Q&A Session: Purchase Contract Agreements & The Importance of Building a Brand – EP40
MANNY: Gui has prepared two questions for us.
GUI: This one is from Steve and he sent it via audio from our website.
Q1: “After you find your supplier and get some samples, do you enter a purchase contract/agreement with that manufacturer?”.
MANNY: I can tell you what I do but later this month I will be doing an interview with an expert on this topic, someone who’s important non-stop and dealing with Chinese suppliers on a massive scale. Until then – I don’t do too much of that. When dealing with countries like China, you’re dealing with places where patents and copyrights don’t mean that much. Trying to force something on a contract is going to be a nightmare, especially if you’re a small company. There was a Chinese company that came out with an exact replica of the new Range Rover, they couldn’t do anything about it and the Chinese company was selling it. I have the manufacturer put have all the terms that we agree on, on their purchase order and have them sign that and e-mail it back to me. One of the things I have on there is that they’ll replace any of the units that Amazon says are damaged. One of the other things I do is when I place my third or fourth order with them, I do wire transfers, I no longer place orders through Alibaba trade assurance, I place them directly with them. I would use Alibaba when starting out as they cover the order.
GUI: I think it’s a good idea to cover yourself especially when you’re starting out to select the suppliers through Alibaba. If you use an escrow company and you have the terms on the purchase order, you’ll be fine.
MANNY: If you’re dealing with a company in the US, you’ll have an actual contract and have anything set up because you can bind people to the contract. Make sure to also get an insurance company to make sure that all the terms and agreements you have agreed on are being followed.
GUI: This is also an audio question from Jamie.
Q2: “I’ve already got a very small Amazon business selling two products. I’m about to launch another product but this product is going to be a total different niche to my other products. Should I start another brand for this product because it is so different to my other products? Do I launch the product under the other brand and then change it later on or do I start from scratch and build that brand?”.
MANNY: If you’re starting a new product and it’s completely different than anything else and you’re trying to build up your brand which you had initially, I would put it with a different brand, to have things relatively focused. It would also help you to sell the brand later on except but if you don’t care and want to have on big generic brand, you can sell it under one brand.
GUI: If you want to make profit, you have to care and do it right from the start.
MANNY: Your product will sell better if the brand people see is actually related to whatever it is they’re buying. If the product you’re selling is baby food and your brand name is Chuck’s Motor Sports, you’re probably not going to get too many sales. Your brand has to lend credibility and strength to whatever it is that you’re selling.
00:45 – Episode introduction
03:44 – First question: After you find your supplier and get some samples, do you enter a purchase contract/agreement with that manufacturer?
10:57 – Second question: I’ve already got a very small Amazon business selling two products. I’m about to launch another product but this product is going to be a total different niche to my other products. Should I start another brand for this product because it is so different to my other products? Do I launch the product under the other brand and then change it later on or do I start from scratch and build that brand?