Ready for a quick test of your Amazon product development and logistics know-how?
Your best friend, who lives in Australia and dabbles in selling through Amazon FBA, messages you about his brainstorm for his next product. His 4-year-old daughter had been gabbing in excitement about the upcoming Barbie movie, and, in a flash of inspiration, he knew what his next product would be: a ride-on toy for young children modeled after Barbie’s car. Your friend already called manufacturers in China and checked with freight forwarders about delivery rates to Amazon FBA centers. All the numbers and timelines checked out, and he’s sure this is going to be a huge success.
How can getting this product to an Amazon fulfillment center go wrong? Let us count the ways.
Problems That Could Stop a Product at the US Border
The US Customs and Border Protection doesn’t play games. In 2022, they seized over $62 million in imports that didn’t meet their safety regulations, and $2.9 billion in imports that violated intellectual property regulations.
A wide range of imported products are subject to safety regulations in the USA, including consumer electronics, toys and children’s products, household appliances, sporting goods and many other product categories. In addition, products containing materials with potential hazards have their own safety regulations and restrictions.
The first thing you need to consider when product sourcing is: which PGA (partner government agency) will be regulating it, and what are their standards and regulations regarding imports? In this specific case, the primary PGA involved would be the CPSC (Consumer Product Safety Commission), which deals with issues of product safety, but if your product involves food, animals, plants, textiles or restricted substances, more agencies will enter the picture.
Your friend’s Barbie-car-inspired ride-on toy is intended to be used by children under 5, making it subject to a whole host of regulations and requirements for materials sourcing, testing and certification.
Relevant regulations include (but are definitely not limited to!):
- conformance to the ASTM F963 standard for toys
- use of materials that do not contain certain plastics (or certain concentrations of specific plastics)
- initial product testing by a CPSC-accepted laboratory who can issue a Children’s Product Certificate
- conducting periodic testing to ensure continued compliance
- affixing a tracking label to the product, including details such as manufacturer, date and location of production, batch number and other identifying characteristics
If anything goes wrong (like for one seller we knew who tested her children’s card game product and found that the Chinese manufacturer had used a toxic (!) coating), your whole pile of manufactured goods is useless.
Intellectual property regulations
If a product uses brand names, logos, designs, or distinctive features without proper authorization from the trademark owner, it may be infringing on IPR (intellectual property regulations). Goods with this problem will likely be seized at the border and possibly destroyed.
If your friend’s Barbie-inspired car is directly or obviously associated with Barbie (and that was the whole point, right?), then it will need proper authorization for use, or the shipment will be seized by customs.
Missing importer documentation
If you’re not an American citizen[REU1] , or operate as a U.S. company, you need to have an official, recognized representative for your imported goods. This entity or individual is known as an Importer of Record (IOR) and is legally accountable for accurate documentation, payment of duties and taxes and adherence to import requirements.
Your Australian friend will need a legal, reliable Importer of Record for his ride-on toys, or his shipment is likely to be rejected at the border for lack of complete and appropriate documentation.
Why do these things happen?
A major cause of these problems, as we’ve observed from long experience as freight forwarders for Amazon FBA (we’ve been shipping there since FBA launched!), is that sellers don’t have a holistic picture of their Amazon product development and supply chain process.
The typical seller views each step in the process – product design, materials sourcing, manufacturing, regulatory compliance, inventory management, shipping – as an independent, almost self-contained entity. Of course, the seller needs help for each step, so they enter transactional relationships with manufacturers, freight forwarders for Amazon, customs brokers, and similar professionals to perform the tasks related to their particular step.
But there is no holistic overview of the supply chain. No advance planning that considers how all the pieces connect to each other – and how to best connect them in order to achieve optimal results, avoid problems and increase profits.
That’s a shame… and it could lose you the game.
Don’t go at it alone
How can you give yourself the best opportunity for success as an Amazon FBA seller?
Get yourself a partner in holistic Amazon supply chain planning from the outset!
We do this for so many of our Amazon FBA sellers. A potential customer contacts us, expecting a traditional freight-forwarding transactional relationship: here’s what I’m shipping and where I’m shipping it to; give me a price and get to work. But then we take a good, hard look at their production and supply chain – and start making suggestions that can streamline their product sourcing, manufacturing, and logistics, minimize risk and increase their overall profit. This Amazon product development consulting is one of the most satisfying parts of our business!
Streamlining Regulatory Compliance
When you start with a comprehensive understanding of the regulatory requirements for the product niche you’re considering, even before you take any concrete production steps, you will often save yourself untold heartache and waste of resources.
A partner who has a holistic picture of the regulatory landscape can positively influence your:
- Product materials sourcing
- Certification process
- Packaging and labeling
- Compliance with PGA-specific requirements
This proactive approach mitigates the risk of rejections, delays, or penalties during customs clearance.
Optimizing Supply Chain for Profits
If you make a chain from taking a bunch of disconnected, pre-built elements and linking them together only where they absolutely need to touch, you are going to get an ugly, clunky result.
The same goes for your Amazon product development logistics. However, when your Amazon product sourcing process is strategically aligned with your supply chain management and freight forwarding, logistic magic can happen. A logistics partner who possesses and can grant you a birds’ eye-view of the what, when, and how of your entire supply chain can enable you to:
- avoid stockouts
- optimize shipping costs
- reduce excess inventory – for materials and for the finished product, both in its country of origin and its destination
All of those elements can have a direct impact on profit. If, for example, your entrepreneur friend was able to design his ride-on toy from the outset for efficient shipping (taking dimensions, mass and volumetric weight into account), that could significantly increase his profit margin.
If you want to succeed…plan, plan ahead.
It would be a shame to have to go the “if at first you don’t succeed – try, try again” route if you don’t absolutely need to.
Invest a little time at the outset of your Amazon product sourcing journey. Develop a relationship with a partner who has expertise in Amazon product development consulting. Put together a plan that aligns all aspects of your product development logistics, from sourcing to supply chain to freight forwarding.
Now you’re ready. You have an integrated plan; you have an expert partner; you’re all set for a smooth, streamlined path to market.
Dominate Amazon FBA – with the right logistics partner.