Most Common Supplier Mistakes - Part 2

Learn what it means to be a factory in China, why you can trust Alibaba, and other important points about suppliers
Seth Kniep
May 6, 2018
Build your Amazon product
There are lots of mistakes sellers can make when working with suppliers, and plenty of them stem from a difference in Western and Eastern though processes. How can you avoid making these common newbie mistakes when working with suppliers? Check out part two of the most common mistakes sellers make when working with suppliers:

This is part two of an in-depth blog post on how to avoid most common supplier mistakes.

Mistake #8: Assuming a supplier must be a factory because they call themselves a factory.

Just because a supplier shows you pictures of a factory doesn’t mean they’re really a factory. Nowadays, you can build a website and put whatever you want on it – and so can suppliers. But that doesn’t mean they’re trying to cheat you or scam you. They just know that Western brains think going directly to the factory will get them the best price. However, that isn’t always the case. 

Mistake #9: Thinking that working directly with a factory means you’ll be paying less.

Often, trading companies can offer you better prices than factories. Why? Because they have great relationships with factories, so factories give them better deals. If you’re new to working with a particular factory, it’s going to take time for you to earn their trust and build a good relationship with them. Factories won’t start giving you better deals on products until they trust you. However, factories already have good relationships with trading companies, so trading companies get better deals. Then, those trading companies pass those deals on to you.

Mistake #10: Thinking it will only take a month to get your product sourced and shipped to Amazon’s warehouse.

If you’re building a highly customized product, it’s obviously going to take time to build. Expect custom products to take up to six months, easily, from the start of product research all the way to the day you ship your product to Amazon FBA. In this case, I highly recommended using a sourcing agent to help walk you through the process.

Even if you’re not building a brand new product, research, differentiation, production, and shipping still take time. Budget at least two to three months for sourcing and shipping your product.

Mistake #11: Assuming that Alibaba is just a bunch of suppliers.

Alibaba provides plenty of advantages for sellers. It’s not a scam, and it’s not just a bunch of suppliers. Alibaba uses trade assurance to facilitate payments in a safe way. You pay a small percentage up-front, your money goes into an escrow, and that money isn’t released until you’re satisfied with your product. Alibaba can be a safe, trustworthy place to find products fast.

Mistake #12: Assuming that just because you signed a contract with a supplier that they won’t share your idea.

What if, a month after you launch your newest product, you see it being advertised by your supplier, and by twenty other suppliers on Alibaba? Don’t ever assume suppliers are going to honor your contract. Instead, find ways to de-risk yourself.

One way to stop your product from getting hijacked is to have one supplier build all the pieces of the product separately. Then, have those pieces shipped to you and assemble the product yourself. That way, your supplier doesn’t know what the product actually looks like. The final product is yours alone.

Another easy way to de-risk yourself is, of course, by differentiating. Add accessories and extras to your products, and they’ll be harder to duplicate.

Mistake #13: Assuming there is something wrong with a supplier who won’t drop the price until you meet a certain MOQ.

Imagine you’re shopping for coffee. You go to Wal-Mart and you buy a bag of coffee beans. Then, you go to Sam’s Club and buy a massive bucket of coffee beans. When you break the price down, the cost per bean at Sam’s Club will be much lower than the cost per bean at Wal-Mart. Why? Because you’re buying a greater quantity of beans. Buying things in bulk is cheaper. The supplier wants to know the time and labor spent building your product is going to yield a big enough sale to be worthwhile. Suppliers won’t lower their MOQ if it isn’t worth their time.

These are a few of the most common mistakes sellers make when working with suppliers. It’s important to learn how to work effectively and efficiently with suppliers, so you can get your products up and selling as quickly and easily as possible. Don’t make these newbie mistakes; learn to work with the Eastern way of thinking, and you’ll be sourcing million-dollar products from suppliers in no time.

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Seth Kniep

Married a pearl. Fathered 4 miracles. Fired his boss. Turned a single dime into $104,857. Today, a self-made millionaire, Seth and his team of 8 badass coaches teach entrepreneurs how to build passive income on Amazon.

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