Robert
[00:00:06]
Hey eCommerce marketing podcast list. Now I wanted to let you know that we have created 16 eCommerce marketing videos for you. You can download these free videos by visiting eCommerce marketing podcast.com forward slash videos are by texting the word videos to plus 1 4 8 0 4 1 8 1 4 11. This step by step video marketing tutorials will teach you how to drive more traffic to your eCommerce website. How to get more back links to your eCommerce website and how to optimize your website to get more paid customers. Get the videos right now by visiting eCommerce marketing podcast.com/videos or by texting videos to plus 1 4 8 0 4 1 8 1 4 1 1. Welcome to the eCommerce marketing podcast. Today’s guest is Sam Boyd and he’s from guided imports.com. Welcome to the podcast, Sam, how you doing?

Sam
[00:01:09]
Thank you so much, Robert. I’m great. Thank you.

Robert
[00:01:11]
So today we are going to be talking about sourcing from China. This is like some hard trend that’s going on right now. A lot of businesses are getting into selling on Amazon and you know, it’s just something that’s really hard, that’s really happening and wanted to have you on because you’re the go to guy as far as private labeling and sourcing from China. But before we get into the topic, why don’t you just let us know about yourself and how you ended up doing what you do right now?

Sam
[00:01:44]
Yeah, definitely. So I have been dealing with China, I guess since 2008, I studied Chinese and university. I done business there prior to moving here. Once I got to China started working for a product development company. I enjoyed it, but I didn’t like the idea of having a boss. So once I learned the ins and outs of international trade, I started my own, started my own sourcing business, which was helping customers get products made from factories in China. And we would get them shipped to retail stores and some e-commerce stores. Okay. So we sort of grew from there. You know, now we help a lot of e-commerce sellers, but that’s basically the, the gist of, of, of what it is that I do. And, you know, we’ve, we’ve been able to grow us a pretty decent size team, all operating outta China and, you know, I guess loving every second of it.

Robert
[00:02:38]
Okay. And do you, what countries do you serve? Like where are some of your customers from I bay from around the world? Or do you just focus on the us Canada, UK?

Sam
[00:02:50]
Right. So a lot of our customers are, are selling in north America. That seems to be the, the most popular market. And we cater now with guided imports, we cater towards private label sellers and also e-commerce sellers. So the, since, since the biggest market is the us, a lot of people are selling in the us, but we also export goods to, to Europe, the middle east and also Australia. And then we from that, we have customers all over the world. So we are, you know, we, we do have our reaches sort of almost everywhere.

Robert
[00:03:26]
Okay. And what exactly is your service? What do you do for your customers?

Sam
[00:03:32]
Yeah, so what we do is we’re a sourcing company, but we sort of handle it in a different fashion than how original sourcing companies or traditional sourcing companies work, where they help people find products. They take a small commission or they take a percentage of some sort and they act as a middleman. So this model works very well with retail sales, where people are doing tens of thousands or hundreds of thousand dollars worth of orders. But when you look at eCommerce, the order size is much smaller because the, the, the sale is so much more surgical. And because of that, that this commission based modeling doesn’t work. So we offer a service where we take over all aspects of dealing, dealing with China. On behalf of our customers, we use our feed on the ground as the purchasing office. And we, we act as, as the purchasing team for our customers, dealing with factories, finding factories, negotiating, managing shipping. So essentially we are an extra employee for, for companies who are selling products on Amazon, getting them manufactured in China or selling them on re on eCommerce at where they’re getting manufactured in China.

Robert
[00:04:47]
Okay. And from your experience, what are some, I guess now we are going to get into the topics of sourcing from China, but what, what are the common mistakes that you’ve seen online as far as advice, or a lot of people are talking about sourcing from China, but maybe they don’t get into everything. Maybe they don’t mention some common pitfalls or they probably just talk about, okay, China’s great. China’s great. It’s going to increase your, your margin and you can get inventory from them, but what are they really not saying

Sam
[00:05:26]
China is a beast? I mean, all in itself, it’s, it’s the largest country in the world. Their output is huge and their business practices are so much different than anywhere else in the entire world. It’s exciting, especially with eCommerce booming right now, and also Amazon being, being a, this, this huge elephant where anyone can get onto Amazon and start, start their own small business am because Amazon is so exciting. A lot of people look at this as an opportunity that anyone can, can make millions doing this. And one of the, one of the immediate things that I try to explain to, to people who are, who are new to sourcing from China or new to selling on Amazon, or bringing their products in the eCommerce is this, isn’t a get rich, quick scheme. Dealing with China is a, is, is difficult. It’s not easy. There’s a lot to learn.

Sam
[00:06:21]
And while it can be exciting to read about these incredible case studies where people are, are, are doing millions of dollars worth of revenue every year by just sitting behind their computer and sipping my ties. There’s a, there’s a lot more to learn and understand about China. And without doing that before moving forward and, and looking towards this place as a, as a location for offshore manufacturing, you could run into some serious difficulties. So I think that’s one of the, the, the initial things that I like to point out to people, especially when they’re a beginner and they have no idea how to start or where to go. That’s one of the, that’s one of the early things that we, we like to, we like to explain the people that, that you, you truly need to respect.

Robert
[00:07:08]
So yeah, like many of the beginners when they get into it, they’ve probably had one of those case studies and they’re excited that, oh, Hey, maybe this is one way I can, I can make money. I can get rich really quickly and I can just retire and then, you know, move to a private island. But it’s, it’s not, that is, it’s just like everything else you really do have to put in your time to get whatever profit or reward you’re going after.

Sam
[00:07:38]
Yeah, I think you’re right. And when, when I try to explain how difficult China is, you know, we, we start with the analogy where getting a product manufacturer in China, it’s not as simple as just going to a deli and ordering a sandwich. It’s also not as simple as going to a bakery or baking a cake from scratch. It’s, it’s, it’s, it’s almost equivalent to baking ha being, being asked to bake a cake from scratch, but not knowing any of the ingredients that are inside of a cake. And you have to go and find all of these ingredients and start testing, figuring out how do I make this cake? And because of the, the business being so different, it is necessary for people who are interested in this to start doing some research, reading about it. There’s tons of information that’s free online that, that you can, that you can look into there’s there’s blogs. There’s there’s videos. Yeah, go ahead. Sorry.

Robert
[00:08:32]
Yeah. So I was going to say, when they’ve already done the research, and then they’re ready to jump in, I guess the first step is trying to find supplies and manufacturers.

Sam
[00:08:45]
Yeah, definitely. So there’s tons of suppliers in China. There’s, there’s tons of factories. And if you have an idea of a product or, or you’re currently selling a product, and you’d like to see if you can get it directly from the source, you can hop onto Alibaba or global sources.com and start finding factories that are making this exact product. Now, the most important thing in this and this, we we’ll sort of jump into, do a little bit of fast forwarding and assume that people understand China. They, they understand how to find suppliers, how to, how to use global sources to, to speak with suppliers. So what are the things that you really need to look out for when you’re, when you’re speaking with these suppliers and some of the, some of the, the key things that, that I like to, I, I like to make sure that people understand is when you’re looking for suppliers, the very last thing you want to be looking at is price.

Sam
[00:09:38]
Price is a dangerous vehicle. When everything that you’re doing is, is guided purely by the price because of how volatile suppliers are in China. So once you take price out of it, you then want to try to be as selective as possible when you’re looking for suppliers, because when you search for, when you search for factories, you’re gonna see tons of them. And you want to be able to find the ones who communicate well, who present themselves as legitimate as legitimate companies and provide the necessary amount of information about the product that you’re interested in purchasing. And while a lot of people, when they first start out doing this, or even after they’ve been doing this for a while, when they start speaking with factories, they get very excited and almost, they almost feel as though they need to show off to these factories. They need to make them think, oh, we’re this big buyer almost overcompensating, because they know in reality, they’ve been able to create their own business behind their computer.

Sam
[01:10:38]
They want to make it seem like they have a giant company where in reality, that’s not really necessary. What you wanna be focusing on is having these suppliers validate themselves to you. Do they, do they have the, do they have the amount of experience? Do they have the amount of understanding? And certainly can they produce the products that you’re looking, you’re looking to get made at the level that, that your customers require? So this is, this is really the, the, one of the, the first steps into dealing with suppliers. And while we’ll see, a lot of guides will tell us, okay, here are, here are five tips for finding a qualified supplier. The, the true focus for, for anyone who’s dealing with, with China is to come up with your own solution as to what makes a supplier qualified for your company. And for some people that will be, they accept Alibaba’s trade assurance, which is like escrow, or they have phenomenal pictures on their website for people like, like us.

Sam
[01:11:39]
When we’re sourcing products for suppliers, we’re looking at their business contracts. We’re looking at making sure that their businesses are fully licensed, that they have proper certifications, that their certifications are real. It’s super easy to fake certifications. So we wanna make sure that they’re actually legitimate certifications. We want to see are they producing these products in the same market and do are their existing happy customers. So a lot of times people think, well, I’m not gonna ask China for references, cuz maybe they’re not gonna give them to me. Well, you know, if you wanna work with a new accountant, you’re gonna ask ’em for references. If you’re gonna work with a factory, you should ask them for references as well. Sometimes they’ll give them to you, which is good if they don’t wanna give them to you, that could be considered a red flag. So building yourself, this, this list of, of key reasons to qualify and disqualify a supplier is really, what’s gonna make your sourcing process and finding good factories simple.

Robert
[01:12:38]
And what about the language barrier? Is there a language barrier or a lot of these manufacturers and suppliers are a lot of them. Do they have an English speaking team or how, how do you like just find somebody if, if you don’t know Chinese or you don’t have a translator, how, how does that play out? Right?

Sam
[01:12:59]
Yeah. So for the most part, everyone who you will find on these, these supplier database websites will speak English to some regard. It’s, it’s kind of funny. I’ve, I’ve brought some clients over to China and, and, and had them meet some of the suppliers or we go to different trade fairs. And when we’re both speaking English, when I speak to the suppliers and when the client speaks to the supplier, the suppliers are always able to understand me, or they sometimes have a difficult time understanding the client. And the reason, because the reason for this is I simplify everything. Okay. And it it’s, it’s important to know that when you are speaking with, with these, with, with these Chinese people who English is not their first language, taking away all of the, all, all types of complex words or any, any, any, any form of speech that would confuse a fourth grader, you want to take that out and speak clearly and clearly and slowly, and they should be fine. It usually communication is only an issue. Once you start negotiating. And once you start, once you start changing your product requirements, but there are certain things that you can always do to make sure that while if communication is, is a difficult, is a difficult thing to, to overcome with one supplier, there are tricks that you can use when you’re purchasing to make sure that they fully understand everything.

Robert
[01:14:29]
Okay. And once you’ve gone through that whole database and you find the supplier that you want to use for your product, how do you ensure that they, that they will be producing great products? How can you have quality control?

Sam
[01:14:45]
Yeah, that, that’s a great question. And I it’s, it’s probably, as eCommerce is growing and more and more people are looking at China, the largest concern we’re seeing lately is, is quality control. Because every single person who touches your product has the opportunity to publish something about that product, about your product on your site or on online. And it’s gonna stay there forever. Never. There was, there’s never been a time in retail where every single customer has been able to listen to every other customer’s concerns or feedback prior to e-commerce with quality control being the biggest one, anyone who’s purchasing from China, one of the most important things that you need to factor into every single shipment. We’re not talking every other shipment or we’re not talking. Every first shipment is to have quality control. You want to have a third party quality inspection company, go to your, go to the factory during the production to inspect the goods.

Sam
[01:15:46]
This is something that can’t be avoided. This, this is something that many people choose to neglect, but by having a, a non partial third party, third party inspector go to a factory to inspect the goods and to provide an inspection report, nothing. There there’s no, there’s no other, there’s no other way for, for you to, for you to feel comfortable knowing that the supplier produced exactly what it was you were looking for, unless you do something like this, because a factory is always gonna say, yeah, the products are fine. We quality can, we did quality control on them and we didn’t find any there’s no problem. Of course, they’re gonna say that, cuz they want you to, they want you to spend all, all your money and it, it it’s, it’s in their best interest for, for the order to go smoothly. So quality control 100% all the time. It’s it’s around $300 per order. You can use all types of companies. You can just do a quick Google search to find these guys and it can, it can end up saving you thousands.

Robert
[01:16:47]
And do you tell this third, third party company, the requirements that you want the product to meet? Do you let them know ahead of time that these are the specifications? I want this product to have this, to meet this, this requirement.

Sam
[01:17:04]
Yeah, absolutely. So it it’s one of the, it’s one of the more important things. And that’s why fully understanding your product is also important, fully understanding. Where are the weak points in your product? If you got multiple samples for multiple suppliers, where were people screwing up? Where is there a part in your product that uses paint? And sometimes the paint was chipping or was there stitching that sort of, that needs to, you need to ensure that the stitching is strong and, and straight. So all of this stuff is what you wanna have, have ready. So you can talk to your quality controller and you can tell ’em that this is what we want you looking out for. These are some of the things that, that we saw as weaknesses in the product. And we want you to make sure that, that these are checked also.

Sam
[01:17:49]
This is how the product should look. So if you’re having bouncy balls manufactured, you want to make sure that it’s it’s, it’s a perfect sphere. There’s no, there’s no seams where the, the, the silicone, the, the silicone shows that, that it was, it was used to make a mold. It, it needs to, it needs to bounce. Like it’s, it’s, it’s going over with this quality controller, how the product is supposed to work, what, what it’s supposed to look like, what it’s supposed to do. So they can then use that information when they go to the factories. And I, I wanna point out because a lot of people who are new to this, don’t, don’t fully understand how quality control works. Almost every single quality control inspector is not gonna test of your products. It’s not practical, there’s too many products. When people are doing orders of thousands or tens of thousands of products, there’s too many to check.

Sam
[01:18:41]
So what they do is they do statistical sampling during world war II, the us government, the us military produced a, they, they, they, they produced a document that basically it’s called the accepted quality limit for manufacturing. And they say that if, if we want, if we want to manufacture 10,000 units of something, and we want the quality to, to reach, to reach X standard, this is the, this is the percentage that we, that an inspector needs to check to ensure that that percentage is met. And that’s what quality inspectors do today. They, they do, they do statistical sampling on the products. So it’s important for an e-commerce seller to understand that when you’re using these, these inspectors, they’re not gonna be looking at every, every single product there are gonna be defects. That’s one of the most difficult things in the e-commerce right now is how do we solve this solution of, of getting rid of all the defects? Because when one person gets a defect, people are gonna complain and they’re gonna, they’re gonna talk about it. So while quality control is important, there, it, it should always be known that that they’re trying to find the lowest amount of defects possible. And that means that there still will be some, but to get it to the, to get your production where there’s zero, it’s often going to turn out to be more costly than, than producing in China.

Robert
[02:20:07]
Okay. So, yeah, that is definitely something that good to have in mind. As you, as you look into sourcing from China, with payment in your notes, you mentioned that you shouldn’t pay the sellers using PayPal. Why is this something that people should avoid?

Sam
[02:20:28]
Yeah, I think as I think as, as most of your listeners would agree, PayPal is, is commonly used for, for all types of e-commerce transactions. So it’s, it’s, it only makes sense to, to use PayPal when you’re, when you’re paying factories. I tell everyone that PayPal is a bad idea. The reason why is it’s expensive when you’re dealing with factories, you’re, you’re, you’re sending them thousands of dollars. The, the, the processing fees alone, which the factories will say that you’re responsible for. If you want to use PayPal are 3%, 4%. These are, these are really high fees when you’re looking at thousands of dollars worth of orders. So from a cost perspective alone, it’s expensive PayPal also doesn’t their, their terms don’t don’t offer protection for customized products made outta China, private labeled product it’s. So when people think, well, if, if I use PayPal as a safety net, so worst case scenario is I follow a dispute and get my money back.

Sam
[02:21:29]
They’re they’re not really gonna get prot protection. And the most dangerous part about that mentality is if you’re realize if you’re utilizing PayPal to be your safety net, to be your, if all else fails, I’ll dispute the claim on PayPal. Then you’re, you’ve done a very bad job sourcing the supplier, because your goal, when you’re sourcing a supplier is to find the supplier that is qualified to do that. That is qualified to do business with you. And that one of those things means being able to send them money under, under an agreement from, from two different countries. And you’re confident that they’re gonna produce, produce the goods that you’ve requested. And finally, PayPal, PayPal’s not the way this industry works. As, as exciting as, as China is for a lot of people who are looking to, or are already manufacturing there. This is an incredibly old industry. It is it’s outdated and it’s complex. And most people, when you’re, when you’re dealing with international trade, they like to stick to the, to the, the traditions that have always been done. And by trying to use something as amateurish as PayPal, it, it tags you as, as someone who’s naive in this service, in this industry. And there’s a good chance that tag will mean that you could easily be taken advantage of.

Robert
[02:22:53]
Okay. So yeah. Bill just know who you’re a new, so,

Sam
[02:22:59]
Yeah, exactly. So I guess the, the final question is, so how do we, how do you pay them? And traditionally, what you wanna do is a wire transfer. Okay. You wanna go to your bank and ask to do an international wire transfer, usually with factories, the way they, they work things is you’ll pay a small deposit up front. It’s usually 30% of the production. And then once the goods are complete and your quality inspector has tested the goods and your inspection report has come back and as a passing grade, then you can pay the final, the final deposit to get the goods released.

Robert
[02:23:32]
It definitely makes sense. PayPal comes, can seem convenient, especially coming from the eCommerce world. You handled some payments from PayPal. So it kind of makes sense, oh, it’s, it’s really convenient. But when you’re dealing with these suppliers, it’s definitely best just to use the wire transfer. Because even when you’re doing, when you’re working and handling other payments or services that you do for your business, not all of them, you you’ll you’ll do with PayPal. You only do PayPal for the most convenient, easy, or, you

Sam
[02:24:09]
Know, small ticket transactions,

Robert
[02:24:11]
Exactly small amounts, but something like this, a wire transfer, and you’re still protected because you’re just given 30% discount. And then you make the full payment once everything has been done. Yeah.

Sam
[02:24:22]
And it’s, it’s also important to understand that there’s no risk free way to deal with China. There, there is a risk in dealing with China. It’s, it’s, it’s an inexpensive solution for a lot of businesses, but it’s not perfect. And I mean, when you, when you look at a company like, like ours, where we, where we offer a solution to, to take over all aspects of, of importing from China and manufacturing in China, we also tell our customers that, that we’re not guaranteeing, nothing is going to go wrong. We’re not promising you, that, that us on your side, this process is going to is gonna be without a doubt, Bulletproof, that’s not necessarily what we do. What, what we try to do is, is we try to explain that we’ve made a lot of mistakes in the past, and there’s a lot of mistakes that that could be made.

Sam
[02:25:11]
And the, the, the processes of how we do business, the processes of how we work with factories, we do so in a way that mitigates those, those risks and, and, and brings them down to, to a very, to a very low percent. So while I would, I would confidently say you have less risk using us. There still is risk, regardless of what happens when you’re dealing with China, whether it is payments or whether it’s doing quality control, or even finding a qualified supplier, things happen, things always do happen. We’re sort of here just to make sure everything is done. So those bad things have a very, very little chance of happening. And for the people who are afraid, like they, they don’t like how that sounds. It it’s a, it’s usually a good, it, it’s a good determining factor to tell you that maybe purchasing from China is not right for you. And it, it would be more ideal for you to continue purchasing domestically or from another country.

Robert
[02:26:11]
And how can listeners find you if they want to use your service, if they have questions about sourcing, what’s the best place to get in contact with you?

Sam
[02:26:23]
Yeah. So you can always get in contact me, contact with me through our website, which is guided imports.com. You can email [email protected]. I’m usually, I’m usually pretty responsive when it comes to inbound emails. I’m, I’m usually the first one that likes to likes to, likes to talk to customers and figure out if our service is good for them. And, you know, apart from that, you can also find me on Facebook. I’m on a couple groups. We have our own Facebook group. So there’s, there’s a couple places where, where you’ll be able to find me. I’m pretty, I’m pretty accessible.

Robert
[02:26:56]
Any final thoughts on what we’ve covered with sourcing from China?

Sam
[02:27:02]
I would, I’d probably just like to say for those who are new, look into it, do some research, try to do one, one production on your own to see what it’s like. Don’t expect to make a lot of money, but just get the experience of dealing with China, for those who, who are currently purchasing from China. And you’re looking for a way to streamline your business, to, to allow a service, to take overall aspects while you stay in the loop in it, in, in its entirety, we could definitely be a, a solution for that. Or, you know, you can always look at, look at all different types of sourcing services. They’re definitely all there to help you.

Robert
[02:27:40]
The last question I usually ask for the podcast is what is one thing an eCommerce business can do right now to help them grow, get traffic, get leads, just achieve their goals. What advice would you give any e-commerce business and what action should they take right now to help them be a step closer to their goals?

Sam
[02:28:06]
So while, while I’m probably not the best person to, to give advice from a, from a marketing standpoint, I, I can hopefully give advice from a e-commerce product improvement perspective. And if, if you’re selling products currently that are getting reviews that are, are less than, less than perfect. That means that there’s always room for improvement. And by working with China, whether it’s working with a new factory than you currently have changing the way your current factory is operating or coming to China from your existing source, being able to change those reviews by modifying your product is, is a very helpful way to, to show people that not only are you growing, but you’re listening to what they’re saying. And by using China, you can always tweak your products. You can always make them better. You can always look for rooms of improvement and your customers, your reviews are the best place to find that information.

Robert
[02:29:05]
Okay, Sam, thanks for being on the eCommerce marketing podcast.

Sam
[02:29:09]
Thank you so much, Robert. I appreciate it.

Robert
[02:29:13]
Thank you for listening to the eCommerce marketing podcast. Join the eCommerce marketing podcast, Facebook group to learn, connect, collaborate, and grow with other eCommerce marketers@ecommercemarketingpodcastdotcomslashfbwww.ecommercemarketingpodcast.com slash FB. Subscribe to us on iTunes by searching for e-commerce marketing podcast, and please leave our rating and a review. Thank you for listening to you next time.