Today, I’m going to show you how to find and filter suppliers to build your Amazon FBA product.
Keep reading to get our preformatted supplier research spreadsheet that you can use to rate and compare prospective suppliers.
STEP 1: Search for suppliers.
At this point in your Amazon FBA journey, you should already know what product you intend to sell.
You will vet suppliers based on the types of products they make, so it’s important that you’ve already selected one of your product ideas. If you’re not there yet, check out our articles on finding and evaluating different product ideas.
There are dozens of sites you can use to source products for your Amazon FBA store. However, no site compares to Alibaba.com, the world’s largest business-to-business (B2B) retail site and the fifth largest site across the globe.
On Alibaba, locate the search bar in the top center and type the word or phrase that best describes your product without any added bells or whistles. For example, if you will sell wooden docking stations for iPhone, you would search “Wood phone docking station”.
Click the search icon.
Now it’s time to add some parameters to your search to ensure you don’t get caught in a scam.
Filter your search.
To the left of search results you should see a box that reads Supplier Types. Under it, check the box marked Trade Assurance.
Trade assurance is Alibaba’s way of protecting your payment from fishy suppliers while remaining fair to legitimate ones. It stipulates that your payment goes into a third party escrow, or holding, account until the supplier has made your order to your exact specifications (which can be verified through an inspection service).
Next, check the box marked Verified.
Verified suppliers have been…well, verified. They’ve had to prove their legitimacy—including their business setup, facilities, sales history, etc.—to a third party service. So, for instance, if a supplier who is Verified lists that they are a manufacturer, they actually do have a factory with production equipment (and have pictures to prove it). However, a non-verified supplier who lists themselves as a manufacturer could actually be a trading company.
At this point, you should only see products made by suppliers that are verified and offer trade assurance in your search results.
These two protections are some of the most important when it comes to filtering suppliers. However, they’re not the only factors to consider.
Consider supplier quality.
A supplier’s age (or years in business) directly correlates to their overall quality. In Alibaba search results, you can find a supplier’s years on Alibaba in the middle of their product listing next to YRS.
Aim to find suppliers who have been in business for at least three years.
You should also take note of each supplier’s Supplier Online Performance Index (SOPI) score, measured in orange gems (next to supplier age).
SOPI is a direct indicator of supplier quality and performance on Alibaba. It’s based on:
- Presentation quality: the completeness of the supplier’s product listings
- Product popularity: average response times, number of request for quotations, conversion rates
- Transaction volume: gross production volume and number of buyers from the past 90 days
- Service quality: delivery timeliness, buyer ratings, illegal violation numbers
A supplier’s overall SOPI score is based on the lowest of these four ratings. Scores range from a measly, singular grayed out gem to a stunning five orange gems.
Aim to find suppliers with at least three orange gems. SOPI scores can be found in the middle of product listings in search results, to the immediate right of the supplier’s age.
Once you start to find suppliers that meet the above criteria (and appear to make your product), right click on their product listing in Alibaba search results to open their product page in a new tab.
I am showing you today merely one of the many methods Just One Dime teaches students how to find suppliers. And we go even deeper into this particular method in Amazon FBA Mastery, our online Amazon seller school. Take lessons on your own time with resources to help you achieve the financial success you’ve been looking for. See what I mean at JOD.com/freedom.
STEP 2: Build a list of potential suppliers.
You can grab our handy preformatted supplier research spreadsheet at JOD.com/srss (or find it below this post).
On it, add each supplier that you are considering to build your product. Include their name and link to their product listing that you are interested in. You should also fill in their business age, SOPI score, and grade the quality of their product images and videos (if they have them). Do this for at least ten suppliers.
On each product listing page, navigate to the blue box (it will be labeled Verified if that supplier is in fact verified) on the right side.
Assess whether this supplier is a Manufacturer or Trading Company or both.
In the blue box, underneath the supplier’s name (top center, underlined) you should find the supplier’s company type: it will read Manufacturer, Trading Company, or both.
Manufacturers are just that: manufacturers. Their predominant business operation is simply making products. If you are looking to make lots of customizations to your product and/or you want the lowest price option, favor manufacturers.
Trading companies source products from manufacturers. If you will source multiple products (or product components) to make a bundled offering, favor trading companies.
A company that is both a manufacturer and a trading company both makes their own products and sources others outside their operation.
Note each supplier’s company type on your spreadsheet.
Then, click the supplier’s name (at the top center of the blue box). This will open the supplier’s minisite.
Evaluate the niche centricity of the supplier.
Most suppliers create more than one product. For best results, you should find a supplier who makes multiple products within your product niche. In other words, you should find a supplier who makes your product and other similar products, as this suggests that they specialize in that niche. What you don’t want is to find a supplier who makes one wood phone docking station, one dog bed, one charcoal grill, one set of fancy soaps, etc.
A supplier who focuses on, and produces in your niche will typically
- Produce higher quality products
- Have a variety of your product type to choose from
- Offer more complex customizations
- Offer lower pricing
To assess if the supplier predominantly makes products in your niche,
Hover over Products/Product Categories/Categories (or similar—these labels are not consistent across all Alibaba minisites) in the top menu.
If your product niche is a line item, click it and assess what you find.
If not, type your product type into the search bar and click the search icon.
If you have to search the product on the supplier’s minisite that’s not a great sign. If you have to search it and only find a few relevant results, that supplier is not niche centric and they don’t primarily focus on your product type. In that case, you should note this on your supplier research spreadsheet and move on without contacting that supplier.
On the other hand, if you find a supplier that has a dedicated category for your product niche and has several relevant results for your product type, they are a much more niche centric supplier who is likely focused on that type of product (and will make it well). Take note of this, you will likely move forward with that supplier.
Repeat this process until you have five prospective suppliers.
STEP 3: Assess supplier capabilities.
Once you have found a few suppliers who focus on your specific product niche, find the product in each of their catalogs that most closely resembles what you want to produce and sell in your Amazon FBA store. Click on the product to visit its Alibaba product page.
Consider supplier cost.
On any Alibaba product listing, you should see either a price or a price range.
Oftentimes, suppliers offer tiered pricing where the more units of a product you buy, the less you pay per unit.
Many alibaba product pages explicitly break down the per unit cost at different amounts, as you can see here:
For instance, we can see that if we order 800 units, it will cost us $4.99 per unit, however if we order 3,500 units, it will only cost us $3.52 per unit. And those small savings add up when you’re working with orders in the thousands of units!
Suppliers also often require that you purchase a set minimum number of units in order to buy from them at all. This is called a minimum order quantity (MOQ).
In the Customization section, we can see how many units are required to order a customized version of the base product (which you should do 😉). In this case, the supplier requires custom orders of at least 500 units.
Keep in mind that suppliers on Alibaba are typically making products in a factory to your specifications. It costs them time and money to set up a manufacturing run, so MOQs ensure that orders are profitable to the manufacturer.
Not all Alibaba product pages will be so helpful. Sometimes you come across pages that tell you a price range, but don’t indicate how many products you need to order to get to the different pricing labels, such as the case in this scenario:
We see that the supplier’s MOQ is 500 and that the pricing ranges from $4.20 - $6.80 per unit. We can assume that if we order 500 units, we will pay $6.80, the max, per unit. However it would be helpful to know how many units it would take to get to the $4.20 per unit price or how much it would cost per unit if we ordered 2,000 units.
However, one thing that both of the above suppliers have done well is to indicate the time it will take them to produce different sized orders.
Consider supplier lead times.
Supplier lead time is how long it will take the supplier to produce (or acquire, in the case of trading companies) your order from the time that you place it. And it follows that the bigger your order, the longer the lead time.
Between the two products we’ve looked at, there are some discrepancies with their lead times.
On the one hand, the supplier who included their tiered pricing will require 10 days to manufacture 500 units, 20 days to manufacture 1,500 units, and 30 days to manufacture 2,500.
On the other hand, the supplier who only included their pricing range needs much more time: 45 days for 500 units, 50 days for 1,5000 units, and 60 days for 3,500 units.
Shorter lead times allow you to better forecast and manage your store’s inventory.
At this point, you should have all the data you need that you can immediately get from product and supplier listings on Alibaba.
STEP 4: Contact suppliers.
Click the Contact Supplier button on the right side of the product page.
An inquiry box will open.
Ensure that you’ve accurately set the quantity (and type) of units you want to order for your message.
Select any dropdowns to communicate the exact iteration of the product that you’re inquiring about. You can also select Customize if you’re unsure.
In the box, type the detailed requirements for your end product. Write in plain, simple language.
You don’t have to give away your entire plan, but you should inquire as to the cost of the product with your proposed modifications. At this point, you’re mostly looking for supplier flexibility since you should be communicating with suppliers who produce your product type and within its overall niche.
For example, you might ask the cost per unit of this docking station product if you were to add an additional wrist watch holder.
Additionally, if you will add another component found in that supplier’s product catalog, reference it specifically with a link, ID, or image.
In your message, specify if you will:
- Add your own custom logo and if it will be single or multi-colored.
- Add or customize any graphics or designs.
- Customize the packaging.
Keep in mind that customizations tend to increase the supplier’s price quotes on the product page. However, if you know how much a product will cost you without customization, you can inform your prospective manufacturers the maximum you will pay per unit with customization. For example, since we know it will likely cost us $6.80 per unit for 500 units, we might write in our message that the max we would pay with customizations is $7.00 per unit.
This strategy sets you up as a serious buyer not to be fooled with.
Our membership goes in-depth on several proven strategies to negotiate pricing with suppliers.
Once you’ve explained everything, click Send inquiry now.
Repeat this process for all the suppliers you are still considering. You’re now in a waiting game for their responses.
STEP 5: Vet Initial responses.
The suppliers’ first response will tell you a lot about them and your prospective partnership:
- How hungry they are for your business
- How quickly they will likely respond to you moving forward
- How well you respond to each other’s communication
- How flexible they are towards your ideas
The faster a supplier responds, the better. That means they take you seriously and want your business. That said, you may find that some suppliers take several days to respond or simply don’t respond at all.
For all suppliers who respond after a few days, consider if they have a viable reason for the delay. If so, you can move forward with them. If not, however, cut them along with any suppliers who do not respond within more than a few days.
You will hopefully have a few suppliers who respond within 24 hours; you should aim to find around three who do and move forward with them. If you don’t have at least three who are eager to do business with you, you may have to repeat some of our earlier steps.
If you only find one supplier who makes it thus far, and their samples aren’t strong, you need other options.
STEP 6: Request samples.
Before you ask your remaining suppliers for samples, save yourself some time and money by creating an account with a consolidation service such as TripTrans.
The most expensive part of requesting supplier samples should be international, air express (door-to-door) shipping. You can drastically reduce that cost, however, by having all samples from all suppliers sent to you together in one shipment.
When you sign up with TripTrans, you will receive a local, Hong Kong mailing address where you can have suppliers ship their samples and then forward them all to your actual mailing address in one shipment.
At this time, you can unveil your full product more to your remaining prospective suppliers.
Comb through each supplier’s catalog and select any and all products with any of the components you will include in your final design. If there are multiple colors and you can’t decide which you’d want your product in, select all potential options.
Send each supplier product IDs, links, and/or images of the products you’re requesting samples of. And if the product itself is more costly, you might request a specific component to test, rather than the entire product. For example, rather than requesting the entire charging station, you might direct the supplier to the watch docking component, specifically.
Request samples from each supplier by sending them a full list of the sample (components) you wish to test.
Do not request custom samples. You do not need to have your custom logo added to the samples (although, if they come with someone else’s logo on them, you’ll have an opportunity to assess the supplier’s printing abilities). At this point, you are merely testing the manufacturing quality of the products, along with their functionality.
Provide the suppliers with your Chinese TripTrans shipping address.
Oftentimes, suppliers will only charge you the cost of shipping rather than the cost of the actual samples.
If a supplier does charge you, do not negotiate on pricing; this may lower the supplier’s opinion of you which could complicate your future business dealings. Save your negotiation for the full order (when you need it!). If the price of the samples is outlandishly high, remove that supplier from contention.
You will be notified once the suppliers’ samples have arrived at your local address. From there, request that TripTrans consolidate the shipments into one box and ship them internationally to your actual address for testing.
STEP 7: Vet samples and choose your supplier.
Thoroughly test every single sample you receive. During that process, evaluate:
- How the products are packaged
- How the products look, feel, and even smell (that’s a relatively common Amazon shopper complaint)
- Product performance and how well each product performs its intended functions
- Style and color
- The potential combination of components that will go into your design if you are sourcing more than just a supplier’s base product
- Durability of each product; test each product for how well it stands up to normal wear and tear as well as potential common misuses your customers might put your product through (you might even conduct a drop test)
Take as many photos as necessary to help you make your decision (before you test each sample’s durability, preferably).
Once you’ve tested each product (component), you should be 100% clear as to which supplier is the best fit for you and your brand.
Politely inform all other suppliers of your decision.
Inform your chosen supplier that you would like to move forward with them.
You can now draft your trade assurance contract and begin manufacturing your new products!
Don’t forget to grab your free supplier research spreadsheet from below or jod.com/srss.
This article comes from just one of more than 100 video lessons that comprise our Amazon FBA mastery membership, in which we show (future) Amazon sellers like you how to source and build your product, launch your store and brand, and expand your company as you grow. Get all of that and more at JOD.com/freedom.
What is your biggest challenge when it comes to sourcing suppliers for your Amazon FBA products? Let me know in the comments.