TAS 006 The 5 Steps For Finding And Sourcing Products To Private Label And Not Get Scammed

One of the hardest parts of starting your Amazon FBA Business is sourcing a product from China or overseas. I have sourced two products so far and working on my third as I write this post and I've had good luck so far.

But, I feel it's because of the research and the suppliers I contact. In this episode I share with you my 5 steps for finding suppliers and feeling confident I won't get scammed.

The 5 Steps:

  • 1. Search for Products In Alibaba.com
  • 2. Use Filters To Find Highest Quality Suppliers
  • 3. Contact Supplier with Specific Questions (Very Important Step)
  • 4. Respond to Suppliers That Email Back
  • 5. Place First Order and WAIT!

I go into great detail on the podcast, so you'll hear all the ins and outs for choosing the right supplier.

The Podcast recording is down below or you can find it on iTunes or Stitcher Radio.

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•Email Template For Suppliers-

I mentioned in the podcast that I would include a basic email with the question to ask.

Hi, My name is ————– and I'm the purchasing agent for XYZ Company.

We are in the process of adding a ——————— to our product line and your product seems to be what we are looking for.

I have a few questions.

1. Do you offer samples and how much including DHL Express Shipping to United States zip code 89078?
2. How long to receive 2 samples?
3. Can we pay using Paypal?
4. Can we change the color ?
5. Can we brand with our logo?
6. What is the cost per unit including shipping by DHL Air Express to United States Zip Code 89076?
7. How long for manufacturing once we place order?
8. Do you accept Escrow payments?

Our first order of 500 will be a small test order and in the future will be ordering between 1,000 to 5,000 units.

Can we order 500 units for the first order?

We are looking forward to hearing from you soon.
Thank You!

John Doe
-Kitchen Express –  Purchasing Agent

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Tip: Copy and paste your email to at least 10 to 20 suppliers. You will weed out the ones that are late to reply and only attract the ones that could be possible suppliers.

 

Join the discussion

176 comments
  • Great podcast. Enjoying it! I have a question regarding Escrow and Trade Insurance. If the supplier offers trade insurance but no Escrow would you still go with that supplier? If they offer insurance protection is it still a necessity that they offer Escrow payments for complete protection?

    • Hi Vince,

      You could…as long as they allow you to pay via PayPal. You need some type of protection other than Trade Assurance in my book. I like Escrow personally.

      Good Luck.

  • Hey Scott,

    Your show is AWESOME.

    I’m encountering suppliers who offer 30% deposit and then 70% BEFORE shipment as payment terms. How best can I get them to accept my full balance AFTER the shipment of my finished products?

    THanks a ton for these shows.

    • John,

      This is why I only use Escrow when first starting with supplier. They accept 30% down and 70% when delivered. Then you confirm when money is released.

      • Hey Scott! Great Episode! About using Escrow with suppliers … I have a supplier that I am currently communicating with about ordering a test run of one of my new products. Problem is, they said, they don’t want to use Escrow because the VAT cost is higher for them. In my response back to them, I asked how much the VAT cost was and if they would be willing to split that cost with me. If they reply back and say they will not use Escrow at all then I won’t use them. However, what I am really wondering is, are there any other “fail-safe” options available besides Escrow? I know Paypal doesn’t truly protect you so what does besides Escrow?

        • PayPal does indeed give you a level of protection, there is a common misconception that they don’t. I would at the very least split the payments (just like with escrow). Pay them a percentage up front and a percentage on completion. Additionally I would use a platform like Alibaba (pay through the platform and get the trade assurance protection) so that your bases are covered that way.

      • Hi Scott,
        Now you are famous even out of the United States. 🙂
        Well done! It looks like you become a very good starting starting point for Amazon dealers.
        The process that you have described in the Escrow procedure is not that clear to me and I would appreciate if you can explain it again.
        let’s say I asked the supplier to manufacture 500 units, and he agreed to work with escrow.
        1) It means that know I need to pass the escrow company the entire money or only the 30%?
        Let’s say that now the supplier telling me that he manufactured all the units and they are ready to be sent to me.
        2) How can I know that he really finished manufacturing and exactly as I have instructed him so I can acknowledge passing him the 30% from the escrow company?
        Now let’s say that the product has arrived to Amazon how can I be sure that they are exactly as they should be since Amazon doesn’t know how they should be look like?
        Thanks you very much I hope I will do it a lot because of your help!

        • Hey Ariel, it would depend on the company you work with. Some will require the whole amount and will release 30% others will only require the 30% up front. When they are complete, they will generally send you pictures, if you want to take it a step further you can higher someone (like Topwin) to inspect the product onsite before releasing the remaining payment.

  • Chris,
    You Rock! I really like how you are just releasing all this valuable information to us. Keep up the good work.

  • Scott,

    Thank you so much! I’ve been doing Amazon for years and I’m learning that I’ve been doing it all wrong! I really appreciate you taking your time to record these and everything. Have you done anything on Etsy or any other online selling platform? I’d love to hear your thoughts on those as well.

  • Scott,
    Thank you so much for being so transparent and providing awesome value. Been considering an Amazon business. My wife and I really want to leave the corporate world and begin our journey as entrepreneurs. Your site is the first one that provides honest, detailed and truly actionable steps. A real blueprint for success! Any chance of you starting a community for beginners? I’m sure if you build it you can monetize it later. I want to be on the ground floor! Com’n Scott! Even a private FB group would do. Please????

    • Hi Fred,

      Thanks for the kind words.

      I should have our private FB group set up soon. As for an exclusive group or paid group, I’m not sure if I would ever do this. I’ve already had many requests for me to consult or create a course and I’m just not sure I want this. But, if I can figure out a way to do it where it’s valuable and I can truly help…then maybe. Hey…you never know.

  • I listen to your podcast on my drive to/from work and while i’m at the gym. I find them informative with clear direction on how to get started in FBA. Keep up the good work

  • How do you find a great Agent? I know you have one that you like a lot. How do I get one like that?

  • Hey scott, I have a question. I am coming very near to finalizing on purchasing my first private label product and I am quite excited!! I just spoke with my supplier and they informed me that they have worked with other customers to ship directly to FBA warehouses. The only question I have is, what do I need to do in regards to labels? I tried searching on the group but don’t really see much. I want to know how to set up a label with amazon and/or if I need to purchase labels separately and have them sent to my supplier etc.

    • Yes, you will need to purchase a UPC code to use for each item you sell. This will be used even if you sell it in a retail store. I always have my supplier label them for me and then ship to Amazon.

      Amazon also has their own sku number and will charge you .20 to label. I would have this done in the beginning, but as you get going you can have this printed by your supplier and save the .20 cent fee.

      • Hi Scott,

        Quick question. Do you create listing first and ship to FBA ? Or the opposite? I am confused.

        Regards,

        Sabin

      • Hi Scott, really appreciate the work you do. I am at a similar stage like the one Shreyas mentioned.

        I just wanted to get somethings clarified:

        If I want to ship directly to FBA warehouses, with regards to UCP codes, I have two options:

        a) buying codes and getting the supplier to put it on the individual products?

        OR

        b) I can get Amazon to do it for me?

        Yes that correct? If it is – then, as I am starting out should I go with amazon doing it, or make my supplier do it? What do you recommend?

        • Hey Asif,

          You would only have to purchase 1 upc code for each product. Your supplier could then put them on the box for you. If you go that route, Amazon will charge you a few cents per unit to put the FNSKU on the box as well. Alternatively, you could have the FNSKU (provided by Amazon once you create your listing) printed on the box and they would be ready to go when Amazon gets them.

          Both ways have pros and cons, so the choice is up to you!

  • Sourcing Questions
    I added to your template, what’s your opinion?

    Hi,
    My name is ——- and I’m the purchasing agent for ———- Company.
    We are in the process of adding a ——————— to our product line and your product seems to be what we are looking for.
    I have a few questions.
    1. What is the minimum order quantity?
    2. What are your pricing tiers and quantity discounts?
    3. Do you have the product available?
    4. How long will it take to have it ready to ship?
    5. How is it packed individually?
    6. Can you send me the label or package design template?
    7. What is the shipping cost to USA Zip code 11011with DHL for the minimum amount?
    8. Can you add our logo to the unit?
    9. Do you charge extra to add a logo?
    10. Can we change the color/size?
    11. What is the price and shipping cost to the US Zip code 11011, for a sample?
    12. How long to receive 2 samples?
    13. Do you accept Escrow payments?
    We are looking forward to hearing from you soon.
    Thank You!
    ———
    – ———– – Purchasing Agent

    • It looks good. But, you may be asking too many questions at one time. The template I created gives me the info I need to know if I can move forward with this supplier. Thanks for the comment and adding to the template.

  • Just to clarify. If you have it shipped DHL, it just shows up at your office? No extra inspections? No different than using UPS domestically?

    • That’s right Jenn! It comes to my Home Office and I inspect it personally.

      DHL Door to Door.

      Hope this helps.

      • Do you do this with every single purchase? Or just the initial purchase? Do you send your second/third orders directly to Amazon?

        Or literally EVERY single order comes to your door?

        • Hey Justin, I inspect every order and then reship to Amazon, you can pay a third party inspection service like TopWin to do it for you if you don’t want to do it yourself.

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