Outsmart Tariffs and Maximize FBA Profits with Logistics Hacks

/
May 8, 2025
Share Post

Akbar Jessani brings over 20 years of hands-on experience in supply chain and logistics, previously working with global giants like Unilever before founding Universal Shipping. Today, Jessani is dedicated to guiding e-commerce and D2C sellers through all the red tape of international shipping and customs. In this episode, Akbar shares practical, insider strategies to help sellers tackle the recent tariff hikes without losing ground in the market. Read the full transcript below.

Episode 33 of The Seller’s Edge – Akbar and Jonathan talk about:

  • [00:00] Introduction to Recent Tariff Increases
  • [01:17] Common Mistakes Sellers Are Making
  • [03:32] The Response to Tariffs
  • [05:42] Moving Stock to Avoid Price Hikes
  • [07:44] Brands Battling for Market Share
  • [08:59] Innovative Approaches to Streamline Inventory
  • [11:28] How Universal Shipping Supports Sellers
  • [14:55] Understanding Access Codes for Shipments
  • [16:28] Mistakes Related to Customs & Import Regulations
  • [18:56] How Sellers Can Prepare for Trade Uncertainties
  • [24:26] Ways That AI Can Revolutionize Inventory
  • [25:17] Advice for Overwhelmed Sellers
  • [28:52] The 3 Things Sellers Should Focus On
  • [32:05] Sourcing Materials for Products
  • [36:47] Recap and Closing Remarks

Key Takeaways:

  1. Prioritize Market Share Over Short-Term Profits

Assess the marketing costs it took to secure your current position, then decide how much temporary margin reduction can be absorbed to maintain it, since regaining rank is usually far  more expensive.

  1. Break Down Your Cost Structure for Precision 

Break down your product costs into raw materials, labor, packaging, shipping, fulfillment, and other components. This detailed view helps identify tariff impact, avoid overreaction, and pinpoints targeted cost-reduction opportunities.

  1. Audit HS Codes and Customs Documentation

Have a customs expert to review your product classifications and documentation to identify potential savings and prevent customs delays. Many sellers use generic codes that result in higher tariff rates when exemptions or better classifications are available.

  1. Consider Assembly Restructuring

Evaluate if products can be imported as components and assembled domestically or in Mexico. Restructuring assembly can significantly reduce the declared value subject to tariffs while creating additional benefits like “Assembled in USA” marketing opportunities.

  1. Develop Multi-Country Sourcing Relationships

Identify 2-3 potential suppliers in countries like Vietnam, India, Indonesia, or Mexico capable of producing comparable-quality products. Having these in place provides flexibility during tariff changes and gives you leverage when negotiating terms.

  1. Implement Enterprise-Level Inventory Strategy

Develop a capital plan that allows you to maintain at least 6-12 months of inventory, potentially using AI-forecasting to optimize quantities. Substantial inventory reserves allow you to capitalize when competitors run out of stock.

Full Transcript of Episode:

JONATHAN: So have you found, with the, the tariff situation, have you found any sort of common mistakes or misconceptions that sellers make or have? 

AKBAR JESSANI: Definitely, Jonathan. There has been so many misconceptions and uncertainty. People are thinking nowadays that, okay, like, let’s go and switch a supplier, right? Let’s go and get another country for our product, right? They’re not thinking the whole logistics out of it, right? So getting a product to America is not only about a supplier, it’s all about the logistics part of it, right? So people might be switching suppliers, thinking that this supplier in an XYZ country can give me a solution, but that supplier might not have the certification required to bring the product to America, right? It might not have all the custom compliances that you need to make sure that you have that, right? Another common mistake is people are making is not going back to their current supplier and trying to renegotiate the pricing, right? Trying to renegotiate the invoicing type that they’re doing. Trying to renegotiate with the current warehouse contracts that they have, right? So that is what is important at this time. Rather than reacting so quickly, we should evaluate and make a strategy out of our business before we take a decision of moving a supplier or moving, you know, a country that you don’t even understand that they’re going to have all the requirements that’s going to be available for you. 

JONATHAN: People panic in times of uncertainty. And I know some sellers who are really just thinking it’s a doomsday scenario and they don’t know what to do. And then there’s other sellers that I’m reading about that are like closing up shop and all sorts of things. I’m like, this is, let’s take a beat and figure this out and find our bearing before trying to do anything hasty. 

AKBAR JESSANI: Especially the ones that are private label sellers. Jonathan. Because if you lose the market share today, right. I’m sure they would remember how much money they spend on the marketing to get that market share, right? You’re going to have to spend it again if you don’t, you know, strategize today. That is very important to understand and we can discuss in more detail later on that why market share is more important today. 

JONATHAN: Yeah, you pointed out some mistakes and misconceptions that people have, but when it comes to like how people are actually responding, I mean, we talked about those sellers, but are there other, I mean, what’s kind of the spectrum of reactions that people or sellers that you’re seeing having to the current situation? 

AKBAR JESSANI: So basically what they’re doing is they’re trying to look for other sources, right? Right now in the market there are good sources. I’m not going to say that my current sellers who I work with are not moving away from China because that’s the major hub for getting your product. So what they’re doing is they’re going to countries like Vietnam, India and Mexico, right? But I’ve also seen more countries other than these. Well, I’ve seen Indonesia is one of the big examples that people are moving to. There’s Egypt, there’s Turkey, there’s Brazil, right? Every country have their own source of product that you can go and get depending on the requirements that you have, right? For textiles, the major area is going to be Vietnam, India, Bangladesh, Pakistan, Egypt. And Turkey is a good source of textile, right? Nowadays, right? People are moving to Egypt and Turkey as well. Don’t forget Egypt is still a good emerging player in the garment sector that you can go after, right? When it comes to Brazil, if you are doing agriculture and niche manufacturing, Brazil is very good for this respective of that. For electronics, you can go to India, you can go to Vietnam. There’s another, you know, Mexico can be other near shoring, you know, assembly line for you. Rather than, you know, just having everything made in, you know, further in Asia, why not bring parts and try to assemble in Mexico and try to bring it here in the U.S. right? That’s another way of sourcing. Why not in this way? Right. So you have to think out of the picture. You cannot just make decisions on, okay, fine, I’m getting a product at one location. You have to look at the pros and cons of it, right? That’s where, you know, we can come in to help you or you can go to your custom brokers that can, you know, evaluate is this product gonna be become compliant by the time it comes to us. So that’s the biggest common mistake that people are making right now. 

JONATHAN: Yeah. And I mean that’s on the sourcing side. I mean what have you seen on the warehousing side? Do you feel like people are trying to move their inventory domestically to try to avoid, you know, sudden price hikes? 

AKBAR JESSANI: So they are doing it, but they’re looking for bonded warehouses right now. So a lot of people are looking for. I’m getting requests for bonded warehouse every single day and I am helping them get their bonded warehouses. But that’s the thing you need to understand bonded warehouse is also not cheap and ex easy to find, right? Because it’s always going to Be now everybody’s rushing to the bonded warehouse. At one point of time people are going to be having the requirement. The solution could be that to take it to Mexico or near shore it and bond it over there. If you cannot find bonded here or it depends again, we need to take a step back, Jonathan. It’s all about each and every brand itself and their strategy, right? You cannot make a decision of bond your product and not sell it where you’re going to lose your market share, right? You need to keep selling your product because everything is based on what you’re selling right now, right? For example, if you have gained market share out of a product that is, you know, by a Fortune 500 country companies, right? So you need to look at your product. Hey, if I stop selling it or if I start selling it for expensive, am I going to start losing the market share or not? Do I need to eat up the loss for some months for keeping the market share? It’s easier to keep a market share by eating up a loss than to gain it back later, right? So it’s all depend on how much money you’re going to spend. The money you’re spending on putting the product on a bonded warehouse and going to take it back later. It’s better to eat that loss up for a while and keep selling that product. If you don’t find a product that you’re using today, you’re going to go to an alternative, right? When you gone to an alternative, is it going to be only 50? What I feel is only my analysis that 50% is going to come back to your product. The 50% market share is going to lose it to others immediately. 

JONATHAN: Yeah. And then I guess on the other flip side of that is the people who are kind of struggling to get their foothold on the market share. It’s like this is a good time to stick around and make sure that you don’t get out of the game. 

AKBAR JESSANI: Because right now whoever have the stock is the king. That’s what I’m saying. 

JONATHAN: A hundred percent. I hadn’t thought about that option. I was thinking about like the successful sellers and how it’s going to slow down their momentum. I hadn’t thought about the other sellers who it will absolutely open up opportunities. As long as they say stay in the game. 

AKBAR JESSANI: Yes. If you can stay in the game, you can eat up the loss, you can sell it on, break even. This is the time to. It’s the time for a business battles, right? Forget about the trade war. That’s a separately, right? So you have to think about on your local turf. There is going to be a business battles right now. So you need to fight that battle first before the trade battle, right? So focus on this battle. That is very important. If you cannot focus on getting the best out of your business battle at this time, this is a strategic war right now. Think about Pepsi and Coca Cola, right? Have you ever seen them stop fighting against each other? Whatever situation this is what situation is right now. All the sellers needs to make sure that they have their feet grounded and they’re ready for the battle. 

JONATHAN: Last man standing. 

AKBAR JESSANI: Yes.

JONATHAN: Yeah. I mean as far as like just sellers trying to be sort of innovative and strategic about handling the situation. What sort of things or other avenues have you seen them pursuing to try to streamline everything? 

AKBAR JESSANI: The other avenues that people are adapting is basically they’re trying to make sure that they get better rates for the warehousing. They get better rates for their fulfillment. See, you have to understand, you have to break the cost, right? That your landed cost and your cost of goods sold and the cost of a product that three different prices, right? It’s not one, right? People are thinking cost of goods sold is my first price. So if you break your price down, if something is selling for $10 on Amazon right now, what is the cost? Cost might be a dollar, right? Lended card might be $2, right? But the tariff is only on a dollar, not on $2, not on $10, right? So you have not got a big increase. So can you eat up that increase or can you talk to your vendors to share that increase, right? So there could be what I feel the overall increase is not going to be more than 15 to 25% of your overall costs. So that is where you have to look at it now. How can you avail better opportunities to have that safe? Other cost that you have is your fulfillment cost that you pay to the warehouse or A3PL or freight forwarders or Amazon, right? How you can reduce that, how you can, you know, reduce that cost? You need to renegotiate your rates with your current warehouse contracts, right? You need to find a better warehousing partner who can give you a better rate. This is again in my industry, it’s also battle right now. It’s time to gain better customer by giving lower prices. That’s what it is, right? So that’s another way to reduce your cost, right? Go to your warehouse provider, try to say, hey, listen, if you’re charging me $2025 a pallet, I need $5 discount on it or at least give me 25% discount on it or 10% discount on it, right? Survive paying for my products. If I cannot reduce it here, you need to take a share as well so I can keep bringing the product. Because they also need your to bring your inbound containers. If you stop bringing your inbound containers, they cannot operate also at one point in time. So as many inbound containers can come in, it’s the more good for the business to flow in America. So that’s how it is going to be, you know, all interlinked. 

JONATHAN: Yeah. So like, I mean that’s basically just like renegotiating those fees, looking at bulk shipping discounts, all of those avenues. I mean, is there anything else that at Universal Shipping that you guys are doing with, with customers to help them through it? 

AKBAR JESSANI: Yes, definitely. So we are. Right now what we’re doing is we’re giving them one month of free storage. We have. What I have done is I have just launched a campaign for FBA Prep, right. I’m giving them 40 cents for FBA prep, which is a rate I used to give to an aggregator, right, who’s bringing me 40,000 units a month. I’m giving it for everybody who wants FBA prep at $0.40 unit. That’s a very, very low. They have time till end of May to come and join us. If they come and join us, there is no minimum. We used to charge 5,000 minimum, you know, units a month. Now there is no minimum. So you come and join, you get one month free. So no placement charges for you. You get your product ready in $0.40, send it to Amazon. So now I’m giving you almost, that’s 20 to 30% discount on a normal rates, right? So safe save there. I’m trying to help my customers with this way. Why not? 

JONATHAN: That’s great. That’s actually phenomenal. Again, going back to the people who kind of like panic and like they’re trying to think of all of these different things. I mean, it’s. Who’s the best person to adapt to market conditions, right? Like that’s really what we’re talking about. And like, no matter what, whether it’s tariffs or whatever else, something’s going to come your way that you’re going to have to, you know, move the pieces and figure out how to make it work. 

AKBAR JESSANI: Definitely, that’s what it is. Another suggestion which I am giving to my current customers is to let’s do assembly somewhere else, right. That’s another way of saving money on tariffs, right. If you can bring, if you’re doing. If you’re selling a lamp, right? The lamp has total of four components. There is electrical component, there is a base, there is a head and there is a cover on top of the head, right? So why not send those separately to Mexico, right. And get them assembled there. And even the packaging going to be done in Mexico, the cost from China is going to be very limited now, right? So now you can get that assembled somewhere else so it becomes assembled in Mexico. So your tariff goes down. It goes for any of your products, right? You need to be creative how you’re going to do it. Second, another example is that let me audit your invoice from your customers, right? Probably you might be taking an FOB price right now. Why not go for export price, right? Why not go for per piece price rather than, you know, packaged price, something like that. So you have to look at your costing of what you’re doing because the tariff is only on your actual unit, not on trucking that you’re paying. They’re not on a labor that you’re paying there, right? So it’s only on the first component. That is your. If this is a pen being made in China, so this is what is being tariff not to ship this from the factory to the port of China, right? So why I. If you take an FOB price, that’s all inclusive price you get, right? So that’s better to get your custom invoices audited to see where you can, you know, reduce your extra price per unit. 

JONATHAN: Yeah, those are really great ideas. 

AKBAR JESSANI: It’s completely legal. It’s not something out of the ordinary. That’s how it is. Like it’s like basically people, not all the sellers actually know about X works, right. So that’s something they need to understand. And second is that there are also common mistakes about the HS codes. You are deciding on your invoices, right? You could be taking a journal HS code where you have an exempted HS code that you don’t know about. So let somebody expert evaluate your invoice. Let’s see if what HS code is actually applicable on your product to bring your cost down. So that’s something to look into. We do it ourselves. So I have a custom broker, Bob, he’s very experienced, he’s been custom broker for 40 years and he can review your invoice, he can discuss with you what type of requirements are there. Are you overvaluing your product? Are you undervaluing your product? It’s also another reason things get stuck in customs. If you’re undervaluing your product Right. So you need to see the value of the product. You need to see the HS codes are correct or not. These are other mistakes people don’t try to, you know, solve. And that’s something can help them get a better, you know, pricing or better custom clearance done, right? And you should not miss your ISF filings. ISF filings and other important thing. I have seen many customers getting their product on hold when it arrives to us. That’s another delay that they have and they pay a lot of charges for the hold or, you know, container being used. What we do is we make sure that we pre clear, okay? We do compliance checks before it happens, we take it, make sure that we do a triple review paperwork before we file it. And it has to be filed before it arrives, not file it after it arrives. So pre clearance is a very, very, very smooth requirement to have for your products to come into America. 

JONATHAN: That’s fantastic. I actually didn’t know about that. So that’s really great. I mean it’s all about finding loopholes and workarounds, right? There’s always going to be some angle that you. And it’s great to hear these ones. These are great ideas other than, you know, looking into that as far as like stricter custom regulations and all of that. Like what are some of the common mistakes or other common mistakes you’re seeing sellers make right now and how can they avoid them? 

AKBAR JESSANI: The custom, the ones I told you about is the incorrect HS codes, right? That’s the biggest common mistakes people make is the, the, the, the HS codes they’re doing second is they’re trying to undervalue it, right? So right now I got to know that people are getting the, the vendors are telling them, I’ll get you the product here, let me use my shipping and everything. And this is going to be your price, right? This is what you pay once you get your product. That’s called undervaluation, right? I don’t know what type of services the, the vendor is using. But let’s say what if your product gets stuck in customs, right? You have to make sure that your documentations are correct, right. You need to get your document pre cleared before it’s even get boarded or get offloaded here, right? So that can save you 30 to 40% of your time before your product gets to you, right. That will be faster to get it done. And other important thing is like that, like I said, the free zones, right? The bonded warehouses is something that people are looking into. So if you have 20 containers of product that is Ready and you’re getting good rates to bring it here. There’s another way of this, you know, looking at it is to find a bonded warehouse. Keep your product in bonded warehouse for a while till you decide to bring it out and you pay the custom charges when it is, you know, when all this trade wars is already resolved, right. So you don’t have to pay the higher custom charges. So that can also help you, you know, to be ready, right? If you have, let’s say, for example, if you have a product for the next three months available, let’s get your product to America, keep it here for a while, get into a bonnet warehouse, work, let it be there till you decide you want to bring it out. If you decide not to bring it out, you can, you know, if you, if you start selling in Canada or somewhere else, you can send that product to Canada without paying the customs here. And you only pay the customs, whatever it is, requirement in Canada, Right? Some of it. So that’s another option that you can look at. 

JONATHAN: Yeah, that’s a great idea. What we’re discussing is, is largely about, you know, adapting to market changes and trade uncertainty, which is this is not going to be the last time that there’s ever trade uncertainty. There’s going to be things that happen in the future. I’m just curious, like what sort of advice or guidance would you give to sellers to sort of prepare for, I mean, after navigating their way through this, like how to kind of prepare for those changes. 

AKBAR JESSANI: First thing is to always. So you have to, you have to, if you are a private label seller, you have to consider yourself as a big seller, Right. If you don’t consider yourself as a big sellers and you do not strategize like a big seller, you will never have that leverage over others, right? So how the big seller works. I work for unilevers of the world, right. Being in my previous profession. So what they do is, Jonathan, they don’t have less than one and a half years of inventory ever. I have never seen a company that has less than a year. I’ve never seen less than a year. And I’ve always seen one and a half to two years of worth of inventory in stock, Right. That is very important to leverage your brand, Right. You never know what’s going to happen, right. How are you going to leverage it? Right. How are you going to attack the other market competition that’s going to come and, you know, try to, you know, leverage their brand against your brand? Right. So that’s where it comes in Play is to have a forecast and at least have minimum, minimum one year of inventory. Without having one of your inventory, you cannot excel your private brands, right? That’s the first important thing to have, right. Nowadays you have AI available. Let AI derive your forecasting, right? Let them decide. Right? Finalize your just in time restocking, you know, alerts. You need to have that. We provide that with our customers if they want. Our, you know, 3PL software allows that. And as soon as your inventory hits to a certain stock, you’re going to get an email that it’s time to restock your inventory. Why do you want to go out of stock? Right. I have seen, I think if I’m. If I’m sure if it’s correct or not, Jonathan, because I don’t do a lot of Amazon, but I think they also put in for key sellers that you need to have a certain limit of inventory with Amazon all the time for them to do FBA for you. Why is that? Is because without having the inventory with Amazon, they don’t want to lose it to somebody else, right? They don’t want to lose it to a private seller selling as fbm, you know, and taking leverage over Amazon, right? That’s very important to have that inventory. Same goes for vendor central, right? If you’re doing vendor central with them, same thing. They’re gonna have a certain number of quantity they need every month from you. Why is that? Because they are strategizing how to leverage this inventory into selling your brand, right? That’s very important. The first thing is that second thing is think about a shared warehouse model, right? Think about how you can build relationships with your vendors, right? What happens is nowadays people are just thinking of vendors and another person, right? They’re not building relationship. In previous years, in previous times, when everything was about, you know, B2B businesses or retail businesses, there were relationships built rather than doing just a transaction, right? So you need to do is make a relationship with your vendor, not only a supplier at the York Origin factory. You need to make relationship with your warehouse guys, you need to make relationship with your trucking guys, right? If you don’t have that relationship, you will not be able to leverage it, right? You should be able to pick up your phone and say, hey, Akbar, I’m getting problems, right? Can you help me reduce some cost? What should I do? What do you think is the best way to get about it? Right. That’s the relationship you need to build with your. Every vendor that you can think of is your key vendors, right? Don’t Fail transactions, build relationship is another way of succeeding, right? And always keep enough margin when you’re launching a new product for these sort of, you know, issues that can happen. So I would say if you want to make 20% profit, keep 30% as an overall margin so you can leverage while, you know, competing with your peers in the selling industry. That’s very, very important. 20, 30% is an average margin that you need to have against each of your product that you’re selling. So you can, you know, help yourself with it. That’s very, very important. And second, start utilizing returns. People have stopped thinking about returns, right? Hey, hey, throw it away. I don’t want to use it. It’s more costly to process your return. But right now, why not find a partner who can do it for a reasonable price and get your returns back? Even if you don’t want to sell it as a new item, why not sell as a, you know, better than used item, Right? It’s, it’s almost new items. Why not sell it as that? And Amazon allow you to sell that? So that will also give you some money back on your returns, right? Rather than losing that 15 of your profit to returns, let’s start getting 10% back out of it and just lose 5%. So these are the important things to strategize today to move forward.

JONATHAN: That’s really crafty. I love that. Especially with the FBA fees and how Amazon kind of cracks down on it. Like what that perfect balance is. Of course, it’s. There’s nuances because every brand’s different, every product’s different, but it’s threading that needle, man. What a. I mean, that’s the. You mentioned the use of AI and I’m like, what a perfect use for it. 

AKBAR JESSANI: Definitely, yes. Take your five years of sales. Let AI give you a forecasting how much inventory you need to keep. Right? And it’s not even AI, Jonathan. People is calling it AI driven. It was already there. Algorithm was always there, right? So people were not using at that time. Now, AI came as a new good, easy word. Two words to remember, two alphabets to remember. So people are AI. Let’s do AI. But in the end, it’s all algorithm based, right? It’s all about analysis, right? The data. That’s what it is. 

JONATHAN: Absolutely. And then for any sellers out there who are feeling really overwhelmed by the current tariff situation, what sort of wisdom would you offer? 

AKBAR JESSANI: Sit down, think about the products that you’re selling and don’t lose the market share, right? It’s very like I said it’s very important to, you know, be in the business and fight with your competition. Right? Now take the example of Pepsi and Coca Cola, right? At this current reasoning, if they were gonna have a trade issues with the prices, do you think they’re going to start selling for higher prices or they’re going to try to take each other’s market, right? That’s what they want to do. They want to take each other’s market. This is the actually business war that they’re facing, right? That’s the same thing with your brand. You need to decide what you want to do. Do you want to eat up that loss that is happening as a, you know, you are letting about it this way that you’re starting a new startup, right? And then you want to invest this much money. So this is again at that stage is to put in more money to stay ahead of your competition. Right? Now if you’re going to increase your product suddenly by 20, 30%, there’s a big chance you’re going to lose the market share. Unless and until your product is a necessity and nobody else is making it, right? That’s a different story. You can increase it, but again you’re going to lose the shares in the market, right? People might go for a cheaper product, right? So it’s always about how I can avoid my price hike. What are my strategies to avoid my price hike. If you need help, I can definitely, or my team will definitely review and strategize with you to see where you can actually save money. It’s not only about saving money at the origin, right? It’s always about saving money at fulfillment level, at shipping level, at, you know, storage level, at fulfillment level. So let’s see where you can get you to save money, right? It could be that you’re paying $7 for shipping your product from California to Houston to somebody, right? Let’s get this down to five and a half dollars or six dollars. There’s another dollar saving there that could help you overall, right? So very important to strategize so that way you can actually run your business in a proper competitive environment. Because this is right now, it’s competition. Trust me, people might thinking is not competition. Everybody is facing that increase. But whoever is smart is going to try to take your market share today. Whoever has the money in their bank are going to put in more money just to get that market share because they know this war is going to end within a couple of months. It’s not gonna, it’s not gonna stay for years and years Right. Especially when Christmas is around, gonna come in like six months, right. You need to be ready for it, right? So this three months, whoever can survive, whoever is a bigger person to put their feet down and put more money in their business will be successful and gonna get the more market share. So that’s what you have to think about it today. Are you willing to. Is your product good enough to put in some more money to stay in the market? If yes, don’t discontinue it, continue it. That’s the only thing I would say. It’s very important. 

JONATHAN: That was really great, Akbar. Thank you. And then I’m curious, if you had to give sellers beyond that, like three things that they should focus on, what would that be? 

AKBAR JESSANI: So under the tariff stress, I would say stay agile. And with sourcing and logistics, look for your better sourcing partners, right? Although don’t leave your current sourcing vendor. But it’s always good to have a backup, right. I have companies who, even before this happened last year, from China, they went to Malaysia, Vietnam to look for better sourcing partners for future, right? It’s not only about the tariffs, also about the quality, also about, you know, they want to go from the restaurant industry, they wanted to go into the hospital industry, right? The healthcare, healthcare require better quality. So they went to Vietnam and Malaysia to find better quality. Although it was just a strategic decision on their part, nothing to do with terrorists, but this is going to help them. Now they already have another sourcing partner available and ready to give them supplies if they need it for the restaurant industry as well, right? So always have multiple sources available. Don’t stick to one or two sourcing partners or sourcing countries, right? So spread your wings. That’s what it is about. It’s a world. It’s not only one country. So go to the world, find better sourcing partners. Even if it’s a little bit expensive, that’s where you have upper hand. That in case something like this happens again, you’re ready to, you know, help yourself and get your business growing as much as possible. The second would be invest in supply chain data. Visibility. That’s very important. You need to know your supply chain data. You cannot just say, this is my cost, this is my selling price, right? Break out that cost completely to each and every line item that you can to analyze and understand. What are you paying for what item? Right. What are you paying for fulfillment? What are you paying for storage? What are you paying for your cost for your product? Right. People have in their head lending costs, right? Even if you go to your insurance claim, they don’t pay you on lending costs, they pay you on the invoice from your supplier. They don’t care what you paid for the shipping or logistics. Right? So this is very important to invest in supply chain data visibility and that is very, very important. And the last and very important, like I said before, build partnerships and relationships, not just a vendor list. If you don’t have a good relationship with your partner vendor, you’re never going to succeed because it’s you are one and one team in all, right? Like you want to sell your product, they want to sell your product to you as well, Right. So it’s one team. So talk to your vendors, discuss again how they can help you strategize, you know, reduce your cost, help you share this extra burden that you got in this hardship that’s happening. Let’s try to build a better strong relationship with them and let’s get your cost down to a level that you know, you can sustain and grow your business as much as possible. 

JONATHAN: That’s really great. I’d love to get into the sourcing piece a little bit more. Especially like things that you’re seeing, you know, out there with sellers, like what are you seeing with your customers as far as the decisions they’re making or things they’re looking for in other countries or if there’s any examples you have to share.

AKBAR JESSANI: So most important thing is people are trying to make sure that they have multiple countries on their vendor list, right? So what I have seen is a good source is Egypt. Why? I’ve seen that Egypt is, I have seen One of my AC suppliers that is actually selling a lot of ACs here in US have started, have created their own factory in Egypt rather than China, right? Why? Because there’s a good labor, reduced in labor cost there. Secondly, it is near, it’s like part of Europe, so it now becomes near to America. There’s faster, you know, shipping is going to be available. So that’s what I have seen and other area I’ve seen is Egypt is a lot of textile is available, a lot of plastic. You know, suppliers are going to Egypt to look for better sourcing partners because Egypt do have a good aluminium as well as well as plastic. So, you know, the restaurant industry, I’ve seen people going there trying to get their product of, you know, the, the, the container that you get your food in. Rather than China, they’re going to Malaysia and Egypt. That’s the two other areas they’re going to. And I have seen, I Was I’ve seen my. Some customers are going to Pakistan for textile, right? Because they have a lot of good textile. With respect to, you know, home textile, if you look at the number, I think is one of the top 10 sellers on Amazon. He has learned everything from China and made his own factories in Pakistan to get that product made, right? I don’t name names, but yes, I’m sure everybody knows him. So another thing would be to Mexico, right? Near shoring is very, very important. Like I said, let’s try to see what you can bring to Mexico and get it reassembled there. It’s not only Mexico. Think about us, right? There are some states that have still have low labor rate. Why not make a assembly unit there? Get your product from China, bring it here, get it assembled here, get it packed here. So you’re only paying for your product, that is, you’re buying as a raw material there and you’re paying tariffs on that. Now if you bring that product here, get it assembled here, it’s not going to be tariffed. Right? It’s going to be assembled in US Right. It’s going to be made in US actually, right? You’re doing a lot of stuff. If you can buy some of the components from us, that also makes it in the US and this will not only help you as a seller, it will also help the U.S. economy, right? Why not think about the place where you live in, right? This is a good for the economy to grow. I have seen momentum as people started looking for more, you know, manufacturing unit spaces in U.S. why? Because it’s good to have more manufacturing done here. In the last five years, what I have seen is people were moving their, you know, manufacturing units from U S to TJ or Mexico. Right? It’s good to bring those back here in U. S. This is good for economy, is good for our labor market to get more work to do, right? Why pay a lot of unemployment outside, right? Let’s. Let’s try to build a good niche manufacturing here in US Even if you cannot do it from scratch. Let’s try to assemble. That’s the first step. Let’s try to do assembly here, packaging here, labeling here. You know, a lot of people are doing their FBA prep ready in China. If they can do it here, the cost per product goes down, right? They’re not paying that over there. So they’re not paying tariffs on that labeling part that they’re doing in China. Right? So why not bring it here? Let’s get it done here, right? The more work you bring here. The cost for per piece gonna go down here in US as well. That’s another part that you can think about, right? And the biggest in country to look after is Indonesia. It’s still near, it’s for more nearer than China. It’s gonna be a quick transit time for you guys and it’s have a cheaper labor and space to do a lot of manufacturing for you. So see another sourcing partner in Indonesia and there are a lot of product Indonesia is already making, right. They have the infrastructure, they have the competitive labor. So if you can get your product and your factory made in Indonesia, that’s going to help you out, why not?

Additional Resources

The Impact of New Tariffs: What E-Commerce Sellers Need to Know (and How Our Tariff Calculator Can Help)

Want more insights? Check out more episodes of The Seller’s Edge Podcast.

The show has covered many topics including PPC strategies, International markets,  DTC tips, creative content, and how to get those 5-star reviews easily.

Also, don’t forget to follow Viral Launch on LinkedIn, Facebook, or Instagram, and subscribe to the podcast on Spotify, Apple Podcasts, Audible, Soundcloud, or any platform you prefer.

If you’re a new seller who is looking to 10X their business, here are some really valuable resources to get you started:

  • Viral Launch – Viral Launch offers the most powerful suite of seller tools on the market, designed to optimize listings, drive traffic, boost conversions, and maximize profits.
  • Chrome Extension – Get real-time Amazon data and competitor insights with the Market Intelligence Chrome Extension, helping you make informed decisions with strong research and analyses of the market.
  • Free Tools for Sellers to Leverage – Keeping the budget tight? We get that. In that case, feel free to access our free tools, such as the FBA Calculator, to streamline your business operations and make smarter, data-driven decisions for your brand.

Don’t miss the chance to make your Amazon business soar. Subscribe to The Seller’s Edge podcast and explore Viral Launch’s valuable array of services and tools today!

Try Viral Launch, the all-in-one solution for new and established Amazon sellers.

Set Your
Amazon Business
Up For Success

Never miss an update with Viral Launch!
Subscribe to our exclusive newsletter for the competitive edge you need. Get essential tips, trends, strategies, and the latest news to elevate your Amazon business.

YOU MAY ALSO LIKE

SEE HOW VIRAL LAUNCH CAN HELP GROW YOUR BUSINESS