Expand Your Amazon Sourcing Platform with India’s Innovative B2B Program

For those of you who might be wondering about the viability of online business platforms during this COVID-19 pandemic, let’s take some time to examine the B2B e-commerce scene in India. Sure, it’s pretty early in its development and practice, and like everyone else, India’s not immune to the coronavirus’ current effect on worldwide business. But being the new kid on the block can certainly have its advantages.

Let’s define a few terms first.

What Is B2B?

It is important to differentiate between B2B and B2C. B2B is short for “business to business,” which essentially means that one company conducts business with another company in an online setting. This is different than B2C, or “business to customer” transactions. Amazon is an excellent example, and we all enjoy the convenience it provides.

Due to the nature of its business structure, B2B not only functions on a different level in the delivery chain than B2C but also has a more complicated process. The most important thing to know is that the pricing, the manufacturing, the packaging and the shipping are all negotiated within a B2B agreement. 

This industry is growing in leaps and bounds. Globally, B2B has market profits estimated to reach 1.2 trillion USD by 2021.

India’s Product Sourcing

Amazon brand sellers are jumping at every opportunity to get ahead of their competitors and smart product sourcing is how they’re doing it. Some see North America as a potential sourcing location, but the veteran players in the B2B arena still hail from Asia. Among them, India is attracting a lot of prospective sellers.

Here’s the rationale in India’s favor:

• India has less of a communication barrier than other Asian countries because of its established English language infrastructure.
• India’s developing market is attractive to Amazon sellers. Its manufacturing facilities are rarely back-logged with orders, and as a result, may be more open for negotiation.
• India has lower Minimum Order Quantities (MOQ) than China, for example. When business is through the roof, lower MOQ may make all the difference in competing for businesses that rely on smaller order quantities.
• There’s a lot of unique cultural merchandise available that tells a story. We all like to have that one conversation piece on the mantle that lasts long in our guests’ India is well-known for creating fascinating naturally-sourced and handcrafted products.
• India’s factories prioritize testing. From the raw material all the way through the manufacturing process, brand sellers can rest easy knowing their product followed safe standards of procedure (SOPs).
• Labor costs make all the difference. Recently, China’s labor costs have spiked 10-15% with the additional burden of U.S. tariffs on Chinese goods. India’s costs, in comparison, are very reasonable.

China’s Product Sourcing

On the other hand, those who source their brands in China have a strong case as well. 

While it might be easier to get started with manufacturers in India, it’s important to understand that there’s a lot more necessary groundwork, since unlike China, India is incredibly new to the field. China has been at this game for a very long time and is the reason why many businesses source products from China at the best price.

China is known as the world’s factory, and it’s not going to be easy to knock it down from the top of the mountain. It’s the reason why Honu’s product sourcing enterprise is based entirely in China. India is relatively new to large-scale B2B e-commerce. 

Here’s why China still leads the pack:

• India’s product diversity is still limited.
• China has mastered e-commerce logistics.
• While India’s SOPs are good, China’s are at a whole different level.
• China has all the export licenses in its pocket.
• Because of its longevity in the B2B business, China’s reputation for cultivating mutually beneficial relationships with shippers cannot be ignored.
• China supports the Amazon FBA process.
• India’s manufacturing output is limited by its shorter hours compared to China’s 12-hour days.
• China has 100 ports between Beijing and Hong Kong. India’s only shipping port is Mumbai, placing it at a disadvantage.
• Much of India’s water freight makes a pit stop in the Middle East to get transshipped (overland) before going back on the water, adding to product travel time.
• India’s limited experience with B2B as a sourcing origin means that brand sellers will need to establish supply lines via a sourcing agent.

As you’ve seen, India has some significant disadvantages in the shadow of China’s experience and expertise. However, every difficulty can have a silver lining. Amazon sellers are starting to recognize this.

Sourcing your product through a Chinese company doesn’t take a lot of work. Hundreds of sellers are doing it (nearly 4,000 people sell on Amazon daily) and anyone can be involved. Alibaba is one such convenient platform. However, we have found that 9 out of 10 online businesses overpay their suppliers. Make sure you’re getting the best prices by booking a consultancy call with us today.

The downside to this accessibility is the volume of competition. Brand sellers would be wise to consider all the facts before settling on their preferred sourcing partner.

The YETI Principle

You’ve probably heard of YETI products. YETI wasn’t breaking into new territory when it came out with its first $800 ice chests and $45 stainless steel tumblers. To the contrary, it all started with a simple, double-walled plastic tumbler collecting dust on a store’s lower shelf. YETI took the idea, slapped some sweet stainless steel into the mix and got their break. YETI found its golden egg.

The “YETI Principle” goes into effect when a company takes an interesting product that’s already on the shelves and makes a similar, much more attractive, product. Not only that, but it gets it done before its competitors. 

Parting Words

There’s a lot going for India as the new kid on the B2B e-commerce block. Just remember that regardless of who you settle on as your sourcing agent, you’ll still have your hands full validating the product to the larger Amazon community and getting your name out there. Maybe it’s time to take that challenge to heart and try a risk or two.

Who knows? Soon enough, you’ll sleep easier knowing that elusive golden egg is just over the next sun rise. 

Looking to make the right decision? Visit  honuworldwide.com to speak with one of our agents today and feel secure about sourcing.