AS 35: Dealing with Manufacturing Delays with Your Amazon Business
08 Jul 2016
What’s up guys, grab that coffee out, it’s the AmzSecrets Show, with your host David Aladdin. When the tough gets going, you can’t back down. I look at Amazon as a massive battleground between sellers.
You’ve got corporations with their calvary, medium sized businesses with their artillery. We are the strategist, the Kings,. We strategize from above. We carefully plot decisions, and attack certain areas we deem as vulnerable. We take the high ground and get that extra advantage. Welcome to the show.
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Amazon News Summary: Amazon Launches “Interesting Find”
So what does this all mean David?!
I think this is a smart move for Amazon. If your product gets used as a “Intersting Find” expect your sales volume to skyrocket and BSR to jump thrroughhhh the roof. It can bring startups into stardom, but also give you a significant advantage amongst your competitors.
That being said, its completely automatic I believe. I suspect this list is curated by A9, and probably involves a statistic related to how many customers “gift wrap” your item. If a large x amount of people gift wrap that item, it will likely show up. Just my guess though.
In all, I think this is a pretty cool feature. Lightning deals does give extra exposure to sellers, but it really is tough to earn money via a lightning deal. Your essentially sacrificing your profit margin to increase your BSR. A tradeoff, only worth it for a non-moving product.
Today’s podcast is episode 35, How to deal with manufacturer delays in your Amazon business.
Mannnn… manufacturing delays suck. And it’s not even the China News Year. What the heck. I’m just messing. Instead of complaining, there’s a lot you can be doing.
So in my current business, I’ve had really bad manufacturing delays with one of my manufacturers.
Manufacturing delays can be caused by:
- Defects on the product line
- Holidays in China
- Low staff at the factory
- Lack of management
- Lack of planning
- Over capacity at the factory
A delay in manufacturing with the have an adverse affect in your Amazon business. Okay David, so…you didn’t plan your order timing right!?
Ha, well I thought I did but in a sense I guess your right. However, I put the order in about 3 months ago and it’s still not finished. My prediction was a 2 month production rate, and slowest 3 months, but we are now in the 3 months of production and it does put strain on the entire business.
Okay David, what effects has this slow moving manufacturing process have on your business…and secondly, what are you doing to fix it?
By having a slow manufacturer, it creates a lot of sitting cash. You have a 30% downpayment that has technically not “worked” for you. Your products will sell slower with higher price points, or you can just run out of stock, which will cause your BSR to go back down. And your likely sitting on a lot of cash on hand, due to the fact your waiting to pay for the other 70%.
Slow manufuacturing, IS a very bad bad situation. Now to get to your second point, what am I doing to fix it?
On the specific manufacturing side, this is a very challenging area. I am pressing the manufacturing as light as possible so it doesn’t come off as too pushy, but I’m also doing a neat strategic thing. I’ve placed my next order, but have refused to pay 30% of that order, until they complete the existing shipment. This gives them more incentive to collect on the current 70% and the next 30%. It also shows them I am still committed to working with them.
I’m also doing another thing. I started diversifying manufacturers and adding more products from other manufacturer catalogues. I already have a few manufacturers, but the delay in one of them has brought an all too real/ risky situation. I don’t want most my chips on one manufacturer. In-fact, I am doubting how much capacity they can handle, and how timely they are with manufacturing.
On the other hand, my other manufacturer is very timely, and predictable when finishing. This allows me to re-fill my inventory for different products at different times.
Having multiple manufacturers is more work, as your managing more sales reps, and coordinating more SKU’. However, it’s a big de-stresser. If one manufacturer goes out of business, you have other products to sell.
Ok David, but do you lose that SKU if your manufacturer disappears?
Dang, that’s an excellent question.. but technically, it must be since you, I, created the question. So I know of some sellers using two manufacturers to create the same product. There is issues with doing this as one quality can be better than the other, and then you get different reviews, and customer satisfaction.
I do like the concept of doing that, but for now, I am going to stick with one manufacturer per sku, or per skus.
What other methods can you do to increase a manufacturer speed time?
Another trick I’m trying to pull off is if you have one manufacturer creating multiple products for you, you can tell that manufacturer to ship when ready, instead of shipping all the products at once like the order was created. I have yet to successfully deploy this, but if you can pull it off with your freight forwarder teams and the manufacturer, you will get your products out faster.
The other cool thing with using multiple manufacturers is I feel like manufacturers respect you more in the sense that they no longer have complete control over your product line. Giving complete control to a manufacturer for all your products can spell disaster as they can technically launch and create on your own listings etc.
It’s good to never be dependent one sales channel, one manufacturer, one shipper, and even one shipping quote. One of anything is a bad number.
That’s all for this cast.
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