Amazon FBA (fulfillment by Amazon) has revolutionized eCommerce. However, when you’re preparing to ship goods from a Chinese supplier to an FBA warehouse, it’s important to know the common pitfalls to avoid that could cost you time, money, and your reputation as a seller. The first thing you should understand is what FBA is and why it matters.
What is FBA?
When selling on Amazon, you have several options regarding order fulfillment — how your goods are prepared and delivered to the customer. In fulfillment by Amazon or FBA, Amazon stores, packs, and ships products to the customer on behalf of Amazon sellers.
You no longer have to worry about packaging, shipping, customer support, or processing return orders because Amazon takes care of everything. This differs from FBM, or fulfillment by merchant, as the seller must perform order fulfillment, returns, and customer service.
FBM may be preferable if your products have a low turnover rate, you don’t need Amazon’s logistical support, or your items are heavy and bulky.
Common Mistakes When Shipping from China to Amazon FBA
Amazon sellers make several common pitfalls or mistakes when arranging to ship goods from China to Amazon warehouses in the US.
Violating Amazon’s Product Guidelines
Amazon’s guidelines regarding what can and cannot be shipped to an FBA warehouse are strict. Always consult the company’s list of prohibited products and product restrictions before ordering with your supplier. Amazon prohibits the following items for FBA:
- Alcoholic beverages
- Vehicle tires
- Gift cards and gift certificates
- Goods containing “unauthorized marketing materials” include branded price tags, pamphlets, and non-Amazon stickers.
However, outside of product categories, Amazon also prohibits shipping products that fail to meet its preparation requirements, such as:
- Products that require preparation but that have not been prepared according to Amazon’s FBA packaging and preparation requirements
- Loosely packed batteries
- Products that are damaged or defective
The sale or import of hazardous materials, regulated by the Department of Transportation, are also prohibited. FBA warehouses cannot take receipt of hazardous goods; this includes the shipment of weapons.
If you consistently violate Amazon’s guidelines, the company may restrict or terminate your selling privileges, cancel ongoing listings, or terminate your FBA relationship.
Failure to Conduct Proper Inspections
One of the disadvantages of having your Chinese supplier ship directly to Amazon’s FBA warehouses is that you can’t inspect the goods before receipt. However, there are advantages and disadvantages to direct shipping.
Advantages of shipping direct to FBA
If you have your Chinese supplier ship directly to an Amazon FBA warehouse, you can potentially save time and money. However, you should have an established relationship with your supplier for this to be a reliable and cost-effective option in the long run.
Reduced transit times
Because products are shipped directly to the FBA warehouse, a separate company doesn’t need to receive them first. This reduces transit times and shipping costs.
No middleman cost
By not contracting with an intermediary, you’ll save the cost of hiring a third-party to inspect your products before shipment to Amazon.
Disadvantages of direct shipping
If your Chinese supplier ships directly to an Amazon FBA warehouse, they will need to know exactly how to prepare the goods to comply with Amazon’s product requirements. You must provide your supplier with detailed instructions regarding compliance.
Limited quality control
Lack of third-party inspection and preparation can be expensive if it causes you to violate Amazon’s product or preparation requirements. If a seller’s defect rate increases, for example, the key performance indicators that Amazon uses to determine the status of sellers can suffer.
You have to pay customs
Customs duties and freight charges are due before Amazon takes receipt of the goods.
Using Asiana USA’s freight forwarding service can simplify the shipping, customs clearance, and inspection process for your goods, ensuring your products are shipped seamlessly and without adding unnecessary costs.
Sourcing the Incorrect Products
Product sourcing from Chinese suppliers for sale in the United States, from clothes to electronics, is an affordable way to operate an online business. However, if you’re starting an eCommerce company, it can be challenging to maintain high-quality manufacturing standards, especially if the products require assembly or testing.
Always request samples or prototypes before placing a bulk order. This way, you can determine the company’s workmanship and quality control. If the product is labor-intensive to produce or assemble, this can increase the per-unit cost of your goods.
Not Verifying Intellectual Property Protection
If you source a Chinese supplier, select a product from their catalog or suggest one yourself for production, and place an order for sale in the US, it’s crucial to verify whether the product is protected by patent or trademark.
Some companies don’t comply with Intellectual Property (IP) laws, manufacturing and selling products without a license or permission. Selling or importing these goods can result in a lawsuit that could shut down your business.
Other suppliers may sell counterfeit goods, such as shoes, handbags, perfumes, jewelry, and cosmetics, resulting in a cease and desist order or litigation suit from the manufacturer of the original goods. There are also safety concerns related to counterfeit cosmetics.
According to United States Customs and Border Protection:
“…on a typical day in 2020, CBP officers seized $3.6 million worth of products with Intellectual Property Rights violations.”
Avoid these pitfalls and legal challenges by ensuring everything you buy and sell is compliant with U.S. intellectual property laws.
Shipping to the Incorrect Fulfillment Center
Amazon has several fulfillment centers across the country, so it’s important that your supplier ships to the correct one. To minimize errors and delays, it’s crucial to create a shipping plan on Amazon’s website. A shipping plan specifies what products you intend to ship and in what quantity, the carrier and related information, and whether you want to prepare and label your inventory yourself or assign this task to Amazon.
If your goods arrive at the wrong fulfillment center, Amazon can reject them, and you’ll have to pay for return shipping or shipping to the right warehouse.
Not Hiring a Customs Broker or Freight Forwarding Service
Customs and Border Protection (CBP) aims to prevent the import of dangerous or illegal goods into the United States. As part of customs clearance, CBP will determine whether what you’re attempting to import can legally enter the U.S. and may conduct random inspections or sweeps.
To simplify the customs-clearance process, consider hiring a customs broker. If the goods you’re importing fail to meet CBP’s requirements, CPB may seize them or refuse their entry, sending them back to China.
Asiana USA’s freight forwarding service provides customs brokers to ensure that your goods comply with CPB’s strict requirements. CBP licenses a customs broker to navigate import/export laws, preparing the necessary documentation to obtain clearance from CBP and other governmental agencies.
You can also have your supplier in China ship to Asiana USA’s facility in China for a country-of-origin inspection first. Asiana USA can ensure that all goods are in proper condition and labeled and packaged according to Amazon’s requirements. The higher cost of third-party consolidated shipping is worth it, as you’ll ensure that your relationship with Amazon FBA remains healthy.
Choosing the Incorrect Shipping Method
Every Amazon seller who organizes shipment from China to the U.S. needs to select the correct shipping method. The shipping method can directly affect transit time, from a few days to more than a month.
It also impacts your overall shipping costs, so it’s essential to choose the right shipping method for your goods. The shipping method can also determine what items you can ship. For example, some hazardous goods cannot be shipped by air.
If the goods you’re shipping are less than approx. 440 lbs. (200 kg) and take up less than 2 m³ of space, air freight is the ideal shipping method.
Air freight usually takes 5–10 days to arrive in the U.S. from China, but by using a freight forwarding service to organize air freight, you can benefit from the high-volume rates they provide, lowering your shipping costs in the process.
Air freight is more restrictive regarding goods than other options because certain types of cargo can’t be transported by air, such as hazardous chemicals, aerosols, and flammable items.
If the goods you’re shipping weigh more than approx. 880 lbs. (400 kg) and take up more than 2 m³ of space, sea freight is a more cost-effective shipping option. If you need to ship heavy or bulky goods or shipping in high volumes, this is one of the cheapest methods available.
There are also fewer restrictions on what you can ship via sea freight compared to air freight. However, sea freight is the slowest shipping method available, often taking over a month to arrive at the destination.
The two most common ways of shipping using sea freight are LCL (less than container load) and FCL (full container load). How much space your goods take up helps you decide which option is best for your needs. If your goods don’t fill a container, consider selecting LCL.
In an LCL agreement, your goods will be sharing container space with other shipments. While this can be cheaper if you’re shipping lightweight goods that don’t take up much space, FCL is generally more secure and easier to track because the container is under one consignee.
If you need your goods to arrive as fast as possible, express is the best choice. This method is available from DHL, UPS, and FedEx. Intended for comparatively lightweight and compact goods, express shipping is ideal for cargo that weighs 440 lbs. or less and takes up 1 m³ or less of space.
While express shipping is less complicated to navigate than air freight, you will still need your goods to clear customs. Select this method for the reduced transit time, for low-volume orders, and samples and prototypes.
If you need to ship lightweight, low-volume parcels, regular mail is an inexpensive option. You can also use this shipping method for samples or prototypes if you don’t mind waiting longer.
Not Insuring Your Cargo
You should always insure your cargo against loss or theft when shipping goods from China to the US and Amazon FBA warehouses. Depending on the worth of your goods, failing to purchase an insurance policy could cost you thousands of dollars or more in the event of seizure, damage, theft, or misplacement.
You should also insure your cargo if you request your Chinese supplier to ship samples or prototypes to an address in the U.S. for inspection.
Palletizing Your Shipment Too Early
Whether you should palletize your goods in China before shipment depends on a few factors. If you’re shipping bulky goods by air or sea, you may need to palletize your goods in China to simplify storage and transport.
However, avoid having your supplier palletize your goods before shipping from China to the U.S. unless you’re shipping a full container load (FCL). If you’re not, palletizing your shipment can increase the volume and shipping costs. However, if the goods you’re shipping are relatively fragile, and you intend to ship them by sea, palletizing may be your best option.
Pallets allow forklift trucks, pallet jacks, and other material handling equipment to move, store, and retrieve goods safely and efficiently.
Not Accounting for Lead Times
When organizing shipping to an Amazon FBA warehouse from China, you need to consider lead times and associated costs. The lead times can depend on the complexity, quantities, and volume of the products you’re ordering.
However, it’s also important to take into account regional and cultural factors that may affect the lead time of a production run, such as Chinese holidays that are not celebrated in the West.
Not Ordering Enough Stock (or Too Little)
Accurately estimate the amount of stock you’ll need to avoid purchasing too much or too little inventory. If you don’t order enough, ordering more inventory will end up costing you more in shipping and may impact your throughput, leaving you unable to meet customer demand.
However, ordering too much stock means that it will sit on racks in Amazon’s warehouse, collecting storage fees while you wait for your products to move.
This is why it’s critical to understand the market demand and peak seasons for your products. Several software programs, such as BlueYonder or Forecast Pro, can accurately calculate supply and demand for your product, ensuring you always have the right amount of inventory in the Amazon FBA warehouses.
Not Selecting a Reliable Supplier
Before placing a high-volume order with a Chinese supplier, it’s important to perform your due diligence. Meet the manufacturing team and determine what kind of reputation they have for quality control.
Order samples prior to committing to a bulk purchase, and only pay a deposit until you’ve inspected the goods and verified that their quality meets your requirements. Developing a relationship with a supplier you can trust is crucial to long-term success.
Asiana USA Can Help
At Asiana USA, we specialize in logistics and freight forwarding services for American entrepreneurs who want to sell Chinese products to U.S. customers. If you’re looking for products, we can help you source suppliers in China, inspect and prepare goods for shipment to Amazon FBA warehouses, and ensure compliance with customs requirements.
Call us at (855) 500-1808, and we’ll discuss how we can improve your experience as a seller.