Foundr Magazine publishes in-depth interviews with the world’s greatest entrepreneurs. Our articles highlight key takeaways from each magazine issue. We talked with sourcing specialist Kian Golzari about how to find Amazon FBA suppliers. Read excerpts from that in-depth conversation below. To read more, subscribe to the magazine.
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When most entrepreneurs talk about building relationships, they’re usually referring to their customers. When Kian Golzari talks about relationships, however, he’s talking about the kind he builds with his suppliers.
Golzari is one of the world’s top sourcing experts. He has manufactured products for top companies and NGOs, including Tesco, the United Nations, the 2012 Olympics, and Google, among others. In all, he says he’s sourced more than 2,500 products and works with 100 of the top sellers on Amazon.
Here’s his advice on finding the right Amazon FBA supplier for your ecommerce business.
Getting Started
If you want to start a product-based business, the first thing you need—of course—is a product. An entrepreneur can always start with keyword research to find a trend to jump on, but Golzari recommends two other options. First, he says,
“I always feel the best products are the ones that solve problems.”
His second rule in finding a product? Start with something you’re passionate about.
“Entrepreneurship can be a long and lonely journey, as you all know. But if it’s something that you’re passionate about, then it’s something you don’t mind working on until two, three o’clock in the morning, getting samples, solving problems, talking to those different suppliers,” he says.
To help him visualize new products, Golzari creates a mood board. His mood board will include competitor items, market leaders, trending colors, sustainable materials, influencers in the space, and any other ideas he has around a new product idea.
“I kind of save all those images and print them out and put them on a big sheet. And then it’s almost like connecting the dots, right? Some things will just come to life for you once you visualize all of that stuff in front of you. But it’s hard when you keep it in your head.”
For Golzari, product ideation isn’t just about the product itself. It’s about everything that surrounds the product creation process. “It’s the entire journey. Can I make the packaging a little bit more environmentally friendly? Can I make the packaging a feature of the product? What’s the customer experience like?”
Amazon FBA Supplier Relationships
Once an entrepreneur has zeroed in on a product, it’s time to start looking for a supplier. The most helpful platform for that, Golzari says, is probably no surprise: Alibaba.
But Golzari advises entrepreneurs against using Alibaba as the sole conduit for doing business. While Alibaba is a great jumping-off point, he says, entrepreneurs should be talking to—and even visiting—manufacturers from the very beginning.
Here’s why: direct access.
Golzari always looks for a direct line of contact between himself and the factory managers.
“Because quite often, you talk to a supplier on Alibaba,” he says, “but you’re dealing with the sales assistant. But it’s really the boss who is the decision-maker.”
To discuss product details or hash out problems, Golzari jumps on a WeChat call to meet in real time with factory managers.
More than anything else, however, Golzari recommends visiting factories whenever possible. It sends a clear message about your commitment to doing business with them.
It also gives entrepreneurs firsthand knowledge about the manufacturing process in general and their chosen factory specifically.
“The first time I ever went to the factory, it was a backpack factory, and my mind was blown.”
Until then, he had always thought of a backpack as one unit on a store shelf. But at the factory, he saw a backpack in several pieces.
“I saw the shoulder strap, the foam that goes in the shoulder straps, the webbing, the zippers, the buckles, the coolers, the inside lining, the waterproof coating, and I saw these different stations and processes where they were all assembled,” he says.
That gave him insight into how to build a better or more cost-efficient product. If, for example, he wanted to lower the price, he could experiment with different components. If he wanted to improve it, he could do the same.
Attracting Amazon FBA Suppliers
Alibaba allows you to search for manufacturers that build products in your space without having much interaction. But how do you attract really good Amazon FBA suppliers, especially if you’re just starting out?
Golzari encourages founders to talk directly to them and tell them who you are.
“We can always show our leverage with the supplier, even if it is a first order of a small number of units,” he says.
He illustrates his point with a new entrepreneur in the yoga mat space. Rather than simply asking for a price or MOQ, they would communicate what they could bring to the table.
“You would say things like I have been a yoga instructor for 14 years. I know all the biggest yoga influencers in the space,” Golzari says. “I’m very knowledgeable about the products I’ve been selling offline. Now I’m going to move online. So now that’s a customer that the supplier wants to work with.”
Negotiating Price
When it comes to pricing, searching in Alibaba for similar products will only get you so far. You’ll get a range of prices, sure, but there will be no exact product match. Instead, Golzari recommends going directly to manufacturers with your spec sheet.
“The number one, 100 percent most important thing is to have a specification sheet for your product.”
With every part of your product spec’d out, entrepreneurs can get accurate pricing from multiple manufacturers, then negotiate from there.
“So you start to get prices back—$5.70, $5.90, $6, $10. But everyone’s quoting on the exact same thing,” Golzari says.
Once you have your prices, as well as your samples, and you understand market prices, Golzari says, you can negotiate from a place of knowledge.
“And once we have those prices back, it’s not just like, OK, cool, I’m going to go for the cheapest one. You can still select your favorite supplier and say, ‘Hey, I really liked your product. I liked your sample. I want to do business with you for the long term. However, I just got a quote for $5.80, as well. And if you can match the price, I’m happy to do business with you for the long term,” he says.
Read more: It’s Time to Get Serious about Sustainable Packaging
Golzari has a few other tricks up his sleeve for getting a better price on products. First, factories deal with canceled orders frequently, which means they hold extra materials they want to get rid of. Entrepreneurs can ask manufacturers what they are currently holding in stock and negotiate a lower price for it.
The same is true of canceled products. “And then you might want to just customize the packaging,” he says.
Finally, if you’re keen to improve an already popular product, look for its current manufacturer. That way, there is no learning curve and no need for worker training or new materials or equipment.
“And then if you can just make a small innovation on top, like making the material waterproof or increasing the dimension of it or changing it from steel to aluminum, you can innovate on top of something that already works,” Golzari says. “And in that way, you can add new features but also keep a low price.”
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