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Maximize Product Sourcing while Building Meaningful Relationships with Suppliers - Amazon Business Tips with Francois Jaffres - Part 2
October 11, 2021
Maximize Product Sourcing while Building Meaningful Relationships with Suppliers - Amazon Business Tips with Francois Jaffres - Part 2
Things we discussed in this session:

A. Part 1

B. Part 2

Things we mention in this session of Seller Round Table:

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Transcription in this episode:
[00:00:01] spk_2: Welcome to the seller roundtable e commerce [00:00:04] spk_0: coaching and business strategies [00:00:05] spk_1: with and er, not and amy [00:00:07] spk_0: Wiis. Mm hmm. Yeah, I mean the other thing to think about as well too is, and you know, a lot of people learn this the hard way is, you know, if you, especially if you're new at this and you go and you know, you, you put in this giant order with this factory that you've never dealt with before. Um, you know, unless you're doing a really good job at uh, inspections, you know, you could end up spending all that money, getting it, you know, sent to amazon or, or three pl and then, you know, having half of them with apart, breaking off or you know, missing apart or you know, there's all these issues that can come further down the road. Um, you know, so that's also definitely part of the equation on your website. I saw that you guys are starting to utilize um, ai to to make decisions. I'm a huge, you know, we talked a little bit before the show how I'm a I'm a huge geek when it comes to a I is a huge new passion of mine. I think that it's super interesting and really kind of essential in modern business because if you're not using it, your competitors are um I don't know if you can speak too much on this, but but you know, what are some of the things Neverland is doing with a I to maybe streamline the process or maybe look for data points that others may not be finding. Mhm [00:01:14] spk_1: Yeah, I can I can touch on it very, very briefly. I never really yeah, me and the founders never really had the direct conversation. What exactly can we saying, can't we say? So just very briefly, I would say a lot of the standard operations in regards to factory finding um is what they built on the back end that alright, ai helps us internally um And in regards to um just gathering the data itself, it's time consuming. And so a lot of that data has to process, we have to determine when to for example, do certain actions. So like checking with factories based on the first uh cycle of production versus the second cycle of production, how is all that going? So it's it's there's a lot of ways that you can utilize AI and it determines it's going to be determined on how complex your supply chain is going to be. And it's always gonna start with a smaller data, I would say. So that's how much I think I could talk about it, I don't even know I got too much but [00:02:25] spk_0: no worries. No I get that. Yeah. And uh yeah that's interesting like I said, um you know, I had early access, I don't know if you know, a GPT three is but I had early access to that. Been playing with that a lot. And to me it's like that, to me it's the it's kind of like the the advent of the internet, right? I mean this is a whole new kind of realm that people don't even realize, not only that, but with quantum computing, combined with the I um you know, that's where we get into the to the terminator zone, which is like we're also talking about a little bit about this, which is also super exciting if used, well, to help mankind, but also kind of terrifying. Uh you know, are we going to let some genius out of the box and and and not know how to put them back in? So um anyway, I digress, I'm a geek and like to turn dial so, um, I can talk about, [00:03:14] spk_1: yeah, A lot of our tech flies over my head to be completely honest. Like I know where they tell me to click the buttons and at the back end, that's when, you know, to want our founder, if he gets into the depth of it, I'm like, and I love what you're talking to me, I wish that I could fully comprehend it, but it's just going over my head. So long story short version, [00:03:35] spk_0: Right? No, that's great. No, that's great. Yeah, just like I said, it's a passion of mine. So that's, that's very interesting to me. Um, let's go back to kind of the basics though. So, uh, I would love to hear kind of, the customer journey when it comes to what you guys do in terms of, well, you know, and I'm sure it'll be similar if somebody is kind of doing it on their own. Um, but you guys streamline and I sure have a lot more dialed in in terms of processes, things like that. But give us a journey about, like, you know, somebody comes to you and says, hey, I've got this product idea, you know, I wanna, you know, I want to get this product to amazon, you know, what's kind of the customer journey there. [00:04:10] spk_1: Yeah, so that upfront, uh, you know, product idea, we do actually ask for a lot of information, um, and it's kind of required in order for us to determine the best factory, the factory that has the proper machinery that has the right upstream supply chain with raw materials and things. Things of that nature. Um, so that, that part itself makes sense to us, to a lot of businesses, it doesn't make sense. It's it's they think it should be as simple as I just want this mug and it should be an easy product and I find it everywhere in Alibaba. Why don't you just have a factory for me? Well the issue with that is that mug tells us, you know these three dimensions, but we need to know the thickness, we need to know what type of plastic is it just as plastic on what type of plastic? Um Do you need, let's say textiles for example, how do you want your design printed on that shirt? Do you want an embroidered? Do you want it heat transferred? You need a sublimation. So there's so many different facets to manufacturing and I understand that not everyone is a product designer, right? Most um amazon sellers I would say are definitely not product designers or engineers or anyone that have a lot of experience with product development. Um but it's something that they have to at least start to be educated in if they want or have someone on their team. That is right. Someone that understands hey for them to produce this successfully, I have like Amy always says I have to be a master at this, I have to fully understand what I'm about to sell. Um So the process goes, they would come in uh sign up as soon as they signed up, they can submit a request for a quote or an R. F. Q. Um and that's where they would tell us all the project details. So the budget, the, timeline, the materials, any other cad files, any specs that they could provide us um and they would always have an on boarding call every single one of our users, most of our users, I would say actually have talked to me directly now they're talking to our customers success team, um Jack primarily, uh and and he's great and they're talking to him about, you know, a little bit more about their current supply chain where they struggle with, are they looking to switch suppliers? Is it a new product development? What is the timeline on it? And then we educate them. Hey, this is realistic. This is not you want this for a dollar. And I understand on Alibaba has 200 units for a dollar. But with all these small customization is you're gonna have to think about tooling or molding or you're gonna have to think about um the M. O. Q. S. Are going to be higher than what you're expecting and it's probably not going to be a dollar and that dollar didn't include shipping. So, now let's talk about packaging, right? Do you need this product to be protected? So you're probably going to need some styrofoam. If you need some styrofoam, that's going to increase the volumes. If it increases the volume is going to change the master cartons. So, all these different trickle effects that you might not have thought of initially are important to actually think about. So, we just bring some of these things to light in that initial call, um, and making sure that we are the right fit to work with whoever signed up, um, from there, our product specialists in our overseas team really takes over. Um, so they match it to the right factory. They have all communications with the factories, the final product, factory selection, the quoting process. Any questions that our users might have things of that nature, And uh, Well, typically out of 10-15 factories, we might pick the top one or two to actually release the quotes from and we'll have a few backups. Typically just diversify that supply chain. But um, all right. So we have the quote and in that quote, you know, you can chat with our product specialists, chat with our factory specialists and ultimately find exactly what it is you're looking for. So our goal is to get you the most accurate pricing, not always to get you the cheapest pricing cheap is not good as we touched on it a little bit earlier, cheap. You get you pay what you get for. Um, so, and what we'll be very upfront. Very honest about that too. It's our goal is not to get you the cheapest is to get you the quality that you're looking for. Now, if you are a dollar store or, you know, you're trying to look for something to sell at yard sales or anything or Ebay and you market it as something cheap, we'll definitely go for it and we can get you the cheapest one possible probably. Um, but then we coordinate samples. One unique piece of of our tool also is as soon as you get quotes, you can actually add that product to a cart. So similar to shopping on amazon, just added to a cart, Tell us which amazon locations that might go too. So let's say you pick one on the west coast, one of the east coast one in texas, one in Minnesota. Maybe just to see the variant, you know, the variable shipping costs. Uh, and it immediately will tell you what the import duties are going to be and what the shipping costs are going to be, what the production timeline is going to be, what the overall timeline is going to be. Um, you have a different option between ocean Free and Express Air if it's a smaller product. Um, so it's a, it's a very quick tool for you to just see, okay, this is a valuable product and if it's not viable at 1000 we'll maybe I get a price break at 5000. And that price break also comes along with me filling up half a container. So my shipping per unit cost is actually going down because I paid for the first cubic meter. And that was only, I don't know, let's say, 2,000 3000 units. So now you're getting to advertise that overall 5000. Right? Um, so it really tries to streamline and simplify a very complex process, a process that otherwise you would have to go on. Uh, let's say Alibaba or any of these other marketplaces reach out to suppliers, thoroughly vet them. We take care of all that for you, all the communications with the factories directly, making sure there's no miscommunications, making sure samples are done, make sure they're done, they're done on time and they're done well, we take care of all that for you, um, sample consolidation, we'll ship all of them to our china office first take detailed pictures, take detailed notes, send this off to you before shipping the product. You take care of that for you. Um, and then seeing what the delivered pricing and all, you know, documentation, all that's going to cost you All that's done directly into platform two. So it's a, it's a one stop shop, truly [00:10:31] spk_0: awesome. So, um, a little bit of follow up to that is one of the questions we just had is like, you know what side cell are you working with? What you work with anyone and and which I assume you do but what's kind of like the minimum uh you know range of of pricing that you know somebody would come to you that you guys would work with. [00:10:50] spk_1: So we work primarily with medium to large sized factories. Um So oftentimes they have higher M. O. Q. S. Not necessarily higher prices. Um So we do see that that sweet spot is the kind of the 5 to $8000 price range for that initial order and that tends to include shipping in that 5 to $8000. Uh Now we've gone down to, I know we've seen something as small as like $300 for some of our clients and that's just they're just ordering some stickers to go along with the products uh Typically But 5-8,000 is really that sweet spot. Now of course, if you have customization and you need molding and tooling, it's going to, it's going to go up. I mean there's no other way to say it. If anyone says otherwise that they're going to cover it for you. What's kind of like free shipping, you're paying for it anyways, you're just paying it for it in a different place, right? [00:11:41] spk_0: Yeah. You're paying for it. You're paying for it when they start making copies. You know, when the factory start sharing your mold because they paid for it. Right. [00:11:49] spk_1: Right. And typically they won't even pay for it. You might hear on your second order after they hear back from me and they say, okay, well your unit price actually doubled. Well, where is that coming from? Hey, we need to pay for this mold somehow. or they might make some erroneous terms for you to pay it off over a certain amount of time. Uh, it's going to come somewhere. Uh, it doesn't, it doesn't often at least come out of the goodwill of suppliers unless you have that relationship with them, right. Unless they, you've been, you've been working with them for 6 to 12 months at least. And they see that you're growing and they see that there is an opportunity for them to continue growing with you. Then they will invest in you potentially. Usually they still not usually they might just give you a better cost, but those are the only times that they would invest in you, otherwise you're always going to be paying for it some way somehow [00:12:42] spk_0: right there hiding the cost. Kind of like the cell phone, you know, pricing, it's like, oh yeah, $75 But after taxes, fees, you know, it's like 90 or 100 or your cable bill [00:12:52] spk_1: Or whatever. That's what I say about free shipping. It's like uh well would you rather pay $15 free shipping or $10 for the product and $5 for shipping, you're paying for the same exact thing? [00:13:01] spk_0: Yeah, exactly. It's just how it's packaged a quick follow up that we touched on this a little bit on this, on this last segment. But you know, if if a product's original so somebody comes to you with an original idea. Um you know when you're, you know, a big issue is when you're shopping, you know, ideas to factories a lot of times in china, especially it can get stolen where they can, you know, kind of modified a little bit and and things like that. So do you guys have any safeguards or in place to help with that? Or do you you know kind of suggest your clients you know hey you guys need to to go get a design pattern or a provisional patent or you know whatever you know something to protect them. Any kind of guidance in that area. [00:13:42] spk_1: It's a bit of both. Um So anyone that we talked to that has a very unique design. We would always suggest that they talk to someone like you l. Uh huh. Billy. Uh And you know she does particularly or specifically I. P. Protection in amazon I want to say. Um So she's great to talk to you about copyrighting trademarking. I believe patents. Um And we did a great episode with her on link up Leaders also. But uh the only way to protect yourself whether it's with us whether it's with anyone else no matter what contract you have it's always going to be with a uh an I. P. Protection not a contract that's the contract will not protect you. I don't care how many trip ones how many N. D. A. S. You sent out to however many suppliers um And whatever vetting you have a lot supplier. Your product is naturally protected until you protected yourself. Um So that's number one but number two we have agreements we have our terms of use that of course outline that. We have to be cautious with all the data and all the I. P. Um that that we take in. Uh And with the factories are china counterpart actually, Movieland Hung Show Technologies. Uh They have agreements with the factory. So those are localized agreements um Those aren't something that we've ever had to enforce necessarily. Um And that's most contracts. I mean unless it's you have to have a significant backing to enforce your contract, especially with something overseas. Um So a lot of them are more so formalities. And even if you're in the U. S. Or anywhere in the world and you're sending your idea to anyone literally anywhere in the world. Nd a Trip One agreement. Trip one is a non use, non disclosed, non circumvent for anyone that might not know. Um Those are formalities for you to reference to. Um Those are, hey I saw my products on Alibaba and you told me that you wouldn't put it on Alibaba. But then their counter argument could be, well hey prove it, prove that you didn't send this to anyone else except for me. Well chances are you probably did too. Um But the way that we protect them is yeah, we have our own agreements in place with our suppliers. We of course are U. S. Based company so we have to abide by our agreements with our users and clients. Too [00:15:56] spk_0: awesome. Uh So uh pricing like so if somebody comes to you, are you guys building your kind of fee into the per unit cost? Um Are you is it a percentage kind of how are you charging people when they take that journey? [00:16:11] spk_1: Yeah. Yeah. We do include a new Zealand services feet in the F. O. B. Pricing itself. Um now we have an algorithm that determines what that pricing actually is, but it can range typically anywhere between three and 13%. Um which some people say, Hey 13%, that's so much. Well, 13% of a price that we're able to get from a factory with all the accurate information and specifications versus 13% of what you can get is quite significantly different. especially when we have boots on the ground, we have the established relationships. So let's say they gave it to us for 15% lower than they would offer you an alibaba for the exact same product. Maybe even the same factory or 13% is negligible. It's actually less than [00:16:55] spk_0: what you're paying for yourself a lot of the times. [00:16:58] spk_1: Yeah. And plus we handle complimentary QC inspections with every single order. Uh It's the east of using the entire platform, knowing exactly what you're shipping costs are going to be, what your import duty costs are gonna be, knowing that someone else takes care of all that for you. You don't have to spend time doing that. Um And so our algorithm that determines what it actually is, but it is built into the F. O. B. Price. [00:17:22] spk_0: Okay, So before they, you know, before they sign on the dotted line, they at least have uh if not the exact price, a very close range of to what they can expect to pay you guys. [00:17:32] spk_1: Well. So let's say they see, let's say they're ordering these mugs and they see the mugs are with all the packaging and everything, it's $2 F. O. B. Uh ningbo. And they see they add a product to a cart, they see it's a dollar per unit for import duties. Um and it's another dollar 50 per unit for shipping right there. They have their landed cost, they have their DDP pricing um that F. O. B. Price at the beginning, better it includes novi land service fees. So the price they see is the price they pay. They're not paying any additional hidden fees. There's no and we've seen this a lot, a lot of the last minute hey your products at the port, it's ready to go but it's actually an extra $300. Can you send that over to us now? [00:18:12] spk_0: Right? Right to grease the palm of the DACA. Uh [00:18:16] spk_1: Yeah, so all of its, all of its included, we don't grease the palm of the dock but yes it's all included in there. Um So there's nothing hidden, there's no monthly recurring fees. Uh There's no um annual fees, anything like that either it's just uh directly incorporated in there, [00:18:37] spk_0: so it's one off contracts to you. So [00:18:39] spk_1: yeah, so I mean the majority of our users to come back for second orders um but it's at the same time if you find a different supplier and again this is all about time and scalability, right? If you have the time to scale by yourself or with the sourcing agent or by different method or you're traveling directly to china All perfectly fine. We are not walking into an annual contract or anything. Um We just tend to think that we do a better job than a lot of supply chains out there um and we have the technology to back it. So we're really building the proper infrastructure for a lot of businesses, particularly those that are small to medium sized. [00:19:18] spk_0: All right, last question. Before I get to the second or the last last question really quick, are you guys generally, is it majority of, if not all of your sourcing going to chinese factories or are you also going to, you know Vietnam or some of these other kind of up and coming areas? [00:19:36] spk_1: Yeah. So right now china is the only open market on our platform. Now we do work with a few enterprise clients and they are working with a few of our factories in Vietnam. Uh, that's not open currently, um, to the general public. They have a significantly different supply chain infrastructure. Uh, even then when it comes to china, some may say, well they're right there, what's, it's that much different? I mean the entire, the machinery, the labor force, the transportation systems, the dock processes, um, and export process. It's all similar, but it's um, so before we release that, we really have to build that out and that's something that we do plan to do in the future, um, is go global and really empower more countries to be able to manufacture great products, [00:20:26] spk_0: awesome. Cool. So last question, this is always kind of uh, what we love to wrap up with is, you know, anything you've been into lately in terms of like personal development podcast, you know, anything that you feel like it has made a big difference in your life, whether it's health business, you know, anything that you're you've stumbled upon that you feel like has made a big difference in your life. [00:20:47] spk_1: Mm It's a great question. Um so after watching and being pushed by a few friends, by my girlfriend by uh, by lisa even um and watching people like Amy we's and going to the gym. It's one thing that I have actually been trying to do. It's something that just one, it gets me out of the office, gets me out of my house. Because those are really the only two places that I ever am. If I'm not in the office until eight or nine PM, I'll probably be at home watching netflix or hulu. So I'm just trying to get out in general. Um and I think the gym has been great. It's been healthy, it's been um uh just something different. It's something that I haven't done in years to be completely honest. So I think it's, it's changing my routine, which is important, I think to a lot of people, [00:21:45] spk_0: Yeah, awesome. Yeah, I've done the same thing. I started this year, I used to be a super hardcore gym goers in my twenties, but then through parenthood and marriage and all that, it's, you know, kind of got pushed to the backburner, but you know, I'm getting into my forties now, so uh you know, so now it's a little more serious, like yeah, I got to start taking taking care of myself. So yeah, I've been hitting the gym too and I love it. I mean I did love it back then, I just forgot how much um and I always kind of end with the, you know, sauna or steam room just to kind of like, you know, do a little meditation in there. Also read a lot of information about how that's cleansing. And you know, they say like 30 minutes in the sauna is as good as 30 minutes of of uh aerobic exercise, which is pretty interesting. Um I didn't know that. Yeah. Yeah, look it up, it's interesting. Um So yeah, I've been doing that a lot and then also I've been doing the keto thing for quite a while now, so I've been dropping a lot of weight, getting healthy. So that's great. I think you know that that's a hard one though. It really is. It's like getting into that routine is the hardest part, but I feel like once you ease into it, um you know, that makes a big difference. So All right, let's people know francois. It's been awesome having you. Thank you. Nice. Uh, nice to meet you. Thank you. Thank you so much for being on. Um, how can people get in touch with you? [00:22:54] spk_1: Uh, yeah, if you look at my name, francoise, Jaffrey's on linkedin. I will probably be the only one to pop up, I would think. Um, uh, facebook's another easy way to get a hold of me. Uh, if you go to Neverland dot com, you can almost guarantee that you'll get a phone call with. You always get a phone call with someone on my team, but they can always transfer you over to me too. Um, or just my name at Neverland dot com francois at Neverland dot com. So that's F R A N as a nancy C O I S dot at no villain dot com. Yeah. Yeah, that's right, nailed [00:23:28] spk_0: it. Yeah. You got it awesome. Thank you so much again. Uh, and if you guys haven't done so yet, please rate review, subscribe the podcast francois. You guys have a podcast as well. You want to, you want to let people know about that. [00:23:39] spk_1: Yeah, Late Cup leaders and we'd love to have you, I mean anytime and I knew I'd love, [00:23:45] spk_0: I'd love to, I'd love to be on. Yeah, let me know. Um, yeah. All right. Great. So guys, if you have not yet done so please rate review. Subscribe if you leave a review on the podcast, we really appreciate it. We haven't gotten any a little while. So I'm, I'm kind of sad even if it's a bad one. Like we've gotten a bad one before and actually, you know, even if we're doing something that you guys don't like, I love that feedback because it helps us guide us kind of, you know, on on how we can improve. We also love to hear from you guys directly. If you have a suggestion on somebody who want to be on the show, please let us know if you have a topic you want us to cover. Please let us know Andy, it's Alessio dot com. I always, you know, let you guys know uh that you can, you know, email me with quick questions as long as it's concise and to the point so I can reply quickly. If you write me like three paragraphs, I'm sorry. I get so many emails, I might not reply Lincoln as well as a great place to get me. Um, and I believe Amy is pretty active on her facebook group and also on linkedin as well. You can reach out to her. She stepped out for the uh, the prosperous show here in Vegas that she's at. Thank you guys so much for being here and we'll see you next time on the sail around table. Thanks for tuning in, join us every Tuesday at one PM pacific standard [00:24:55] spk_1: time for live Q and A. And [00:24:56] spk_0: bonus content after the recording at cellar round table dot com, sponsored by the ultimate software tool for amazon sales and growth seller [00:25:05] spk_2: S c o dot com [00:25:06] spk_1: and amazing [00:25:07] spk_0: at home dot com.