There are many people importing low-cost goods from China and reselling them online for a profit, Alibaba wholesale and Aliexpress are the places to find profitable goods for your eBay, amazon or standalone e-commerce stores.
Alibaba is an online b2b trading platform for suppliers and manufacturers to meet up with their buyers and retailers. Most members on Alibaba are either manufacturers or resellers who trade in large quantity order.
AliExpress is a newer wholesale marketplace from Alibaba. It offers millions of products at factory prices. A buyer can buy from 1 single item for themselves to use, or as many as they need for reselling, and paying online using its secure escrow service. AliExpress will only release buyers’ payments after the deliveries are confirmed. AliExpress has less risk as it is more for individual customers and small amount buyers, while Alibaba wholesale is for business to order big amount. That is why Alibaba suppliers usually have a minimum order quantity requirement.
Being one of the biggest online marketplaces, Alibaba has helped millions of small business owners find profitable products to resell online. However, since most sellers don’t speak or read English well, there are language barriers for non-Chinese buyers. (Use the contact form to find out how we can help!) There are also bad sellers who take advantage of naive buyers, which might be the same in other marketplaces.
Useful Resources relating to Alibaba Wholesale
- How to send out inquires to Suppliers through Alibaba Wholesale
- Alibaba – How To Make Huge Margins Importing Products
- Read the Hacker’s Guide To 35,000,000 Products: Alibaba.com: The Etsy, eBay, and Amazon Treasure Chest ( Read this for free on Amazon)
Below are 15 most useful tips you should learn before you dive into the tempting Alibaba wholesale world for building a profitable importing business from China (Most of these books are free on Kindle. Read them to gain more knowledge).
1. Contact multiple sellers
If you’ve found some interesting products to buy at Alibaba wholesale, you should send out multiple requests to different sellers who handle the same products. Some of the sellers are middlemen, others are real manufacturers. Alibaba allows you to contact different suppliers at the same time so that you can compare all the options and narrow down to several suppliers that you are interested in doing further investigation.
2. Always ask to get samples
Don’t count on verbal promises and email contacts only. No matter how precisely you’ve described your final products to be, the produced goods may be different in many ways. A better practice is to ask for samples whenever you can.
When you are comparing among several suppliers, get their samples first. Although it may cost you a few hundred dollars upfront, but it is one of the important procedures you should take to guarantee the quality of your ordered products. To further ensure the consistency of the quality, you can even order another sample from the same supplier using an anonymous email account.
If you’ve ordered a bulk with your own design and logo, ask for another sample sent to you right before the whole shipment imported to you and you pay for the rest 50% cost. When you see your own company name and logo on your ordered items, you can be more confident that you are going to receive what you’ve asked for.
3.Ask for references
Another good rule of thumb to avoid scam on Alibaba wholesale is to ask for references from previous buyers. Contact those previous buyers to ask if they are satisfied with the sellers’ services, how long they have worked with the sellers, what price they have paid before, and if they recommend the same sellers to you…
4. Ask for photos
This is another step you take to make sure you are dealing with genuine manufacturers. Ask for photos of their factory, their products. When your manufacturing run is over, always ask for photos of your finished products before making a final payment. If you ordered 10,000 units, ask for photos of the individual product and of the whole shipment.
5. Have a factory tour
To avoid being scammed by bad sellers, you should always tell your sellers that you need to come to visit their factory before you place any big order. Even if you may not be able to do it yourself, you should mention this option in your contact with them, ask to set up a time so that they can show you around the manufacturing process.
If their answer is “no”, it could be a red flag. If you order is big, you should really consider this as a secure measure to protect your investment. There are services online that you can pay to have someone in China to visit the factory on your behalf. Alibaba also has similar services called “inspection service”.
6. Check more on Sellers!
You can use the internet to check if the manufacturer you are going to deal with is legit or a scam. There are many questions you can ask and see if you are satisfied with the answers:
- Does it have a physical address?
- If it has a standalone website?
- Does the email address match their company name?
- If it posts a live video of their factory, that is a good sign.
- Does it have a Gold Member status in Alibaba? For how many years so far?
- Does it have any complaints on Alibaba forum?
- Search the company on Global Sources, if it has a verified profile, you can be 99% sure that the company is a genuine one.
- Do a Google search for “company name + scam” to see if there are any complaints before. Some complaint is real problems of the company, some are accidental posts by picky buyers.
- When you receive your first proforma invoice, always compare the printed company address, phone numbers, bank information with its Alibaba profile. They should be the same.
7. Don’t buy any branded products from Alibaba
To avoid any legal challenges in the future, don’t bother to buy any branded products from Alibaba. Even if it is not a famous brand, do a google search first to be sure the products are non-branded.
The reason is very simple, most of the branded products sold on Alibaba are counter-fakes, that includes DVDs, software, designer bags and clothing, electronics, etc. There are some reports claiming big profits to be made selling counterfeit designer products. But it is a short-life business model that will hurt you badly down the road.
8. Don’t use the Western Union and Money gram as Payment Option
Many Alibaba suppliers accept PayPal or escrow service as payment options, these are the good sign of a reliable company. If a supplier doesn’t have above payment option, it should at least accept a bank transfer to the company’s business account.
However, some suppliers only have Western Union payment option, or money gram, this is a red flag. The Western Union and Money Gram should only be used for sending money to family members, not someone you don’t know in person, because they don’t have necessary verification process when transferring money, and don’t have protective refund policies when any scam occurs.
9. Never send your money to a personal account
If a supplier told you that they have some problem with their business account, so that you can use their personal bank account to receive your payment, you can just move on and find another supplier. This is one of the most popular scams played on Alibaba wholesale.
10. Negotiate tips
Everything is negotiable between sellers and buyers, however, there are undeniable language barriers for non-Chinese buyers when dealing with Chinese sellers. Here are some tips to ease this problem.
When writing emails to Chinese sellers, choose short sentences with simple wordings to draft your messages, don’t write in big paragraphs, instead, list your questions and requirements using bullet points or number points.
When you started a negotiation, be firm on your final price and quality requirements, and meanwhile be polite. Be ready to walk away from the negotiation if it doesn’t go your way. Don’t worry about you might lose a good deal. Many times, these sellers are eager to make a deal with you and would contact you again with a better offer.
However, bear in mind that a fair deal for both sides is the foundation to build up a long-term profitable partnership, so don’t be too greedy during the negotiation.
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11. Test market with minimum order quantity
When order products from sellers, always start from a small amount. Test the market reaction before you order more. Ask what is the minimum order quantity for the product. Although the more you order, the cheaper the unit price should be, a smaller quantity give you less risk for an unknown market.
12. Look for Gold Suppliers
Although I have mentioned several useful tips to judge a seller’s accountability, there is a more risk-proof way to shop on Alibaba wholesale. That is to always use Gold Suppliers only. A 3rd year Gold Supplier is more reliable than a 2nd year Gold Supplier, so on and so forth.
Why do you need to look for Gold Supplier status? It’s because it costs several thousands of dollars to keep the status; in addition to the condition that no scams being caught or reported during the time. Most scammers wouldn’t bother to pay extra money for this status. Also, even if some of them paid, their status shouldn’t last longer than one or two years before they get caught and banned from Alibaba wholesale.
If you found a supplier with 6 or 7 years of Gold membership, you should have found an established business with a good reputation.
13. It is better if the seller has an Aliexpress store
AliExpress stores are also from Alibaba, except that it allows buyers to shop for small minimum order quantity requirement. Buyers don’t need to worry about the payment security since you can pay with your credit card using escrow service.
Nowadays, more and more Alibaba suppliers also join Aliexpress to satisfy buyers with smaller orders. You can go to Aliexpress to find more about the product quality and how smoothly the transactions were, to figure out what kind of sellers you are dealing with.
If you fond a good supplier, and it as an Aliexpress store, you can order samples through its Aliexpress store. Once you are satisfied with the product, shipment speed, and customer service, you can contact them directly through Alibaba, or use the same Aliexpress store for more quantity.
AliExpress stores take a small fee for each transaction, but a buyer can still get significant discounts on quality products there. Their escrow system guarantees that you only get charged for what you want to buy.
14. Never accept partial refund
NEVER accept the partial refund as this automatically closes transaction as completed! If there’s a need for a change in order, cancel it, get a full refund and then place a new order for the new amount.
15. Use Your Own Brand
It is one of the best ways to build up your e-commerce through Alibaba wholesale. Many manufacturers on Alibaba and AliExpress will be happy to make your own brand. It is also called private label products.
**Disclosure of Material Connection:
Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally or believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials.”