How to Buy from Alibaba: A Comprehensive Guide

Hey, what’s up, everybody welcome in thanks for being here today. Most of my friends on YouTube and out of YouTube asked me how to buy from Alibaba. When we talk about sourcing, maybe the most important part to take care of as an international buyer is finding reliable suppliers because they manage your product cost, product quality, packaging, and shipping. Literally, they can make or break your business. Today’s first and the most important business lesson, whatever you sell, you earn while buying in trade. If you are ready to buy from Alibaba to start your import-export business or e-commerce business, such as an Amazon FBA business, selling on e-Bay, Shopify, or if you are in Southeast Asia, on Lazada or Shopee. Please watch this video first before you create your first purchase order. Why? Because there are millions of products and tons of suppliers listed on Alibaba but not all of them are good for your business. Also, some bad people are going to scam your money if you are not careful. Do not be worried! In this video, I’m going to be sharing my knowledge and experiences to help you to research and source on Alibaba. If you follow these things, the risk you getting scammed is going to be close to zero. And the chance of you finding a good supplier for your business dramatically increase. At the end of the video, I’m going to be sharing with you one bonus tip, that’s going to save you from the risks. Keep watching! I will focus on 3 things in this video. Are you ready? Let’s look at what’s in our store today. One; Basic Knowledge of Alibaba, Two; How to find the best suppliers on Alibaba? And Number Three; How to buy from Alibaba?

Basic Knowledge of Alibaba

Question 1: What is Alibaba? Alibaba Group was founded by Jack Ma, in China. They have many companies like Taobao, Aliexpress, Tmall, Alipay, and so on. Alibaba.com is the first one which was built around 20 years ago. This website mainly for non-Chinese buyers to find suppliers in China. But now you can also find suppliers from all over the world. Alibaba.com is dominating the Business to the Business trading platform. We can say Alibaba is a search engine for B2B businesses. Question 2: Is Alibaba the right place for you or your business? If you are searching for any branded products like iPhone, Nike shoes, you can’t find them on Alibaba because they have their own distribution network in every country. If you are buying less than 500 US Dollars for each product. Don’t use it! Even though, Alibaba is good for small and medium-sized enterprises. But it is not good for too small businesses. If you want to find a world-class manufacturer that has supplied big brands. I wouldn’t tell you don’t use Alibaba, but almost you can’t find them there. Because their target clients are big companies and big brands. But main buyers on Alibaba are usually small and medium-sized businesses. So alternatively, visiting a trade show in China, like Canton Fair, will be much easier to find this type of manufacturers. So we can say if you own small and medium-size enterprises if you are not looking for branded products or world-class manufacturers and if your order is more than 500 US Dollars. Yes, Alibaba can be the right place for you. Question 3: How does purchasing work on Alibaba? Essentially, Alibaba is like an online trade show. You can find suppliers for all kinds of products, and you can get an idea about products from their photos, videos, or descriptions. And evaluate suppliers by company information. But you cannot complete the whole purchasing process online as simple as Aliexpress or Amazon. Because Alibaba is an international trading platform and you are supposed to deal with suppliers and purchase products in large quantities, or customize a product, and make your own packaging or own brands. So every customer has various requirements on the products and suppliers usually don’t have an inventory. They will start producing after placed an order. Because this is international trading, and products or packaging are usually customized. So if you are not satisfied with the products that you received, it’s almost not possible to return the products to China and get your refund. Honestly, I didn’t see any people made their return and got a refund. Almost no one will tell you this truth. When you are doing product research on Alibaba, the prices that you see, are not real. Because most of the transactions are not completed online. And just suppliers will try to mark their prices as low as possible to attract buyers. And this is a very common trick that they play to stand out from their competitors. So if you want to get real quotations, you need to spend time to find the best suppliers for you and contact them.

How to Find the Best Suppliers on Alibaba

Step 1 Identify who they are. When you look at a supplier profile, you have to look at these four things. Supplier name: You might be wondering why supplier name? What does it matter? Actually, in China, the company name is very structured when they register the business, their business name must include four essential elements. They are registration location, company name, the main product that they are involved in, and the type of partnership. Second Business Type: There are three kinds of business types on Alibaba. Manufacturer, Trading Company, and Wholesaler. Manufacturer; lowest price, high minimum order quantity, and sometimes you can see some manufacturer wrote also a trading company and some just manufacturer. In China, not all manufacturers have an export license, so if wrote a manufacturer and trading company it means can export your products also. Trading Company; specialized in certain product categories, buy a product from manufacturers and sell to you. And Wholesaler; very low minimum order quantity, wide product categories, they can sell any kind of products. Buy from manufacturers or trading companies and sell to you. And their price is higher than the others. Most of the tutorials will tell you that you must buy from manufacturers and a trading company is always a middle man to increase the price and rip you off. That’s totally wrong. Because first, you focus on your business if you want to buy small amount products may be trading company will be better for you. And also my advice you always focus on how to balance price, quantity, quality, and service. And the Third Number of Years on Alibaba: This is obviously very important I advise you to choose the suppliers who have a minimum of three years on Alibaba. Because it shows they have enough experience and business maturity in the e-commerce business. So the last one is the company certificate: The company certificate is different from the product certificate. It can help you get some ideas about suppliers’ profession and if they have certs from big audit companies like TUV, SGS, Bureau Veritas, could more valuable because these companies have a good reputation. With all these four elements in step one, you should have an idea of who they are. And we look at step two: What they do? If you look at the suppliers’ main products and product categories you should be figured out the supplier specialized in one product range or sell all kinds of products. And second, if you are searching for the product, you need to know which product certifications must-haves and which nice to have. For example, if you are searching for an electronic product and your main market is the USA, the product must have FCC or you will sell in Europe, need to have CE certs. Step Three: Where are they? We can identify are they manufacturers or trading companies by looking at their address. If their address like suite 103, 14th floor, we can tell they are a trading company, but if they are in an industrial zone, so they could be a manufacturer And we can check the city that they are located. If they are located in 5 major coastal provinces. These provinces are called industrial clusters and if the company is located in these provinces also easier and cheaper to ship your products. They are Zhe Jiang, Guang Dong, Shangai/Jiang Su, Fu Jian, Shao Dong. And finally, step four is your suppliers this is obviously you can find out after you contact the supplier. But if your suppliers’ English skill is so good, it shows they might have an experience and it is easy to contact and save you from misunderstanding. And if you have a chance, you can ask suppliers for a factory tour, and you can send your agent or friend who lives in China. And they can take photos and videos about the factory or can live call so you can identify the suppliers’ reliability and capability. And if your order quantity is big enough, you can demand third party inspection from TUV, SGS. It costs around 300 US Dollars per day.

How to Buy from Alibaba

Buying from Alibaba mainly not too much different from importing goods from anywhere. You must know the basics of the international trade process. Let’s look at these processes: 1 – Searching Supplier and Product 2 – Collect quotations from suppliers 3 – Get Samples 4 – Place order and payment Most of the Chinese suppliers on Alibaba work as payment terms 30 or 40% deposit before starting production and balance 60 or 70% before the product leaving their warehouse or before the product shipping out of China. I have mentioned at the beginning I have one bonus tip for you. Here my tip; You can use Alibaba’s Trade Assurance Service. This service is recommended because it can ensure the product quality is the same as what you expect and your products will be ready on time. But here you or your supplier must define product quality as much as detailed, also specify ship date. It is effortless, you can create the trade assurance order by yourself, or you can ask your supplier to create the trade assurance for you. After that just follow instructions on Alibaba and send your money to Alibaba. Alibaba holds that money until you receive your products. If your supplier does not accept trade assurance, you can search for a new supplier or you cannot find better than them you can use a third-party inspection company before I mentioned in section one.