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Its time to pay and ship your samples!

Having sourced and settled on a supplier, its time to make payment. But let me recap for those who might not have had a chance to follow from from the beginning. This serialized articles are about starting a physical goods business with low to zero risk. Normally, starting a manufacturing business is tough. From raising capital, getting approvals, operations to marketing and keeping the business afloat. But we have a tested and working alternative! From our first article, we have explained how China is the alternative. If you missed, go to our first article. 

Now,at this stage we need to identify reliable and trustworthy shippers from China. I recommend working with www.choicexp.com. I personally use them for all my shipping. They have an office and warehouse in Kenya and China. Please Whatsapp their representatives in China.

Vivi – +8618820119940, Kira – +8615177409862

Introduce yourself and you can tell them I recommended you ūüėÄ. Ask them for their physical address which you should share with the supplier. Once you have the details, its time to make payments to supplier. The good thing with Paypal, you can connect your debit or visa card and Paypal will pay directly from your bank. Once you have paid, share the confirmation details with the supplier. Samples are usually sent to Choice same day or the next day. Once sent, supplier will share a delivery note. Share the same with Choice representatives. This will help them in tracking and keeping tabs with your goods.

Once Choice reps have received the goods, they will alert you and will share a tracking number once they have shipped to Kenya. Then you wait for the arrival of your products. Usually 5-10 working days. You will be notified once goods are in Kenya and ready for collection. Below is a sample alert sms.

Hi,your goods arrived, CHIL xxxxxx, xpcs xKG total xUS dollars CASH UNACCEPaTABLE,Please deposit to Standard A/C: 8703327539301, name: CHOICE CO, Industrial area branch(sameer park). Please collect within 3 working days, overdue will be charged storage 20KSH per kg per day. Thanks, CHOICE INT’L FORWARDING CO’LTD.. KINDLY NOTE: DONT PAY USING ATM CASH DEPOSITs

Make payment as the alert message and head to their warehouse with the deposit slip for collection. Now you have the samples may be from 1 or more suppliers. Evaluate and check which supplier meets your standards plus who may exceed them. In a couple of times, I have had my expectations exceeded. Share or sell some of the samples with colleagues and family for their feedback. Actually, you should make a sale at this stage if the samples are perfect. This helps in recouping your investment.

If the samples do not meet  your expectations, do not give up! If you are convinced your product has a market, start the process all again with the suppliers you have chosen or new ones. Most probably your budget was not enough for a great product. You can also increase. At this moment, your judgment and instincts should kick in and make the right decisions. BUT I WILL REPEAT THIS. NEVER GIVE UP BECAUSE OF SMALL SETBACKS. Most of the time I have  setbacks, I have actually learnt something new or seen a new opportunity. A setback is not a failure, but moments to look back and reorganize and re-strategize with more energy than before.

Once the samples are to your liking, its time to make big orders with an aim of doing business. The question by now is where and how will I sell the products once I import. Good for you if you are now asking this. I will show and guide you step by step of how to take advantage of e-commerce. Again, zero risk! Keep it Omall Enterprise for more!

Evaluating feedback and deciding on the best suppliers

We already covered how to contact suppliers. We even saw the sample template email to use. Today we will evaluate the responses, and where applicable send follow up emails. The objective is to have 1-3 suppliers whom we can decide to ask for samples.

Its important to make sure all your questions are answered. Especially questions about payment mode, product features and product branding. Note branding will cost you an extra fee, so if you must, make sure to follow up on pricing versus volume.

If a supplier has not responded to all your questions, send a follow up email, pointing out what he/she has not clarified and why its important to have it clarified. For those that don’t respond, ignore them. Its very frustrating doing business with people who don’t care to communicate. Also be on the look out for those accepting Paypal, and the prices of samples vs prices of full order. After receiving feedback to follow up emails, assuming you have contacted 7 suppliers or more of the same product, its time to make a decision on who you want to deal with.

If all suppliers have excellent feedback, you can use price as your knock off. However, cheapest isn’t allows the best. Your gut instinct should guide you. Once you have settled on three maximum, write to them with an indication you are ready to buy, but want a discount for the samples, and share order numbers you are looking make once you approve the sample. Don’t expect much¬†leeway at this moment. Some will give a small discount, others won’t and others will promise discount on the big orders. Take note of this as it will be helpful in future.

So, now that you have all information, its time to pay for the samples. Remember you should only deal with suppliers accepting Paypal as a mode of payment! Its important to note i haven’t shared who our shipper will be at this moment. Don’t make a mistake of using DHL, EMS, UPS or or other international shipping companies for your shipping. In our blog¬†China, manufacturing power house; why you should leverage on this Success!¬†it was very clear you only need pay for shipping fee. Just before you pay for the samples, you need to plan how the goods will get to you. So, in our next article we will cover on shipping. Be on the look out for this article.

 

Contacting suppliers

We continue our endeavor to source for products from China. Previously we were able to narrow down to a few suppliers. Today, we will contact each of the suppliers. Chinese are very serious about business. Its important to create trust and respect from the word go. Unlike convectional way of doing business where you can dress up sharp to create the first impression, doing it online is a bit different and easy. However, many people make a mistake at this stage, which costs them dearly.

Below is an email template to use. Please note that this is meant to create confidence to the supplier and to elicit more details about thier product.

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Hello {SUPPLIER NAME},
My name is {YOUR NAMES} from {YOUR COMPANY NAME}. Our owner asked me to contact your company about working together in a potential lucrative business venture. We’d like to introduce ourselves and express an interest in creating a profitable partnership between our two companies.
We are planning to purchase {THE EXACT PRODUCT NAME ON ALIBABA FOR THE SUPPLIER. NOTE DIFFERENT SUPPLIER HAVE DIFFERENT NAMES} ({THE EXACT LINK OF THE PRODUCT}) to add to our product line. After a lot of research, we feel that your company could be a great supplier of this product. We would like to get some more information, and we have a few questions.
1. May we get a sample of the product, and how much will you charge, including sending to our shipper with address {YOUR SHIPPER ADDRESS.} ?
2. How long will it take to receive the samples?
3. Can we pay for the samples via PayPal?
4. Can we brand the product with our label?
5. Can we change 200 of the product? (color, additions, changes, etc.)
6. What is the cost of this product per unit including sending to our shipper at{YOUR SHIPPER ADDRESS.}?
7. Do you accept escrow payments or PayPal for the full order?
8. How long does it take to manufacture once an order has been placed?
9. Does the product have {HERE YOU ASK FOR UNIQUE FEATURES YOU WANT THE PRODUCT TO HAVE OR FEATURES YOU ARE MOST INTERESTED IN MOSTLY BECAUSE THEY OFFER YOU A BETTER COMPETITIVE EDGE}?
10.{HERE YOU ASK FOR UNIQUE FEATURES YOU WANT THE PRODUCT TO HAVE OR FEATURES YOU ARE MOST INTERESTED IN MOSTLY BECAUSE THEY OFFER YOU A BETTER COMPETITIVE EDGE}?
I would be grateful if you would contact us with the answers to the above questions as well as your shipping and other policies we may need to know. Can we discuss a sample order of three pieces of the product?
We hope that we will be able to start a mutually beneficial relationship.
Thank you,
{YOUR NAME}
Purchasing Agent {YOUR COMPANY NAME}.

Note how this template makes an introduction of your business and show mutual benefit to the proposed partnership. Its good business ethics to show shared interests rather than showing your only selfish interests. Keep off suppliers who will not accept Paypal as a means of payment. Paypal has a refund policy if goods don’t meet your expectations and/or are very low quality. You just need to raise a dispute, and you will need to use this email and its responses to defend your case. Once Paypal establishes malice on the supplier, you will be refunded all your money, and this is something Chinese suppliers understand. So any supplier willing to accept Paypal shows they are ready to deliver to your expectations and high quality goods.

Make sure to be precise with the features you need in a product and ask for them each in a separate line. Also make sure the supplier responds to each of the features.

There will back and forth emails after the first contact, but make sure you have your questions answered categorically in a way there will not be a misunderstanding in future. Also, your negotiation prowess should kick in and negotiate for a good deal. If you are extreme on you negotiations, they will just ignore you. They get lots of request on a daily basis and they will not waste time negotiating with you.

Contacting suppliers and the responses usually takes time. The reason why we advise you contact several manufactures/suppliers at once. You will then filter again based on the responses. Next we will look into evaluating feedback and settling on the best.

Searching for products manufacturers

By now, you have decided what product(s) you want and you already have an Alibaba account. In the previous article we did discuss the requirements to start this venture. Whether it is for business or personal use, the process is the same. You will then need to do a web search on Alibaba. Search for the phrase: ‚Äú[your product] + supplier/manufacturer‚ÄĚ. For example, if your product is an iPhone screen protector, search for ‚ÄúiPhone screen protector supplier‚ÄĚ or ‚ÄúiPhone screen protector manufacturer‚ÄĚ.

You will get lots of results depending on your item. More results could be a validation of your search because it shows the item has ¬†market traction already. But few results is not necessarily the opposite. If you don’t get results relating to what you looking for, try ¬†and change the wording till you can relate with the results.

The results page has a few elements which I will discuss below.

  1. Products/Supplier tabs. Product tab has the products from different suppliers. Supplier tab has all suppliers listed as supplying your product. Its important to filter supplier location to Mainland China.
  2. Filter Section. You have several options to narrow your search. Check the boxes to filter to higher-quality suppliers.
  3. Item listing. Each row has as much details needed for each product and supplier. On the left is the product overview and a picture, price where applicable and whether its a sponsored listing or not. On the Right is the manufacturer details. Of importance here is the number of transactions in the last 6 months and response rate. These numbers will help you know well in advance what kind of a supplier you dealing with. A supplier with high transactions is a sign of an established business while a high response rate shows the supplier has invested handling customer requests which means your requests and questions will be responded to in time.
  4. On the left of the whole page is further filtering of the product depending on features. If you understand your product well, use these filters to narrow the results.

The aim at this stage is to narrow down to about 7-15 suppliers. Check that you have suppliers within your working budget for each item and they have good qualities like high response rate and high transaction rates. At this point, don’t be intimidated by the minimum order requirement. We will deal with that later. All you need to do now is identify several manufacturers. Click Add to Compare for each of the products you decide on.

Next we will go through how to contact each of those selected suppliers.

Preliminary requirements to source from China

Before you can start sourcing for products from China, there are basic things you will need. We will look at each

 

1. An Alibaba account

You might have heard of them, and never got interested. Or you could be working with them already. But alibaba (https://alibaba.com) is the center of attention when it comes to sourcing from China. On 18 September 2014,¬†Alibaba’s IPO¬†priced at US$68, raising US$21.8 billion for the company and investors.¬†Alibaba¬†was the biggest US¬†IPO¬†in history. On 19 September 2014,¬†Alibaba’s¬†shares (BABA) began trading on the NYSE at an opening price of $92.70 at 11:55 am EST.¬†So what exactly does Alibaba do? Its simple from their mission statement “ALIBABA GROUP’S MISSION IS TO MAKE IT EASY TO DO BUSINESS ANYWHERE.” And how does this align with what we are about to start? Stay here, you will have that explained! So head to Alibaba and have yourself a free account.

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2. Paypal Account

Secondly, you will need a way to make payments for your samples. Alibaba have a Trade Assurance service¬†plus Secure Payment service¬†but as I said in our first article, we want to do this with zero risk and zero cost! Both of the trade assurance and secure payments are charged a fee, and we can accomplish to do¬†the same without paying a penny and get same results. Thats what we want. Isn’t it? The good thing about Paypal is its refund policy incase a¬†supplier¬†doesn’t meet thier promise, you can ask Paypal for a refund and it takes Max a month to get. Please note, this is not meant to con suppliers. Rather to protect you from the bad ones. This will be explained too. Head to Paypal¬†and get yourself an account (Either business or personal, the preference is all yours). The good thing is you can connect you account to your card and make payments directly from your bank.

 

3. A shipper based in China

Lastly, you will need to get samples shipped to you for verification. Good thing with getting samples is that you can have a true look and feel of the items you intended to sell. Also you can share or sell to¬†friends for feedback. If you are in US or Europe, shipping from China is almost free depending on size and weight of your cargo. There are couriers charging as low as $1. However, if in Kenya, shipping from China would¬†be very expensive if you don’t use the right means. This might include paying taxes. Note I am not contradicting myself. If you use the right couriers, you wont have to pay taxes on any products from China, however, if you use the wrong guys, you will be in for a rude shock! I have personally worked with several couriers and i will recommend the best.

The process to source is quite easy;

  1. Search for the manufacturers of the product you intended to buy,
  2. Filter and write to the best,
  3. Evaluate on their feedback and settle for the best,
  4. Pay for the sample. A good negotiator can get sample free and only pay for shipping,
  5. Sample is shipped to you via your shipper of choice.
  6. Once sample received, evaluate and decide whether you want to work with the manufacturer. If not, repeat from step 2 using second best option, or you can decide to search again.

The process takes between 2-4 weeks for each product, but you can concurrently work on many products. So next we will look into each of the steps above in detail. CHAO

China manufacturing power house; why you should leverage on this Success!

China has perfected one thing, manufacturing. Many companies across the world have closed their factories and out sourced to China. But why is China accomplishing what so many in the world seem to fail at? Below we look at the major assets (competitive advantages) China manufacturers have, which manufacturers in other countries only dream of.

  • Cheap labor as compared to other countries. $5/hr for Chinese Labor compared to $7-$8/hr for US labor.
  • Raw materials of products are cheap because of 2 factors: One, most of them are produced in China itself. Second, due to high demand they are available at cheapest price.
  • China only has VAT taxation system which allows taxing only value added services. So production is cheap. Plus, China doesn’t charge on export. And the US doesn’t have import duty for Chinese goods. China charges on import though. This makes it hard to access the 1 billion people (20% of worlds population) Chinese market from outside,
  • Costs of compliance to health & environment safety are neglected in China. Thus reducing costs
  • Chinese currency, Yuan, is kept lower than US $. This means that for a low price of US $, the Chinese companies can still make huge profits.
  • Mass production enables china to further bring down costs of production.
  • China has negotiated for free exports zones with many countries.

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So, what does this mean if you are a manufacture here in Kenya? To be complaint and allowed to operate, you will need to pay not less than 12 different licenses. Don’t forget, you will also pay VAT, Excise duty and the corporate tax once you are producing, plus other operation costs. If today instead of manufacturing you start to import same products from China, you will only pay for the goods (This price is usually very low compared to the cost of production you would have footed¬†manufacturing and without¬†margins) and shipping. Nothing more! Don’t be surprised! Chinese goods are not taxed entry in Kenya. Whether this is by design or omission, i don’t know, what i know is China government has gone as far as negotiate free trade zones. This is not only happening in Kenya. Even in the US, Chinese products aren’t taxed

So my question is, why should i or anybody else invest so much to build a production line instead of leveraging on China? I say there are no bad decisions, only uninformed decisions. Thus information is power, and with todays world, information is right on your hands with a mobile phone.

Next, i will start to serialize on how to leverage on Chinese power house with ZERO RISK!

P.S. If you missed our last article, get it here SECURE AND GUARANTEED SOURCING OF PRODUCTS FROM CHINA WITH JUST A LAPTOP AT HOME

There exists a misconception about doing business with the Chinese especially on quality. For purposes of clarification, china controls a fifth of the world’s manufacturing of physical products. World Manufacturing Production Statistics for Quarter II, 2016. Did you know that 63% of world’s iron ore is imported by China? Iron Ore Imports by Country SEPTEMBER 19, 2016.¬†Now you know.¬†Even the high end phone, Iphone is manufactured in China.

We all have heard of the insinuation Chinese products are low quality. The truth be told, quality comes at a cost. And Chinese have mastered to fulfill all classes of quality for the same product depending on how much you are willing to pay. So next time someone tells you Chinese have low quality products, put them straight and tell them Felix said so!

Another big lie is that you have to visit China to see and know the manufactures of products¬†before importing. This is a big fat lie! With today’s connected world, communication and doing business has shifted to online rather than the old way of physical interaction and handshakes to signify agreement to do business.

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It does take time for people to change and adopt to new ways. This is no exception in sourcing from China. If we can send money via our mobile phone or shop online at Amazon and pay without meeting whoever receives the money, then sourcing from china can be done without ever meeting your manufacturer. It’s being done already. Rather then travel and use up air tickets and accommodation for sourcing, with modern tools, this can be done form the comfort of your house and use the travel expenses to buy more.

At Omall Enterprises, we have refined this process. We source for high quality products every single day and sell them across the world. With our sister online shops www.nitfashion.com and www.omall.de we have a world reach using this technique we have refined over time. So next time someone says you have to travel to china to do business with them, again, set them straight and tell them Felix said.

Next we will talk about the physical goods industry, how and why to leverage on Chinese mammoth manufacturing capacity.