A lot of new Amazon sellers often make the mistake of putting logistics and freight forwarding as an afterthought in the product launch process, and it can hurt profitability. Jimmy Tran, General Manager of World Craft Logistics is a Product Launch Hazzard expert on Freight Forwarding. He knows that Amazon sellers need a highly dependable freight forwarder who will cater to their needs to get their products shipped smoothly and securely from factory to warehouse. Starting his online business from the comfort of his own bedroom five years ago, he now has a 78,000 square-foot warehouse to accommodate the upward demand from clients. Detail-oriented Jimmy shares his freight forwarding know-how so you can keep your supply chain running efficiently and cost-effectively by optimizing your logistics strategy, from timing deliveries, customs clearances, proper documentation, warehousing distribution, light assembly, labeling, and everything in between. You can get in touch with Jimmy and ask your questions on all things logistics.
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We have Jimmy Tran of Worldcraft Logistics. I want to introduce you to Jimmy. I met him at a meetup for Amazon sellers enjoyed the way that he works, which is why he’s on this platform because we want people who know how to service, know how to answer questions because you have a lot of questions. If you get prepared ahead of time, if you know this information or if you get the information or you have someone you can trust to go to and get it, then it makes your flow, your process, you’re launching faster, easier, safer and more likely to be successful. That’s why Jimmy is here. Thanks for joining us, Jimmy.
Thank you for having me here. I want to say that you pointed out something that you want to work with freight forwarder that answer detailed questions. I’m very detailed. I will make videos if they need me to.
You do and I’ve seen your emails so I know exactly how detailed you are, which is why I enjoy working with you. Jimmy, tell me a little bit about you and your company.
I’ve been doing this for ten years. I started my company about five years ago. Just like any Amazon seller, I started out of my bedroom and right now we are at a 78,000-square foot warehouse. We grew from a bedroom to 78,000 square foot and we’re going to continue to grow because there are a lot of referrals. In the freight forwarding industry, it’s mainly referrals. We do a good job with you and your client, that’s why I’m here. I’ve been learning from you guys as well. Amazon sellers are great marketing people.
They are. They’re great at marketing, but the logistics side, and let’s define because you’re more than just freight forwarding. There’s a lot more to it. What’s logistics? What does that mean?
Logistic is basically when you pick a freight forwarder, I’ll tell you right now, any freight forwarder can move the cargo for you. Any freight forward could just get your package from the factory to Amazon. You need to find a freight forwarder that’s going to cater to you. What we do is we answer very detailed question. I make videos so that people could follow the instruction and maybe share this video with their factory. Recently, we made a video on how to do packaging labels. We’re going to start making video on how many pieces would be in a box. Like 150 pieces, you can’t go over more than that. You can’t go over more than 50 pounds, things like that.
That’s great information right there because a lot of your decisions that you’re making early on in the product design process is like, “How many should I put it in a case? How many will fit?” To know that there’s a limit, if you pack too many and then all of a sudden you find out there was a limit and you already packed it all and then called the freight forwarder, you’re going to be in trouble when it gets to the Amazon warehouse.
What we’re going to do is we’re going to make video and we’re going to put Chinese subtitle into it so you could share this with your factory. Like for example, if you were to work with a factory that has never done Amazon shipment before and you say, “You don’t know how to do it,” that’s language barrier between you and the factory, English speaking, Chinese speaking, but here’s a video, and he’s like, “Thanks for the great instructions.”
They would show this to their 5,100 staff in Chinese and then everybody’s on the same page. There’s no English barrier between you and the factory and then the manager to the production manager to the staff if there’s a video. What we do here is we do the freight forwarding. We do the custom clearance as well. That’s another one for typical freight forwarder. Once it gets to our warehouse, what we do differently from the rest of the freight forwarder is that other freight forwarder will just move your cargo to Amazon, not very detail or just move it to a warehouse. Traditional freight forwarders work with traditional company. We move away from traditional style because we know that Amazon seller, you’ve got to depend on Amazon to sell your products, so you depend on us as a freight forwarder as a checkpoint. Once your cargo hit our warehouse in China, we also check on it lightly to make sure that it has made in China to clear customs in the US.
There’s going to be no problems because that hangs people up because the communication back can be very bad. You don’t know why it’s held up.
Then once it hits our warehouse here in the US, we also open up your shipment only if you ask. Like for example, if you were to sell a giant fidget spinner, we’re going to open it up and we’re going to make sure that it has the FNSKU that’s going to meet Amazon requirement. If it uses plastic bag, it should have a suffocation warning. Pretty much we are your final checkpoint before it gets to Amazon. We take pictures of your product and then we email it to you and we say, “This is your product that we did the final check for you. Here’s the photo. Is it good enough?” If the customer says it’s good enough, then we send to Amazon. If it’s not good enough, then we go further. If you say, “I need you to fix it. I need you to put in pamphlets. Some people put in a coupon codes or whatever they need to put in. Some people buy product in the US and they merge it, made in the US.
Merge the things?
Merge them together. Some people market it that way because now your product could be made in the US. We do a lot of things here. If your cargo goes to Amazon and then labeling is wrong, like the FNSKU is wrong which happens a lot, and we take care of that for you too. You ship the cargo back to us and we do the relabeling.
Otherwise the masses, your freight forwarder delivers it to you. You have to do all of it, then you have to get it back out. It’s a nightmare and a lot of time lost. You’re cutting that off by taking care of that for people.[Tweet “We want to make sure that all our Amazon sellers survive Q4.”]
Yes, that’s right, and then also our storage. How we work here is that we want to make sure that all our Amazon sellers survive Q4. A lot of the Amazon sellers complain that their factory tried to compete with them during Q4. What they don’t know is that as Amazon seller or as American, we are the best marketing country in the world. Believe that you are the best. Unlike the factory, the factory just ships their cargo straight to Amazon and lower the price. During Q4 when each pallet that Amazon has on store for you is $200 per pallet. Let’s say you bring a whole container here, a whole 40-foot container is about 30 pallets. We charge $21 for the first 30 days and after 30 days we charge $31 per pallet.
I’m just going to stop you right there because Tom and I have not heard of pricing like this. When we know we have a client who’s like, sometimes just the manufacturing process or the timing, some runs that we have to do with certain factories have to be done when they’re making that run of a certain material or a certain thing. That means you have to hold on to inventory. Whenever we hear a client like that were like, “You’ve got to go to Jimmy.” We know that it’s going to have to sit for a while until it gets to Q4, until it gets to the timing in which they can actually sell it. That is, you have one of the best pricing that help people hold out.
Yes, a 40-foot container, 30 pallets, you store it at Amazon, it costs you $6,000 a month. You store 40-foot container, 30 pallets here times 30, that’s $900. Do you want to pay $900 or do you want to pay $6,000 in storage? This is where it kills people in Q4. Q4 is great. For retail in Q4, it’s pretty much half of the year sales or one-third of it.
It should at least be a third but for most people it’s half. You do what you do for the whole rest of the two-thirds of the year in that fourth final.
Pretty much what we do is we want to work around the client because the thing is that’s how you’re supposed to build your business. Same thing like your service. You have to ask the client what they need and then you build your service around them or else they’ll just go somewhere else.
That’s a big difference because you’ve built your service for this purpose, for what is essentially sometimes load a bigger run. From smaller, you go to bigger runs as you get bigger and bigger over time. What happens with it is that if you were a traditional freight forwarder or someone who came out of it, they just adopted their existing services and said, “We’ll make that available to you, Amazon seller or new inventor.” It’s just more of like you’re going to now have to adapt to their process and their costs and their systems.
I use to work for a traditional freight forwarding company. Traditional freight forwarding company works with companies that just bring in the cargo to their warehouse, like they’re going to sell on eBay.
They’re going to sell everywhere.
Amazon destroyed those companies. All the companies now are struggling against Amazon because when you go to Walmart, let’s just say you want to buy this screwdriver, it’s red. What’s happened is they made this pink, yellow, and blue as an option. Guess what? I might want a bunch of pink screwdrivers. What Amazon did was Amazon allowed people to be creative.
Have choices, right?
That’s right. We have to work around very creative people. Since you were creative, we have to be creative with you.
Logistics involves freight forwarding, customs clearance. There are lots of documentation all along the way of all the things that you have to do. Warehousing, distribution, and perhaps I’m going to call it light assembly or reassembly as you insert thing and do them, storage, and sometimes labeling. There’s a lot that it comes with. Am I missing anything?
Yes, about the importation, the document. I just want to say that if anyone wants to, let’s just say, import a product and you have questions about the duties or you have questions about FTA or anything like that, they are welcome to contact me, it’s 100% free. I don’t ask for any deposit.
Let me remind everybody that you can reach Jimmy through his Expert Profile. He’s got his email and all the company information is right there in his Expert Profile. You can reach him right from there, you don’t have to go finding them on the internet. Go right into the membership area and go to the Expert Profiles and you’ll Jimmy there and all the details. This is important because sometimes in the early planning process when we’re deciding whether or not a product is profitable enough to continue and move forward, we’re making that decision not knowing what import category it goes into, what its duty costs are going to be. If we don’t run with accurate information and we just run with generalized information, we may turn down a good product. We have to have the right information to make that decision. You offering access to that is very valuable for those planning.
Picking a freight forwarder and picking the right product is like picking the factory outlets. I feel a lot of Amazon sellers also make the mistake with picking the factory. You know how when you go on Alibaba, you see the factory minimum production in a week is like 10,000 unit, let’s just say 200 units. They will work with the lowest price factory and the factory will produce 100 units per week and they sell 100 units per week. Next month when you sell 200 units per week, the factories will cater 200 units per week, but when you move to 1,000 units per week, the factory can’t handle it. When you pick the factory, just like you pick a freight forwarder, you have to say, “I’m okay to work with your company when it’s small. The thing is when I expand to be bigger, can you produce this much unit per month because I’m planning to be like Walmart? I’m planning to be big.” If you accept a container now, I want to know two years from now when I’m doing a container every single month, not every five months, can you handle three containers, can you handle five containers during Q4 for me? You have to interview the freight forwarder for that.
The factory as well. You’re so right about that. I’m sure that because you touched so many different types of products and different types of factories, you see a different view of them, like what Tom and I do on our end because of the way we go in and work on the development side of things. We see the engineering and development capabilities in the early pre-production side of companies. We don’t see them when they go out the door. You see that part of the organization. When you do, what you start to realize is that so many have bad communication or they just don’t have the systems in place that they should. They’re like, “There’s a guy who does it,” and you call him up and he gets it done, but there’s no system or process in place. When you start to get bigger that becomes problematic.[Tweet “Scaling is always an issue for people and money is an issue when you scale.”]
Scaling is always an issue for people and money is an issue when you scale. As any company, when you scale there’s a shortage of staff.
I’m sure you know that. You scaled up very quickly in five years.
Amazon is starting to do that as well. There’s a short scale of staff and then there’s the SOP, like do they have an SOP?
Standard operating procedure for those of you who are not in the lingo, and you should get one if you don’t have one.
Pretty much there’s a process. What I tried to do here with my company is that I want to make sure I outgrow my client. Pick a partner. I’m pretty sure every viewer here might have a partner. My advice is when you pick your partner, you have to pick a partner that outpace you.
They’re always a little bit ahead of you.
It will push you, because the thing is like, let’s just say you work with me in a 5,000 square foot warehouse and then you decided to do five containers next year. You going to ask, “Jimmy, are you going to move out or are you going to stay? If I say, “I’m a slow partner. I want to stay,” it’s too bad, right?
Yeah. You want someone who’s going to be able to keep up or be ahead of you. I agree. That’s so smart. Let’s talk a little bit because this is Product Launch Hazards. Let’s talk about some of the things you’ve seen go wrong for people that are common, one or two things that you’ve seen go wrong again and again and reasons maybe things don’t pass customs or they get in and you have to unbox them all and do some work. What’s gone wrong for people?
Number one thing is made in China. They forgot to label it or pretty much a miscommunication with the factory. You tell the factory, “Don’t put any label.” China is very good about following instructions to the letter.
We have this character, this book here in US, Amelia Bedelia. You’ve heard Amelia Bedelia before. I don’t know if when you were young or whatever but Amelia Bedelia does this stuff where she follows exactly what it is. She’s like, if you hang the drapes, it means that you literally put a noose around them and you hang them outside. She takes everything to the literal sense and that’s the way I always think about that. I think about like, “What is my daughter’s going to say?” Like I said to my daughters, “I’m going to jump in the shower. You guys sit here and be concerned and do your thing.” They looked at me and they go, “Mom, if you jump, you’ll slip.” I was like, “I’m not jumping in the shower. I’m going to step into the shower.” Our words, we have to be careful with that. It’s the same thing when you have a translation issue. You have to be careful with the words that you use and make sure that you’re being clear in that communication so you get what you want.
For the made in China, our team in China will always make sure the products have made in China before they leave. In terms of you picking your product, lately I’ve seen there’s a surge of people picking product that’s FDA. Let’s talk about FDA product. When people order small quantities from the factory, they will ship with DHL Air or FedEx and UPS. It goes through the DHL channel and they would declare it wrong. They will get in and then the Amazon accounts start growing. It starts selling the product. After a while when you say, “I want to move big shipment now,” and they found out the fact that you have no paperwork and they also have no paperwork, and now they spent so much time building this product and it ends up nowhere because you can’t import it legally now. It’s always good to review with your freight forwarder.
Why is that? You’re talking FDA. FDA is Food and Drug Administration, which means that it’s regulated like supplements, food products, some beauty products.
Let me give you a random example. My parents are Asian. Five years ago, they were buying this thing made of like rocks. What you do is you massage your head and then it’s supposed to release stress and stuff like that. The thing is when you import product in, you have to be careful what you put on the packaging.
What it’s regulated and able to do, like making claims.
Yes, making claims. Let’s say you import a rock. It’s a rock. Don’t put on the package making claims, saying that it’s going to release stress when you put it next to your bed or when you rub it against your body, it reduces pain. Don’t do that.
Health and wellness claims are the biggest area.
The thing is people see other people put this product on Amazon. People see them making this claim on Amazon. They always ask me about it like, “You’re telling me I cannot put this stuff on my packaging? I see this on Amazon all the time.” What I tell them is because when they import rocks in, they don’t put anything on the rocks. It’s just rocks. When you put it on Amazon, you could put your listing any way you want.
The listings are not as regulated. They should be, but they’re not. Thank goodness for the people who want to sell that stuff. The box, you’re saying the difference between air freighting stuff and how you do that because you’re doing a box at a time or a DHL at a time, it has a different set of categories and rules that it goes through than it does when you bring a big container load.
If you were to bring something in by DHL and it doesn’t meet the standard US custom for the air express side, they will let it go. Once you bring something in like over 1,000 pieces by air freight or ocean freight, what happens is that the custom officer is going to question and say, “This thing is going to go into regulation. It will be among the people; a thousand pieces are going to be out there. No, this cannot go out.”
You have to pay attention to what I’m going to call warning labels, compliance claims. They all fall into there. You were mentioning suffocation warnings earlier about that on the packaging. I found that most factories, it’s automatically in the bags that they use because they know everybody needs it, but you should check. If it’s not in your specifications, you better make sure that it is.
Yes, that’s right. I would say you can’t trust the factory.
It’s always on you. That’s our rule. If you didn’t specify it, if you didn’t put it in your quotation, you didn’t add all these things in, if you didn’t check it before it came in, not getting a sample that’s completed in your box with your stuff, then you have problems.
Another thing is we have to compare ourselves with big companies. Even a big company like Johnson & Johnson or Victoria’s Secret, when they make production overseas, there’s quality control for every batch. Even companies that exist for that long do that much quality control. You being a small company, working with a small factory, you have to do quality check every shipment or you’ll go out of business. Even Johnson & Johnson have problems where they have to pull everything back.[Tweet “We will collect the data and we would get all the information and we give our client the rate.”]
They do. This is the thing, we think that we’re so small that it’s not going to matter, that it’s not going to be a big deal. The reality is that when somebody comes in and there is a problem and everything gets recalled or something happens like that, it’s not just on you. Amazon is going to push all that onto you. It’s going to be your problem. The factory is not going to be held liable for that. It’s on you and you will have paid for inventory that you can’t move, maybe can’t correct because you didn’t do a cursory check. More importantly, if it’s egregious enough, meaning if it’s a bad enough violation of some safety rule or a compliance rule, you can be held liable because you didn’t make a concerted effort to track it, document it, follow it, do any of those things. Those things matter that you have a process and a system or a partner who can help eliminate what you don’t know.
When they go wrong, we fix it. We’ll be the one fixing it for you.
You’re like Mr. Fix-It for us. That’s wonderful too. On the other side of things, let’s talk about the positive instead of the hazard, the problems. The streamline way that you work is in and of itself a positive for early business because it means that I don’t have to think of early product launch. Even if I’m in a business that has tons of products already for sale at bringing in a new product, I’ve got lots to worry about to keep stuff selling. I don’t have time to worry about however things happening or what’s happening. You’re willing to do it, I’m going to call it blind to me, meaning I can get an email once a week if I want. I don’t have to see every little conversation if I don’t want to. If I want to, I can.
Yes. We streamline everything for you. There’s a lot of back office work, like how we do with our clients that after a while our client will just tell us, “My product is ready, please contact the factory,” and we will reach out to the factory. We will collect the data and we would get all the information and we give our client the rate. The client accepts, then we just contact the factory again and then now the client doesn’t have to stay up late at night to deal with the factory and stuff. We collect all the data for you and we reached out to factory and, “We’re here to collect the shipment when it’s ready to move.” Once it’s moved, we tell the client the schedule and say, “Here’s your schedule when the shipment going to arrive in the US.” Then about seven days or three days before it gets here, we notify the client again. 24 four hours before it touches our warehouse, we ask the client, “How do you want to get this through Amazon? Do you want to store some? Do you want to UPS some or do you want to LTL some?”
This is important, the fact that you don’t make people decide that at the beginning. A lot of companies, it’s locked in. Based on the time of year, when it finally gets through port or there happens to be a port strike or something like that and some things happen, now all of a sudden, you’re like, “I’ve got to have them all sent to Amazon.” It changes on you and some companies flip out and don’t like to make changes.
That is correct. I do realize when a client works with another freight forwarder, pretty much the other freight forwarder will say, “This is my process that I quote you, that’s it. You’re set because we built it that way in China already, that process.” For us, we understand that once your cargo gets to our warehouse, let’s just say it was ocean freight, it’s going to take 25 days. Within those 25 days, a lot of things could happen. You could do so well, you market so well and you sell out your product, or you have too much product at Amazon and you say, “Don’t send to Amazon because right now if you send it in, those four pallets are going to cost me $800 a month while it’s holding back at your warehouse for $80 a month.”
It gives you a lot of flexibility and that’s key. Easy communication, lots of flexibility, those are some definite positives and willingness to answer questions, which brings me to why you’re here on this platform. Let’s talk about some things that you might discuss in future Office Hours. Timing, when should they get you involved? It’s a great idea for you to do a whole Office Hours on, where you do ten or fifteen minutes talking about what works best for you guys and what has worked for many Amazon sellers. Then they can just ask you questions.
They just schedule a time to talk with me and I’m here for them.
There are so many things that people have questions about. You’re planning your launch and you’re learning how to sell on Amazon or you’re already selling on Amazon and you’re really concentrating on that. Now you’re learning your product and you’re getting your product ready. To make the freight forwarding and all of that logistics side of things and afterthought can sometimes hurt your profitability. They can also hurt your ability to launch on the timing you expected.
Logistic is something you shouldn’t learn to do. You just hire someone else.
You should learn who to call or email.
For our staff to understand logistics, let’s say you work for Walmart, McDonald’s or whatever, three months is the normal time that you understand how to make a hamburger, let’s say. For logistics, it takes about two years for a person to understand it and they work eight hours a day. Every product is different, every client is different, and everybody buys from different locations and ship to different locations. It’s not like a hamburger where this is how you make a hamburger and you either order number one combo or number eight combo. No, every shipment will be different.
Jimmy, I am so glad you are on the Product Launch Hazzards platform. You have direct access to all of our members and they have access to you. Thank you so much for doing that. We look forward to your next Office Hours.
Thank you so much.
About Jimmy Tran
Jimmy is passionate about the things he does and he loves logistics. if you have a chance to talk to him about planning your logistics, you will see the different in services that he provides compare to the competitors. He treats all his clients like his friends and he will always make sure you get more information than what you need. He was once pro strategies gamer but now turns into a global logistics specialize. In his own words, “logistics is a joke compare to playing video games”.