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My First Experience Selling Private Label Products on Amazon FBA

Was it a Success? Yes. I tell you how I did it...

  – Chris Cagle

My Pallets!

In January of this year, I noted that a way for me to increase the margin and revenue of this site would be to start creating my own products instead of only pushing my visitors to other manufacturer's products on Amazon. It seemed like a sure thing at the time, but there was a lot of fear of the unknown.

How do I find a reputable supplier?

Would visitors from this website trust me selling my own products rather than a third-party review?

Would the sizable amount of capital I would need to invest be worth it in the end?

Those questions and more kept me up for the next few months while I decided my fate. In May I decided to start the process of looking for a supplier on Alibaba, because... where else would I find a supplier?!?

Suppliers, Suppliers, Suppliers

Wow, Alibaba is huge when you start looking at the listings. Type in anything and you will be presented with hundreds of companies saying they have the best products, with bad images and poorly worded descriptions.

I started by simply reaching out to the few listings that I could understand well. After a less than organized message to them, I realized this wasn't cutting it. I asked about a TV antenna, but the suppliers starting throwing a million other products my way, and the emails back were less than organized.

I then stumbled across an article that explained how a highly structured RFQ was the best way to go. After spending a few hours putting together an explicit set of questions and instructions, I went ahead with the RFQ.

My Pallets!

Bingo!

I got the answers I was looking for, and there were a lot of them. I probably received 15 different emails in the next few hours (I posted the RFQ late my time, so China was just starting to wake up).

Sorting through the Suppliers

The prices varied wildly. The lowest prices were half of what the most expensive ones were. I was contacted by the same manufacturer, buy 3 different sellers. Some were very professional in their responses, and some didn't follow my instructions. Still some suppliers were saying they were from a company where the website didn't load, and I couldn't find any reference to it anywhere online (shady?).

I decided to only write back to the professional sounding ones. 1) because I felt like they were listening to me better, but 2) as the article above mentions... if they take care to follow your instructions, they will do the same with your product.

I decided on two suppliers, and one had a price that was a full $2 less than the other. Both had products that looked good, and were very responsive and diligent in communications with me.

Choosing my Supplier

After about 3 weeks of back-and-forth communication, I had customized samples air mailed to me. Some might have said that I should have just focused on product quality first before customization, but the whole presentation was just important to me than if the product worked.

The customizations I asked for was custom packaging, a better coaxial cable and pre-drilled holes. Both suppliers agreed to do it for my sample, but I paid a little extra, and had to wait a couple weeks for it to be done.

Both products were great, however the antenna I ended up choosing performed slightly better and the packaging was made a little better. It was however, the more expensive one (no surprise).

I was able to negotiate them down $0.50 a unit, so I felt happy with my negotiating skills and supplier of choice.

The Big Day

To consummate the agreement, I needed to send a couple thousand dollars to a Chinese bank. This is where the fear set in. I probably sat on this task for a week while I pondered if I really, really wanted to do this.

What if they walk away with it all and I never hear from them again?

What if the 1,000 units I am ordering are nothing like the sample sent?

What if...

I had to bite the bullet. NoCable was making enough revenue every month that losing this couple thousand wasn't going to break me if it went south, so I made the leap. The cashiers at my local bank gave me some weird looks when I said I needed to send thousands to a bank in China. I live in a small town, and I doubt this happens very often, if at all.

The Waiting

The supplier I chose mentioned that it was going to take 45 days for the manufacturing to be done. It felt much longer than that. In the meantime, I got my Amazon listing setup, spoke to a few seasoned FBA pros I found on UpWork.

Pro Tip: Do the UpWork thing. For a couple hundred bucks, I spent a few hours on the phone with a guy that has made a career out of selling on FBA private label. He told me things that I couldn't find anywhere else, demystified the whole FBA labeling requirements and explained some listing tips that would set me up in the future pretty well. (These tips are probably an article for another day...)

QA

I also decided to spend about $300 to have AsiaInspection randomly inspect my products after they were completed, but before the shipping company picked them up.

I am not necessarily sold on their service, but I will continue using a company like them... $300 for piece of mind... totally worth it.

Shipping

For shipping, I shopped around a bit - probably not as much as I should have - and settled on Flexport. These guys seemed to really know what they were doing, and were a one-stop shop. They took care of everything from picking up the products from the Chinese port, to customs, to picking the same products up at the California port. I provided them access to even schedule the shipment of my products from their warehouse to Amazon's FBA. I did little during this period other than follow along via their UI. I would highly recommend using Flexport if you are new to Chinese sourcing.

I decided to use sea shipping instead of air since 1000 antennas would have cost me an extra $2,500 to do it by air. I didn't like the fact that shipping took about a month from start to finish, but it was worth saving $2,500 initially.

Getting Reviews

Once the antennas were at Amazon, I needed some reviews to show social proof. I decided to utilize my newsletter - the one I hardly ever use - for gathering a couple initial Amazon reviews. Now, it's against Amazon's TOS to "ask for reviews" through a free product, so I went a different route. I set my price WAAAY low (to the point where I was losing money on each sale), and sent out an email to my newsletter saying that I was discounting my antenna for the next 24 hours to get my first batch of sales. I encouraged them to review on Amazon if they liked what they received. I sold about 30 that way, and got a handful of reviews. Not as many as I would have liked, but enough.

Going Live

My Pallets!

I decided that the 3 reviews I got from my initial batch was enough, so I changed all the NoCable review pages to point to my antenna where appropriate, and then stared at the Seller Central UI non-stop for the next few hours. 1......2.....3...4..5.6.7.8.9...

The sales started rolling in. Yes!! It was working, and they were coming in at a clip that made me think this was going to work.

The Hidden FBA Costs

Well, one point I did not seem to fully realize was the fact that refunds are a major part of selling antennas. I've since spoke to a few others in this industry, and found that antennas are a notorious highly refunded product. The antenna might work perfectly, but it doesn't work in the buyer's home for a number of reasons like: terrain, obstacles, window access, etc.

We probably had about 12% of our antennas refunded for the "didn't work" reason, but when I personally tested all the refunded items, they worked for me. Disappointing for sure, but just a cost I needed to factor in next time.

Another hidden cost (well - it wasn't really hidden, I just didn't fully realize) was the fact that Amazon charges storage costs on top of all their other fees. These costs are higher during Q4 (which coincidently was the time my first shipment was showing up).

Refunds were the big one here though. These things really add up... which sucks since there isn't much I can do prevent it. I was able to mitigate it a bit by using FeedbackFive [https://www.feedbackfive.com/] to send out detailed instructions before they got the products from me and offering a lot of documentation on this site. But in the end, some homes simply did not place nice.

Was it a Success?

Unequivocally Yes. And I learned a ton.

I ordered my second shipment 2 weeks after seeing how my sales were going. Good thing I did because today I will have ran out of my first shipment, with another 10 days or so before my next shipment shows up at Amazon. Lesson learned... hopefully. Order more, and quicker.

TL;DR

  • When contacting suppliers on Alibaba, use their RFQ feature.
  • Don't pick the cheapest supplier. It will bite you in the end if you do.
  • Use the Flexport freight forwarder if you are new to sourcing from China.
  • Contact and talk to a FBA pro. They have invaluable insights. Find them on UpWork.
  • Be aware of the extra hidden FBA costs like refunds and storage costs. They add up.
  • You can use FeedbackFive or a similar service to send out instructions rather than review requests.
  • The whole process can take a while. Overall, this initial order took about 5 months to get on Amazon.

 

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