So, yesterday I got confirmation from my supplier that my new batch of products is ready. I got them to carry out a quality audit on the products because the packaging of my last order was incorrect. Nothing too serious but they used an old packaging design with spelling mistakes instead of the (agreed) new design.
So yesterday I got a .pdf that included images of all new products. It was a pretty good document with images of the packaging, the product, the labels, and the boxes they were all loaded in to. In total this order is for five different products, so there was a lot in this quality audit document.
Unfortunately all is not perfect. What seems like an age ago now when I was agreeing designs I instructed the supplier that I wanted material labels on two of the products instead of big printed logos on the products themselves. This was because I thought the big printed logos were a little intrusive to the buyer and also a small but nice looking material label with my logo on looked more professional and discrete.
This label actually looks good and I’m happy with it, however they have gone ahead and printed the logo on the products as well. There always seems to be some mix up which is pretty annoying. It is not the end of the world though and I will take these new products and they should sell fine. I will make sure it is clear in my listings that there are printed logos on the product so my customers are not surprised when they arrive.
Another things that is causing me some headaches is the coordination between the supplier and my freight fowarder, who takes care of shipping the products from China direct to the Amazon warehouse. This time it happens to be a warehouse in Peterborough while last time it was Swansea.
You’d think it would be easy and I would be able to just say to my supplier and forwarder, “communicate with each other and just sort it out”. However, I seem to have to chase each of them individually and each of them asks for something different or assumes the other one would do certain things.
For example my supplier wants the forwarder to pick the products up from them while my forwarder wants my supplier to take the products to the port. There is also stuff like how to palletise the boxes, how to label the boxes and other bits and bobs like this.
I think it is getting close though. Tomorrow my forwarders Chinese agent is contacting my Chinese supplier to arrange pickup of the products. I told them to just talk to each other and sort it out.
I am using air freight this time because I only have around 180 units left in stock and I am selling 50 to 60 per week, so I cannot wait for sea freight. Hopefully I can get my products into Amazon within two weeks from today, whereas if I went by sea it would take a month (at least).
This total order is for about 3000 units and costs around £8K for the products alone. The air freight is costing me around £4K in forwarder fees, but on top of this is about 5% duty and 20% import tax (which is 20% of products + shipping + duty), so in total this is costing me around £7K in shipping fees (actually it may be more when I include delivery to Amazon). So a grand total of £14K to £15K for this order, which is quite a lot.
If I’d gone by sea, shipping would be around £3K in total so the total order would be around £10K, so I am paying £4K more for the privilege of getting my stock here quicker.
This extra shipping cost make my products about £1.20ish more expensive when compared to sea freight. So if I sell things at the same price as I am I will lose £1.20 per product. At the moment I make around £6 profit per item sold, so this would be down to £4.80.
I’m happy to take this hit this time because I will keep my original product in stock and I will also be able to start to sell my new products quicker. If they sell well I will reorder them and hopefully I will plan things better so I can use the less expensive sea freight.
Actually with this order the only reason I am behind is because of the Chinese New Year in Feb that shut down the Chinese manufacturing for a month. This threw a spanner in the works for my planning which had two knock on effects. One was I needed to use air freight like discussed, and the other is that I put my prices up a little to slow sales.
At my lower price I was at 15 to 20 sales per day and making a profit of around £80 per day (give or take), while at my higher price I am selling 7 to 8 units per day with a profit of nearer £50.
Anyway, I just wanted to moan a little and let you see what kinds of things occur when dealing with shipping things over from China.