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How to Get Precise Quote? Which Trade Term Works Best? Module 3 Ep 1 - YouTube
Channel: Jingsourcing
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in previous video i have talked about
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how to identify supplies background
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such like if they are the real
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manufacturer trading company or
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wholesalers
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and also explain how to identify if they
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are
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professional and reliable enough that
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you can have long-term business together
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so in today's video i'm going to talk
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about the next
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very important thing that you're going
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to do that is to get a precise quotation
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from suppliers you may hear of
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treatments like
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fob cif exw but you probably don't
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understand
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what kind of costs are included or
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which turn you should let the supplier
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quote you for different situations
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actually you don't need to know too
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deeply about this kind of
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trading knowledges just take away my
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conclusion
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in today's content in addition to trade
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turns
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i also shared a lot of tips that you can
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use
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when getting calls from suppliers to
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avoid some
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unexpected price change or product
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change
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after you place order welcome to watch
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the input from china guide video series
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i'm joining the founder of dream
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sourcing the leading chinese sourcing
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company since 2015
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and i will teach you the most practical
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tips
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to import quality products from china so
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make sure you got
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subscribed
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when you're getting calls from suppliers
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you should tell them that which return
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they need to use to quote you the price
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for the products
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because importers have different
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requirements on how suppliers should
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deliver products
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either shipped to a certain port in
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china or a port in your country
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or maybe you just find someone to pick
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up cargos
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at the supplies warehouse accordingly
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supplies have different responsibility
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and
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cost for this kind of situations and
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that's why
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they should quote you product price in
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different trade turns
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and the most famous one is fob
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but i find there are a lot of tutorials
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on internet that
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teach the wrong information they
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encourage you
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always to get a fob prize however
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fob turn is not suitable for everyone
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especially not suitable for
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new e-commerce sellers or small
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businesses or people who want to use the
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career services such like fedex to
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deliver products otherwise you are
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paying a higher price
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which is not necessary in international
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trading
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there are tons of trade terms and
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there's even an international
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organization
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that will publish a book every couple of
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years to regulate all the trade turns
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of course you don't need to understand
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this kind of textbook knowledges
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because they're only used for large
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quantity trading
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what you only need to remember is the
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following
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trade terms and understand in what kind
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of situation
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you should ask suppliers to quote you
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with return
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the number one is fob price fob means
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free on board
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if the supply codes your fob price it
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includes all the costs
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for sending the product to the vessel of
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your appointed seaport
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or sending the product to the aircraft
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of your appointed airport however
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you cannot simply tell the supplier that
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can you give me a fob price for this
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wine glasses
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because fob price should be based on a
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specific
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seaport or airport such like fob
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shanghai
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and opening board if you don't have a
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specific c port that
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led the supplier to deliver to then you
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can just ask a supplier
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let them tell you where is their closest
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seaport
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and then lesson quotes you the price
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based on that let me give you example
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if you find two suppliers and one of
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them
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is from dongguan which is a city in the
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south part of china
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it's better for him to quote fob
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shenzhen price
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because they're only less 100 kilometers
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away from shenzhen
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and the other supplier is from suzhou
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which is less than 100 kilometers away
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from shanghai
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so it's better for him to quote you the
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fob shanghai price
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however you ordered a 40 feet container
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which has around 6 8 kb major capacity
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and you want to load all these two
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supplies products
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in this container so in this kind of
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situations
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you have to ask these two suppliers to
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call you fob
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price based on the same port if you
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ordered
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40 cubic meters of perfume bottles from
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the
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suzhou supplier then it's better to ask
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the
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back manufacturer in dongguan to send
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the products
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all the way to shanghai port and quartu
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the fob shanghai price
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if you don't want to spend too much
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money on the domestic shipping in china
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that sending product from dongguan all
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the way to shanghai
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which is about a selling kilometers
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then you can try to find a bag
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manufacturer
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that close to shanghai to replace the
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one in dongguan
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so if you have your own freight
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forwarders that someone who can help you
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handle the shipping from
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nc portal airport from china all the way
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to your country
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and also help you handle the import and
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the custom clearance
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in your country then it's very
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recommended for you to let the supplier
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quote you the
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product price in fob turn because you
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don't need to worry about
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how far away it is from the supply
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warehouse to the seaport
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and also you don't need to worry about
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what is domestic shipping costs in china
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and if you don't have a warehouse in
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china but you want to
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let the supplies from different parts of
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china to ship
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all their products into one place and
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consolidate into one shipment
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then it's also very recommended to let
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all the supplies
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cause your product price in the fob turn
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but
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they should be based on the same port
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here is also very important information
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when the supplier is calculating the
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cost for the fob service
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there will be some fixed cost which is
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about a couple hundred us dollars
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in each shipment that means if you are
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buying less quantity
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in each shipment then the average fob
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cost on each products
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will be more expensive for example if
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the manufacturer's original price for
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a perfume bottle is the same no matter
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you order
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one thousand or ten thousand unit but
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the fob price for
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one thousand unit will be much higher
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than ten thousand unit because of the
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fixed fob cost in each shipment so
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if the volume of the product you
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purchase is not very large quantity
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like less than 2 cubic meter or less
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than 500 kilograms
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then it's not recommended to get the fob
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quote and also not recommended to ship
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buy the seafood or air freight
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but try courier service instead however
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when you want to use fedex or dhl this
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kind of dot-to-dot deliveries courier
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service
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you cannot let the supplier quote you in
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fob turn because
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career companies they won't go to places
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like
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seaport or airport to pick up cargos and
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instead they will go to your supplies
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warehouse to get your product
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however the fob cost has already
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included all the cost for
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shipping products from supplies
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warehouse to the port
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and until the product load on vessel or
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f craft
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and also the cost for the exporting
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process
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if you are paying the fob price then you
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are paying the extra money
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which is going to your supplies pocket
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so in this kind of situation
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you need to get a exw price exw
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is short for ex works it's the
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manufacturer's
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original product price and it doesn't
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include
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any other service or domestic shipping
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cost
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you need to find your own freight
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forwarders to go to supplies warehouse
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to get the product so when you are
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comparing the price between different
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suppliers
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lesson quotes you the exw price then you
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can understand
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who can literally produce this product
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for the lowest price
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as i mentioned above when you are using
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curry service like fedex to ship
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products you have to let the supplier
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quote you the exw price
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because current companies they will
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travel to supplies
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place to pick up the product in addition
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when you are not purchasing very large
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quantity for one product
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the fixed cost part of the fob price
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will
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make each unit's price looks very high
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that is not very convenient when you are
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doing the product research or not
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convenient for you to decide how much
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quantity
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that you should buy number four cif
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price
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this is also very common use trade turn
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it's short for
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cost insurance and freight well for the
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insurance here i just want to mention
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that
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it doesn't help if your product get
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damaged during the shipping
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it only helps when your whole shipment
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get lost
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if you don't have a freight forwarders
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to help you go to supply place to
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get product shipped from china to your
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country or you don't want to bother to
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do this thing
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then it's better to ask a supplier to
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call you the cif price
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then they will help ship the product to
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a specific
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seaport or airport in your country then
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you only need to find a local logistics
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company and
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a custom broker to help handle the
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custom clearance and also help you
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arrange the shipping from the port to
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your warehouse
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here i need to tell you a fact the free
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cost included in the cif
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price is just a very small part of the
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total shipping cost front
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supplies warehouse in china all the way
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to your warehouse
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in your country the biggest part of the
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whole shipping
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and input export process cost are those
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costs in the import process
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and also the domestic shipping from the
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port
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to your warehouse for example the safe
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rate cost that
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included in the cif price is only around
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50 us dollars per cubic meter from china
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to the aport in united states however
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the actual total
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logistic and input export cost that
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shipping from
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suppliers all the way to your home will
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cost you around 200 to 300 us dollars
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per cubic meter
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so don't be surprised that you find the
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total cost
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from the american seaport to your
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warehouse is
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times more expensive than the free cost
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included in the cif price the number
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four is ddp
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which is short for delivered duty paid
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that means
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the price that supply quotes you has
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included all the costs for
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sending product from chinese suppliers
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all the way to your destination in your
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country
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and the supplier will also pay all the
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costs for the
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import export process and also the
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custom duty
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it's very suitable for those importers
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who don't have any shipping coming
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resources
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or who don't want to bother with the
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shipping and import export issues
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so if you are doing the product research
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and want to know
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how much it will cost to import the
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product from china
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just let the supplier go to the ddp
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price and that's
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exactly the total importing cost the ddp
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price has import duty paid but some
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suppliers still prefer
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buyer to pay the custom duty before
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product being delivered
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in this kind of situation it's called
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ddu price which is short for
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delivered duty unpaid even though the
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trade turned ddu is cancelled
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in the incotern 2010 but it's still
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widely used
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however if the supplier don't have very
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good resource of
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the freight forwarders that can help you
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handle the shipping to
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your place then they are not able to
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quote you ddp
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price
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except for understand some basic trade
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turns
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there's also a lot of things that you
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can pay attention
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in order to negotiate a better price if
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you are quite flexible about
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how much quantity to purchase but you'd
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like to know
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how much the price that supply can offer
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first
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then i strongly recommend you to ask a
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supplier to give you a price list
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for quantity breakdowns most chinese
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manufacturers or trading companies they
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will have a mokio which starts from
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a selling of dollars and usually when
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you can order other than 5 000 or
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10 000 us dollars then there will be
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some related discount
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well the discount will be based on the
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product or supplies
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and that's why you need to ask a
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supplier first so
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what is the maximum discount that supply
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can offer you
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if you can increase a large quantity
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it's really
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based on the supply and product but i
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can give you a rough idea is that
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usually 5 or 10 percent will be a
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maximum for
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most of the cases because manufacturing
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is very low profit business
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and it's very normal that you got almost
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the same price
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no matter you order 10 000 or 100
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selling unit of the same products
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as it's reached their lowest price
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well here's one thing that i don't
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suggest you to do
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is that you negotiate with a supplier
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for a very low price
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for very logically like 10 000 unit but
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eventually you only place order for 1
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000 unit or even less
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and you still want to use the price of
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10 000 unit
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and this will make the supplier upset
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and they will feel like
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being tricked that's not good for
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maintaining a good business relationship
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reason
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when you're getting quotes from
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suppliers there's one thing that you
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need to double check
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does the price include the packaging
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cost and what kind of packaging
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is that let's take perfume bottle as
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example
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assume the supplier quotes you one
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dollar and a half for
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one unit and you have seen on their
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website or alibaba product page that
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this perfume bottle has a white box
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together
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so you place order of a selling unit but
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eventually you'll find each bottle is
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packed with
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bubble wrap instead of the white paper
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box
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and the supplier will explain that the
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bubble wrap is their default packaging
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and a white box will cost an extra 15
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cents
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that is 10 increase on the product price
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and sometimes if you want to make your
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own private label products
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such like printing your logo on the
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product or print some
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graphic design on the packaging box and
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supply will tell you that they can help
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you with this
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but you didn't ask what is a card so you
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thought
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they are doing this for free after you
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place order and
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send them deposit they start to charge
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you for the customization
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which is not you expected so don't
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expect
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all the supplies will tell you the
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detailed cost for
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specific packaging or customization
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you'd be better to double check reason
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before you place order
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the number four thing you need to check
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when you are getting calls from
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suppliers is to make sure if the price
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they offered is for
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inventory products or brand new made for
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most of cases
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when you are buying products in quantity
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manufacturers usually start production
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after you place order but sometimes
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suppliers have some inventories
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and will sell a very low price in order
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to clean them out
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so when you want to order the product
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for the second time
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you will find the price is 20 30
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or even more higher than the first order
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because
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the other inventory was sold out and you
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have to pay the original price
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to start a new production so when you
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are comparing prices
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among different suppliers and if one of
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them
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offers much lower price than others then
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you need to make sure
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if he is selling inventory items maybe
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it's over stock products
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which has been left in their warehouse
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for quite a long time
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it's more likely to have dust rust or
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other defects
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if you are not so picky about getting
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the lowest price
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i stress you always to get new made
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products
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because only in this way you can ensure
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that all the product quality can be
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remained
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quite the same no matter which time you
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order in the future
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and for those overstocked inventory
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products
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you have no idea about what has happened
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to xen
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and you cannot always expect the supply
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will tell you
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the price is for inventory or new
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production
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you have to ask them first thank you for
[1012]
watching today's video
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i hope you have very clear understanding
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about trade turns and also learn what
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kind of things you need to pay attention
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when you try to get calls from suppliers
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do you have any questions
[1024]
about today's topic please leave in the
[1026]
comments and if you liked today's video
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please give me a thumbs up and also
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get subscribed and i will see you in the
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next video
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