In e-commerce industry, specifically in eBay or Amazon selling, price is not the only determining factor to exceed. Sellers must know how to utilize their creativity as well in a strategic way. Reducing your sourcing cost is one of the best ways to get the most out of your margins.
But how? These ways will help you streamline sourcing costs:
Let’s face it. Your funds will soon run out if you are not going to make a way to proliferate it. Time will come that you have to purchase more for your inventory to expand your business. To free more money you capitalized in your firm, you have to obtain better payment terms.
For example, usually, payment terms are being split between a deposit or advance payment in placing a trial order as well as balance payment that is paid prior to shipping.
For starters, the normal terms are 30/70 or 50/50. Don’t just stick with this payment term. Learn to negotiate.
However, you need to gain your supplier’s trust first. When you achieved that, you will get better terms and pricing.
Your business relationship with your suppliers grows once your order volume increase. Thus, it is alright if you can get better pricing when the volume goes up. Most suppliers love bulk order particularly when you imparted them your purchasing plan along with your expected order volumes every year.
Say for an instance, a seller product sourced from China. On their initial order, they’ve bought 500 units which cost $5.20 each. After that, they’ve ordered a thousand units. With that, they tried to cut its price to $4.70 or almost 9% reduction.
By selling at a lower price yet keeping the same margin, you are also cutting your Amazon seller fees. Apart from that, you’ll get a domino effect on your bottom line in terms of decreasing your import responsibilities.
Believe it or not, there is a plethora of ways to decrease your logistic and shipping cost.
Are you delivering through air freight? If so, then you probably aware that it is not as affordable as it seems. When you want to spare your money, why not utilize the pre-determined courier rates of the supplier? Compared from the shippers, they are way cheaper.
Generally, suppliers transport substantial volumes to get less shipping cost via air courier. You may use their reduced rates with, FedEx or DHL to come up with a lower pricing.
Lots of Amazon sellers recommend Air Express Couriers. Unlike other international shippers out there, they are less expensive. Don’t forget to acquire your tracking number and even references in order to guard off yourself.
When the volume increases and once you’ve decided to ship bigger items, always opt for sea freight.
With these secrets, you can’t just save money, but you’re also saving more effort and time. Want to know more secrets how to cut your sourcing costs? It won’t hurt if you do your own research.