportunity TODAY will become a crowded and highly competitive niche 3-4 months later when everyone is selling the same product.
This has happened to me before and I strongly advise against this tactic when choosing your products to sell for a private label business.
So you might be wondering – so HOW do I come up with product ideas?
Here are THREE ways to potentially come up with your next profitable product idea.
And the good news is that you can implement them TODAY.
Let’s dive right in.
Method #1 – TRAVEL
Often times a change of scenery, a change of routine, and a change of environment, can mean not only a shift in MINDSET (i.e. being more open to new things) but also new opportunities for noticing product ideas.
One of my favorite ways to come up with new potential product ideas is to keep my eyes and ears open when I travel. For example when I traveled to Japan, it was hugely eye opening for me because the culture, the language, and the people were so different!
When I went into a 7-Eleven, the clerks would greet you in Japanese and even bow to you. They were super polite in almost an awkward way!
Over time I noticed that in Japan people carried themselves differently. For example nobody would eat or drink while walking in public. They would either consumer their food at the store or restaurant and drink their drinks before leaving the establishment.
At the same time, while browsing local shops and malls I noticed dozens and dozens of new potential product ideas that I had never seen before which I would jot down and research later.
Obviously not all of them result in profitable product ideas (most won’t) but the key is that I am continuously generating new product ideas not from research tools but based on what people are actually using and buying.
This rule holds true regardless if you’re taking a vacation to Florida, a trip to Europe, or to Asia. Product ideas are out there and endless if you bother to notice them. This leads up to the second product idea strategy…
METHOD #2 – KEEP AN ONGOING PRODUCT IDEAS LIST
Seth Godin said that you have to come up with a lot of bad ideas before you come up with good ones.
Based on my own experience as an entrepreneur I agree with Godin 100%.
In my own product ideas list, I have a ongoing list of hundreds of product ideas that I’ve accumulated over time.
I’m always on the lookout and always am adding products to my product ideas list.
This way I have more chances of success when it comes to product ideas.
On the other hand, one common mistake I’ve noticed newbies make is to research product ideas right after they come up with it.
In other words once they add a new idea to the list, they immediately fire up their favorite product research tool to see if it’s a “good” product to sell.
I do not recommend this because it is not efficient and it can make you frustrated real fast.
Conversely, I recommend that you batch your work – research your product ideas together in one sitting. Set aside a couple hours and then run through a group of product ideas that you have on your list. This way you not only save time from stopping what you’re doing every time you come up with a new idea.
Another benefit of this strategy is that prevents you from beating yourself up that it wasn’t a great product everytime you come up with a new idea.
Let’s be real for a minute.
Coming up with a profitable product idea is not easy. So by batching this process, instead of feeling down on yourself you will immediately move onto the next product idea.
It’s like in sports rather than taking one shot in basketball and not making it and sitting on the bench sulking, it’s a lot better to keep moving and get ready to make your next shot.
Make sense?
Method #3 – Gift lists
This is a great way to come up with multiple product ideas quickly and let someone else do the work! My kind of strategy! 🙂
I especially like gift guides such as Mother’s Day gifts, Back to School Gifts, Gifts for the person who has everything etc.
These content creators will have done the research for your because they need to generate product suggestions that most of the general public are not aware of.
So often times by browsing the gift lists online or in magazines, you will discover new products that you are not aware of and trending products that you can add to your ongoing product ideas list.
But avoid junk websites where they haphazardly churn out “list-acles” which in fact are actually Amazon affiliate websites designed to generate commissions when people click through.
OK now it’s your turn.
I’m not writing these emails just to entertain you before you move onto your next email.
It doesn’t matter if you’re just getting started with your private label business.
OR if you’re a six figure seller who’s facing a slump in business.
I challenge you to apply these 3 rules and see how many ideas you can come up with in the next 48 hours. You don’t need to share with me the actual product ideas but let me know if you’re IN and then check back with me on Thursday to let me know how many ideas you were able to come up with.
Talk soon,
-Gary
PS: If this post helped you please do me a favor and share with anyone who can benefit from this.
“A smart man learns from his mistakes. A wise man learns from the mistakes of others.”
Today I’d like to share with you the most common MISTAKES newbies make when beginning their private label journey.
These are errors in judgement and strategy that I have made and I’ve noticed private sellers make.
And committing just one of these mistakes can mean the difference between picking the right product, from the right supplier, and launching it the right way so you can get financial freedom and quit your job…and picking the wrong product from the wrong supplier and launching it the wrong way and losing your investment of thousands of dollars.
Mistake #1: Choosing products using research tools
One of the biggest challenges people face when starting their Private Label businesses is with PRODUCT SELECTION.
More specifically how to choose profitable products AWAY from the crowds.
I find that if you START OUT at the same place as everyone else… you will END UP at the same place as everyone else.
If you are using the same research tools, the same filters, and the same methodology to come up with product ideas, what may look good right now can be a FLOODED market 3-4 months later.
I’ve seen this happen time and time again. And I’ve been guilty of this MYSELF! Which I will share more of in a second.
Don’t get me wrong – Research tools such as Jungle Scout and Viral Launch are great ways to validate product ideas initially. But if you are using them to generate product ideas I’d be very fearful of a sea of competitors (who are using the same tools) coming in a few months from now.
And this would lead to a price war and race to the bottom.
And a wise man once said the worst thing that can happen in a price war is if you are the “winner.”
Mistake #2: Not differentiating and selling a “me too” product
In competitive markets such as Amazon US, if you are simply picking an “off the shelf” product and not making any improvements on the rest of the market’s offerings then you are basically selling the same thing as everyone else.
What makes you think a potential customer will pick your “me too” product over your competitors’ products?
Let’s look at an example in one of the areas that affects us all…. LUNCH!
When I consider lunch I think of a couple of different criteria – taste, value, environment, convenience/speed, and service.
I want something good or unique that is convenient and offers a good value. Environment and service are nice to have but I want great taste, speed (time is money especially since I need to get back to work after lunch), and I don’t want to overspend on lunch.
One of my favorite lunch spots is a Brazilian BBQ restaurant (or Churrascaria) called Pampas Grill in Los Angeles’ famous Farmers Market.
It’s actually a food stall located among two dozen other restaurants cramped into this small tourist area known as the Original Farmer’s Market.
But what surprises me is that this restaurant consistently is the most crowded restaurant and the one with the longest lines EVERYTIME I GO… regardless if it’s a weekday or a weekend.
Also I’m amazed by their LONGEVITY. The crowds were there when I first went in 2008 and there are still there TODAY.
Over the years many restaurants have shut down or relocated but Pampas Grill has been consistently successful and withstood the test of time.
What’s their secret?
While I can’t comment on their “secret sauce” behind the scenes, from my customer perspective, what sets them apart is the following:
Taste – Excellent Beef especially the Sirloin Cap or “Picanha” – This cut is prized for it’s beefy flavor and mouthfeel. It is very RARE in the US and cannot be found in most restaurants.
Environment – You can see the meat cooked on the grill in the spitz in front of you. You have your choice of vegetables and carbs. While they do not have their own seating they can enjoy the outdoor and communal environment that the Farmer’s Market offers.
Convenience – The salad buffet and meat selection is all up to you. If you’re going Paleo you can choose veggies and protein and skip the rice, pasta, and carbs. Love it!
Value – Considering the top quality meats, distinctive regional Brazilian dishes of cheesebread (Pao de Queijo) and Feijoada – this is excellent value in my opinion
Service – Though this is not a full service restaurant (you serve yourself from the buffet), they will slice the meats according to what you prefer in doneness, and cuts. Service with a smile. And many of the staff are Brazilian which adds authenticity to the place
To me this is a formula for a winning restaurant.
Now let’s compare this to the generic POKE bowl (think raw seafood over rice) restaurant craze that was going through the world a few years ago and quickly fizzled out. Many of these copycat places have opened quickly and closed down just as quickly. There got the same idea from everyone else (a fad), served the same food, and didn’t offer anything to differentiate themselves that would attract customers.
The same is true for selling private label products on Amazon. If you are picking the same product to sell as everyone else (like the Poke copycat restaurants) how can you expect customers to choose your product over your competitors with nothing to differentiate you?
Mistake #3: Not delivering a 4.5 to 5 star product
The Amazon marketplace is getting more and more competitive by the day. In my years of selling on Amazon, I’ve noticed that when my product has solid review with an average of 4.5 to 5 stars it’s a lot harder for competitors to knock me down from my ranking. In other words having 4.5 to 5.0 Star reviews helps create a defensible MOAT around your business.
It’s a lot harder for new competitors to compete if your product has high ratings than if your product only has 3.5 or 4.0 stars.
Therefore not only is the QUANTITY or number of reviews important, but the QUALITY of the reviews is even more important and can make or break your business.
Case in point is a posture support brace that I sold on Amazon. It was a private label product that I sold and I’ve detailed the mistakes I’ve made and what I learned from it in this podcast with Seller Sessions. Check it out here.
Stay tuned as tomorrow we will learn 3 ways to come up with profitable product ideas away from the crowds.
YOUR TURN: What did you take away from these mistakes? Comment below and let me know.
-Gary
PS: Do me a favor and share this post with anyone who can benefit from this.
As the US-China trade war drags on, Presidents Trump and Xi will be meeting in Japan this weekend as the G-20 Economic Summit takes place.
All eyes will be on the two leaders to see if they can make some sort of progress as recently the trade war has escalated into a “technology cold war”.
What will happen as a result of this meeting? I see two potential outcomes.
On one hand, if we look at the last time the two leaders met in person in Argentina several months ago, they were able to reach a 90-day truce in the trade war. Though it didn’t end the trade war at least they bought some time to try to make progress.
This time in Japan, we will see if the two leaders can make progress as they give each other some facetime to discuss the issues on the table.
On the other hand, a worst case scenario for ecommerce sellers would be if the talks fell apart and if the US slaps the additional 25% in tariffs on the remaining $300 billion worth of goods not covered by the previous lists.
In essence this would be THE WHOLE ENCHILADA or basically EVERYTHING manufactured in China and imported to the US would face an additional 25% in tariffs.
Virtually no business can absorb this hit and not pass the costs onto the consumer. Case in point: Walmart and Costco have already announced that they are raising prices due to the trade tariffs.
For the average US consumer, this would mean more expensive clothes for back to school, more expensive halloween costumes, and more expensive holiday gifts.
This will be an interesting weekend.
-Gary
PS: if you would like to learn more about how the trade war is affecting ecommerce sellers, checkout my recent interview on the Trademarks Made Easy podcast with Suzi Hixon. One great takeaway is to Search US Customs and Border Patrol records to help identify options for sourcing – Listen now
Good news! Based on our reader feedback, I’m testing a new YouTube channel and I’d love if you can check it out and let me know what you think. We have some previous content with JungleScout as well as some new content that you may not have seen before which includes:
I would love to hear your feedback especially if there are any specific topics that you’d like to see covered.
We are a little late to the game, however, with your help, I’m working hard to create the best content for you about sourcing and scaling your business to 7 figures.
