If you are looking to import Alibaba wholesale products from Asia, then this post will teach you how to use Alibaba the right way so you don’t get ripped off.
But before you begin searching for Chinese suppliers, you need to be prepared. As a result, I highly recommend that you first…
- Know What You Want To Sell – Alibaba is not a good place to randomly brainstorm potential niches. If you don’t know what to sell yet, then first consult my ultimate guide to finding profitable products to sell
- Understand What To Expect When Sourcing From Asia – Alibaba is a search engine for Asian suppliers which means that you won’t find any US or domestic suppliers on the platform. If you’ve never sourced from Asia before, make sure you check out my ultimate guide to sourcing from China
With that in mind, Alibaba is one of the largest databases of Asian suppliers in the world. And it is by far one of the best places to find China wholesale vendors online.
But because Alibaba is so large, it is also filled with unscrupulous suppliers who will sell you junk or try to cut corners on quality. This guide will teach you the right way to use Alibaba and avoid the headaches.
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What Is Alibaba?
Alibaba is a directory of Chinese suppliers where you can find factories to manufacture products for you at wholesale prices.
Almost every supplier that you find on Alibaba will allow you to place your own brand on your product which is a practice known as private labeling.
Because many suppliers on Alibaba are manufacturers or factories, they will usually force you to purchase a minimum order quantity with every order and you have to buy in bulk.
Now the MOQ (minimum order quantity) will vary from supplier to supplier, but in general, you should be able to find a supplier on Alibaba that matches the size of your business.
For example, when my wife and I first started our handkerchief store, we found vendors willing to sell us as few as a hundred units per order.
But now that our ecommerce business is much larger, we primarily work with vendors with minimum order quantities in the 10’s of thousands of units to obtain much lower pricing.
If this is your first time using Alibaba and you are having problems finding the right supplier, don’t get discouraged. After all, there exists an Alibaba wholesale vendor for every business size. You just need to know where to look.
Alibaba Vs AliExpress – What Should I Use?
Both Alibaba and AliExpress are owned by the same parent company (Alibaba Holdings Group) so it’s very easy to get the 2 platforms mixed up.
But AliExpress and Alibaba are different companies with completely different use cases.
Whereas Alibaba is a Chinese wholesale directory of factories and trading companies, AliExpress is more like a Chinese version of Ebay.
In fact on AliExpress, you can buy products in single unit quantities and factories often use AliExpress as a liquidation outlet for their products.
As a result, the prices on AliExpress will be much higher than Alibaba and in general, AliExpress is not a good platform to find long term suppliers for your ecommerce business.
Note: For more information about AliExpress, make sure you read my post on AliExpress Dropshipping and Oberlo Are Dead
Also, vendors on AliExpress will not allow you to customize their products (or attach your brand) so you can not private label products you find on AliExpress.
Bottom line, Alibaba is the platform that you want to use to find wholesale suppliers for your ecommerce business.
Can Anyone Use Alibaba And Do You Need To Own A Company?
You don’t need to have a company or any special credentials to use Alibaba. You don’t need a sellers permit, a website, a corporation….nada.
In fact, most Alibaba wholesale suppliers don’t care who they are working with as long you buy in bulk, pay on time and order on a consistent basis.
Remember, Alibaba is just an online directory for Chinese suppliers and it’s up to you to negotiate price and minimum order quantities.
Some of you have asked me in the past whether you need to have a custom business domain like email@example.com before contacting suppliers on Alibaba.
And while it certainly helps for credibility, I’ve had students in my class use their gmail addresses and it’s worked out just fine.
Is Alibaba Safe And Will You Get Ripped Off?
I’ve been using Alibaba for over a decade now and I’ve never been outright scammed.
As long as you follow the directions in this post, the chances of a Chinese supplier taking your money without sending you your products is extremely slim.
More likely than not however, you’ll run into quality control issues.
In fact, your primary concern when buying from Alibaba wholesale suppliers is that you’ll receive poor quality products that don’t match what you expect.
To prevent this from happening, you MUST follow the guidelines and best practices in this article when finding and ordering from Alibaba suppliers.
Alibaba Best Practices – The Right Way To Use Alibaba
Once you know which product you want to sell online, you should start by performing a search using Alibaba’s search bar.
By default, Alibaba will display every single supplier in its database that sells the product you want to source. But many of these listings will be middlemen or individuals trying to make a quick buck and not real companies.
As a result, the first action you should take is to filter out only verified suppliers (Gold suppliers) and vendors that support trade assurance.
What Is A Verified Or Gold Supplier?
A verified or gold supplier is a vendor that has paid Alibaba a premium membership fee and you can use this badge to weed out lower tier suppliers.
In order to be eligible to become a gold supplier, Alibaba performs the following checks
- Onsite Check – An onsite check is a verification process where the supplier’s factory is checked by Alibaba’s staff to make sure that it’s legit. In addition, the supplier’s legal status is also checked to make sure it’s up to date.
- A & V Check – An onsite check is also performed by a neutral 3rd party as an added level of verification
There is also an additional company tier called an “assessed supplier” where a mainstream verification company like Bureau Veritas goes through and assesses the supplier for their production capabilities, their certifications, and their R&D abilities.
An assessed supplier is the highest grade supplier that can be found on Alibaba.
I’ve attached a table for your review.
Bottom line, working with only verified (gold) suppliers will greatly mitigate any risk of getting scammed.
What Is Trade Assurance?
Trade assurance is a free order protection service where Alibaba acts as a 3rd party escrow company.
The supplier prepares the goods for shipment and you deposit your payment in a special account designated by Alibaba. As soon as the order is confirmed, the goods and the money changes hands.
What’s nice about trade assurance is that Alibaba guarantees your money back in the event of a supplier failing to meet the terms of the order contract. This includes delays in shipment, quality issues and processing problems.
Bottom line, trade assurance all but ensures that you will not get outright scammed by your vendor.
How To Choose A Supplier On Alibaba
Once you’ve filtered out the gold and trade assurance suppliers, you should pay specific attention to the price and minimum order quantities.
In practice, the numbers you see on Alibaba are never set in stone and you can always negotiate more favorable terms. However, the numbers will give you a general idea of the type of customer the supplier is looking to work with.
For example if you’re just starting out, you’re probably not going to be working with a vendor that has a 20,000 unit minimum order quantity.
Instead, narrow down the list of vendors to those who closely match your purchasing power.
Review The Company Profile On Alibaba
Once you’ve selected a bunch of vendors that you potentially want to work with, you should dig a little deeper and review their company profile.
Here’s what you should look for.
- Payment Methods – Most vendors are used to being paid by wire transfer. But if this is your first time importing, you might want to look for vendors that accept Paypal and credit cards.
- Transaction Level – How many transactions has the vendor conducted on Alibaba in the last 6 months
- Response Rate – Is the supplier responsive to inquiries?
You can also click on the company’s profile page to get more in depth information such as company size and annual revenue as well.
As you can see, the information that can found on Alibaba is very thorough.
How To Contact Alibaba Wholesale Suppliers
There is a right way and a wrong way to contact Alibaba wholesale suppliers and it’s a lot like dating.
The reality is that most suppliers on Alibaba are flooded with hundreds of inquiries per day. As a result, your correspondence must stand out among the pack and you must be concise and professional.
Pretend that you are the supplier for a moment. Would you want to waste time speaking with a customer who doesn’t know what they want. Would you want to work with a total newbie?
The answer is no.
As a result, you must project confidence and act larger than you really are. You should present yourself as a buyer or a director of a larger retail organization.
Here’s a sample script that I use when first reaching out to a supplier.
Hi Chou Su Min,
My name is Steve and I’m a buyer for Bumblebee Linens, a store in the US that specializes in handkerchiefs. We are interested in carrying many of the items that you have to offer.
Specifically, I would like to get pricing and availability for the following items
“list the items…provide photos if you have them”
Please send pricing in 500,1000 and 5000 unit quantities. Also, if you could send us your product catalogs, lead times for manufacturing, and MOQ we would greatly appreciate it.
How To Negotiate With A Supplier
When you are importing from China for the very first time, you probably have no idea what the “real” price of your products should be.
As a result, you should shotgun blast as many vendors as you can and obtain as many different quotes as possible.
Ultimately, the quotes that you’ll receive will fall under a bell curve distribution.
Some quotes will come back impossibly low.
Some quotes will come back really high.
But most quotes will fall within the same range.
In general, you should eliminate all factories with abnormally low bids because those suppliers likely sell low quality goods. Personally, I like to stick with the suppliers that offer mainstream pricing.
If I’m looking to produce a high end luxury product, then I might work with a more expensive factory but you have to go with your gut.
Bottom line, I generally do not negotiate on price until I’ve obtained samples of the product and until I know which factory I want to work with.
How To Ask For Samples
At this point, you’ve hopefully narrowed down your list of vendors to 2 or 3. It’s time to ask for samples!
Before you place a bulk order with any manufacturer, you must touch and inspect a finished version of your product for quality.
Here’s what to expect.
First off, the cost of your sample will be significantly higher than your quoted cost for a bulk order. And by significant, I mean a sample will often be 10-20X more expensive.
For example, we recently asked for a sample of a white linen napkin and it cost us $50 whereas our bulk price is typically $2 per piece. Do not balk at the sample price and do not try to negotiate!
In reality, your supplier will credit the cost of the sample towards your first bulk order but paying for samples is just a necessary expense of doing business in China.
Once you have your sample, you want to go through it with a fine tooth comb and document every last detail of what you want on a “quality control checklist”
For example with our white linen napkins, we specify…
- Thread count – This is a general measure of the quality of the fabric
- Specific shade of white – There are hundreds of shades of white so we have to be specific.
- Material thickness – This is where vendors often cut corners
- How it should be pressed – If we don’t specify the presentation of our linens, the vendor will just throw it in a bag all wrinkled.
Now there are many more line items on our quality control checklist, but hopefully you get the point.
Once you are happy with your sample, it’s time to place a bulk order.
How To Place Your First Bulk Order
If this is your first time importing from China, I highly recommend that you get your first order shipped by air courier.
Not only will you not have to hire a customs agent, but your goods will arrive on your doorstep within a week or less and you don’t have to worry about anything.
Often times, you can simply ask your supplier to ship the goods directly to you using their DHL or EMS account.
But once you have your first few successful shipments under your belt, you will eventually want to have your goods shipped over by sea which is substantially cheaper.
While the exact procedure for shipping by sea is beyond the scope of this post, you should definitely hire a reputable freight forwarder and customs agent to handle everything for you.
But beyond getting your goods to your warehouse, the most important factor to consider when placing any bulk order is quality control.
Before your goods ever leave a Chinese factory, you must hire an inspector!
A company like Asia Inspection (now called QIMA) will send a representative to your factory and examine a subset of your goods based on your quality control checklist.
The cost of this service is roughly $300 and the expense is well worth the cost. Once your goods pass the inspection test, you are finally ready to start selling!
Case Study: My Student’s First Experience Importing From China
Even though the instructions in this tutorial are fairly straightforward, you will always encounter some hiccups during the process.
As a result, I invited a student in my Create A Profitable Online Store Course, Josh, to provide a candid and realistic account of his first experience importing from China.
Now in my class, I have an entire module dedicated specifically towards helping students import goods from overseas that goes way beyond this post.
However, it’s one thing to learn and another thing to actually go out and do it. And Josh’s experiences just go to show that the best way to learn is to be aware of the guidelines, know what to expect and just take action!
A quick disclaimer: Josh had never done this before prior to joining my class and he was a bit intimidated early on by the process. But after going through it once, he realized that it wasn’t that bad.
The rest of this post is written from Josh’s perspective!
As Steve mentioned above, I recently completed the sample sourcing process and wanted to share some tips and mistakes I made along the way. Enjoy and please let me know if you have any questions or comments.
Tip #1: Never Assume Anything
When it comes to communicating with your vendors, you should never make any assumptions about product availability.
On multiple occasions I had vendors try to sell me products that were not displayed on their website. In contrast, I also requested samples of products that were displayed online but no longer available from the vendor.
Often times, a vendor’s website is not up to date and some vendors are better than others at maintaining their online offerings. I even had one instance where after paying for samples the vendor came back and informed me that 6 of the 9 samples ordered had been discontinued.
Moral of the story – Don’t assume something is or isn’t available. Make sure to ask and confirm prior to ordering and especially paying for any samples.
Tips on questions to ask:
- Are there any new products or designs that are not currently displayed online?
- Are there any products displayed online that were discontinued or no longer available?
Tip #2: Don’t Be Intimidated By Your Vendors
Most vendors that I dealt with responded in a quick and friendly manner, which reinforced the importance of relationship building. While in a few instances vendors seemed a little cold, most vendors were very eager to engage in conversation, answer questions and discuss samples.
For the most part, their written English skills were pretty darn good. Their ability to both send and receive emails exceeded my expectations. Also, make sure to be complimentary without overdoing it. For example: “I was looking at your catalogue and noticed you have some very nice products…”
Moral of the story – Vendors are real people just like you and me. Don’t be afraid to jump in and start a conversation.
Tip #3: Trust Your Gut
Some vendors are almost too friendly. This is probably due to the cultural differences that exist but when I say too friendly I mean 2-3 emails a day, asking if you want to look at or buy something after you’ve explicitly declined or said no 3-4 times.
Editor’s note: I never use my main email address for Alibaba correspondence to avoid getting spammed by vendors.
While I’m sure most of these folks have good intentions, this behavior definitely raised a red flag due to the used car sales pitch (no offense to any used car salespeople)
Moral of the story – Trust your instincts. Give people the benefit of the doubt but go with your gut.
Tip: If you’re trying to source leather bags and the vendor is trying for the 4th time in 5 days to sell you cat beds, time to hit the spam button.
Tip #4: Be As Specific As Possible
Tailor your vendor inquiries for specific product categories. This might sound obvious but it’s important to be very specific from the start about what you are looking to buy including types of products, materials, size, color, etc.
As an example, I was searching for a variety of bags including leather bags. When I sent an initial email to one vendor who specialized in leather, I accidentally included photos of non-leather bags which caused some confusion.
I would also advise using an email template (I used the one provided in Steve’s course) but make sure to customize 10% of it to each vendor. If you want something made of polyester, specifically state in your email that you are looking for a polyester widget.
Otherwise, like me you might receive a different and most likely cheaper product or material than you intended.
Moral of the story – Don’t assume anything regarding product details.
Tip: Be very specific and ask the vendor to confirm product specifications before both production and shipping.
Tip #5: You May Not Get What You Expect
The ole saying, “ what you see is what you get” doesn’t necessarily hold true for Alibaba and Global Sources. Despite doing everything suggested above, there were a couple occasions where the samples I received were not the samples I ordered.
When I confronted the vendor as to why the products were different than what I ordered, the typical response was something along the lines of: “that product was discontinued or we only had this one other product ready for shipment…blah, blah, blah”
Moral of the story – You never get a second chance to make a first impression. Don’t be afraid to hold a vendor accountable. Some might disagree on this one but my thoughts are if they can’t get a simple sample order correct, the likelihood of screwing up a bulk order is probably be higher.
Tip: Confirm the sample order prior to shipment and request photos of the samples to ensure they are accurate.
Tip #6: Most Vendors Expect Wire Transfers
Payments! Most vendors will allow you to pay via PayPal. Some have PayPal but will not tell you unless you ask so make sure to ask. In fact, with most vendors, I used wording along the lines of: “Our company policy states that first time samples purchases be made using PayPal”.
While most vendors will accept purchases through PayPal, they definitely prefer and will default to T/T (wire transfer) or Western Union. I paid via Western Union for one vendor and didn’t have any problems. I found it to be just as easy as PayPal but with Western Union you have no recourse to get your money back. Once the money is gone, it’s gone.
Moral of the story – Pay for most samples using PayPal but don’t be afraid to pay via wire transfer or Western Union. It’s not the end of the world.
Tip: I would recommend paying via wire transfer (T/T) with one vendor just for the practice. If it makes you feel better, choose a vendor who you will be paying a smaller amount of money to for samples. Although just a suggestion, doing this will help to familiarize you with all the routing and logistics related to international wire transfers.
If you decide to pay via wire transfer, make sure and confirm that you have the exact wire information including beneficiary information, address, swift code and account number. This point can’t be emphasized enough.
I learned the hard way with one vendor and it cost me $75 in wire fees. If one character is incorrect, then the Bank of China might relegate your funds to the Chinese banking void for an unspecified period of time. Plus, you’ll have to pay additional fees to your bank to either recall or amend the wire.
Tip #7: Always Obtain Samples
Samples are an investment. Pharmaceutical companies are notorious for spending millions of dollars on R&D every year. Most drugs will not make it through clinical trials and some will not receive FDA approval, but the few that do make it past all the hurdles will make the investment worth it.
While purchasing samples can seem daunting, make sure to keep things in perspective. Compared to an initial investment for a Subway or UPS Store franchise, the risk/reward ratio is much higher for online stores, not to mention the difference in lifestyle.
Moral of the story – Don’t be afraid to spend money on samples. You have to know what you’re selling before you can sell it and you’ll learn a lot in the process. Be judicious depending on your budget, but don’t hold back for fear of failure.
Tip: Ask vendors what their top 5 products are in terms of sales. Take your time to find the products you like the most because more than likely there will be more products you’ll want to see in person than you’re willing to pay for. Pick the very best ones based on the photos, product descriptions and vendor recommendations.
Tip #8: Act Bigger Than You Are
In your emails to vendors, use the word “we” instead of “I” and “our” instead of “my”. Steve emphasizes this several times in his course. Not only does this make your company seem larger than it is but it also displays a sense of teamwork and unity.
Moral of the story – Project confidence.
Tip: Here is an actual email I sent to a vendor after receiving samples. Notice the use of the word “we” and “our”.
We wanted to confirm that we received the samples today. Over the next couple of months we are going to be meeting with many of our customers to discuss your products and potential plans to move forward with larger purchases. We will certainly keep you updated on our plans.
We did have a few questions in the meantime:
1) Do you provide OEM service (logo)?
2) Can you manufacture according to specific size and color requirements? (For example if we wanted to purchase 5 different products, each with 3 colors and 2 sizes.)
3) What are the minimum order quantities and lead times for bulk orders?
4) How do you deal with product quality issues? For product YD0354, the zippers were very difficult to fasten and ended up breaking in one instance. For most products, we prefer one piece (like YD0316) instead of two pieces to make the assembly process as easy as possible for our customers.
Tip #9: Know The Difference Between Manufacturers Vs Trading Companies
In general, it’s pretty easy to tell if a supplier is a manufacturer or a trading company (wholesaler/retailer). I did however notice some very distinct trends between the manufacturers and trading companies.
As a general rule of thumb, the ones that say “Import/Export Co” are more than likely not manufacturers even if their company profile states manufacturer.
Along with the obvious things such as price and MOQ differences, trading companies definitely had more of a pushy sales approach while the manufacturers seemed more eager to build a relationship.
In the beginning however, it might behoove you to buy from the trading companies because they will offer lower minimum order quantities (MOQ). Just know that the FOB prices (price per unit) will be higher with the trading companies and there is a greater chance for complications such as running out of inventory (if they’re not creating the product then they have less control over the amount of inventory that’s in stock)
Moral of the story – Know who you’re dealing with in terms of the type of supplier and the pros and cons of working with a manufacturer vs. a trading company.
Tip: In some cases I politely asked certain vendors what percentage of their business was manufacturing vs. wholesale. Most reps were more than happy to share that information.
Tip #10: Be Prepared When Shipping Goods To Your Home Country
Oh the joys of international air freight! Most vendors will setup the shipping for you and all you have to do is provide your shipping address and phone number for confirmation. Just know ahead of time that it’s going to cost you and arm and a leg and that the cost of shipping might in fact be more than the cost of the actual samples.
Also, it’s a good idea to confirm shipping costs before paying for the samples. Some vendors will lump the two costs together while others will separate them out and surprise you at the last second.
Moral of the story – Shipping samples is expensive. If this depresses you, remember that samples (including shipping) are an investment!
Tip – Don’t wait until the last second to setup shipping accounts. As a rule of thumb, before you contact any suppliers, have your shipping accounts setup with UPS, FedEx and possibly DHL. UPS and FedEx can be done online.
DHL is a more involved process (felt like I was applying for a mortgage) that involves a phone call and you providing them documentation such as recent bills, invoices, etc. It’s a pain but necessary per DHL to prevent fraud and ensure accurate controls over shipping.
Note: Are you unsure which shipping method to use and how much it will cost? Do you want a good estimate of your real landed cost of goods? Click here to use my free import calculator
Because it was my first time importing goods from Asia, I made a few mistakes but I learned a lot in the process. Here are some questions I would ask yourself after you’ve received the samples:
- Which vendors did you enjoy working with the most?
- Which vendors were the most flexible and accommodating?
- Which vendors wrote and/or spoke the best English?
- Which vendors shipped the samples in a timely fashion?
- Which vendors shipped samples that were packaged nicely?
- Which vendors were the most accurate and paid the most attention to detail?
In the end, your experience will be different than mine, but I hope that the tips above can help you along your journey.
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