Amazon FBA is still a relatively new platform for me. But despite being on it for less than half a year, so far things have been going quite well. Yes, there were a few issues here and there, but nothing major. These are the types of issues we all come across when getting into something new. There is, after all, a learning curve to selling physical products online.
That being said, recently I came across a problem that could have cost me potentially more than $3000. I know that if I would have lost that money, it wouldn’t have been the end of the world. But hey, let’s face it, no one wants to throw away 3000 bucks!
I have decided to share this post because I know that everyone can make mistakes. The more information there is out there of how not to do things on Amazon FBA, the fewer people will get themselves in trouble. As a matter of fact, I am pretty sure that so many new sellers out there are not aware of the exact same thing that I was not aware of. I hate to admit it, but I made this mistake because I was not careful enough and because I did not do my due diligence.
Choosing the product
After having success with my first product, I was a little more relaxed about choosing my next products.
I was browsing Amazon’s different categories for new product ideas, and I ended up choosing a product from the kitchen category. Then I contacted a few suppliers in China through the Alibaba website. I received the prices, weights and dimensions of the products, and then placed them into the 4s product gauntlet software that comes with the Marketplace Superheroes course. The software did its calculations and I got back a positive result. I decided to place an order.
When ordering the first batch, it is recommended that you go below the MOQ (minimum order quantity) for the product, if possible. You want to test out the grounds and make sure your product will sell. Unfortunately for me, there were only a few factories manufacturing what I needed, and they didn’t want to go too low on the ordered amount.
I had two choices: forget about the product and move on, or take the risk and order the amount that they agreed to make for me. Me being me and having already saved up some money from my previous product, I decided to risk it.
After having paid for the order, I came across the fact that certain materials that come into contact with food in the EU need approval and certification. I asked from the factory for the certificates, but they did not have them. I panicked a bit, but because only the smaller portion of the order was originally going to the EU, it was not that much of a loss; I would simply ship everything into the US instead.
But it gets worse. I find out that ALL items that come into contact with food in the EU and the US need certification. As a result, I was left with a completed order in China, the full sum of money paid, and a bundle of two items, both of which are meant to go into contact with food, both without certification. Now I really panicked.
To make it clear, nobody can ever tell what exactly the border control will do to your shipment during the importation. On the internet, there are stories of people importing items and never having any problems. There are also stories of people dealing with random checks and tests, and wasting a lot of time and money to get all of the necessary documents sent over to the border control. I have also read storied of people importing for years without problems, until suddenly all of the goods got detained by the customs and destroyed, causing people to lose tens of thousands of dollars. The importers simply did not know they were doing something wrong until their shipment got checked. This sounded like it could have been my scenario.
Because I wasn’t careful enough to do the necessary research, I almost sent over the shipment to the EU and the US. If it would have been then checked, I would lose the money that I paid for the goods. Moreover, I would also lose the money paid for shipping it there, plus the money that they would charge me for storing my cargo at the border, plus the money that I would have to pay the border control to destroy that cargo. In total, this would have been well over 3000 dollars! Of course, this is the worst case scenario, but a possible scenario nevertheless.
I also learned that in order to sell items that come into contact with food in the EU, it is obligatory to have a special wine glass and a fork symbol on your label. That could have gotten me in trouble as well.
Looking for a solution
In order to deal with the situation, I actively began to Google. I wasn’t really sure what to do or who could help me. I emailed a few companies and organizations, including the FDA, but did not receive any replies. Funnily enough, it was the Amazon FBA website that eventually helped me.
As soon as you create your Amazon FBA account, you can log into the seller central, and use the services that are offered to all sellers. You also get special discounts. There I found a few official testing companies that could take my samples and have them tested according to the FDA standards.
All offered Amazon FBA services can be found here: https://services.amazon.com/solution-providers/#/browse?localeSelection=en_US
“SGS” Hong Kong was the company that I chose. They had the best prices, and the people whom I contacted were extremely helpful and quick to respond.
I had both of the bundle items tested, and both of them passed. I must say I was fortunate. If they wouldn’t have passed, I would have lost all of the money that I invested into that product. Had I lost that money, it would have been a great learning experience, but a very painful one…
To conclude this post, I want to once again emphasize the importance of doing your research before you make an order. Check whether the item that you have decided to sell needs certification. You may think it doesn’t, but that doesn’t mean it doesn’t.
Food, all items that touch food, toys, electrical devices and so many other need those certificates. The factory that you choose may or may not have this certification, so make sure you ask them to provide the papers before you make the order.
Remember, even if you make the order and successfully import your goods without the certificates, the FDA, CPSC, etc., may ask you to provide them once your products are already selling. From what I have read, this may be weeks or even months after the import process. So you must have them at hand. If you fail to provide them on time, you may have serious problems.
The same goes for Amazon FBA. They too may ask you to provide proof to show whether your products comply with the US or EU standards. If you fail to provide it, your goods will be destroyed.
Finally, one more thing that I would like to mention is your resourcefulness as an entrepreneur. Remember, the Amazon FBA business is a real business, and you are a real entrepreneur. Therefore, treat things seriously and be resourceful.
I often see how people ask other people in Facebook groups, what certain words mean or what their response should be to a Chinese supplier’s question. If you want to succeed in the Amazon FBA business, you must learn to do the research on your own. By the time someone responds, it may take a few days. By using Google, you can find the answers within minutes.
Moreover, the majority of Chinese people that I have so far worked with are really nice, helpful people. Just talk to them like you would to anyone else. If you don’t know or understand something, just ask them to explain. It’s in their interest to help you. The suppliers that I have worked with so far have been that way, and so has the product testing company – SGS. Rather ask for help, even if it feels awkward to do so. Mistakes made later will be much more awkward and also very expensive.
This was all I wanted to share with you today. Hopefully, this can benefit you and prevent you from making the mistakes that I almost made. If you have something to add, feel free to do so in the comment section below.
Remember, Amazon FBA is a great business opportunity, but just like any business, it has its risks. Just make sure you do your homework and are resourceful.
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Thank you for stopping by and good luck!