Your Guidebook for Sourcing on Alibaba
In modern days, almost everybody shops, at least once or twice on Amazon. For entrepreneurs in the hardware product development industry, it wouldn’t be too much of an exaggeration if you compare Alibaba to Amazon.
More and more startup companies choose to source on Alibaba for apparent reasons. First, who wants to travel all the way to the other side of the world if you could just have everything done at your desk? Second, Alibaba is like a giant virtual bazaar for global wholesale trade. All you need to do is search the item you want, and almost all the possibilities and options are presented to you. Most importantly, you will get supplier prices for the parts you would like to source for your products.
The Alibaba Group created two platforms for both international and domestic users. Internationally, there is alibaba.com which specializes in global B2B trade, whereas its Chinese website 1688.com, is more for companies that are focused on local business within China. The website itself is built in the Chinese language. If you would like to source through the Chinese website, you will need assistance from an expert in China. For this blog post, we will talk about the international version only.
If you haven’t used Alibaba for sourcing, you can regard this blog post as your guidebook. For those who have experience using Alibaba, there are things you should keep in mind.
How to purchase from Alibaba?
Like all the online shopping websites in the world, the primary flow of sourcing on Alibaba is “Registration – Search – Negotiation – Order”. Let’s take a look the flow step by step,
1) Set up your account
Before making any purchase, you will have to have an account on Alibaba. For foreign users, you don’t have to worry about any language barriers. The website offers services in almost all the major languages used in international business.
2) Search the products/services you want
On Alibaba, you can search either by Products/Services or Suppliers. If you would like to keep working with a previous supplier based on your experience, you can directly search for them by name. Also, you can browse through your options by Products or Services, but make sure to use the right keywords and try multiple combinations to find the right product.
(Search by Products)
(Search by Suppliers)
3) Pick your seller from all over the world carefully
There are two types of suppliers on Alibaba, factories and trading companies/middle companies. If you choose to work with factories, you are dealing with the actual factories that produce the goods.
However, trading companies or middle companies, on the other hand, are the middlemen who source directly from factories and sell to you. You can choose who you want to work with according to your own business and needs. If you can’t tell which side they are on, ask them directly. It can’t be emphasized enough how important it is to understand who you will be working with.
4) Contact the seller
Once you have your target product, contact the seller first to ask for more details that you care. You can either leave a message to the seller or live chat with them. Keep in mind that if you reside in a different country, there might be a time difference between you and the sellers who are most likely to be in China. Therefore, live chat can be inefficient sometimes.
5) Request samples for review
Now you have found what you need and talked to the seller, and you feel confident to proceed with the deal you get. Hold on! Before you place your order, request some samples for review first!
Most sellers agree to send samples for the buyers to check first. However, you will have to negotiate with the sellers about the shipping fee. Sometimes you will have to pay out of your own pocket.
6) Place Minimum Order Quantity (MOQ)
After reviewing the samples from your seller(s), you can decide who you would like to work with and how many pieces you would like to purchase from them. Different suppliers have their requirements for MOQ, and you will have to find out about it for yourself by communicating with them.
Things you should know when using Alibaba
As powerful and convenient as it can be, there are still things for you to remember when sourcing on Alibaba.
AliSource or active search?
If you want to be creative and see what suppliers can come up for you, there is AliSource for you to try. AliSource is part of Alibaba, but the approach is different. Instead of actively searching for products, services and suppliers, AliSource allows you to create Buy Request(s), and within 24 hours suppliers will respond to your request and provide a rough quotation. You can check it out here.
Gold Supplier or Gold Plus Supplier?
According to Alibaba, “Gold Supplier is a paid membership on Alibaba.com. All Gold Suppliers in China must pass our Onsite Check.” For those suppliers who are located outside of China, they must pass the “A&V Check” by a third-party organization.
Gold Plus Suppliers will be going through an even stricter check to be verified. For more information, you can check here.
2) Support Trade Assurance or not?
The Support Trade Assurance is created and supported by Alibaba to protect buyer’s orders and minimize the risk of delayed and/or incorrect orders. Therefore, when you choose your supplier, make sure to go with those who support the Trade Assurance program.
3) Onsite-checked or not?
Onsite Check is a process launched by Alibaba to verify a Gold Supplier’s qualifications in mainland China. According to Alibaba, the following types of information will be verified during the Onsite Check,
- Business license;
- Business type (e.g. trading company, manufacturer or both)
- Company / Factory location;
- Ownership status of the premises;
- Photos of supplier’s operations;
- Contact information;
- Certifications from subsidiaries, partners, and contractors;
An Onsite Check can’t 100% guarantee you this specific supplier is your best option, but at least, it can be used as the first thing to filter out some of the suppliers on your list.
Have you ever sourced anything from Alibaba? How has your experience been? Do you have any questions about it? Leave a comment below and let us know!