Alibaba 101: A Beginner’s Guide to Buying from Alibaba
The Ladingo Team
October 25, 2020
Learn to safely and profitably source goods from the world’s leading online marketplace and directories
When seeking to start up a business, or expand an existing business to reach more customers in more markets, it’s important to secure two critical things. First, you must come up with a viable and profitable product idea that meets the needs and demands of the target audience. For example, BPA-free water bottles for health-conscious consumers, or ergonomic chair support for computer-facing company employees. Next, you need to find a method of sourcing these products that is both reliable and affordable.
Today’s we’re going to help you understand how to use Alibaba to best source your products and meet your business’ needs.
With millions of products from hundreds of thousands of suppliers, Alibaba is the world’s largest e-commerce company, larger than Amazon and eBay combined. It’s also the broadest and most inclusive directory out there, designed to connect mainly Asian suppliers with buyers from across the globe.
Let’s delve into how to effectively and safely source suppliers and manufacturers through Alibaba. We’ll go over the steps you need to take to successfully buy from the popular online marketplace, and other helpful information, such as when sourcing products overseas from Alibaba (and other international marketplaces) is recommended – and when it isn’t.
Alibaba 101. Your crash course starts… right now.
Pros and cons of buying from Asia & Alibaba
In general, sourcing products from Asian suppliers is a great way to cut your business’ overhead costs. Asian suppliers tend to have lower manufacturing costs, and there are many suppliers located in the Asian market to choose from. In addition, Asia is home to many niche product manufacturers, who produce items not necessarily available anywhere else. These suppliers are also eager to work with businesses of all sizes – and provide you with quantities at scale.
In particular, Alibaba provides comprehensive services from a single space, making it exceedingly easy to search for and order products from suppliers. As the biggest wholesale e-commerce website in the world, Alibaba cuts out the middleman, enabling direct sales from manufacturers with no hidden fees, and the backing of a large, trustworthy platform that ensures top quality product delivery.
Other benefits of buying from Alibaba include the ability to customize your product and packaging to reflect your brand image and logos, and the fact that your orders are sent to you – not your customers – so you can ascertain quality before supplying products you did not manufacture yourself.
That being said, buying from the Asian market, including from Alibaba, is often associated with lower perceived quality goods and labor standards, longer shipping times, and cultural and/or communication barriers between brands and manufacturers. This, on top of issues with intellectual property protection, payment security, customs clearance, and post-purchase support.
It’s up to you to decide whether the pluses outweigh the drawbacks for your business. With the right tools and strategic partners in hand, we believe you can leverage Alibaba to your business’ benefit and start buying from this global powerhouse.
How to buy from Alibaba
Step 1 – Create an account
Enter the Alibaba website and follow the instructions on the signup page to create your very own Alibaba account. You will use this account every time you search for and buy products.
Step 2 – Search for products
There are two main ways to search for products on Alibaba. You can either enter keywords into the search bar on the website’s main page, or select a category or subcategories from the left hand side of the homepage. In either case, you can filter the obtained results using the options on the left side of the search results page until you are presented with the products you seek.
If you’ve already done business with a particular supplier in the past, or have heard good things about a given supplier and are interested in purchasing from them alone, you can select the “Suppliers” tab next to the search bar. Doing so will enable you to search by supplier instead of by product.
Make sure any supplier you choose has all the necessary verification badges, providing their legitimacy as a merchant that delivers on their promises. You can also check up on their past deals, by searching online for comments or complaints made by other customers.
To cut down on shipping time and costs, search for suppliers with warehouses in your home country.
Step 3 – Request a quote
Click on the “Submit RFQ” option under “Company Profile” to request a quote. Be sure to specify your sourcing needs by including the product keyword, desired quantity, shipping location, and other relevant information.
If you request and receive quotes from multiple vendors, you can compare them to make sure you get the best bang for your buck.
Step 4 – Place your order
Before accepting a quote, you can ask potential suppliers to receive samples of the products you wish to order, at a cost. Doing so will help you ensure the items you purchase meet the quality standards you desire.
Once you’ve decided to accept a quote, contact the supplier to place your order. How do you contact Alibaba sellers? Click the “Contact Supplier” button, then fill in the details of your order. Be sure to write as concisely as possible, as not all suppliers are native English speakers.
Note that although the product listing most likely includes a minimum order quantity (MOQ) and price per unit, you can attempt to negotiate a more beneficial package for your business. Be sure to ask, and never demand. You can also negotiate the currency and a secure payment method – like PayPal, a letter of credit, or a third-party escrow account.
When placing your order, make sure to iron out all relevant information, such as who is responsible for paying the various shipping costs. Some sellers will offer a FOB, or Free On Board price, meaning that they agree to pay for the transporting goods to the port of loading, but you will have to pay for costs from the moment the order is loaded, until it reaches its final destination.
Step 5 – Pay for your order
Tabulate the total cost of the goods you are ordering, plus shipping costs, customs, import duties, import taxes, and other import tariffs. You can use Alibaba’s Freight Logistics team to help smooth the process, or you can contact a free, comprehensive logistics solution provider, like Ladingo, to enable full and transparent payments, and automated documentation completion.
Step 6 – Arrange for shipping
Even if you paid for FOB services, you will still need to secure transportation from your destination port to your last-mile address. With Ladingo, that’s one less item to cross off your to-do list. Ladingo takes care of all the heavy lifting for you, from your supplier’s factory and to your business’ warehouse, with no surprise costs at any point in time.
Bonus step – Dispute sub-par shipments
While we hope that your due diligence enables you to enjoy great customer service, seamless delivery, and amazing products, we are aware that this isn’t always the case. Should you experience any dissatisfaction from your Alibaba order, you can dispute it by filing a complaint with the Alibaba Help Center. You will need to take pictures of the goods you displeased with, and attach relevant documentation, such as the initial invoice, payment documents, and all other correspondences you and the supplier engaged in.
How to protect your business when buying from Alibaba
Is it safe to buy from Alibaba?
If you follow the steps to buying from Alibaba highlighted above, you’re one step closer to enjoying a safe consumer experience. But there are additional measures you can take to protect your business against the odd scammer or swindler.
First, know that there are different types of Alibaba suppliers. Gold Suppliers pay top dollar to be pre-qualified, hindering any drive to scam potential buyers. Products on offer from Trade Assurance Suppliers are inspected before being shipped off, and are guaranteed to arrive on time – or Alibaba is required to issue a refund. And Assessed Suppliers are monitored by third-party inspectors who issue detailed reports. We recommend selecting suppliers with all three of these accreditations.
Second, while you may be used to brand name products reflecting said brand’s reputation and track record of quality, “brand name” products sold on Alibaba are, more often than not, knockoffs. This is because licensed products simply are not offered on Alibaba. Avoid these goods like the plague, to avoid being subject to legal action. The same goes for products being sold at rock-bottom prices.
Third, if the supplier’s personal name and company name are one and the same, you may have cause for concern. You should also be suspicious of those whose email addresses are from freemium services, instead of those containing the company name.
Next, beware of suppliers who demand full, up-front payments, especially if they want to be paid outside of the Alibaba space. This is a major red flag that not all of their activities are on the straight and narrow.
Finally, it’s always a good idea to pick up the phone and call your suppliers to confirm orders verbally. Video calls are even better, as they let you see your supplier face-to-face, and can help you differentiate those who are trustworthy from those who are not.
Buying from Alibaba can be a smart business decision, so long as you do your due diligence, follow the steps, verify any potential suppliers, and partner with a comprehensive logistics solution provider, like Ladingo, to ensure your shipment arrives safe, sound, and without any hidden fees.
Want to learn more about Ladingo’s services for shipments from Alibaba? Contact us today!
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