How does Amazon’s shipping process from China work?

You have decided to become entrepreneurs and use Amazon’s online platform to market products in the US? The first step in this process begins with choosing the products that will be marketed, following a comprehensive market research, and then finding the supplier that offers you a quality product at a reasonable price. In most cases you will find that the preferred suppliers are in China.  But how to send a large volume of products from China to the US? In this article we will review the various steps and options available to you.

Step one – Choosing the shipping method
Freight forwarding can be done in one of two ways – by air or by sea. When goods are air shipped, the delivery time is shorter with deliveries made within a few days – but the shipping cost can be significantly higher. For relatively large heavy products the shipping cost can reach hundreds of shekels per product. In this case, we prefer to ship by sea – although the delivery time is much slower and can range from weeks to months but the cost is significantly lower.

Step two – Ordering the goods from the Chinese supplier
Now you are ready to contact the supplier and order the goods. After you have negotiated the price and chose the number of units you would like to order of each product (sometimes there are several models and colors of one product), again you can choose between two options. The first option is shipping with the supplier taking care only of supplying the goods. This shipment is called EX Works or EXW for short. The product supplier transfers the goods you have purchased to the person who collects them from the company’s warehouses in China, and from there the product is your responsibility. He does not take care of paying the customs for the product, for transportation to the port or the airport, or for the arrival of the products to Amazon warehouses.

The second method, which saves you quite a bit of hassle, is using Free On Board or FOB. In this method, the seller takes care of the necessary customs procedures in the port in China, until the goods are loaded on the ship. Now – the product is at your own risk, including its insurance. Most of the transactions currently being conducted with Amazon (estimated at 90% of all transactions) are carried out in this manner, when sellers are required to carry the goods through the Chinese customs.

Step Three – From the port to the USA
The goods are shipped to the port in the United States and the customs have been paid, either by your supplier using the FOB method, or by a contact person in China who takes care of the required procedure. The goods are registered and proceeds with their order number to the US Customs inspection process. The seller takes care only of the goods booking – and now you’re ready for the real challenge: clearing the goods from the US Customs and sending it to the Amazon warehouse.

Step four – the big challenge: Clearing the goods at US customs
The fourth step in this process is considered the most difficult. While shipping is carried out when the goods are classified according to a category in the Chinese customs, sometimes mistakes are discovered and the goods are not easily cleared from customs in the US. Officials in America are known for their strict observance of procedures, which we sometimes call in Israel “tiny minds.” A small mistake in classifying the goods, may lead to difficulties for the customs agent to match the product to the agreed tariff code in the various departments in the world (Harmonize System or HS code in short).  This code system should create uniformity of the various product categories worldwide in commercial importation, but sometimes, because of the differences between the countries, one will set, by mistake, the products in one code, while in the US it shall be marked by a different code. Therefore, it is important at the shipping stage to carefully examine whether the code in which the goods are sent, matches the code in which it will be released.

How to deal with the challenge: Using an agent experienced in dealing with Amazon and the customs departments in China and the United States

While the ways to find suitable products for sale and a Chinese supplier can be learned, the changes in shipping and customs regulations require years of experience and ongoing training on various customs requirements. In addition, Amazon also requires compliance with their own standards and goals.

Working with shipping companies that carefully examine the process of moving goods from the supplier in China to the United States, while examining the small nuances associated with each product, coupled with strict compliance with the objectives of Amazon, will ensure that the goods reach the warehouses of the Internet giant quickly and problem free.

For more information on shipping from China to the United States and other destinations, while strictly complying with the world’s customs requirements and the strict standards of Amazon, please contact us at

How to avoid fines for storage in Amazon warehouses?

Amazon’s shipping services for suppliers who store the various items which are sent to the end customer under the Fulfilled By Amazon brand, have made suppliers’ lives easier, with most of the logistic activity, including the packaging of the product on its way to the end customer, inventory management and shipping, done by Amazon. The products are stored in huge logistic centers across the United States or UK in optimum conditions. However, if some of the products are not sold, Amazon charges suppliers an additional fee (a kind of fine) for the use of its warehouses. In this article we will examine the different options available to you, suppliers, in order to reduce that fee.

How is the cost of storing products in Amazon calculated?
Amazon counts the days from the time the products reach its warehouses. When six months pass (or 181 days to be exact) where the products did not leave the warehouse, additional cost is added on storage of products in its warehouses. The inventory of Amazon’s logistics centers is conducted twice a year – on 15.2 and 15.8, with products left in the company over half a year bearing a commission of $11.25 per cubic feet, and products stored for more than one year bearing a commission of $ 22.50

When does Amazon charge the fees?
The additional cost of the remaining products in the Company’s warehouses is charged on the day the products leave Amazon’s warehouses, returning to you as the supplier or are delivered to other warehouses. Shortly before the due date, Amazon will send a notice to the supplier, alerting him to the added long-term storage fee, but before the due date he can still continue to try and sell the product.

Can I remove the products from the warehouses for a few days and then send them back to Amazon warehouses?
Yes and no. Amazon has set a minimum period in which it will not be possible to ship the products to its warehouses again. Even if you decide to order a different product with the same code number, you will not be able to use the Amazon FBA service until 8 weeks have passed. Therefore, many use the solutions of external logistics experts, for temporary storage services for a period of two months, and only then continue to use Amazon FBA services. A small number of the products still remain so that Amazon can continue to send them if necessary.

Possible solutions to avoid paying the fine
In order to avoid paying this fine many suppliers tend to find a variety of creative solutions for storing their products. The first is to ship a relatively small amount of each item to Amazon warehouses, while most of the goods are stored in external storage in the US. When the products are sold, these logistic centers send Amazon an additional small quantity of items of each type (Small amount of SKU). This option is suitable for suppliers of only a few types of products.

Another option is to use centers that also include some of the logistical options offered by Amazon. For example, logistics experts who offer a service similar to Amazon’s ship products that are not sold in bulk. This option is also suitable for products whose cost is particularly high and only a few units are sold throughout the year, or for large products that take up considerable space in the company’s warehouses and are not sold frequently.

Seasonal products – send to Amazon only at the right time
Another niche of products are those targeting specific seasons. For example, Christmas trees, Purim costumes or “Halloween” and similar products. These products are recommended to be shipped to Amazon stores shortly before the holiday in order to avoid high fines.

We will mention another common situation. In many cases, the products are imported from the East, such as from China, and before the holidays the suppliers are swamped. In order to solve this logistical problem, it is possible to send the goods from the manufacturer in China to an outside warehouse, and only just before the holiday, to send them from the local logistics center to Amazon warehouses for the holiday period only. The unsold products can be returned after the sales season to a storage center that does not require additional fines on long-term storage.

To sum up, Amazon’s storage policy, originally designed to ensure that the company’s warehouses store only saleable products, makes it difficult for new suppliers or those who sell a wide range of products, which only some are distributed quickly. In order to overcome this difficulty and avoid paying the fines, you can use external warehouses that send the products back to Amazon in order to reboot the six-month count in which the products are stored without being sold

Finding a reliable supplier in China

Imports from China have opened possibilities for Israelis to import high-quality products inexpensively; however, sometimes the product we receive is not the product that we ordered. Finding a reliable supplier in China will ensure that you receive exactly what you ordered at the best possible price. How do you find a reliable supplier in China? How do you identify unreliable suppliers? How do you communicate with Chinese suppliers efficiently? All of this and more in the next guidebook.

The trend of importing products from China did not go unnoticed in Israel and, in recent years, many Israelis have been opting to import products from China. Importing products from China is perceived as particularly inexpensive and, for the most part, they really are significantly less expensive than the other options. Labor and raw materials costs are very cheap in China and therefore, this significantly lowers the product manufacturing costs there.

However, there have been many reports from around the world about severe problems regarding the reliability of some of the Chinese suppliers. These problems include the shipping of defective products, products being shipped that are not the products that were ordered, shipping delays and, sometimes, even fraud and disappearance after receiving an advance on account.
Problems relating to the reliability of Chinese suppliers are liable to cause major financial losses. Therefore, it is advisable to everything possible in order to avoid such situations. In order to avoid losses, it is advisable that you become more familiar with the import process and, even more importantly – that you learn how to find a reliable and inexpensive Chinese supplier.

The import process – stages

The product import process, whether for commercial or private use, is a very complicated process. Initially, we must clearly define the product that we want. Then, we must find a reliable supplier and negotiate with him according to the etiquette of negotiations practiced in China. The last stage is tracking your order. But obviously, the most critical stage is finding a reliable supplier and conducting negotiations with him.

So how do you find a reliable supplier in China?

Firstly, you should visit the supplier and obtain a first-hand impression of the supplier’s reliability. It is important to verify that the product that you are ordering meets all the required standards – Israeli and international standards alike. Importing a product that fails to meet the Israeli standards is liable to become a severe problem for you. The product might be delayed by the Customs Authority and its entry into Israel might not even be approved, which will cause you a significant monetary loss. Even if you pass the customs obstacle, if the product has no standard mark, you are exposing yourself to enormous lawsuits, if people who use the product are caused damage or injury. You should also verify that the product’s manufacturer and supplier are in possession of all of the licenses and requisite approvals to manufacture the product you selected.

After that, it is advisable to inspect the factory where the supplier manufactures the product. You should inspect the production facilities, the warehouses, the shipping methods and more. Even though it is reasonable to assume that you do not possess the professional know-how needed to ascertain the quality of the product from a tour of the factory, it is important that you do so in order to verify that the factory is operating and that the manufacturing is being conducted under good or reasonable conditions at the very least. Thus, for example, you will not want to order fragile products if you see that they are not being packaged adequately and consequently, are liable to be damaged during shipping.

It is highly advisable to also speak with the owners of the factory. True, this might sound strange, but it is within the realm of possibility that the person with whom you agreed on the details is not the owner of the factory, but rather, might be a swindler or an additional “broker” who will demand a commission and additional payment from you. It is important that you verify that you are speaking with the person who is authorized to set prices and close deals at the factory.

If you cannot travel to China, there are Israeli and international companies that possess vital information about many companies in China. Some of these companies share their information about the supplier with whom you are planning to cooperate, for the most part, for a fee. If one of the companies indeed has this information, it is worth it for you to pay for it, since it will likely save you considerable anguish – and even more – a substantial sum of money.

When these companies do not have the information you require about the supplier you selected, they can perform a reliability check of the supplier for you. Again, this also involves a fee, but this is an important and wise expense that will save you money and considerable bother.

How do you negotiate with Chinese suppliers?

Congratulations! You found a reliable supplier that you can use to inexpensively import the product that you want, but the difficulties do not end here. One of the most important issues when working with suppliers, in Israel and abroad, Americans and Chinese, is the communications between you and the supplier.

It is very important that you have good and full communications with the supplier that you selected. Good communications are critical for coordinating expectations and for preventing misunderstandings about the quality of the shipment, the shipment arrival times and all of the other terms that were defined.

The enormous cultural differences between Israelis and Chinese are liable to cause communications problems between the you and the supplier, which could adversely affect your negotiations and subsequent stages. It is highly recommended that you find a supplier who speaks English, who has broad professional knowledge and is familiar with the professional terms that are relevant to the product that you are importing.

Conducting negotiations with a Chinese supplier can be very complicated. During the negotiations, you will need to reach agreements on the quantity of products being ordered, the price, the supply time and additional details. It is important to not open the negotiations in a manner that is too direct, as many Israelis tend to do, but rather, you should begin with small talk and postpone the negotiations to a later stage, after you are better acquainted with the supplier and with his factory.

For Chinese suppliers, the decorum during the negotiations is extremely important, and sometimes, it is more important to them than agreeing on the final transaction price. Therefore, you must be respectful towards a Chinese supplier and be very meticulous about proper etiquette: you should introduce yourself in a dignified and serious manner, preferably by presenting your business card and additional marketing materials. Furthermore, Chinese suppliers are averse to bargaining, and when they say “no,” this is an absolute “no” and there is no point to arguing. It is important to keep in mind that a reliable Chinese supplier is in enormous demand and has no problem replacing you swiftly with another customer; therefore, your bargaining power is low, and it is reasonable to assume that you will not succeed in significantly lowering the price.

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