Import from Manufacturer in bulk and outsource fullfillment to Amazon

My gut is to say, "If it was as easy as it appears, Everyone would do it". Having dabbled in the "buy wholesale, sell retail" market for a short time, (Note: I handled my own fulfillment) I found out the following:

1. The reason the "wholesaler" was selling it so cheaply was because no one was buying it.
2. Quality on many items was substandard
3. Doc on many items were substandard and had to be re-written (if you want repeat customers)
4. Fulfillment costs (Packaging, insurance, Cost of processing payments) ate up most of the margin on the item.
5. In order to understand when something is a good deal, you really have to focus (lots of time) on a niche and understand what stuff is selling for at the retail level

You can also consider "drop-ship" companies to handle fulfillment instead of alibaba/amazon

Another risk with Amazon is that you are dependent on them to do your sales and marketing. If you have your own website and use another fulfillment house, like SBC Fulfillment, (shameless plug) then you have the opportunity to market your products yourself and take more control of your own destiny. I have worked with entrepreneurs that have moved their products from an Amazon store to their own Magento store and seen sales volumes increase. Granted they have had to work and driving that traffic, but total reliance on Amazon to sell and market your products is a risky proposition.

So you are basically the middle man, right? Middle men are easily dispensable so you may wanna keep that in mind.

Shipping stuff from overseas is also risky. You will need a very good insurance, and also figure out the method of payment, probably letter of credit (at least the first time).

Good luck!!

Okay, this is merely opinion based on doing a lot of online selling as a distributor in the last 3 years.

First off, I'm not sure Alibaba is the group of suppliers you want to be going with. I read up a little on them and not only are you the "middleman" (as Aurelio pointed out), but you will end up being only one of the middlemen, as from what i understand you will not be dealing directly with the manufacturers--you'll be dealing with one or two distributors that then deal with the manufacturers themselves. That's a whole lot skimming off the top by the time you make your sale to either an end user or to Amazon (who is probably going to want to pay you some bulk rate, not retail---if that's how they work, I've never dealt with Amazon).

I sell water filtration components that i buy directly from manufacturers for very low wholesale rates. I then have a conservative formula that i put into place that determines my "retail value" (which is generally anywhere from 10-15% below "List"--which according to my product pricing research, is average and fair). I then sell directly to the end user, and in order to keep those users coming back, they usually want a bit of a break on the pricing--especially if they are ordering a lot, or if i have to reorder for whatever reason (making them wait), or if they are paying via a method that won't penalize me too badly in fees (i.e. brick and mortar merchant account versus Paypal, etc.).

So at this point, prior to even finalizing a sale, my expected retail pricing is down at least 20%, because the average customer isn't going to consider anything less than 10% off a "break". THEN...if this sale gets finalized and transacted through one of the major e-commerce sites, You are looking at least having to pay out another 12% just for making the sale. I know eBay is 12%...and i have heard that Amazon is just as bad. In doing the math thus far, I've already lost 32% of my sale in various fees and discounts. So if i bought a water filter from a manufacturer for $10.00, the retail on that filter would be roughly double or less than, given the market value--so suppose my retail formula spits out that i need to sell it for $18.00. I then sell it to my customer with a discount of 10% for $16.20. Ebay/Amazon/Whoever takes at least 12% (and oh yeah, if Paypal is used then tack on another 3%). This leaves me really selling it for $16.20 - 15% = $13.77. So wow, I've made $3.77 on this one filter--and that's from buying it domestically here in the States, through the manufacturer directly. I'd be lucky if that covered my UPS shipping expenses from said manufacturer just to get it to my store.

Having said all that, i somehow doubt that your cost of product will be worth it when sourcing from China with international shipping, and from what i understand, several other people to also go through in the process. And as you have pointed out in your initial question...there is a lot of end user bias (at least here in the states) about the quality of products obtained from anywhere near that area of the world at the moment.

And 200-300% markup? I don't know...perhaps it's the field that i am in, but i have never seen anything sell successfully and consistently (online or otherwise) even at MSRP or List price (much less double that)--unless it was something either ridiculously in demand or some hard-to-find collectible of some sort. End users want DEALS, and distributors (which is what it kind of sounds like Amazon would be doing in your scenario) want a wholesale rate, which is a lot cheaper than a "deal".

I am not trying to discourage you, and wish you all the luck in the world. I guess i am just trying to share some of the pitfalls i have run into in hopes that you can avoid them :)

Bottom Line: Online sales are fine, but DO NOT get reliant on an e-commerce site for most of your sales, or before you know it you will be running yourself ragged and wondering why you cannot pay the bills in the end. In my case, i should have created my website and finished it before i started putting the majority of my catalog on ebay--as it now sits unfinished because i do not have the time to step away from ebay for very long in order to complete it and thus keep more of my own profit.

Kind regards, Ana

P.S. BRIAN, i would really like to speak with you, lol. Look me up--Water Supply House in FL, US.