With the ongoing China-US trade war and uncertainty surrounding it, many Amazon and eCommerce private label sellers are looking to India to source products.
While sourcing from India is a great opportunity, there are certain things Amazon sellers must be aware of.
Small and midsize factories dominate
While China manufactures at scale, in India most factories are small and midsize. The government too favours SMEs and the country’s regulations are designed to protect them.
There are also many large enterprises, and these are mostly in industries such as apparel, textiles, chemicals, pharmaceuticals, machinery, electronic components, auto & parts.
For most products relevant for private label Amazon sellers, the manufacturers would be smaller factories. Many factories are family-run businesses so don’t be surprised to see two generations attend a meeting with you if you visit their factory.
Small orders are accepted
Since they are smaller companies, and a lot of the products are hand-made, suppliers are usually willing to cater to small orders, sometimes as low as 20 pieces. They may charge a slightly higher price for smaller orders.
This is definitely a huge advantage for Amazon sellers, especially if you’re just starting out with a small budget or if you are an experienced seller and want to test a new product line.
You’ll find unique products
There are specific product categories that are ideal to source from India.
India manufacturers put in significant effort into design development, and offer unique and innovative product designs.
Many products are handcrafted, and are not as price-sensitive as mass-produced products.
Aaron Hughes from Bright Hope Imports says, “I sell a product that most men use and my price is more than double of some Chinese competitors selling a similar style product. Sure, I am not a best seller but I am actually making money and not being targeted by listing poachers.”
He adds that buyers on Amazon don’t always want the lowest price when it comes to handcrafted items and this is where India comes into play. “3rd party sellers can still make the margins we need to create a viable business. It also helps us build a brand and not just be a 1-hit wonder product.”
A US-based sourcing agency with offices in India, Bright Hope helps sellers who want to source from India with sampling, price negotiation, and quality control checks. They have US reps who speak the local language, and who understand the culture and quality standards foreign buyers have.
Here are a few key categories Amazon sellers can source from India:
Home décor and home products (metal, wood, ceramic, cotton, jute):
- Houseware, tableware, kitchenware
- Lawn and garden ornaments & accessories
- Lamps and lighting
- Home furnishings and made-ups
- Carpets, rugs & floorings
- Jewelry and accessories
- Precious gemstones
Textiles & apparel:
- Garments (cotton products – knitted and woven)
- Cushion covers
Gifts & stationery:
- Christmas & festive décor
- Candles, incense sticks, potpourri and aromatics
- Decorative gifts (including corporate gifts)
- Stationery and paper including handmade paper
- Cane, bamboo fiber, natural & eco-friendly products
The more adventurous can also consider food items such as tea and spices.
Learn how to find unique products from India at the upcoming Global Sources Summit
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Your IP is safe(er)
One of the main areas of contention in the trade war between the US and China is IP protection. But when you source from India, you won’t have to worry about your supplier copying your designs and selling them to other buyers.
In general, Indian suppliers have more respect for their buyers’ IP than typical Chinese suppliers. That doesn’t mean your IP will never ever be compromised, but it’s much less likely to happen in India than in China.
In the unlikely situation that your supplier does infringe your IP, and if you do have a strong contract in place, it is easier to take the supplier to court as legal proceedings in India are in English and the legal system is similar to other common law countries such as the US.
Nothing is lost in translation
English is the second official language in India, and most people you will deal with at your supplier will speak English, some of course more fluent than others.
As there are 22 languages in India, each with its unique script, English is the language that unites the country! Generally, most Indians speak two languages – their own state’s language and English.
This is extremely advantageous when it comes to communicating with your supplier, especially when you are developing or modifying a product to private label.
In addition, you don’t need translators when visiting a trade show in India or talking to suppliers online.
Suppliers don’t have updated websites
Most Indian suppliers don’t maintain updated online catalogs of their products and many don’t even have their own websites because they are afraid their designs will be copied by other suppliers.
They prefer sending their newest designs to buyers directly by email or exhibiting them at trade shows. In fact, suppliers are very protective of their designs and discourage videography and photography at trade shows.
You can find suppliers on third-party sourcing websites such as India Mart and GlobalSources.com, at the Global Sources trade shows in Hong Kong or at the IHGF Delhi Fair in India.
Meet suppliers from India at the Fashion trade show co-located with Global Sources Summit
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Expect longer delivery lead times
As a lot of the products are handcrafted, production times can linger longer than expected, says Aaron. Plus, monsoon season complicates things as well as the multitude of Indian festivals, he adds.
In addition, India lacks developed Infrastructure like China’s. Roads are not as well developed and maintained as they are in China, customs and shipping are not as efficient and streamlined, and red tape can slow things down.
As an importer, you need to monitor your delivery times more closely. Unforeseen delays can happen so it’s always better to build in some buffer in your delivery times.
Sameeksha Sachdeva, Founder & President of Seair Global says it all comes down planning, planning and planning. “You need the right freight forwarder who gives cut offs to the factories, monitors the documentation, and hands over the freight on time.”
Seair Global is one of the few freight forwarders in India who understand Amazon FBA requirements. The company is able to source from multiple factories in India, break freight and mix different POs for different Amazon DCs (distribution centers) in the US. They also label pallets for FBA, and coordinate with FBA truckers for direct delivery from port to the DC.
Production hubs specialize in specific materials
Similar to China, there are production centers for specific products in India. But while Chinese cities tend to specialize in certain product categories, Indian cities specialize in materials and offer products across different categories in those materials.
Moradabad is a city that focuses on the manufacture of all types of metal products — from home and garden décor, to hardware to cutlery.
Similarly, Saharanpur has wooden products suppliers that make anything from gift boxes to furniture.
Khurja is a city that focus on ceramic products, and Kanpur suppliers offer genuine leather products.
When sourcing from India, take the time to develop a relationship with your supplier. Similar to China, it is common for suppliers in India to take their clients out for meals or arrange trips to visit tourist locations such as Taj Mahal.
The Indian way of life is a bit slower and relaxed. As family and professional lives are not rigidly separated, you may get questions about your family, and may ask similar questions in return.
Building relationships with suppliers is advantageous as it allows buyers to get better pricing and payment terms in the long run for repeat orders.
Hierarchy is important
Decisions are usually made at the highest level and hierarchy is important in Indian business culture. At smaller companies, decisions are typically made by the owner of the company or if it’s a larger company, by top managers, if they have been given the authority.
Day-to-day communications might become slower if your contact person needs to get authorization for various actions.
When meeting someone face to face, introductions occur according to rank. Talk to the senior most person first, and seniority is determined by the person’s position within the company or their age.
Major trade show for Amazon sellers
The most relevant exhibition for Amazon sellers to attend is the IHGF Delhi Fair that showcases gifts and handicrafts.
This fair has been held biannually since 1994 (Spring & Autumn edition) and is organized by Export Promotion Council for Handicrafts. The Spring 2019 edition featured close to 3,000 exhibitors spread over 197,000 square meters.
Learn how to source from India AND meet India suppliers when you attend Global Sources Summit
Use the code SS100 for US$100 off