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experience
11-28-2014, 02:56 PM
Most people wrongly believe that direct importing requires a big cash outlay and is full of complex problems.

I am here to clear up those wrong ideas that have been caused mainly by a huge amount of misinformation being published on forums. People who know little about importing, but who know that there are huge profits being made by successful importers want to know the truth.

My experience might help you decide whether you should ask me any questions.

I am retired due to heart surgery that left complications. I have a lifetime of experience in shipping, exporting, and importing. Fresh out of college I began work as a messenger boy with a big shipping group where I learned the rules and regulations regarding importing and exporting.

After running my own industrial manufacturing business for some time, in 1978 I began exporting my own products to Asia Pacific countries including China. After selling that business I began importing in 1987. All the products were sold B2B.

Business thrived to the point that having employed all available family members, I continued expansion of the business by selling franchises, eventually having franchisees in four countries. My surgery over 5 years ago put a stop to that and I had to sell the business.

With a body that had to slow down but a brain that just refused to do so, I wrote a book about how to safely source small or large quantities from overseas manufacturers and how to import the easy way. It keeps my brain active and more importantly, I enjoy helping new entrepreneurs get a safe start into the exciting and potentially profitable world of importing.

That’s where this thread comes in. If you want to know anything about product sourcing or importing all you have to do is ask.

From time to time I will post information articles, so I hope you will visit often to learn things that might surprise and please you.

I will even show you why buying small inventory can be far more profitable than dropshipping and why buying wholesale is not going to give you the profit you expect.


Online Sam
02-09-2015, 10:04 PM
Hi Veteran importer,

I'm hoping i'm not too late with my reply here, but I would be keen to learn about relationships around product types, having never dealt with physical products :

Say I had an online (or offline) golf store. If I was keen to offer 100 items in product range but don't want to order and hold 1000 golf gloves or 1000 one irons etc.

Is it common to get a "mixed bag" in importing - taking say 5 golf clubs, 10 golf shirts and so on?

i'll be showing my naievete in not knowing whether exporters even stock such product mixes or deal in such a manner.

I guess you can see what i'm getting at here in having a few items of each on hand to fullfill sales, but not filling up containers with single items etc.

Cheers

experience
02-23-2015, 08:38 PM
Hi Online Sam,

I always recommend dealing only with manufacturers and not with wholesalers, because profit margins when buying from the real manufacturers far exceed those obtainable through wholesalers.

Wholesalers will often supply a mixed bag, but not in very small quantities.

In some product categories, manufacturers will produce a wide range of products and with the right approach they will often supply a mixed bag.

The most important factor is to find those genuine manufacturers. Most of the big B2B sites have large lists of suppliers claiming to be manufacturers, but they are in reality traders or wholesalers.

I have taught hundreds of people how to safely source, how to negotiate small orders, how to be sure they get the best prices, and then how to get the supplier to do the legwork in organizing the importing process for you.

If you need more information, just ask. I have been offline for some time, but will now be able to give this the attention it deserves.


experience
02-25-2015, 11:35 PM
In my original post I said I would from time to time post information articles, so here is the first one.

There is a lot more to the sourcing and importing process than just searching a B2B site for suppliers, so I have set out a brief step by step guide that you can use to make sure you have at least done the basic work before you get in too deep.

I see too many people on forums like this who jump in at the deep end without doing adequate research.

I could just give out the names of a couple of safe B2B sourcing platforms, but I know that some newbies, maybe even a lot of them, would go there, like the trustworthy suppliers they find, and start placing orders. That could still cost them big bucks.

It is not uncommon for people to go off half-cocked knowing almost nothing about what is involved in buying overseas. In effect they treat the overseas buying process as though they were buying from the corner store. Some even turn to me for help after they have ordered goods without knowing what to do about actually getting the goods delivered to them.

I have on my files tales of woe that include one who ordered a large shipment of bulky goods. Great price! The problem was, this person discovered that freight was going to cost several times the value of the goods and by the time she came to me for help she had already paid for the goods. I find it hard to believe how careless some people can be with their own money.

If someone intends going it alone without obtaining expert guidance, they should at least think carefully about the project from start to finish. Here is a very brief step by step guide. Intending importers should at least complete the first two of the following steps before starting to even source products.

• Market research. What to sell, how to sell it, are you sure you will be able to sell it, and what prices can you confidently expect to sell it for at a profit. That confidence must be based on thorough research, not just checking sold prices on eBay or Amazon.
• Determine what maximum landed cost is affordable in order to be profitable, making sure you take into account all selling costs. See first point.
• Search for suppliers using a safe sourcing site. Don’t just go to any site casually suggested on forums, because on many of them everything is not what it appears. For example, “Verified” means the business actually exists. “Gold” or “Premium” Supplier means they paid out hundreds or sometimes thousands of dollars to gain that status. Alibaba were for almost a year discounting that fee by 90%, so that means a whole lot more suppliers have bought status without scrutiny.
• Remember that Chinese businesses almost invariably trade under multiple different names, so bad reviews don’t bother them and bad feedback rarely appears. They simply leave their bad record behind and trade under the next name on their list.
• Avoid suppliers falsely claiming to be manufacturers. Some popular B2B portals have big lists of suppliers claiming to be manufacturers, but they are not. They add their profit to the prices they pay real manufacturers. You lose that part of your potential profit.
• Avoid middle men falsely claiming to be wholesalers. They do not even carry inventory, but are opportunists who will offer for sale anything from paper clips to million dollar machinery.
• Avoid dropshippers too because they take profit out of your pocket.
• Conduct due diligence on the chosen suppliers.
• Convince the supplier to allow you to order much less than their stated MOQ.
• Get quotes. Don’t forget freight.
• Beware of freight collect quotes. A common scam in this area could lead to your bankruptcy.
• Negotiate payment terms. Beware of W.U., and Telegraphic Transfers. Scammers love them.
• Ensure that all costs to your door are covered and that you have them in writing.
• Obtain sample/s. Beware of freight ripoffs in this part.
• If satisfied, place a small trial order crossing every “t” and dotting every “i”.
• Pay deposit.
• Pay balance as negotiated.
• Check the goods.
• If all is well to this point, you are in business. You can do your test marketing and be ready to place another order.

Now this is not an exhaustive list, but it may help those who prefer to risk their money rather than seek expert advice. There is much, much, more. It takes me 133 pages to set it all out in detail for those new to importing.

Online Sam
03-01-2015, 04:43 PM
Thanks for your response...,

Sounds like a tough game, but there must be some good rewards in it to encourage one to work their way through those steps.

Look forward to the next update Experience.:o

experience
03-01-2015, 08:53 PM
Yes it certainly can be a tough game for those who think they are buying from the corner store and can automatically trust the vendor, send them payment without too much concern, and worry about the details later.

I have successfully guided hundreds through the apparent complexities, but in reality it is a simple process. Just like any field, you need to know the basic rules at least. Once you know, it is like learning to ride a bicycle ..... it becomes easy and you wonder why you fell off so many times when learning.

I am trying to be like the one who walks behind the bicycle, holding the saddle when necessary, just to reduce the number of bruises and scratches.

Online Sam
03-02-2015, 10:24 PM
Good man Mr. Experince.

I have heard before that looking for something light (in weight) and often searched for or impulse items are great items to be importing.

On the other side of the coin I had a friend who made a small fortune (over 100k clear) in a 6 month stretch selling counterfeit P90X systems around a big city in the states when that program was hot.

A winner can be great!

experience
03-03-2015, 02:51 PM
Coincidentally I have just answered a PM from a person about counterfeits. I will post here what I told her, with a little extra information:

Always avoid counterfeits, knockoffs, or copies, whether or not they carry the big brand label. It is illegal to import them and illegal to sell them.

Sooner or later you will get caught, and Customs will seize the goods, so your money goes down the drain. But that is not the end of the story .....

Customs will flag your name and address so that every shipment you receive will be delayed at Customs for thorough inspection. If the value is enough, you can be prosecuted, facing fines and in serious cases, imprisonment.

If the brand owners discover what you are doing they will sue and that can lead to bankruptcy.

It is worth noting that even something that looks like a big brand item can be classed as counterfeit. Designs are often the subject of copyright.

Online Sam
03-03-2015, 08:14 PM
Yes - advice heeded. It didn't work out so well for this guy in the end I can tell you:(

Cheers Ex

imogene
03-03-2015, 10:46 PM
I have been looking for dropshippers on Alibaba, but nobody seems to offer dropshipping.

Should I just contact a few manufacturers and ask them if they will dropship? Or will they think I am to small?

Online Sam
03-05-2015, 10:51 PM
I've successfully "imported" via AliBaba (not Ali Express) in small amounts. Tested a market with 10x units which I bought from exporter as a "sample" (their MOQ was listed as 10,000 units HA)

Sold those 10 then asked for 20 more

They fulfilled this one as well.

Then when they were sold, I asked for 30! and go this response

"Dear Sir,

Please try to expand your business up to where you will be ordering in excess of 10,000 units at a time.

This small business type is not good for us."

I laughed and printed it out.

if you look around on Ali you'll often find a pretty much identical product for sale from another vendor anyway.

experience
03-07-2015, 11:03 PM
I have been looking for dropshippers on Alibaba, but nobody seems to offer dropshipping.

Should I just contact a few manufacturers and ask them if they will dropship? Or will they think I am to small?
Dropshipping from China is potentially quite risky. There will be slow delivery, and your customers are likely to have to pay duty and tax. You will also find that most of the dropship suppliers in China will compete directly with you, and they have your customer details.

How long do you think it would be before they contact your customers direct?

Manufacturers can be persuaded to supply small orders if you are buying for inventory, but most will not dropship.

experience
03-07-2015, 11:10 PM
I've successfully "imported" via AliBaba (not Ali Express) in small amounts. Tested a market with 10x units which I bought from exporter as a "sample" (their MOQ was listed as 10,000 units HA)

Sold those 10 then asked for 20 more

They fulfilled this one as well.

Then when they were sold, I asked for 30! and go this response

"Dear Sir,

Please try to expand your business up to where you will be ordering in excess of 10,000 units at a time.

This small business type is not good for us."

I laughed and printed it out.

if you look around on Ali you'll often find a pretty much identical product for sale from another vendor anyway.
Because you are buying through Alibaba, I would suspect that your supplier is a trader or wholesaler and not a manufacturer.

This would partly explain why they are quoting you an MOQ of 10,000 units. Many Chinese traders don't carry any stock. They get an order, take a deposit, then contact the manufacturer to see if they will supply. The bigger the order the more likely it is that the manufacturer will supply them.

If you find the real manufacturer (not easy to do on Alibaba), you will have a much better chance of getting them to supply small orders.

experience
03-08-2015, 02:48 PM
I promised that from time to time I would post more information. This post does not relate directly to importing but it is important for all those interested in online marketing of physical products.

Dropshipping is a business model that allows you to retail goods without holding any physical stock. Without any goods in your possession you advertise for sale those products that your dropship supplier has in stock.

When you make a sale, you send all the sale details to the dropshipper who then ships the item out on your behalf. Your profit will be the difference between what you charge your customer and what the dropshipper charges you. Don’t forget to allow for your selling costs, including Ebay fees, PayPal fees, postage etc. Some people even have to pay a dropship fee.

Pros:
• Dropship wholesalers offer a vast product range for you to sell.
• You do not need to outlay money for inventory.
• Your dropship supplier does most of the work for you, including packing and postage, although you still have to handle the sales and administration work
• Theoretically your bigger product range could lead to higher sales.
• You don’t even have to worry about storage space.
• You can automate the process.
• Your dropship wholesalers might have photos that you can display on eBay or Amazon.

Cons:
• You have no control over your own business. That can lead to very unhappy customers.
• You might keep selling not knowing that the supplier is running out of stock.
• Your supplier may even discontinue a product line without informing you. That can result in bad feedback that will damage your business.
• Dropshippers make mistakes, but you get the bad feedback.
• Those who promote dropshipping boast about their huge turnover, but they don’t tell you how low their profits are. Dropship resellers posting on business forums generally report a profit margin of 20% or less, but there are a few who say they get 30%.
• Many sellers on Amazon and Ebay use the same dropship wholesalers, so there are often hundreds of sellers flooding the market with the same product.
• When you buy from dropship suppliers you are engaging in a business to business transaction and in almost all western jurisdictions that means you do not have protection under consumer protection laws. Your customers do. Even if they did not, they still get favoured treatment from eBay and PayPal and credit card companies, which means they can, and do, return the goods for any reason and claim a refund. If numerous customers do that, perhaps simply due to a recently announced product update, you now have an inventory of returned goods whether or not you have the funds to finance an inventory. Your suppliers will not give you a refund unless the items are faulty.
• In order for an item to sell successfully especially on Amazon or Ebay, it has to be either unique, or a very desirable item. If you browse through dropshipping directories you will find it almost impossible to find items that meet these criteria except for those very desirable hot selling products that every man and his dog are selling at ridiculously low prices.

Don't forget that I welcome your questions on anything to do with product sourcing and importing

experience
03-10-2015, 09:44 PM
Is There a Difference Between Factory Direct and Wholesale?

These two terms "factory direct" and "wholesale" seem to be used interchangeably, but the question is: Is there any difference?

The short answer is that there is a massive difference. Let me explain.

Many suppliers offer "factory direct" prices, trying to give the impression that those prices are as low as it is possible to buy. Dropship suppliers often use that term on their websites, yet it is obvious that those suppliers are not manufacturers.

It is important to understand that, with some exceptions due to issues of surplus stock, overruns, slightly faulty goods, distress sales, or mistakes in manufacture such as wrong colors causing rejection by QC, the manufacturer can always provide the lowest price.

Wholesalers buy from manufacturers. Wholesalers are in business to make profits - therefore they add a margin to the price they pay the manufacturer. They then sell at that higher price to people who buy wholesale.

Manufacturers sell to wholesalers. The price they charge is the factory direct price, more correctly referred to as the ex-factory price. That, apart from exceptions noted above is the cheapest price available.

Those resellers who are not hung up on the idea of buying wholesale can also enjoy the huge profit margins enjoyed by wholesalers plus their own retail margin when they sell the goods to the public. The profit difference can be mind boggling.

Summing Up:

Factory direct prices are the prices charged by the actual manufacturers.
Wholesale prices are the much higher prices charged by wholesalers.

Wholesale prices may look cheap, but why pay so much when you can buy even cheaper direct from the manufacturer?

imogene
03-15-2015, 10:56 PM
Thanks for all that information about dropshipping. It is really making me think again.

I dont think I will ever have enough saved up to buy inventory unless I work harder at my expensive brand clothing that I get from charity shops. I will keep saving cos I would like to have a real business selling something that I can keep on selling month after month.

experience
03-16-2015, 11:54 AM
The good news for you Imogene is that you do not need a lot of money to get started on importing.

I have helped many people get started on a very small amount. Here is an email I received recently from one of them. Originally he thought I was exaggerating but his successful first venture into importing has changed his mind.

"Ok. From extremely skeptical to successful completion. Credit given where credit is due. I followed the book instructions you laid out. Took my time to double check everything and was able to successfully import an order from China. Not only that but it was also a “sample order” for less than 300.00. A 300% mark up has allowed to get initial investment back and I have 70% of my inventory left. Stop promoting your book. Your encouraging competition for me Many thanks."

NOTE: The email is on file for inspection by the FTC if necessary.

Online Sam
03-17-2015, 05:35 AM
The book must be a little beauty exp. Well done.

Congrats to the fella having some success.

experience
03-22-2015, 02:55 PM
The book must be a little beauty exp. Well done.

Congrats to the fella having some success.
I am pleased to say that he is far from being the only one having success.

When I was running my importing business I promised my franchisees that if they followed my methods they would enjoy a [B]minimum [B] mark up of landed cost X 250%. I obviously had to be very sure of myself because the franchising industry is notorious for litigation.

If I had failed to deliver on that promise they would have sued me.

In practice they often achieved much higher margins, but they never went below 250%.

Since I retired and wrote my book, I have helped a huge number of people start up as total newbies. One of the most common questions that I get is "How much do I need to get started in Importing?" My answer is that If I was starting again I would like at least $1,000, but like the person I quoted in my post on 17th, I know of many who have started with as little as $300.



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