Amazon Seller Resources – Demystifying the Supply Chain Post Webinar Q&A

By Nicola Malaney | Amazon

Mar 02

Although we tried our hardest to squeeze in every last bit of logistic-y goodness into our webinar, there were certainly some topics we couldn’t cover in the time we had, so we’re following up here to address those issues we missed!

1. What differentiates Shapiro from other freight forwarders/brokers?

Let me count the ways! To start, we’ve been involved with Amazon for many years and still handle some of Amazon’s direct imports. Amazon relied on Shapiro to handle their Fulfillment By Amazon (FBA) program when it was first created and for a long time, we were the exclusive broker for FBA imports. However, as the program scaled, one company could not possibly handle the powerhouse of FBA freight volume. Starting at the forefront of this program, we have been able to get a unique perspective into FBA Seller needs as well as Amazon’s stringent requirements creating a streamlined solution for shipping e-Commerce Sellers either directly into FBA, or other fulfillment programs. We understand that our clients are logistics specialists, which is why we take the time to provide a hands-on and educational approach to international shipping. Our team eats, sleeps and breathes fulfillment and we’re dedicated to helping you grow your e- commerce business by helping avoid some of the pitfalls we’ve seen throughout the years. At Shapiro, you will find a real-live person at the end of the line and a team that wants to see your business GROW. We can’t and don’t try to hide our quirky personality that makes up our corporate culture; but we can guarantee it’s unlike any other business in our industry!

2. How do I determine whether to have the manufacturer ship to the port, or have my importer pick up at the factory?

Is there a way to expedite that decision making process? This has everything to do with your incoterms or as they are more commonly known, your terms of sale. When you negotiate pricing with your manufacturer, you’ll do so based on these terms. Shapiro’s Incoterms 2010 Downloadable Resource breaks out the costs the Seller and Buyer are responsible for. The main difference is choice; Ex Works (EXW) terms imply the buyer (you) will select your own truckers, carriers, brokers, and insurance to handle a shipment from the time it loads onto the container while Delivered Duty Paid (DDP) means the manufacturer will include the price all the way through delivery and select all providers along the way. While DDP sounds like an inviting option, consider that you are electing to allow the manufacturer to procure and price these services without providing an itemized breakdown. This could mean extra costs added to your bottom line.

3. How can a Chinese supplier ship products to FBA warehouse?

Just like anyone else, really! A non-U.S. resident follows just about the same steps as a U.S. resident for importing. Shapiro can set you up with a Customs bond, an Importer number, and once you’re set up on Seller Central, we can quote to move the freight from the warehouse in China directly to Amazon (including any palletizing that needs to be done prior to delivery). We have a wonderful partner in China who helps to arrange the export and a dedicated team here in the U.S. to keep you updated along the way. Our free cargo tracking tool, Shapiro 360°, allows sellers from around the world to see the real-time updates to their shipment, regardless of their time-zone.

4. Does shopping around to different freight forwarders really make much difference on a few boxes being shipped by sea?

In general, you’ll find that most forwarders are priced similarly but there is certainly something to be said for ‘getting what you paid for.’ If you find a dirt cheap rate, expect dirt cheap service. However, if you’re new to shipping and are not a fan of hidden charges, you would certainly find it worth spending a bit extra to hire a quality forwarder and broker that not only has 100 years of dedicated industry experience, but are compliant, reliable and proactive! When comparing rates it is always important to check that you’re comparing apples to apples and that you know what costs might not be included. Shapiro makes every effort to quote you on all costs. Of course, we’re not fortune-tellers so we can’t predict the likelihood of a Customs exams, but we always strive to provide transparency and comprehensive pricing.

5. Can you go through a real life example and show the costs – it would help us to estimate shipping by sea basic costs and how much we can save versus courier?

For a great real life example, we recommend checking out Patrick Muir’s journey in the Seller Lab’s $25K Challenge. Shipping costs greatly differ depending on key variables like commodity, shipment size, and origin/destination location. Unless you duplicate your shipments, you will find that no two shipping quotes are the same. Consider freight market fluctuations throughout the year. When demand is high during peak seasons, usually around the fall before the holidays as well as Chinese New Year, rates also increase. Generally, we recommend using a courier if your shipment is below 150kg or 1 cubic meter in volume. Shapiro’s FBA team is happy to provide you with a quote for comparison, simply Contact Us!

6. Does the 2500 maximum commercial value for air freight courier clearance exclude the cost of air freight itself? So can I have $2500 value of product or do I need to deduct air freight cost?

When you are determining whether or not your goods can be cleared by a courier service, you only have to consider the commercial value of the goods, the cost you paid for them. You should not include airfreight in this calculation. In addition, not all commodities fall under this threshold; textiles will require a formal Customs entry if they are valued at over $200 as well as goods that are subject to regulation by agencies such as the FDA and USDA.

7. Sometimes I do not have enough products to fill a full container. How can I bring stuff into U.S.?

Filling a container is certainly a popular notion among sellers trying to keep their cost per unit down but there are certainly alternative options you’re not quite there yet! Less-than-Container Load (LCL) shipping allows multiple importers to share the costs of shipping a container to the U.S. The price you pay will be based upon how much room your freight is taking up in the container. LCL shipping is a good way to get started, especially if you don’t have tight deadlines. When the container arrives in the U.S., it will be drayed from the port to a container freight station (CFS). At the CFS, the freight is deconsolidated and clears Customs. As you’re sharing a container, you may be at a higher risk for a Customs exam due to the varied contents. Perhaps the company you’re sharing a container with didn’t hire a very good forwarder and their Importer Security Filing (ISF) was not sent to Customs prior to the freight departing China. That’s a red flag to U.S. CBP and they may want to examine the container before they allow the goods to be released. When this happens, everyone with freight in that container will bear the cost. Check out our Shap Blog: Examining the Issue, A Behind the Scenes Look at Customs Inspections for background on some common Customs exams. Overall, LCL shipping can be a very good way of bringing a small amount of freight in by sea, but it’s important to know that there may be some delays associated with this method of shipping. Of course, you can always ship a very small amount using an express courier, or by regular airfreight.

8. I have problems figuring out taxes and duties before the product arrives overseas. Can you help?

Absolutely! We have a staff full of licensed Customs brokers and so we’re happy to take a look at your product and let you know your duty rate along with any other commodity-specific regulations that may apply. We know that duty rates are just as important as shipping costs, so we’re happy to help. You don’t want to get all of your ducks in a row only to find out the product you chose is subject to very high Anti-Dumping Duties (ADD). For example, with the popularity of adult coloring books, colored pencils are a hot commodity at the moment. The trouble is, colored pencils from China can be subject to ADD because U.S. Customs has found that this particular commodity is being produced and dumped below fair market value. They impose a higher duty rate on these articles to even the playing field for domestic producers. It’s not a nice surprise to find out your goods will be taxed at 114% so we recommend doing your research!

9. How do we prevent our suppliers from sending directly to Amazon?

This is a great question. Of course everyone hopes that their supplier can be trusted not to cut them out of the process and in most cases, this is true. However, we can arrange for documentation known as a blind bill of lading that will prevent the supplier from seeing the ultimate destination. There is a small charge for this as it requires additional paperwork, and there is never a 100% guarantee, but it’s generally the best solution for shipping direct to FBA if you’re concerned about confidentiality. Another workaround would be to ship to a 3rd party warehouse and then send the product to Amazon.

10. Is it possible to pay a higher rate for air freight to get a faster shipping time?

Yes, in most cases we can offer fast and slow options, however there are some routes where there may only be one option. Keep in mind you’ll want to ask for expedited trucking rates as well. If you’re looking for lower cost options, slower services will generally be indirect, which means the freight is laying over in another city. The chance for delays in this type of routing scenario is higher.

11. How do you know if your supplier’s factory complies with US product regulations, specifically for toys?

Most toys are regulated by the Consumer Product Safety Commission (CPSC) so you’ll need to contact that agency directly to understand what they will be looking for in your particular product. It is then up to your supplier to comply with those requirements and provide any certification the CPSC may inspect. The same goes for other government agencies; you need to check with them for current regulations and then communicate this to your supplier. We suggest asking for a sample before placing an order.

12. I’d like to know more about how to get FBA going in international marketplaces?

Without knowing which marketplaces are being referred to, I can say that we offer freight forwarding and clearance services in the U.S., Canada, the U.K., most of continental Europe and most recently, Japan. Most of what you heard today applies to these regions as well, however import requirements will be specific to the country of destination so I encourage you to reach out to us and we can help to point you in the right direction.

As an example, Japan will require the importer of record to be located in Japan, unlike the U.S., U.K. and Canada. If you don’t have a relationship with a company in Japan (such as a trading company), it may be difficult for you to enter this marketplace. Shapiro has some resources that may help you!

13. I’d like to understand Amazon’s requirements for importing a full container load directly to an FBA warehouse. Can you help?

For full containers, you have a few options. In our opinion, the least risky option is to have the supplier palletize your goods to Amazons specifications prior to loading the container. This will expedite delivery and, if palletized properly, minimize the risk of rejection. We do understand that many suppliers are unable to provide this service but if you’re able to do this, it is the best choice. To utilize the most out of the space in your container, you can ship loose boxes and have the goods trans-loaded, palletized and delivered to Amazon as a full truck load here in the U.S. Generally for a 40’ container, this will require 2 trucks. Lastly, you can ship your goods as floor-load, meaning no pallets, but directly in the ocean container. Amazon has specific requirements for how the goods must be prepared inside the container available on their website. If you’re confident that these rules can be followed, and you’re understanding of possible additional costs such as container per diem and driver detention, this is another way to ship in bulk.

Still have questions? Please feel free to reach out to us at FBAAdvantage@shapiro.com and we’ll be happy to help. 

About the Author

Nicola is the FBA manager at Shapiro. She helps businesses import their products into Amazon FBA from overseas.