Shipping Private Label Products from China: My Nightmare Story

Man facing tsunami

This post is by Danny McMillan, a private label seller and international speaker on selling through the Amazon marketplace. Danny is a music industry survivor and serial start-up entrepreneur, focusing on Amazon FBA for the last two years. As a public speaker, he has appeared at events including the Smart China Sourcing Summit, Private Label World Summit and the European Private Label Summit. He can be found at DannyMcMillan.com.

I’ve been private labeling for a couple of years now: sourcing products from China, creating a brand and selling them through Amazon FBA. I haven’t nailed it by any stretch of the imagination, but I’ve been through the sea-shipping process six times, gained some amazing experiences and learned a lot of lessons along the way.

Back in May I wrote about my first visit to China and the Canton Fair. Trade shows are a fantastic way to scout for new products and meet suppliers face-to-face. Not long after, I decided to embark on a new product launch with my supplier. I worked through product selection, branding and manufacturing without too much trouble. One task remained: shipping the finished products over from China in time for Christmas. It’s just moving something from A to B. Should be simple, right?

Wrong. It turned out to be the most difficult and unpredictable experience of my private labeling career so far. Murphy’s law tells us that everything that can go wrong will go wrong. And it did. I was asked for paperwork that I hadn’t needed before. As soon as I had jumped through that hoop, I was asked for more documents. That happened again and again. Then the payment to my supplier went through early, before the products had even been inspected. After that, we had hazardous material issues with the shipment. Then the boxes were damaged on the way to the port in China. Any one of those problems would be enough to lose sleep over.

But Murphy’s law was wrong. Not only did everything that could go wrong go wrong, things that can’t go wrong went wrong too. My shipment ended up slap-bang in the middle of the biggest economic disaster to hit the freight industry in the last 100 years: the bankruptcy of the world’s seventh-largest shipping company. It was completely unprecedented, and nobody had a clue what was going on. Would my products ever see the light of day?

So here it is: my nightmare story of getting one shipment over from China. I’ll be candid about what happened, and tell you everything I learned. I hope it helps you avoid the same problems.

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The EIN

I feel I have a reasonable handle on the freight industry, it’s workarounds and how it operates to get my products from the supplier at point A to the customer at point B. I had in the past been using two reliable shipping companies with very few problems. However, in a drive for efficiency, I decided to consolidate my shipping and move it all to one company. With one shipping company everything should be simpler. It wasn’t “broke” but I was determined to do some fine-tuning and make it better. That was the idea anyway.

This shipment would be coming from China to both the US and the UK, with the larger part going to the USA. After doing a bit of research on shipping costs, I got a quote from a US company. It was a lot more expensive than my existing UK-based shipper. This was primarily because they were geared more to the US market, and not really setup for smaller consignments less than a container load (LCL).

I gave the US company an example of the UK quotes I’d had in the past, and they reduced the cost substantially. A good lesson to bear in mind when dealing with shipping companies is that they are prepared to negotiate. I was making progress, so agreed the quote and got started plowing through the paperwork.

Piles of paperwork

One of the first communications I had from my new shippers was to ask for an EIN (Employer Identification Number – the standard business ID number in the US). I revealed that I didn’t have one, and that my previous freight forwarder took care of it for an admin fee. I assumed that I would be able to use my new shipper’s EIN too, but they said that was against company policy. The EIN is needed for US Customs’ paperwork, so there’s no getting around it. If they wouldn’t let me use theirs I’d have to figure out an alternative.

So I went back to my old freight company with my tail between my legs, asking to borrow their EIN. I was still using them for FBA prep and we had a good relationship – that made it a lot easier to ask for a favor. I crossed my fingers and waited for a response.

The reply came quickly, but it was not what I hoped for. They said that borrowing their EIN would look a little suspicious to US Customs. The company would not be the authorized carrier for the shipment, so the EIN wouldn’t match. It might look like they were trying to hide something, and that could encourage customs to investigate the delivery and cause delays or even legal problems.

They suggested a solution: use my new company to organize shipping, but my old company to clear customs. The old company would be the “consignee” responsible for receiving the shipment, and all the paperwork would have to be changed to show their EIN. My new shipping company agreed with this arrangement, and said they would deduct the customs fee from their quote. At least I wouldn’t be paying that twice!

I only started down this road to simplify things, but here it was getting complicated again. I was also more involved in the process and drowning in paperwork. Exactly the opposite of what I intended. Still, you’ve got to expect a few hitches when you change your process, so I pushed on.

The Bond

As soon as the EIN was dealt with, my new shipping company insisted that I needed a “bond”. My previous company had sorted this out for me in the past, so it hadn’t been an issue.

The bond is essentially a guarantee that all duties, taxes and fees owed to the US federal government will be paid. It enables the shipping company to guarantee the delivery, shows there is a contract in place, and demonstrates that the rules of shipping will be followed. It’s possible to buy a continuous bond for a year, or one for each shipment. If you import more than twice a year it’s usually more economical to buy a continuous bond, so that would make sense for me.

A continuous bond ranges from between $250 and $500 for a year, and I got a quote at the bottom end of that range: $250. Across my previous six shipments I probably paid out around $700 to my freight forwarder in admin fees, so it looked like a good deal and I agreed with the new shipping company to buy a continuous bond.

It was another headache to deal with, but at least I was saving money.

The Importer of Record

Now it started to get a little ridiculous. I was told that the bond and EIN were insufficient and I also needed an “importer of record”. I suggested that they had authority to act on my behalf, but again they said it was against company policy.

The importer of record is the company responsible for ensuring that goods are imported in accordance with the law. They are responsible for filing the documents, and paying import duties and other taxes. Again, this was something my previous shipper handled for me. There’s no doubt that it’s needed, but it had never been my problem before.

My frustration was growing by the second, so I threw the ball back in their court. If they couldn’t act as the importer of record then I couldn’t ship my goods. It was a showstopper, but there was nothing they would do to help. After a few fraught calls, my old shipping company came to the rescue once again .

The Power of Attorney

With all that behind me, I felt happy that I was making progress. To stay ahead of the game, I finished compiling the documentation and arranging witnesses for a Power of Attorney (POA). The POA allows the shipping company to act on your behalf to handle customs and any other legal matters that come up along the way. It also includes a statement describing exactly what the shipment contains, so it has to be 100% accurate.

The Power of Attorney is one piece of paperwork that I did expect. No shipping company will accept your goods without a POA form, and your shipment will be delayed if you don’t have it properly authorized. It’s a bit of a headache to get it in order, but not a big deal after you’ve done it once – it’s just admin.

My products would be coming into the Port of Los Angeles. It’s an absolute monster of a port, the biggest in the USA in conjunction with the Port of Long Beach right next to it. It occupies 7,500 acres of land along 43 miles of waterfront and employs nearly a million people in LA alone, even more worldwide. Ports aren’t just somewhere to park big ships, they’re enormous and really complex organizations in their own right.

The Port of Los Angeles
The Port of Los Angeles

My deadline for shipment from China was the 24th of August. It would take about three to four weeks for the container ship to reach the Port of LA. Time was really of the essence and any more delays would be a major setback to getting my inventory into Amazon FBA for the crucial holiday shopping season.

I was satisfied that I had done everything I could, so I contacted my new shipping company to get the shipment started. They informed me, almost in passing, that I couldn’t buy a bond through them because I was using another company to clear customs. So I couldn’t save money with a continuous bond after all, but they did need proof that I had a bond in place.

So there I was, with the time in the UK past 11pm, trying to reach my old freight forwarder again. I didn’t even know if it would be possible for me to arrange the bond through them, or whether it could be done in the next few hours. The shipment was ready for collection from the factory the next working day, and as China is eight hours ahead of the UK it was already 7am there. My shipping company were on the West Coast of the USA, eight hours behind UK time. It was 3pm there, nearing the end of their working day. I was in a real bind.

With little or no time to sort this out, I soon discovered there were other issues to contend with.

The Payment

Right at this time our quality control company was finishing off an in-depth three-day inspection. With time being so tight, I wanted to make sure our payment to the supplier would be released as soon as the inspection was finished (all being well). The last thing I needed was the factory hanging onto our products for a few more days because they hadn’t been paid.

I spoke to my account manager at the currency company I use, and explained that we needed payment to be sent only once the inspection reports were returned and checked, and I had given the go-ahead. With that cleared away, I transferred the balance for them to hold on account until we were ready. I was ahead of the game for a change, so I moved on to other tasks.

All leverage with the supplier would be lost and I would be at their mercy if there were any problems.

The next thing I know, to my horror, is that the currency company has authorized payment. We didn’t have the inspection reports, so we’re completely in the dark about the state of the shipment. The payment was never held on account. In sending the funds to the currency company I had actually triggered an automatic payment to the supplier. Once the balance was over the line, all leverage with the supplier would be lost and I would be at their mercy if there were any problems.

I put a call through to the currency company and explained the situation. I learned that there would be a 48-hour delay before the payment got through to China, so there was a little time on our side. But I was left in the awkward position of having to pretend to the supplier that the balance had not been released. It wasn’t a pleasant position to be in. Feeling a very real race against the clock, I chased the inspection company for the reports so we could quickly request any changes that were needed.

Just in the nick of time we got the reports in, reviewed the positives and weighed up the negatives. The only stand-out was that the product was packaged in jars, and each carton had a set laid on their side. I could foresee a lot of issues with that increasing our defect rate during transportation, so we arranged delivery of new cartons that would allow all the units to be packed upright. It added a three-day delay getting the stock to port, but was worth it if it prevented some breakages. I was beginning to think that this order was jinxed. Everything was so close to the wire.

But there was one solitary ray of sunshine. The delay gave us enough time to arrange the bond with the old shipping company. I let a little optimism creep back in. Maybe things were starting to turn back my way?

The Damaged Cartons

The shipment had now left the factory, and all the past problems were history. The EIN, bonds, importer of record, payment and packaging issues all felt a little overblown now the physical products were on the move.

Just when I thought we were out of the woods, I got a WhatsApp message from our supplier, swiftly followed by an email. That’s never a good sign at this stage of the game. Our products had reached the warehouse at Shanghai port, and would be held there for a short time until the ship was ready for loading. But there was a problem: the warehouse staff had noticed about ten cartons were damaged when the goods were delivered. They were not in a fit state to be shipped.

Damaged cartons

I asked the supplier if they could send over one of their people to pack the goods into new cartons, but they couldn’t find anyone who would do it – even if we paid them.

As a workaround, the supplier contacted their carton factory and bought some extra boxes. The carton factory agreed to deliver them to the Shanghai warehouse and swap the broken cartons. Of course they knew nothing about our products, and they didn’t speak great English. This product had two different sizes, and the carton factory people were afraid of getting them mixed up, so they wouldn’t label the outside of the new cartons for us – usually a requirement for shipping. We were getting so close to the sailing date that we had no option but to agree to send them unlabeled. A report was filed at the port to explain the situation, then the cartons were re-palletized and booked into the system.

Broken cardboard boxes are one thing, but what about the products inside? What condition were they in? I found it quite impossible to write off ten damaged cartons (600 units) given there wasn’t so much as a scratch on them when they left the factory. The shipping company knew there was nothing I could do once the product is at sea, and no-one had even sent me photos of the defective cartons. We would only find out what damage had been done when the shipment reached our FBA prep company in LA. I sent an email to the supplier voicing my concerns.

I’ve seen a lot of private labelers treat their suppliers poorly and try to extract every last penny from them.

Now I am a big believer in building good relations, and treating people as you like to be treated yourself. I had built a wonderful relationship with the supplier, and that was about to pay dividends. I received a reply. The bad news was that there were still no pictures of the cartons to show the damage to the products inside. However, without any prompting from me, they said that they were responsible for the goods reaching the port safely, and would reimburse me accordingly.

They also hinted that the likely cause of the damage is that the cartons were unloaded two or three times before they were eventually sent to the warehouse in Shanghai. They assured me they would look for sturdier cartons in future, and pay greater attention to packing to ensure the goods remained intact when they reached their destination. There were always teething problems at the start of a new order, and a learning curve for them to try and improve the process. I have seen a lot of private labelers treat their suppliers poorly and try to extract every last penny from them, but at times like this relationships are a massive factor in resolving difficult issues.

At last we had everything ready at the port for both UK and US shipments. All that remained was to get the order to sea, through FBA prep and then into Amazon. I was on the homeward straight. Which was just as well, with the sailing date just a couple of days away. I didn’t know what we’d do if there were any more glitches.

The Hazardous Materials

I soon received another message. This time it said there was an issue with the shipment due to hazardous materials. It was held up yet again.

Hazmat is a terrifying term, covering materials that are radioactive, flammable, explosive, toxic or pathogenic. I had visions of people wearing bio-hazard suits and oxygen tanks, carefully loading our products into a furnace to protect the Chinese population from contamination. In reality, although our products look kind of “chemical”, they are biodegradable and about as toxic as table salt.

It turned out that because this type of material hadn’t been passed through this port by us before, we needed to go through “processing”. We had to make a series of calls and get clearance, because the shipping company had no prior experience in handling these materials either. Between the factory and freight forwarder the problem was mopped up over a couple of days. Right on the deadline, we were able to move forward.

The Hanjin Yantian, © Dave van Spronsen via ShipSpotting.com
The Hanjin Yantian, © Dave van Spronsen via ShipSpotting.com

Our shipment was finally packed into a container, and the container was loaded onto a ship named the Hanjin Yantian. Hanjin Shipping is the South Korean company that owns the ship, and they named it after a district called Yantian in Shenzhen, China.

It doesn’t have the romance of the African Queen or Jolly Roger, but the Hanjin Yantian is an impressive vessel: 300 meters long and around 80,000 tons in weight. It can carry 6,000 containers holding 90,000 tons of goods. It’s not the biggest container ship on the sea, but a monster all the same.

The global trade we have today would not exist without ships like these.

The Bankruptcy

You don’t expect to hear any news while your shipment is at sea, but seven days after the ship left port a message came through. Hanjin, one of the world’s top ten container carriers, had filed for bankruptcy in Seoul and requested that the court freeze its assets.

As I read on in horror, I felt a little reassured that my freight forwarder was working “closely with their entire network of carriers and partners to monitor and mitigate the impact”. But they acknowledged that the development would affect all their clients to some degree, and that this was “unchartered territory and no one in the industry knows what to expect.”

They weren’t kidding. Events unfolded quickly, and the failure of Hanjin became a major news story. It was the largest bankruptcy ever to happen in the container transport industry, causing worldwide disruption. Ships were being refused entry to ports, who were understandably concerned that their fees wouldn’t be paid. The ships’ crews were left with no choice but to set anchor a few miles offshore. They had no idea what would happen next, and their supplies were dwindling day-by-day.

With my ship still at sea, no-one could tell me what would happen when it reached the Port of LA. But it didn’t look good. The port has eight terminals, two of which had already stopped releasing Hanjin containers and two more which would stop the next day. There was no information on the other four terminals. Many other ports around the world were refusing to allow Hanjin ships to dock or unload freight.

This was beyond bad. The whole situation had descended into chaos.

One Hanjin vessel had been arrested in Singapore, and many other third parties were refusing to fulfill contracts with Hanjin in case they wouldn’t be paid. US rail terminals and railroads were also refusing to release Hanjin cargo, and truckers were refusing to accept Hanjin containers. This was beyond bad. The whole situation had descended into greater chaos than I could have ever imagined.

And what about my shipment? Concrete information was impossible to come by. If and when the Yantian would make it to port was completely up in the air. If it was allowed to dock – and that was a big “if” – there could be a lot of additional fees for unloading and transport. Yes, I had already paid for that, but the money that went to Hanjin was frozen in their accounts. Any additional costs would come back to me.

My shipment was due to dock on the 7th of September. All I could do was try to get a handle on what would happen, so I fired off an email to the shipping company. How long can a vessel sit out at sea? What would happen if it isn’t allowed to dock? If it does get to the dock, what would happen to my goods? If they were unloaded, where would they go and what would I have to do to get them released?

Over the next couple of weeks I was like a cat on a hot tin roof waiting for news. I kept seeing news on what was happening, and would send these to my account manager at the shipping company for feedback. It turned out that they didn’t have any more of a clue than I did. All they could say was that it was an unprecedented situation, everyone was angry, and no-one really knew how it would unravel.

Our FBA prep company was only 18 miles from the port. If the ship did make it to dock they could almost reach out and touch the products. It was so frustrating.

The Ship Gets Sent Home

All this time I’m glued to my shipping agent’s tracking page. It has all the shipment details, with a neat little world map and a dotted line showing the progress of the ship across the Pacific Ocean. I’m willing it to move every pixel of the way, like it’s a race horse I just bet my life savings on.

Finally I learn that the ship is anchored just outside LA and it sits there on the tracker for a few days. Then I look again and it’s heading off in the opposite direction. I also receive an email from the shipping agent with a news article saying that Hanjin ships are returning to Korea and shipments will have to be rearranged from scratch.

This was the worst outcome possible. Not only was it devastating for Q4 and the holiday shopping season, but some businesses and livelihoods will be wiped out overnight. So much cash is tied up in these goods stuck out at sea. No sales are being made, while interest payments and supplier invoices become due. The knock-on effect will be tremendous, and I pray I won’t be one of the victims.

Man facing tsunami

Then the magic happens… I get a message from my old shipping company, the one clearing customs for me, asking where my shipment is. My contact tells me he has been “unloading Hanjin shipments” over the last few days. I explained the situation and asked him to get someone down to the port, saying, “I don’t care what it costs, just find out what the heck is going on”.

A few hours later my contact phones me. Despite what the news and the tracker said, the ship wasn’t going in the opposite direction. Miraculously, it was docked, and my shipment had been in port for a couple of days. My current agent had no idea, but when I asked them to check they confirmed it. Just two days later my consignment was with the prep company in LA.

At the Prep Company

The FBA prep company in LA inspected the stock and it transpired there were no damages. Some units were missing, 17 in total, but that this was something I could live with. It could have been a whole lot worse, and the factory was happy to give credit for the missing units.

The cartons were in bad shape though, so all the units had to be re-boxed for delivery into Amazon via UPS. They arrived at Amazon, who quickly notified me that they had managed to damage 49 units. However, they took responsibility and offered a reimbursement. Ordinarily this would be frustrating, but compared to the Hanjin bankruptcy it didn’t seem like a big deal.

The number of problems with this shipment was now into double figures. That wasn’t the kind of record I was planning on breaking when I got into private labeling.

The Scratched Lids

Getting the US shipment into Amazon was a huge relief, but that wasn’t the end of the story. There was still the UK shipment to get through.

It cleared UK customs with no issues and the products were trucked from the Port of Felixstowe to our prep center. Then I got a call. The cartons were all falling apart. I had come to expect that by now, but there was more. When they looked inside, all the lids were scratched. That may not sound like a big deal, but Amazon – and even more importantly, Amazon’s customers – expect their products to look brand new. There was no way they could go into FBA like that.

Panic set in and I started making calls. The supplier said it would take a week to get new lids, and I would have to order a minimum quantity of 10,000 to bring the price down. How could this have happened anyway? Not only had I arranged a pre-shipment inspection, I paid extra for a higher percentage of goods to be checked. It was suggested that as the jars were stacked that the dividers rubbed and caused the markings. Maybe, I thought, but how come the US shipment wasn’t affected?

I bounced some ideas around with a group of Amazon powersellers I’m a member of.

I didn’t much like the idea of buying 10,000 new lids. There was the lead time, then I would have to get them inspected again, and air-freighted over. If there was another problem, like them not fitting properly, I’d be back to square one.

With that in mind, I bounced some ideas around with a group of Amazon powersellers I’m a member of. The solution we came up with was to put a sticker on top of the lid. I had a sticker designed for the 2 different variations, and paid the prep company to apply them. As they did that they found 60 damaged jars. We had included 35 spare jars in the shipment so could salvage just over half of them. The scratched lids problem had eaten away a few more days, but it solved the problem. Things could get moving again.

Right at that time I had a flight booked to Hong Kong. I had a speaking gig, and would be sourcing new products and talking with suppliers. We were also hosting two pop-up events. It wasn’t a trip I could miss and things finally seemed to be under control with the product launch, so I left feeling pretty confident.

Brand Registry

With all that was going on I had left it late to apply for Amazon’s Brand Registry on the new product, both in the UK and the US. I had uploaded a flat file with the initial product data, but without Brand Registry I was unable to edit the listing and had to contact support to request changes. I also had issues with the Browse Node I had selected. The Browse Node is basically the product category, but at a very fine-grained level. Amazon has over 120,000 Browse Nodes in the US alone, and selecting the wrong one had a knock-on effect on my PPC ads and traffic volume to the listing. Basically, I had zero visibility and zero sales.

Brand Registry is not a trivial thing to apply for. Amazon want to see evidence that you have a genuine brand-name product, and the best way to show that is to setup your own website showcasing it. Sitting in my hotel room in Hong Kong, I bought a domain and built a website for the product, then completed the application. I had been granted Brand Registry before, and followed exactly the same process this time around. I didn’t foresee any difficulty getting approved.

Over the course of the next seven days Amazon sent me one canned email response after another. They said I could not get Brand Registry because my packaging was unprofessional and there was no link between the product on Amazon and the website. I couldn’t see what the problem was, and Amazon were not budging.

Stubborn boy

The “poor packaging” claim had me completely stumped. I had spent a small fortune on product development and detailing including a professional photographer, location and model. The packaging design was done professionally too. I explained all this to Amazon, and even sent them a screen grab to demonstrate how much better the quality was compared to my competitors. It made no difference.

Then I bounced an idea around with a friend, of revising the website. I added the URLs for each product variation on Amazon US and UK, along with the UPC code and FNSKU (the Amazon FBA product identifier). This linked the products on the site to the products on Amazon in a completely unambiguous way. I resubmitted my Brand Registry applications and waited. 24 hours passed, then I got more canned rejections. That continued for the rest of my trip.

After seven days in Hong Kong I arrived back home, shattered from a packed schedule and jet-lagged from the flight. Not willing to give up, I reached out to a buddy in the US who used to work at Amazon. He and his partner negotiated internally on my behalf, and in less than 24 hours the gates opened and we were granted Brand Registry. We never found out what the problem really was.

Then I fixed the listing, selected the right Browse Node, and got the Sponsored Products Ads running. It started selling at last.

The FBA Labels

Back in Britain, I started getting back on top of my admin and checked my inventory reports. It turned out that Amazon in the UK had miscounted the product. One variation had 60 units too many, and the other variation had 60 units missing. It seemed like a simple problem and I wanted to raise a ticket right away, but there is a delay between the shipment being processed and the opportunity to reconcile. The goods were available to buy, but I had to wait until early November to raise the issue. In the meantime, I hoped the miscounted units wouldn’t cause any fulfillment problems.

While I was waiting I received a notification that I had 151 units of defective stock and needed to create a removal order to get them out of the FBA system. I was advised by a friend to email them back and politely ask for a recount. So that’s what I did. When their reply came, it surprised me. They did the recount, but it hadn’t cleared up the problem. They explained that it wasn’t the stock which was defective, but that my listings for the two variations were the wrong way around.

Alarm bells were now sounding. I went through my checklists, and traced the issue. We had somehow mis-transcribed the codes and applied the FNSKU labels to the wrong jars. It didn’t make any sense, but then I remembered something. After we had worked through the checklist which keeps everything accurate, we had the size of each label adjusted by a few millimeters. Instead of adjusting the file for each label separately, the designer might have made the change once and duplicated the file, but then updated the barcode in the wrong file.

It’s really easy to introduce a mistake through copy-and-paste. However it happened, the buck stops with me and it’s my responsibility. It’s a valuable lesson that something so small can have such a massive knock-on effect.

We put a mop-up plan in place. First, we looked at the units that had already been sold. Lots of people had bought a small jar and were wrongly sent a large one, so no complaints there! But other customers bought the large variation and received the small jar. We explained to them that it was a mix-up, issued refunds, and apologized profusely. We also contacted Amazon and notified them that the listing images, titles and sizing had been switched so they now matched the FNSKU. Thankfully we got a message back to say that this was acceptable and the “defective units” had been changed to sellable.

Going ahead with a removal order in a case like this can cost a business thousands of pounds. Thinking outside the box and being polite but determined in seeking answers can really pay dividends, and save you a ton of hassle.

A few days later 49 units were moved back to defective. I recorded a quick video explaining the previous issues, using a browser plugin that generates a URL you can paste in an email. Support teams love it and it takes a fraction of the time to explain that way. This time they came back saying they had “relabeled” the stock! Actually, they were just in the wrong bin in the warehouse. Remember the units that were out by 60 in different directions for the two variations? Yes, it was them.

Finally everything had been straightened out. Everything that could do wrong did go wrong, and then some.

Then a warning email came through. Amazon had a fire at their Rugeley fulfillment center near Birmingham. Some of my stock could be damaged, but I’d have to wait to find out for sure. Here we go again!

Lessons Learned

Incredibly, we have not lost money on this product. Not yet, anyway. But we have to decide whether to persevere or to lay it to rest. The whole process has not been for the faint of heart.

Most shipments will have “just one” of these kind of problems to contend with, maybe two if you are unlucky. But this shipment generated a lifetime’s worth. Each one is an opportunity to learn, and we’ve already put many new checks and balances into place. It’s also given me lots of ideas, and I feel like I’ve definitely earned a few more stripes.

The goal was to consolidate shipping but it completely blew back in our face. The Hanjin episode was unprecedented, but the rest could have been avoided. We were also trying to do too much in Q4, cutting it too fine to sell a new product with two variations, both in the US and UK. In hindsight we should have tested just one of those markets.

If we do continue with this product, for our next shipment we will use higher-quality cartons with reinforced corners internally, and air column packing slipped over each of the jars to reduce impact. It really makes sense to invest there, so when the products reach the prep centers they only need a visual inspection to find any damaged cartons.

We’ll revise the pre-shipment inspection for next time. We already increased the percentage of units to be inspected, but we’ll investigate further and see what changes can be made. The scratched lids really should have been picked up by the inspection.

Danny McMillan
Danny McMillan

Continuing on that point, we ran some tests with the lids and found they got marked pretty quickly, so we sourced a different material and are awaiting a sample delivery. Most people can go through their lives not giving a second thought to the type of plastic that lids are made from, but when it’s your business this is the level of detail you have to get into.

Next year we will diversify our product lines and start sourcing domestically in both the UK and US. While the costs will be higher, lead times and risk will be lower. We can order smaller volumes and turnover our inventory a lot faster. Amazon selling is a cash-flow business and you don’t want to tie up your funds for too long. A faster turnover means we can get in and out of SKU’s much quicker, making us more nimble.

So there you have it. They say every cloud has a silver lining. And when you have this many clouds, you get a lot of silver linings.

You can contact Danny through his site DannyMcMillan.com.

Credit: This post was written with Moira Magee and Andy Geldman.

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5 comments on “Shipping Private Label Products from China: My Nightmare Story

  1. Many thanks for sharing your experience. Not many people would share their experiences in this matter. You wrote thoroughly and was worth reading it. I will be starting my private label journey next year after researching into chinese manufacturers for the last 15 years!

    1. You are more than welcome!

      I am a big fan of sharing lessons learned. There are always two sides to a coin, sharing successes are motivating but you learn much more when your back is against the wall.

      Some of this was unprecedented and out of my hands, some was bad luck whilst others was down to me being sloppy. The great thing is we have put a load of processes in place now to avoid a lot of the issues morning forward. This was also an extreme case, most people have one or two issues per shipment – as you read we had a lot to contend with. Good news is, we were able to remedy a lot of it. It’s gave us lots of ideas for next year, of which we are preparing for now. Bring on 2017 😉

  2. Danny,

    Fair play for ploughing though it. I had one of the biggest challenges of my FBA career over the past few months as well, 4000 defective units.

    Still resolving the issue now…nearly there i hope. I think sourcing products in North America/Europe is essential. The cash-flow & risk factors compound the bigger the business grows.

    Anyway, well done for getting it all resolved…lot’s of lesson here we can take on board as well.

    Have a good christmas!

    Niall

  3. Danny my dear,

    We never thought you should face so many many problems in this time! You are so powerful, and taught us more than supposed!
    Thank you!

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