Alibaba is the world’s biggest B2B marketplace; it’s a level playing field where both start-ups and established businesses can source their stock from factories in China. However, while it remains a great way to source goods, it can also be incredibly confusing to use – especially for first time business owners. Today, we’re going to answer some of the most common questions that importers have about Alibaba.
What is Alibaba?
Alibaba is an online marketplace that showcases factories and the products that they create. It offers businesses the opportunity to buy goods wholesale at extremely low prices straight from Chinese suppliers.
Who is Alibaba used by?
Alibaba is a B2B marketplace, which means that it is used by businesses. A lot of E-Commerce sites use Alibaba to source stock for their online stores. Because the prices are so low, there is no entry barrier and start-up businesses can also buy from Alibaba.
Is Alibaba a scam?
No, Alibaba is a legitimate website. However, the website is a marketplace filled with thousands of individual sellers, some of whom may be scam artists. Learn how to avoid scams on Alibaba here.
Can I dropship from Alibaba?
Typically not. Most Alibaba products have a MOQ (minimum order quantity) of over 100, so you won’t be able to buy individual products as drop-shipping requires. If you’re drop-shipping certain large items such as machinery, however, you may be able to.
Are Alibaba and Aliexpress the same?
No. Both are owned by Alibaba, but Aliexpress is a B2C (business to consumer) business whereas Alibaba is B2B (business to business); Aliexpress is the retail branch of Alibaba. This means that Aliexpress has higher prices, but no minimum order requirements.
About Sourcing & Finding Products On Alibaba
What is a MOQ on Alibaba?
MOQ stands for Minimum Order Quantity. A MOQ is the minimum amount of products that you’re allowed to purchase from a supplier. If you’re looking at a product listing where the product is £0.10 each but the MOQ is 1,000, you will have to buy a minimum of 1,000 products for £0.10 each.
Can I buy less than the MOQ?
As a rule no; however, you can negotiate to get the MOQ lowered. When conducting business with China, there is often room for (fair) negotiation – so, as long as you aren’t trying to lower the MOQ to something ridiculously low (like 1,000 to 20), you may be able to buy less.
Are Alibaba products high-quality?
As Alibaba is a marketplace, there are thousands of individual factories on there, all with varying practices and quality levels. Due to this, it’s impossible to make a generalisation on whether the products are high-quality or not. That being said, it is very much possible (and somewhat easy if you use all the safe-guards that Alibaba has put in place) to find high-quality goods.
Are branded products sold on Alibaba genuine?
Generally, no. If products on Alibaba imitate or are advertised as being branded, they’re likely fake – but what you need to watch out for is goods that contain Intellectual Property. These are harder to spot, but anything using logos or even images of branded characters (such as TV characters, band photos, Disney characters etc.) counts as Intellectual Property. To learn more about importing counterfeit goods and products that contain intellectual property and the consequences read our guide.
Genuine suppliers of branded goods will have a certificate of authorisation from the brand owner; if you are trying to import branded goods, make sure that you ask your supplier to show you this certificate before you commit to buying.
How do I avoid scam sellers on Alibaba?
We’ve written a guide about avoiding scams on Alibaba; most of what you need to is due diligence. The platform has a lot of safe-guards that you can utilise (such as live factory cameras, on-site verification checks, etc) if you’re willing to put the time and effort in.
What do I need to consider when I’m buying from Alibaba?
Product quality. The largest issue when buying products from China is ensuring that they’re of an acceptable quality; you don’t want to get stuck with products that you can’t sell!
The cost of shipping. The true cost of buying from Alibaba is not as low as some may like to think; although the products themselves may be cheap, you also need to factor in the shipping costs. You’re not only shipping internationally – you’re also shipping large quantities of goods. This means that shipping will in all likelihood be a significant cost.
Your supplier. When buying on Alibaba, you need to be extremely careful that you’re dealing with a trust-worthy supplier. More on that in the next section.
Whether the product is going to sell. Making sure that you haven’t just sunk all of your life-savings into a dud product that nobody wants is a good idea. There are many ways that you can conduct market research and test whether there’s a demand for a product before you start selling it.
How do I control quality issues when buying from Alibaba?
There are many ways that you can ensure that your products are being produced to a good standard of quality – you can even hire agents to check your product’s quality in China before you pay for them! We’ve written a guide on controlling the quality of products made in China that we highly recommend you read.
About Manufacturers On Alibaba
Are Alibaba suppliers high quality?
Yes. As we’ve already mentioned, Alibaba is a marketplace hosting a wide variety of suppliers; however, there are many high quality suppliers on Alibaba. Here are our steps on how to find them.
How to find a decent supplier on Alibaba?
Using the safeguards and filters that Alibaba has in place, you can sift through suppliers to find suppliers that are legitimate and trustworthy. A few of these safeguards include:
Gold Suppliers. This is a paid annual membership; however, scam artists get removed from the platform after a customer complains, which only gives them a lifespan of a month or two – due to this, illegitimate suppliers usually won’t pay for a membership.
On-site Verification. Alibaba will send agents to the factory to ensure that the factory is operating at the physical location that it claims and it and will look around the work-site. They will also follow-up on the business’s legal presence to ensure that the supplier is a real business.
Supplier Assessment. A supplier assessment is like a more detailed on-site verification; you have access to 10 times more information – and even things like videos of the factory.
Trade Assurance. This is a form of payment protection wherein your money is held in escrow until you confirm that you’ve received your goods. This means that if you do encounter a scam seller, your money is protected – and, as a seller has to elect to provide Trade Assurance, using merchants with it is a relatively safe option.
Live Factory Video
How do I negotiate with suppliers on Alibaba?
You can negotiate with suppliers via email. There is also a messaging portal on the Alibaba website.
Why aren’t suppliers responding to me on Alibaba?
There are many potential reasons that suppliers aren’t responding to you on Alibaba; usually, it’s because you don’t seem serious enough to spend time on or you aren’t being specific enough in your request. Make sure your introduction is as professional and to-the-point as possible.
About Purchasing From Alibaba
How do I pay suppliers on Alibaba? Which payment methods on Alibaba are safe?
There are many payment portals that you can use when buying from Alibaba – among these are popular names like Paypal and Western Union as well as lesser known services such as Alipay and Alibaba Trade Assurance.
The first method of payment transfer is a Wire Transfer; this directly pays money into your supplier’s bank account from your bank account. This is not a very safe method of payment and there are risks associated with this method, but we’ll discuss those in the next question.Another option is using an escrow service; this means that a third party will hold your money until you confirm receipt of the goods. Alibaba’s Trade Assurance acts as an escrow service. These are quite safe as your supplier doesn’t receive the money until you’ve confirmed that goods have arrived.
Credit cards are a viable option to pay for goods with; however, it is not advisable to due to the risk of credit card fraud.
Paypal is a well-known and familiar service, but it is also relatively safe – the problem is that the reason it’s so safe is also the reason that a lot of suppliers won’t use it. Paypal will freeze fraudsters accounts, which is good for you . . . but they are also known to freeze legitimate accounts (without giving them their funds) too. Due to this, a lot of suppliers won’t use Paypal.
AliPay – owned by the Alibaba group – is essentially the Chinese version of Paypal. The transaction fees are a lot higher at over 10%, but most Chinese suppliers have and use AliPay.
What’s wrong with using Western Union and Wire Transfers to pay Alibaba suppliers?
We’ve written an entire post dedicated to why Western Union isn’t a good way to pay Alibaba suppliers, but the gist of it is that paying via Western Union is the same as paying via Paypal Friends and Family – it’s not marked as a business transaction and there’s no protection. On top of that, there’s no way to get your money back if you are scammed; it’s untraceable.
What is Alibaba Trade Assurance and Should I Use It?
Alibaba Trade Assurance is a payment protection scheme put in place by Alibaba; it allows you to get your money back if your manufacturer has delayed your shipment, or if the products haven’t been made to the required quality standards.If it is available, Alibaba Trade Assurance is always a good option. However, only certain suppliers offer it – Trade Assurance isn’t guaranteed across the platform. Another thing to note is that Trade Assurance only covers a certain amount of money; usually it will only cover up to a figure between $10,000 and $30,000.
About Delivery & Shipping From Alibaba
How are my goods delivered from Alibaba?
Your supplier will package your goods into cartons and, if needs be, palletise them. From there, depending on your shipping method, the goods will either be collected from the factory or the supplier will arrange for them to be transported. There are three main ways that your goods can be delivered from Alibaba: courier, air freight and sea freight. Read more information about the three methods of international shipping.
What are my delivery options?
Courier – courier services are the most familiar option; these have pretty much the same process as buying something from Amazon and it being delivered within a few days. However, courier services become extortionately expensive once goods reach a certain size.
Air freight – air freight is cheaper than a courier service and means that your goods will be loaded onto a flight and transported. Air freight will take a couple days longer than courier and will require you to hire a freight forwarder.
Sea freight – sea freight is by far the cheapest option for delivery, so if you’re looking for low costs sea freight will be the one for you! The delivery time is a lot longer, but the savings are a lot larger.
What’s the cheapest way to ship goods from Alibaba?
The cheapest way to ship goods from Alibaba is sea freight. Learn more about sea freight here.
What do I need to know about customs when I import from Alibaba?
When you import a bulk amount of goods via sea freight, they will need to be processed through customs before they’re allowed into the country. For goods to pass customs, they will need to be equipped with the necessary documentation and have been manufactured to the UK’s quality standards. For some goods, this will mean that get tested or that you need to provide test certificates to customs when you try to bring them over.We’d suggest reading our Guide To Clearing UK Customs and What Documents You Need To Clear UK Customs.
Can I get my goods delivered straight to an Amazon FBA warehouse?
Yes! If you’re selling your goods on Amazon FBA, it’s easy to get them delivered straight to an FBA warehouse. Your supplier will need to package them to Amazon FBA Packaging Standards, but many suppliers in China are familiar with this, so it shouldn’t be a problem.
Legal Issues Surrounding Alibaba
Is importing from Alibaba to sell in the UK legal?
Absolutely! Provided that your goods aren’t violating any intellectual property or copyright laws, it is perfectly legal to import white label products and sell them on as your own.
If something goes wrong with a product, who’s responsible – me or the supplier?
The importer is responsible for any liability; if you were to import a product and something went wrong to a damaging degree, you would be solely responsible in the eyes of the law. This is called importer’s liability (and is worth reading up on more).
Is there any way to make sure that I’m not liable for anything that goes wrong?
Yes – due diligence. If you can prove that you did your due diligence and took all the necessary precautions when importing your goods, this can be a defence.
Hopefully, this answered a few of your basic questions about Alibaba. Remember, if you do import from Alibaba and you want to save money on shipping, feel free to ask us for a shipping quote!