A lot of innovation is coming out of Chinese firms, which is great news for Amazon sellers focused on a China sourcing strategy. An improvement in quality systems, materials engineering and industrial engineering capabilities is creating opportunities for importers seeking to bring new or differentiated products to market.
Chinese factories have established themselves as leaders in production scale and they can churn out mass customizations at low price points, making China the top choice for common goods typically purchased wholesale for retailing on online marketplaces.
Whether you’re interested in selling sophisticated electronics or plastic toys, certain considerations are important to business success.
1. What the market wants
Market research is the first step in a sourcing strategy. You may have retailing or importing experience related to a category of products that generates good margins. In this case, the logical next step is to find a supplier in China that makes those products and has experience selling to Western companies. If you’re a complete newbie, you have the big task of figuring out what to sell on Amazon. Here are some ways to understand which products retail well on Amazon and the most popular products imported from China.
Amazon’s list of best-sellers is a good starting point. The list is updated on an hourly basis. Popular categories on the site include home and kitchen items, clothing (including accessories, shoes and jewelry) and of course tools and home improvement items. However, choosing a product from a popular category would mean going head-to-head with established competition. Unless you can distinguish your product or undercut the competition, hitting the desired sales numbers will be difficult.
Conduct keyword research on Amazon. A simple way is to just type into the Amazon search bar and see what comes up. These results are reflective of the products customers frequently search for. If you’re interested in retailing radiator caps, you’ll see it’s a frequently searched product and that same search will direct you to other highly sought-after items.
Use keyword research tools to find high volume and high value keywords on Google is beneficial as those same items are also worth targeting on Amazon. Google’s Keyword Planner is a free tool that you can access with a Google ads account. Identify which long-tail key phrases have a relatively high volume to gauge demand. For example, ‘stainless steel brackets 3 inch’ may have a high search volume while there may be fewer or possibly no searches for stainless steel brackets in other dimensions. You can also use the Keyword Tool designed specifically for Amazon. The Pro version of the tool generates twice the number of Amazon keywords compared to the free version.
Use market intelligence tools that provide sales estimates for products on Amazon. These tools use real-time and historical data to project both estimated monthly sales and monthly sales revenue. An idea of how many products you might sell each month, and the profit you can make on a specific product, can help you choose a great product to sell on the leading marketplace. This information is also useful in planning the amount to invest in the product, and the units of inventory to order from your China manufacturer.
Find profitable products imported from Alibaba, a popular China sourcing platform. The Autosuggest feature offers clues into common searches. Here you can see the price quoted for each product and calculate the total cost to you by adding the shipping cost, custom duty, insurance cost and other applicable taxes, to this amount. Then check the price against those products on Amazon. Subtract your total purchase cost from the selling price to estimate the profit you can make.
2. How to ensure quality and quick deliveries
Chinese factories have been stepping up to importers’ demands for new electronic and mechanical products. You may be interested in selling products that need to be manufactured to exact technical specifications. Once you’ve confirmed the demand for a specific product, at a price that you can justify, your search for a Chinese supplier can begin.
You may want to work with a manufacturer that specializes in making the product and has the capability to fulfil orders without delay. Amazon sellers retailing new mechanical or electronic products aim to get the first batch of products on the market as quickly as possible, acquire customer feedback, and use that revenue to get the ball rolling on the second batch. The goal is to get in front of customers before other sellers enter the market and compete for all the attention.
If you’re selling a technically complicated product that is in demand or one that must otherwise follow multiple technical requirements, quality and lead times will be a priority. Partnering with the right factory puts you on a solid footing, but it is also the most challenging aspect of your China sourcing journey. A sourcing agent will not only connect you with the right supplier but can also save you time in reviewing different factories in the country.
A China sourcing agent helps you overcome these hurdles:
– Identify particular local experts from the large variety of processes available in key manufacturing zones, including die casting and forging, plastic injection molding, and metal fabrication. If you’re interested in specific industrial cities such as Shenzhen or Huizhou, the agent can pinpoint different local suppliers by your technical requirements, review the bids, make an educated selection, and send you a quote.
– Conduct a detailed factory audit. Here, the ability to converse in Mandarin is helpful in correctly assessing the advantages and drawbacks of working with the particular manufacturer. Other than the production aspects, corporate information such as management structure should also be clear to determine the ease of communicating with the supplier from a different country.
– Follow-up with the supplier and stay on top of your order. Chinese suppliers are often reticent about seeking clarifications about technical specifications and sharing bad news. A sourcing agent acts as a liaison, double-checking if the supplier has understood your requirements correctly.
– Perform in-process quality inspections after production has begun and additional inspections, such as packaging and shipping marks. This extra layer of control goes a long way in ensuring consistency with all your requirements.
Sourcing agents’ proximity to production makes them a valuable ally for Amazon sellers. Chinese manufacturing depends on different tiers of suppliers. The interdependencies and supplier density strengthen manufacturing and create opportunities for sellers. Teaming up with a sourcing agent is a hassle-free way to draw on this strength and explore innovations down the line.
