A New Association For Cross Border E-Commerce

Looking for a group that has your best interests at heart for your cross e-commerce business?

As things have developed here in the South of China in preparation for the upcoming Cross Border Matchmaker, great things have been happening. Shaking hands and building relationships with other top organizations in the cross border ecommerce industry in China and overseas, we have come together and united the clans (making me think of a Braveheart movie reference).

You may be thinking – isn’t that what Global From Asia is? We are more focused on media and spreading news and knowledge about the industry. While we considered making GFA its own stand alone association, that isn’t what an association is!

Here’s the definition of an association:

as·so·ci·a·tion
əˌsōsēˈāSH(ə)n,əˌsōSHēˈāSH(ə)n
noun
1.
(often in names) a group of people organized for a joint purpose.
“the National Association of Broadcasters”
synonyms: alliance, consortium, coalition, union, league, guild, syndicate, federation, confederation, confederacy, conglomerate, cooperative, partnership, affiliation, organization; More
2.
a connection or cooperative link between people or organizations.
“he developed a close association with the university”
synonyms: relationship, relation, interrelation, connection, interconnection, link, bond, union, tie, attachment, interdependence, affiliation
“the association between language and nationalism”

The main point is – it is a community of various board of advisors and “owned” by the community. The financials will be reported publicly, and it will also be a union of Chinese and Foreign industry leaders.

By being a member of this new e-commerce association, you will receive the following benefits:

So let’s not go it alone, let’s join together and make something strong and powerful.

Want to see this association officially kick off? Join us into the new year where we will announce the founding members of the association and reveal more of the details of what this organization is and will stand for.

Be part of history in the making! As the marketplaces, supplier environment, and ecosystem for e-commerce players change so fast – you need to assurance and protection by being part of a greater good that has your best interests at heart!

Stay tuned for more news as this association debuts later in 2017. If you’d like to get involved please send us a note!

Developing on a New E-Commerce Business Model Ecosystem – Joining Chinese Brands and Amazon FBA E-Commerce Sellers

Here at Global From Asia – we have seen the reading on the wall for quite some time – F2C (factory to consumer) is inevitable.

Some feel it is 10 or 20 years away, but during our interviews with Chinese factories, they are already registering brands and opening up Amazon seller central accounts. They are pushing forward to build global brands – and it almost lines up with our blog name Global From Asia.

So what is an experienced, hardworking Amazon e-commerce seller to do?

We want to keep you in the game, and during our interviews with these Chinese sellers and Chinese factories, we asked them about new business models in the F2C e-commerce business game. Let’s dig in to where we are now in the industry and where we want to go.

For now, the way is works is pretty cut and dry – the factory makes a brand on demand for a customer. The customer is a distributor from overseas and has their market knowledge and experience to then get those products sold in his or her country.

There is a MOQ (minimum order quantity) of usually 1,000 pieces in order to make your own brand, and packaging. This would then have the factory’s design (and moulds) used to put the “stamp” of the buyer (e-commerce seller in this example) on the product and print new cardboard packaging.

It has been eye opening to visit these factories and see their showcase of patents and trademarks – filed around the world. One example is David from Ausdom – he is a son of a factory owner who studied in Penn State in USA and then after graduated returned to China. He discussed with his father and friends to register their own brand, and not simply make OEM/ODM for customers.

David’s father and friends supported his new business idea, and a new brand was made and a new company and department was built. He has registered the domain and trademarks around the world. He isn’t doing F2C exactly, as he works with local distributors in those countries, but he is the owner of the brand and he grants them permission to be the seller of his brand in that market and on that channel.

His company understand the value of a brand and the way to build it and control it. He has his staff monitoring the marketplaces and ensuring only approved distributors and resellers are listing his branded goods.

David also understands that it isn’t just putting a logo on a product and a box. He has invested in marketing in those markets to support the local country distributors, and works closely with them as a partner. He says he needs these local representatives to help in the market for after sales support and local presence.

This is a model we are truly excited about here at Global From Asia – brands are willing and able to register a new trademark in a partnership with an ecommerce seller.

Why would a seller do this instead of the traditional OEM method? Because the factory is willing to finance the inventory. The suppliers we have discussed with have limited English and overseas marketing ability, and are open to finding a qualified partner to help them market and distribute overseas. They understand that the seller wouldn’t build up a factory’s brand direct – but are open to sharing the long term value of brand equity so long as both sides are delivering value.

We are pioneering this here and need to coin a term for it. In Chinese, they call is marriages and having children together (factories and sellers creating brands and joint ventures) and explain to me this is a big challenge to overcome.

Yes, it is true – creating a new joint venture and brand together is a challenge. Especially if it is cross culture, cross border, and rather complex.

So it needs to be simple. Here are the criteria we are working with:

* Shared Brand (Trademark) Ownership – to make this a unique business model, we must make sure both parties own a stake in the brand. That is the long term value of this which we are making. Also if a patent comes from this joint venture, we would need to also put that into this business.

* Inventory Financing From The Supplier – to get the ecommerce seller excited, we need to have the factory do inventory of the goods and give terms to the seller for a certain amount of time. In our discussions with Chinese factories, they are willing to do 90 day terms most of the time.

* KPI for sales and turnover – Now, what the factory wants from the seller is – yes you guessed it – sales! So we need to have a fair sales target that the FBA or any e-commerce (even retailer) needs to reach in order to keep the supplier happy in this business relationship. How to find a standard here is something we are still working on.

* Marketing budget – who is spending the money on Amazon PPC (pay per click) and Facebook ads? Who is investing in the product photos, the product description copywriting, etc. What is the total amount that this normally costs on a per product basis, and which side needs to put that capital and time into it. This seems to be more of a responsibility of the seller, as this is their experience. I feel this is fair for the inventory financing that the supplier is putting up. Need to make a matrix of amount of inventory financed over a certain amount of time equals a value equal to a certain amount of marketing budgeted.

These are the main criteria I see in making a business deal (aka marriage!) between these factories and sellers. There is a new business model emerging. Yes, F2C can happen, and is happening – that is – factories selling direct to end consumers around the world, going global from Asia, but we believe there is still room for the seller, the marketer, the local market expert, to still get a piece of the action.

We are pioneering this here and need to coin a term for it. In Chinese, they call is marriages and having children together (factories and sellers creating brands and joint ventures) and explain to me this is a big challenge to overcome.

Yes, it is true – creating a new joint venture and brand together is a challenge. Especially if it is cross culture, cross border, and rather complex.

So it needs to be simple. Here are the criteria we are working with:

* Shared Brand (Trademark) Ownership – to make this a unique business model, we must make sure both parties own a stake in the brand. That is the long term value of this which we are making. Also if a patent comes from this joint venture, we would need to also put that into this business.

* Inventory Financing From The Supplier – to get the ecommerce seller excited, we need to have the factory do inventory of the goods and give terms to the seller for a certain amount of time. In our discussions with Chinese factories, they are willing to do 90 day terms most of the time.

* KPI for sales and turnover – Now, what the factory wants from the seller is – yes you guessed it – sales! So we need to have a fair sales target that the FBA or any e-commerce (even retailer) needs to reach in order to keep the supplier happy in this business relationship. How to find a standard here is something we are still working on.

* Marketing budget – who is spending the money on Amazon PPC (pay per click) and Facebook ads? Who is investing in the product photos, the product description copywriting, etc. What is the total amount that this normally costs on a per product basis, and which side needs to put that capital and time into it. This seems to be more of a responsibility of the seller, as this is their experience. I feel this is fair for the inventory financing that the supplier is putting up. Need to make a matrix of amount of inventory financed over a certain amount of time equals a value equal to a certain amount of marketing budgeted.

These are the main criteria I see in making a business deal (aka marriage!) between these factories and sellers. There is a new business model emerging. Yes, F2C can happen, and is happening – that is – factories selling direct to end consumers around the world, going global from Asia, but we believe there is still room for the seller, the marketer, the local market expert, to still get a piece of the action.

We would love to hear your feedback and ideas on this model. Do you think we can match and marry the supplier and the seller?

It comes down to trust on both sides. The suppliers fear they are paying upfront for inventory and will the seller actually be able to sell the goods. And of course, can they trust these products won’t be stolen by the seller and he/she disappears.

The seller worries will the factory really honor this relationship. What will prevent them from making some extras without telling the seller and selling directly. How can the e-commerce seller be sure that the factory will honor this relationship long term. Or what if the factory makes multiple relationships like this and dilutes the value of the brand or floods the market?

Yes, there is a lot of risks, on both sides. We are studying this closely and would love to hear from you.

Does this business model sound interesting to you? Want to find factories who are open minded to trying this new business model?

What we are doing now is bringing factories who understand this new way and are open to working with experienced Amazon FBA and e-commerce sellers from around the world and make a deal. It is all happening – at the Global From Asia event called Cross Border Matchmaker.

We will have world-class Amazon FBA sellers, from overseas and China sharing their strategy. On top of that we are going to have these suppliers at tables in the matchmaking room looking to make some strategic deals with qualified Amazon FBA sellers. Our team will be on site to assist you in making these relationships and we cannot wait until this new business model emerges.

See you at CBM 2017 (Cross Border Matchmaker 2017) and welcome to the new F2C business model for Amazon FBA and beyond! Go “global from Asia”!

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