BOM Cost Reduction
Amazon FBA sellers are the new wave of quick inquiries to China’s vendors. FBA is of course Fulfillment by Amazon. A 3rd party vendor sends in their wares to the Amazon warehouses. For fees, Amazon receives, stores, picks, packs and ships. To the excited receiver this manifests in Amazon Prime. Most customers don’t really care. If you ask John Smith where he got his widget, he usually says, “Amazon” Most times, unless really savvy customers are oblivious to the 3rd party vendor.
There’s a large range of companies that sell FBA
There are established brands that everyone knows, who also happen to sell there products on Amazon. But many of these companies are brand new. There’s a lot of propaganda and internet guru hype that get folks’ blood a boilin’ in that “hey, I can achieve this too”. Do a quick google search of “FBA private label” and you’ll see what I mean. It’s flashy stuff. These gurus and coaches paint China manufacturing and importing as if it’s as easy as ordering a customized sandwich from your local greasy spoon. Visit an Amazon FBA seller group on Facebook and for every few posts, you’ll have a China vendor or pop up and offer such and such. It’s almost like the trade companies on Alibaba are gearing specifically to them in some ways. China trade companies, logistic companies and peripheral warehousers sniff this out. There’s blood in the water. Many of these new private label founders will ask questions on the Facebook groups, “Should I have a 3rd party inspect my shipment?” Is water wet?
Here’s Reasons that Amazon FBA Sellers Should Inspect Shipments
I’m going to answer this based on the FBA seller paradigm. I could just say “so bad quality doesn’t ship”, but there’s a bit more to it for the FBA seller to consider.
Avoid bad product shipping out:
There I said it. This is the #1 obvious reason. If you let junk ship out, then it’s going to ruin your business. This of course would be pertinent to if you’re an FBA seller, an Ebay seller, a brick and mortar or a back-of-a-pickup truck seller.
There are low quality suppliers who don’t care about quality:
Trade companies are easily accessible via Alibaba, etc… Good professional factories, don’t always respond. A portion of them are not taking long-term business seriously and they even view the new age FBA seller as a “commodity”.
Limited budgets and low-cost assembly shops go hand-in-hand with these new would-be sellers
These newbie importers also are pretty heavy-handed in price negotiations with the vendor. Many of them are starting out on limited budgets. Remember, the online guru is shilling that it doesn’t take much money to start! The vendors repay them by being casual with the overall project. There are trade companies that are looking for quickie order in, quickie order out. New to your own private label and working with vendor? Sending in a QC team will give you better insight and relief that they’re treating you seriously.
Minimum quantity orders:
Connected with the limited budget and “trying to enter the market”, these new private label sellers frequently shoot for the minimum order quantity from their vendor. If you already have a casual vendor, then the minimum order quantity order isn’t exactly causing the vendor to really tighten up when it comes to their quality control systems.
As any seller well-versed in the Amazon commandments knows, a packing mess up can be disastrous.
- Barcodes: wrong barcode, wrong product being checked in to Amazon, wrong product being shipped to customer. Big costs to correct this.
- Also carton labels for each export carton. Once Amazon receives the bulk goods, if these labels are wrong, how will they know who sent what? They won’t. Even when you correctly label, Amazon loses stuff…imagine doing it wrong.
- There’s inner packing requirements for Amazon…and also for your own brand, right? You want Amazon to ship it safely. The packaging should accurately reflect the brand you’re building.
Bad quality on Amazon causes product returns and low reviews:
Once these product returns start, the fees and reimbursements can flow right out of your bank account like water. That’s one of Amazon perks, right? Allowing buyers to liberally send stuff back, no questions asked. Now if there are quality issues, the buyer will have no problem sending the piece back and leaving you a 1-star review to boot. It’ll be a very sobering feeling to see returns pouring in. And you think to yourself. “How many are bad?” “Is it the entire shipment?” “If I would’ve only had a company do a QC…”
Closing of your seller’s account
In selling poor quality item, the results will ruin your FBA venture. Your seller’s name will be sullied. With too many returns and too many complaints, Amazon will cancel your listings. They may cancel your account for that…I don’t know. But if you’re a seller, staring out, hoping to strike that wave of success…you probably don’t want to push that possibility.