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Requesting advice concerning shipping fees

by avax
3 replies
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I was negotiating with a manufacturer to buy some food containers but with a special packaging (not too bulky)
Pack dimensions: 21.5 x 18.5 x 10 cm approx (8.6 x 7.5 x 4.7 inches)

We agreed on the amount of 200 packs which is the MOQ with the price of $3.5 for the pack.

The pack is being sold on Amazon between $15 and $20 USD (but with a less fancy packaging).

For the shipping, the manufacturer asked for 1400 USD (via Fedex / air) as door to door shipment (from china to Amazon or to a prep house) (and $1000 was offered for sea shipping)

Which increased now my base cost from 3.5 to 10.5 USD which would make my deal totally non-profitable considering I was not planning to sell it for higher than 15-20 USD

Looked for another seller he was asking a bit more for the packaging and a bit less for the shipping, but this kept my base price for around $10 per pack.


Could you please advise on what would you do on a similar situation?
- Find cheaper ideas for shipping?
- Skip the idea altogether and look for something else?
...

Any other advice would be appreciated.
#advice #amazon #china #fees #requesting #shipping
  • Profile picture of the author ZanyZebra
    Originally Posted by avax View Post

    I was negotiating with a manufacturer to buy some food containers but with a special packaging (not too bulky)
    Pack dimensions: 21.5 x 18.5 x 10 cm approx (8.6 x 7.5 x 4.7 inches)

    We agreed on the amount of 200 packs which is the MOQ with the price of $3.5 for the pack.

    The pack is being sold on Amazon between $15 and $20 USD (but with a less fancy packaging).

    For the shipping, the manufacturer asked for 1400 USD (via Fedex / air) as door to door shipment (from china to Amazon or to a prep house) (and $1000 was offered for sea shipping)

    Which increased now my base cost from 3.5 to 10.5 USD which would make my deal totally non-profitable considering I was not planning to sell it for higher than 15-20 USD

    Looked for another seller he was asking a bit more for the packaging and a bit less for the shipping, but this kept my base price for around $10 per pack.


    Could you please advise on what would you do on a similar situation?
    - Find cheaper ideas for shipping?
    - Skip the idea altogether and look for something else?
    ...

    Any other advice would be appreciated.
    This is a basic profit margin issue that experienced ecommerce people, selling on amazon, face a lot of the time. (I have my own large branded ecommerce business selling 6 figures a month on average).

    Either:

    1. evaluate if you can sell the product for a higher price, thus improving margin, or...

    2. look to bundle the product with another product that would add value to the purchaser, and then sell for a higher price, or...

    3. look around for a cheaper shipping price (unlikely that you will find much of a difference, but always worthwhile), or...

    4. mix your shipping plan, send a few by air (most costly) to sell whilst the majority by sea (least costly) to improve your average margin rate, or...

    5. find a source for the product in the same geographical space as amazon, thus negating shipping fees, or...

    6. move on, time is money in ecommerce.

    Often the best way forward is to buy a small quantity and test the varies strategies. A small price to pay in order to try and gain a decent margin.

    Good luck with your venture.
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    • Profile picture of the author Importexport
      Here are a few things that might help.
      • Are you sure you are dealing with the real manufacturer? If you have located them on Alibaba there is a high probability that you are dealing with a trader disguised as a manufacturer.
      • At about 80 m³ you have a total shipment that occupies more space than weight. This will always be costly to ship.
      • Air courier will not be economical for you no matter which service you use.
      • Sea freight on small consignments can often cost more than air freight.
      • Contact several local freight forwarders and request quotes for air freight (not courier) on a door to door basis.
      • Tell them you will accept delayed shipment or transshipment to reduce the cost.
      • The quote must be in writing, not verbal, and must include Customs clearance work. Your only extra cost will then be duty and tax if charged at Customs.
      • I agree with ZanyZebra that initially buying a smaller quantity is desirable.
      • Never believe that you must order the MOQ quoted. I have taught hundreds how to negotiate smaller orders.
      • Finally, I advise against importing bulky , low cost items. Instead I suggest it is better to look for heavier, smaller items.
      Regards,
      Walter


      "If you think education is expensive - consider the cost of ignorance."
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      Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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      • Profile picture of the author avax
        Yes, in fact I took those things into considerations, but coming from a world of selling digital items (non physical) I found it too much to pay $7 on shipping something that has the size of a shoe box.
        I guess I need to make more research about the shipping options and fees.
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