Selling on Amazon | How to Pay Your Suppliers with PayPal – Amazon FBA for Beginners


Hey, what’s up guys? My name is David. Welcome back to No Rev Limits, and today we’re going to be talking about how to pay your suppliers. I’ve made some mistakes in the past. I’ve used PayPal, and I’m gonna help you figure out if PayPal is the right payment choice for you. Here we go. So, guys, there are many ways that you can pay your supplier, and I’ve made some mistakes early on and, I want to help prevent you from making those same mistakes. Okay? So, after you’ve done some product research, and you’re ready to place that sample – you’re excited. You want to pay your supplier. You want to get in right away. I absolutely know that feeling, but there’s a couple of things that you need to pay specific attention to when paying your supplier. So, to start off with, there are a few ways. Okay? You have PayPal, which a lot of people recommend. You have TT, which is telegraphic transfer, and this is, pretty much, a wire transfer to your supplier. And you also have trade assurance. Okay? And these are just certain ways, and pros and cons, on using those particular payment methods – some payment instruments that you can have different protections on, or lack of protections – and I’m going to tell you what happened to me. So, when I ordered my very first product, guys, I mean I’m excited. I’m, you know, I put in my deposit down and my suppliers ready to bring in – you know, ship my product. So, everything is great. Okay, so this is what happened. I negotiated terms with my particular supplier, and I decided to go with PayPal. Okay? Basic terms, when you’re working with suppliers, 30 percent deposit, 70 percent for the rest of the funds when your item is ready to ship. That is when you place that final payment amount of 70 percent. So, I’m like, “Hey, I want to pay through PayPal.” Because, why? PayPal has certain protections. So I thought. The issue with PayPal is, when you’re working with suppliers and different manufacturers when you’re buying your product, if they’ve modified the product in any way – if it’s not off the shelf. If they’ve modified the product in any way, meaning, put your logo on there, and you made some modifications etc., then it is not eligible for the payment or buyer protection through PayPal. That’s crazy, right? So, pretty much any private label item is not covered under PayPal’s Terms of Service and buyer protection. That’s unbelievable. So, when you’re ordering the samples, if you order the generic sample, maybe – but we’re not ordering those in bulk. That doesn’t help us. Okay? So, when I ordered my particular product from my supplier, I ended up getting my product, I was excited, it landed January 21st – I believe – of 2017. Super excited. Okay? I open the box ready to look at this beautiful product, and then boom! I got garbage. Okay, now, I mean, let me not exaggerate. It wasn’t complete garbage, but I couldn’t sell at the premium price, and you know, when we’re doing our product research, we want to sell a premium value product, right? We don’t want to go to the bottom feeders. We want to sell a premium value product. We’re differentiating. We’re adding value, and we want to be at the top of the top of the price range for a particular niche – or niche. That’s what I was aiming for, and I paid the premium price for this particular product. So, when I got it back – or finally got it in my hands – it was not what I was expecting and therein lies the issue guys. I bought this product at a premium cost, thinking I was going to sell it – expecting to sell at a premium price. So, we’re not buying products where we’re just doing me too products. We’re trying to add value, right? So, we’re trying to correct problems, solve the problem for the customer, charge the premium price in that particular niche that we’re in, and that’s exactly what I did. But, when I got this product, it was not the premium quality that I expected. So, I immediately hopped on the phone and talked to – called my suppliers like, “Hey guys, you see me a product that’s not up to my specs and my requirements and, this is the problem.” Now, the thing about this is that, I didn’t get an inspection, and I’m not going to go into detail about inspection services in this particular video, but inspections are incredibly important, because that’s an extra layer – an extra step – for you to protect your inventory and your investment. With that being said, I end up getting the order, I think December – I’m sorry January – 21st of 2017, and I was extremely disappointed. So, I got on the phone with my suppliers like, “Hey guys, we gotta fix this.” And, again, this is a typical Chinese supplier back and forth where they’re like, “No, we gave you exactly what you asked for we’re not gonna do anything about it.” So, I’m worried. I’m panicking – didn’t know what to do. I was like, “Well, I’m gonna go to buyer protection, right? I payed through PayPal.” Alright, so – so, this is where I made two critical mistakes. The first mistake, when you’re buying through PayPal – or when you’re paying through PayPal, your supplier through PayPal – you’re not going to be protected under buyer protection if your product is modified. So, that means all of private label. If you’re getting real samples with your logo, your brand, or made any modification where they had to make changes – If the supplier can prove that they modified your particular item to send you, you will not be protected under the buyer protection program. So, now what? So, I decided to – okay, well, I decided to submit a report. My supplier, pretty much, told me off the bat that, “Hey, you’re right. We sent you a different product. It was not where you specified.” I have text messages, emails, pictures – sent this big appeal to PayPal, and guess what? They didn’t do anything about it. They denied it three times. So, I’m not feeling confident at this point, guys. So, what I ended up doing was like, okay. Maybe, since I paid you PayPal it’s going through a credit card, so I thought, and I’ll have bank protections. That was critical mistake number two. I didn’t set up – I didn’t make this particular payment through a credit card purchase. I used the same account, but I ended up doing it through a wire transfer. So, you have two different ways you can do this, PayPal wire transfer through a bank account and directly to your credit card or debit card. I’ve made the mistake of actually making this purchase through a transfer and not using the credit card. So, I don’t have any protections from my bank, and I would think with the information that I had given them that I would have had this protection, would have gotten that money back from the bank. But, I did not. So, that was the critical mistake number two. So now, I was left with a product that I couldn’t sell at the top price, or the price that I wanted to, and pretty much had to go on and sell this product at a lower price – lose some money off the bat, before I even got started. And I don’t want you to make that mistake, guys. So, to sum this all up. There are two critical things that you must pay attention to when you’re making a payment through PayPal to your supplier. Actually, there’s a few. The first thing is making sure that you specify your terms with your supplier. Okay? In most cases it’s 30 percent – 70 percent. So, you pay 30 percent deposit, 70 percent for your final payment and this payment has done when the product is ready to ship, because as soon as they deliver – depending on your shipping terms – as soon as it leaves their factory, or it’s delivered to the port, it is hands off for them. They don’t care what happens to the product. You’ve already paid. Okay? So, when the products ready to ship, that’s when you send in your your final payment of 30 percent. For your 30 percent, you know – regardless of that 30 percent or whatever payment terms – make sure that you are paying via a credit card or debit card charge on PayPal. And if your product is private label, which we’re all doing, then you’re going to have to go through your bank in order to get that protection. I would still file the appeal through PayPal, just to make sure and just file the report through PayPal just to see if they handle it or not. But, if they don’t, you have a backup through your bank a provider or that particular credit card if things were to go wrong. Just make sure that you document everything. Okay guys? So, I’m hoping this helps you out. Avoid that mistake. Okay? Big issues end up being a big headache, but you know what? Here I am a year later, still selling, and next up, we’re gonna be talking about how I did my product research. Anyways guys if you like this video, go ahead and hit that subscribe button. Hit the bell so you get notified when I release my next video. Thanks for supporting me, and I know this is the grassroots – the very beginning. Hope I can get this a little more consistent where I’m releasing the videos and content a little bit easier. It’s kind of tough right now because i’m still in my nine-to-five. So, it makes it a little bit difficult only getting to film at night time, and all the things end up in a being a problem. Anyways like, subscribe, and I’ll see you in the next session. Peace guys.

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