Everything you need to know while buying from Alibaba

Whether you are a wholesaler or an online retail seller, you will definitely not have heard of Alibaba. You may have heard it, but you don’t know how to buy from alibaba, let alone find the right products and suppliers by Alibaba to increase your business.

Here there you have it- all the guides, pros & cons, tips you need to become an effective entrepreneur.

We will step by step to show you how to navigate by Alibaba and lock onto the perfect suppliers for your products idea and get more profit on your business.

Ok, let’s dive right in.

1. What is Alibaba?

Alibaba is said to be the largest e-commerce company of not only China but the whole world.

It has segregated its operations into three websites namely Taobao, Tmall, and Alibaba.com.

Taobao has stood out as the largest online shopping website of China;

At Tmall, you can buy your favorite branded products online, and this site specifically targets the middle-income group;

And Alibaba.com brings Chinese exporters (traders) in contact with buyers/importers throughout the world, thereby making trading convenient and easy for parties involved.

Millions of merchants, traders, manufacturers, and users rely on Alibaba for buying, selling, and international trading purpose.

Considering the large chunk of business that Alibaba handles, it won’t be wrong to give it the ultimate tag of being the greatest e-commerce organization of all times.

1.1 Alibaba Review: Is Alibaba Safe?

Have you ever come across this question “Is Alibaba safe?”.

Many of you must be of the view that Alibaba is not a genuine platform.

However, that’s not true.

This platform tends to bring buyers and sellers together, thereby making trading convenient.

It won’t be wrong to say that the site may have a few scammers that people need to be aware of.

But then, that’s the case of almost every online site and not just Alibaba.

Importers who have just entered this trading business, or who are using Alibaba for the very first time are reluctant to trust its operations completely.

Alibaba is indeed not the right place if you’re planning to buy original and branded products as you won’t find any.

Also, licensed products that have some sort of industry or brand logo imprinted on them are not the ones you’ll find on Alibaba.

Are you wondering if Alibaba is safe?

The answer is Yes, but not 100%.

Alibaba is the safest B2B marketplace, however, there are still risks of buying from Alibaba.

Tips to stay safe on Alibaba:

(1) Work with 3 years + suppliers: For ensuring reliability and safety, it’s always a better option to select suppliers who have a trade history of at least 3 years.

(2) Always get samples before ordering: Another way for dealing on a secured basis on Alibaba is to order samples beforehand, in order to ascertain if it actually matches your expectations. Placing an order for a sample, and comparing it with other alternatives is anytime better than placing a bulk order, and then discarding it if it doesn’t match your expectations.

(3) Communicate within Alibaba email and chat: Establish effective communication with suppliers via Alibaba email and chat, and stay updated with what suppliers are up to, or anything that is related to your order delivery, shipping, and production.

(4) Be specific on what you need in the email: The trick to getting what you need involves being as much specific as possible about your order. Use Alibaba email, and tell the supplier about the MOQ, product attributes, the preferred mode of payment and your expectations related to the order.

(5) Use Alibaba Trade Assurance: Alibaba’s trade assurance service creates a sense of security between buyers and suppliers and safeguards the interests of buyers in terms of payment, shipping, and quality of products.

(6) Inspect the products before balance payment: In the initial stage, buyers need to pay a certain amount of money before the production starts. However, they can decide to pay the balance amount after being 100% sure of the quality received.

1.2 Difference Between Alibaba and Aliexpress

Alibaba stands out to be the biggest online platform in the whole world where B2B (Business to Business) operations take place.

Here, importers find their prospective suppliers and manufacturers and place their respective orders. On the other side, Aliexpress is the sister site of Alibaba and is more about B2C (Business to Customer) transactions.

In this section, we’ll be covering the factors that make Alibaba different from Aliexpress.

• Order Quantity
  At Alibaba, importers usually place bulk orders online, while Aliexpress is the platform for buying individual products such as 1, 2 or more. For placing small orders from Aliexpress, the importer doesn’t have to stick to a minimum quantity.

• Prices
  Alibaba is your go-to place if you are willing to buy products at a wholesale rate. In contrast to this, the prices at Aliexpress are indeed lower than the ones offered by its competitors such as eBay and Amazon, but still, they are higher than the ones offered at wholesale rates. For example: If you buy a pair of leggings from Aliexpress, it may cost you $6, but if you place an order of 400 pairs on Alibaba, it will cost you as low as $1.5-$2. Now, that’s such a great difference, right?

• Communication
  Alibaba gives its users the authority to be confident of its suppliers’ authenticity. Further, it’s a platform where both the parties can communicate their requirements, and clarify doubts if any. In case, you want to customize a product, suppliers at Alibaba can do that as well. On the other hand, Aliexpress is just like any other e-commerce site where you select your product and buy it instantly.

• Dropshipping
  For considering the idea of dropshipping, you must have an online website, contact a supplier that offers fantastic drop shipping services, select products you want to display on your website and make payment to the supplier when an order is placed. As it’s the responsibility of the supplier to dispatch and ship goods to the customer, you don’t need to bother about stocking products and incurring additional costs. However, this drop shipping service is applicable for Aliexpress alone, and for Alibaba, you can rely on importing facility.

1.3 Sites Similar to Alibaba

We won’t mind repeating ourselves saying that Alibaba is the world’s biggest e-commerce or B2B site.

But have you ever felt like exploring more options in terms of sites that are almost similar to Alibaba?

After all, there is no harm in knowing about the platforms that offer the same trading services as Alibaba. A few sites revolving around the same concept are:

• Global Sources

Global Sources, headquartered in Hong Kong, has made it possible for over millions of importers or customers to source products to over 250 nations at wholesale rates. They organize trade events so as to make it feasible for global clients to reach out to reliable Chinese suppliers for trading purposes.

• DHgate

DHgate, headquartered in Beijing, offers premium quality Chinese products at comparatively reduced MOQs. The site paying the seller only after receiving approval from the buyer is indeed a spectacular feature of this e-commerce platform.

• Made-in-China.com

MIC specializes in Chinese product promotion and only accepts Chinese suppliers to post product information. It is the business-to-business platform that solely promotes Chinese products. Moreover, most of the buyers are from developed countries such as Europe and the United States targeting on a regional basis.

1.4 What Does MOQ Mean on Alibaba

MOQ is an acronym to Minimum Order Quantity. It specifies the minimum quantity that a supplier wants to manufacture or sell at a time.

The method of arriving at MOQ may vary from one supplier to another. It also depends on the expenses/costs that the manufacturer may have to incur for producing a particular set of products in one go. It not only covers the production/manufacturing costs but also makes sure that the supplier earns profits.

In case, there is a mismatch between MOQs and number of units produced, they won’t be able to cover their production expenses, or reap profits.

As you buy in bulk from suppliers, it lowers down the cost of each unit, thereby offering you the most feasible price. However, a downside of MOQ, especially for budding companies, may involve incurring huge down payment before the production actually starts.

For example: if 1000 units need to be produced at $5 each, the production cost will be $5000 that the business will have to incur anyhow for the smooth functioning of operations. And just remember, it’s just the production cost that doesn’t include any shipping, custom or other expenses.

1.5 What Is OEM on Alibaba

In contract manufacturing, OEM stands for “Original Equipment Manufacturer”. OEM simply provides private labeling in order to give your product a sense of differentiation than others.

Here, it will be the duty of the factory to print a personalized logo on the product that they’ll produce/manufacture for you.

Hence, the majority of OEM organizations are referred to as private label manufacturers.

Here is an example is taken from the electronics industry. As we know Apple outsources their electronic manufacturing services to a Chinese company called Foxconn, even though all the Apple products are designed in Cupertino California. And therefore, in this case, Foxconn is considered as Apple’s OEM partner.

1.6 What Is Gold Supplier And Verified Supplier on Alibaba

To be a Gold Supplier and Verified Supplier on Alibaba, a supplier has to subscribe to the premium membership plan. It gives buyers the confidence that their business has been certified by a third party as legit.

Once you pass on-site checks and earn the status of Gold Supplier, your company’s logo will be accompanied by the number of years that you’ve been with Alibaba as a Gold Supplier.

The verified supplier can show more their business profiles, production capabilities, assessed and certified by independent third-party institutions.

But, do these Gold Suppliers on Alibaba really earn the tag of being trustworthy?

Though Gold Suppliers have the advantage of making their products visible and engaging in product promotions, it still doesn’t assure superior product quality and morally correct behavior.

There are some companies, who were gold suppliers, offer outstanding product quality on Alibaba.

But then, there are some, who in spite of being gold suppliers, offer poor quality products, and don’t bother hiking prices at last moment.

So, buyers need to be very careful even while placing an order with gold suppliers.

Alibaba earns revenue from suppliers listed as ‘Gold’ on its website. An, it has nothing to do with reliable quality, on-time delivery, and so on.

1.7 What Is Trade Assurance on Alibaba

Trade Assurance is a premium yet free service formulated in order to protect buyers’ interests and give them peace of mind during the entire trading process. There can be cases when the buyer doesn’t receive the order as per his/her specifications, or on the due date.

This is where the concept of trade assurance comes into the picture. You will get a complete refund if the order doesn’t match the quality standards.

For ensuring that your goods are covered with trade assurance, you should place an order with a ‘trade assurance supplier’, and make payment to the escrow account of the supplier on Alibaba.

The supplier will receive the payment once you receive and approve the goods. Some of the amazing features offered by Alibaba are as follows:

1. Safeguarding your payment: Your payment remains safe up to 30 days upon the receipt of goods.
2. Ensuring product quality: Your order will be eligible for refunds if the product quality is not at par.
3. Shipping coverage: You will receive the shipment of your order on the specified date, and in case, it doesn’t happen, stay assured of getting a refund.
4. Protecting your order: You get 30-day protection of your order once you have goods.

1.8 What Alibaba doesn’t do

1. The Trade Assurance Program offered by Alibaba is not responsible for scheduling shipping due dates or quality-based specifications.
Under this program, buyers can enforce terms and conditions of the agreement that both of the parties have already complied to.

2. A buyer should be specific about when he/she needs the order to be shipped followed by certain quality standards.

3. Using too broad phrases such as ‘supreme quality’ or ‘quick delivery’ will make it hard for the supplier to understand your requirements.

2. How to Buy from Alibaba

Buying from Alibaba is easy if you follow these steps:

• Register on Alibaba: Creating an account on Alibaba is easy, and the good news is that you don’t need any wholesaler’s license or credentials for registering here.

• Product search: Now, the next step is to look for products either by entering the keywords in the search tab. Or have a quick glance over the listed products on the left side of the page. For making it steadier, refine your search results by using ‘filters’ such as color, size, type, supplier’s location, etc. Still confused about finding the right product for your trading business? Then, reach us out today in order to find the feasible product as per budget and specifications.

• Supplier search: Searching for a supplier can be effective when you already know with whom you want to work. You can filter suppliers on the basis of location or country of origin. Also, if you want to place orders from numerous suppliers in decent quantities, and want to ship them all in a single container, then reach out to us today. We offer a sense of identity to your products by adding a logo that suits your mission, and further add unique packaging style to sell them off quickly. In case, you are planning to visit numerous factories, or wholesale markets somewhere, then we can plan your business trip personally.

Tips:

1. Find the products that you want and tick those in to compare easily
2. Contact suppliers one by one

• Asking for an RFQ (Request for Quotation): Once you’ve filtered out suppliers and products, the next step will be to compare quotes of different suppliers and select the best one amongst them. You can do this by hitting the ‘Submit RFQ’ tab and provide details such as product keyword, number of units you want, shipping schedule, mode of payment, product specifications, etc. Ask if their MOQ is negotiable. To ensure that you’re selecting the right supplier, go with the one whose profile has badges including A&V Check, Assessed Supplier Check, and Onsite Check. Also, you can go through the feedback or reviews provided by previous buyers or customers to save yourself from any negative experiences in the future.

• Ask out for a sample
  If you’re not sure of the quality of the product or are dealing with a supplier for the very first time, inquire them if they can send a sample for testing purposes. The price of a sample will indeed be higher than the price per unit (if ordered in bulk), but it will give you a sense of confidence of whether to go with the product or not. You don’t want to place a bulk order without testing any samples in the first place. Don’t you?
• Calculate the overall payment to be incurred
  Once you’ve placed the order, you need to ascertain what amount needs to be paid to the supplier. You can either make secured payment via Alibaba’s Escrow account or PayPal. Calculate your freight costs, transportation costs and customs duties using the user-friendly Freight Logistics feature on Alibaba.

• Coordinating shipment with suppliers
  If you are ordering from multiple suppliers, and each order comes in CBM that is less than 20 feet container, then you need to coordinate shipment between these suppliers, mix their products into one container and arrange shipment accordingly.

If you’re iffy about custom duties and taxes, and other legal functionalities, prefer hiring a customs broker. And once your order has reached the destination port, choose among various options such as FedEx, rail, or truck depending on how far or near you’re from the port.

Since Alibaba is not 100% hassle-free, so we will cover the “problems of buying from Alibaba” in Chapter 5.

2.1 How to Buy from Alibaba Without A Company

If you are of the assumption that you need to be a company, organization, acquire a seller’s license or an official website for placing an order on Alibaba, then you’re wrong.

Alibaba suppliers have nothing to do with what you do, or whether you’re a company or not, as long as you are placing bulk orders, making on-time payments, and being their regular customer.

You must remember that Alibaba comes as a huge e-directory of suppliers based in China, and it’s totally your choice to negotiate price and order MOQs.

2.2 Sourcing Suppliers from Alibaba

Sourcing suppliers from Alibaba can either make or break your trading business.

Undoubtedly, you will see hundreds of suppliers trying to woo you, and collaborating with them for your business.

However, out of those many hundreds, you just need one to kickstart and flourish your import-export business.

A few things to consider while sourcing suppliers from Alibaba are:

• Factory vs trading company
  If you are following Alibaba for finding suppliers to deal with, you need to know if they are a trading company or factory. You can easily figure this out by viewing product categories, and check if they are selling different kinds of products. If that’s the case, then you’ll be dealing with trading company. Though it offers a lower MOQ, it doesn’t guarantee any consistency in the quality provided. However, you can expect the impeccable quality of your order when dealing with factories. So, if you are still unsure if it’s a trading company or factory that you’re dealing with, then contact us for the related information.

• Make a comparison of quotes
  When comparing suppliers on Alibaba, you should evaluate them on all these factors including price, quality, experience, Minimum Order Quantity, and product attributes. Sticking to the cheapest supplier, and negotiating with lesser MOQ can indeed save you money initially, but what if the quality is compromised in this whole process? So, you should strike a balance among all the factors for choosing the right supplier.

• Order placement
  Once you’ve narrowed down your suppliers’ list to 2-3, go for ordering a sample in order to compare the quality and other product specifications. Analyze the samples thoroughly, and ascertain which one exactly matches your preferences and requirements. Formulate a purchase order mentioning quality, quantity, price, specifications, lead time, and payment mode, and mail it to the supplier whose sample you find more appealing.

2.3 How to Contact Alibaba Suppliers and Email Template

If you’re willing to contact a supplier for asking out further details about the product, or sample, then you should preferably use ‘Contact Supplier’ feature that connects you straight away with him/her.

It’s just like sending an email but through a different platform.

Also, you don’t have to bother checking your Alibaba’s profile again and again, just to see if the supplier has responded to you. You will receive notifications on your email when the supplier responds to your query or message.

Many buyers get confused while drafting an email to the supplier.

Having an email template will make it more convenient for you to contact the required supplier steadily.

Also, you can use the sample template for prospective suppliers with a few editions, if required.

Here is an example of an email template that you may use for your next project:

Hello ABC, I am XXX come from a XXX company. I’ve liked your XXX product, and would like to know the unit price? Can you deliver a couple of samples for testing purposes first? If yes, then how much would it cost? What’s the MOQ for this product? What will be the cost of shipping the order via sea, or air? I’ve given details for my shipping address below. XYZ Yours sincerely, (Your name)

2.4 How to Negotiate with Alibaba Suppliers

Once the supplier has offered you a quotation, there is still a scope of negotiating the price based on your buying experience, quantity required, etc.

The supplier will be interested in providing you with discounts if you place a bulk order, or assure the suppliers of placing subsequent orders in the long-run.

Besides price, you can negotiate based on the total amount that needs to be deposited, or the time required to pay the amount.

Other elements such as on-time shipping, warranty, attractive packaging, etc. can also be considered when negotiating with supplier.

If you’re considering quotes of 2-4 suppliers, let them know that you’ll be selecting the one with the most competitive quotation.

This will facilitate competitive bidding strategy.

Finally, you’ve got to act as an ideal buyer that no supplier would like to lose.

Paying on time, communicating effectively, and dealing consistently with your supplier can open doors to negotiation.

2.5 How to Order from Alibaba

For placing an order from Alibaba, you need to invest some of your time and efforts. If done properly, it will create a win-win situation for you.

Once you know which product you want to place an order for, search for it in ‘search bar’, and don’t be surprised if you get thousands of results.

However, to receive valuable results, search as per suppliers supplying the desired product.

Suppliers offering a premium product will proffer fewer prices with better quality and quicker production time.

Create an RFQ so as to make it visible to hundreds of verified suppliers, and get a response from them.

For receiving instant responses from suppliers, ensure to share accurate product specifications, any certifications compliant with the product, Minimum Order Quantity preferred, if you want to personalize your product or want to order as it is, and your contact details.

2.6 Alibaba payment

Once you have finalized your order, the next step is to make payment to the supplier via Alibaba.

Depending on your contract with the supplier, you can pay a certain percentage of the total amount before the process of production starts, and the remaining amount prior to the shipping of your order. Alibaba offers you several options such as Visa, MasterCard, online bank transfer, Western Union, WebMoney, QIWI, and Boleto to make payment easier for you.

However, you can rule out the Western Union money transfer option as most scam suppliers rely on it.

Once you’ve selected your desired payment mode, enter your bank account details without bothering about safety and security as the data entered will be safely encrypted.

Enter the required amount you want to pay, and then hit the ‘Pay Now’ tab.

In case, you forgot to pay or had to rush without completing the transaction, don’t worry, there is a solution for you.

Visit the ‘Transactions and Logistics’ page, and then hit ‘Manage Orders’ categorized under the ‘Wholesale’ section.

Now, fill in your ‘Order number’ in the given space, click ‘Search’, and make payment for the given order.

One of the best things about making the payment on Alibaba is that the supplier will receive payment only after you confirm the delivery of your order.

2.7 Shipping from Alibaba

If you are shipping from Alibaba, then you may expect to receive your order in a time frame of 6 weeks. This shipping period can vary depending on your location. Buyers who are more concerned about the timely delivery of their order should prefer choosing air freight or plan the production process earlier enough in order to not miss the peak season.

3.How to Buy from Alibaba and Sell on Amazon

If you’re buying products from Alibaba and are further thinking about selling them on Amazon, you need to contact with your supplier or manufacturer first so as to ensure that your product comes with the right type of packaging for Amazon.

This will cut your time and efforts in packaging products later on, and will make it easier for you to list your product on sale right on the e-commerce platform ‘Amazon’.

We have mentioned about the way of how to find products and suppliers from Alibaba. You could check back top of this article.

When you negotiate with the supplier, tell the supplier your product should be delivered to the FBA warehouse if you need to enter the FBA warehouse. You must clearly inform the supplier in advance of the need for a package of private label and print the label.

Ask the supplier whether to provide the corresponding service.

If not, you need to find the corresponding package to match the product you are about to buy and find the supply of the printed label.

If you are buying more categories from several different suppliers, you need to customize all kinds of the outer packaging and labels one by one for the products you are about to buy.

When you manage shipment, you must make an outer box label, and let the suppliers paste the external storage labels.

You can send these labels files to suppliers and ask suppliers to do according to your requirement. Since if they are misplaced, you will have to pay extra for changing the label for the future.

As you know, Amazon’s service is much higher than the cost of your purchase in China.

The key for selling profitably on Amazon involves choosing the right product that has a potential target market, fulfills the needs and demands of customers, and is available in a cost-effective manner.

For selling your product on Amazon, you need to comply with certain quality standards. Our company’s FBA prep service ensures that every product you sell on Amazon meets FBA standards.

4.Problems of buying from Alibaba

4.1 Difficult to differentiate between a manufacturer and trading company.

It’s hard to tell whether a supplier in Alibaba is a real factory or just a trading company. If you check the company’s profile of any supplier, 90% of them will show as “manufacturers”. However, the case is quite different in reality. At Alibaba, there are more trading companies than manufacturers.

4.2 The high transaction cost of trade assurance

With Alibaba’s trade assurance, there will be 2% transaction fee charged by Alibaba.

This cost is charged from sellers, but as you can imagine, it will somehow lead to price increase as well.

4.3  Hard to find new styles on Alibaba

Suppliers will never post their new styles on Alibaba because of the risk of being copied. On the other hand, all the items you can find on Alibaba are not amongst the newest models.

4.4  High MOQ

While there are some real factories on Alibaba, they offer a pretty high MOQ which may not sound like a good idea for new importers/buyers.

4.5 Top supplier on Alibaba might not be top in real

The listing ranking on Alibaba is actually related to the following 2 factors:

a)Advertisement

b)Trade Assurance order amount

It’s easy to understand if a supplier invests in ads on Alibaba, they will rank higher, but how does it work with trade assurance order amount?

Simply put, a supplier who fulfills more orders on Alibaba will more likely rank higher than other suppliers, provided other factors are the same.

Sounds fair, right?

But this ranking factor actually gives suppliers the room to manipulate the rule.

I hope I’m clear on this point. If you want to know more or have any other doubt, just contact us and I would be happy to share what I know.

Conclusion

Undoubtedly, Alibaba is the best B2B platform for ordering products from Chinese suppliers,

but sadly, it’s not 100% hassle free and problem free.

Would you like to share any of your experiences with Alibaba?

Also, we’d like to know how frequently you use it being a buyer?

I’ll be responding to your comments as soon as I get online.