Secrets of Successful Sourcing:How to find the right Chinese

supplier for your Amazon business

80/20 Sourcing

Gary Huang

www.8020sourcing.com

Who wants to own a 7-figure Amazon business?

Sourcing: Tricks of the trade

• Chinese cultural and value differences: It’s a relationship business

• Supplier Selection Strategy

• Negotiations: You get what you pay for

• Quality control: The Neverending Story

• Best practices and bonuses

Chinese culture and values are not the same

• What is “Guan Xi”? 关系

• Trust

• Respect

• Face

• Time invested

Guan Xi = Building relationships => Business

Differences in ethics and values

• Ethics

• Copying and Intellectual Property

• Transparency

• Communications

• But… Similarity: Desire to make money

Supplier Selection: 80/20 Rule

• Law of the essential few and trivial many

Takeaway: IDENTIFY AND FOCUS ON THE 20%!

First cast a wide net then go deep sea fishing

How to judge factories from trading companies?• ASK them

• Look at their company name

• Look at their products – common thread test

• Ask technical questions

• VISIT THEM!

Negotiations

•一分钱一分货

• Translation: “You get what you pay for”

• Price is not the only factor

When do I negotiate?

• Initially: Shortlisted suppliers

• As volumes grow: Higher volumes = Lower per unit price

• External factors

• When problems occur and supplier is at fault

Pricing: How much?

• Cost-based approach

• Wide net then deep sea fishing to gauge the factory price

How do I negotiate?

• Strategy – Always play the long game, remember guanxi

• How will this grow your business relationship together?

• Communications: Face-to-face > Phone call/Skype > Email

Quality Control: The Neverending Story

Cost of fixing quality problems over the production cycle

Quality Control: Supplier selection

• BEST PRACTICE: Country test to initially gauge quality and experience

• Get Samples to do a hands on test

• At the same time, gauge their customer service

Quality Control: Placing order

• GOAL: Make sure that factory understands and agrees to your requirements

• Get it in writing on the Purchase Order

Quality Control: During production

• GOAL: Catch problems as early as possible

• Monitor production by asking for photos, videos, and samples

• Expect factory to be passive, YOU MUST BE PROACTIVE

Quality Control: After production

• Arrange an inspection before releasing balance of payment• Third party inspection agency

• Especially when working with a new supplier or product

• Tricks of the trade: Self-inspection

Quality Control: After shipment is delivered

• Watch for defects

• BEST PRACTICE: If factory is at fault:• Negotiate for compensation

• Corrective Action Plan (CAP)

• Put it in writing in the Purchase Order

• But don’t burn any bridges, remember Guanxi

• Rinse and repeat

Introducing 80/20 Sourcing

• Learn best practices through free email newsletter

• Level Up with premium video courses

• Private Coaching

• Full-Service Sourcing

• For more details visit: www.8020sourcing.com

Thank you – Here’s your free bonuses

• Get your free bonuses• Checklist of the sourcing process

• Request for Quotation (RFQ) email script

• Purchase Order Template

• Signup for newsletter

• www.8020sourcing.com/junglescout

• Contact Gary at gary@8020sourcing.com

• 80/20 Sourcing: www.8020sourcing.com