If you’ve been considering the importation business, especially sourcing from China, the chances are high that you’ve come across “Alibaba.” Well, Alibaba is now the world’s biggest e-commerce company. The website connects millions of shoppers with a multitude of merchants and businesses. Alibaba operates a user-friendly platform. Buyers worldwide use it to connect with online suppliers in a few clicks. Hence, the entire importation process has become as easy as regular online shopping.
The process is clear enough for expert importers. But may be confusing if you are a newbie importer as there are many things you need to know beforehand. That said, this guide will teach you step-by-step everything you need to know about buying safely and effectively from Alibaba.
Below, you’ll start by learning how to begin your search. Then how to identify and choose reliable suppliers. Finally we’ll discuss how to arrange for quality inspection and shipping.
We’ll cover the following seven steps in the article.
1. Making the decision to use Alibaba for your business.
2. Searching for suppliers on Alibaba; Direct Search vs. RFQ.
3. Choosing the best supplier for you.
4. Negotiating the best price and discussing your customization needs.
5. Placing your order.
6. Find the best freight forwarding service from Alibaba suppliers to your address.
7. Hiring a 3rd party to inspect the quality of your goods.
1. Making the decision to use Alibaba for your business
Alibaba has become a number 1 shopping website for businesses worldwide. Among other reasons, it offers more cost-effective solutions compared to local suppliers.
But, you may still be wondering if it’s the best fit for your business. Also, what if you need to order fewer quantities? We’ll discuss all these and more.
What is Alibaba?
Alibaba is an e-commerce B2B platform created to connect buyers and sellers globally and ease the online shopping process. The platform provides full-service solutions for the entire buying process. From product selection to payment, logistics arrangements, and so on.
But if you’re buying very small quantities try other B2C e-commerce sites where you can buy single items, like Amazon, Aliexpress, and eBay. Alibaba is comparable to an online showcase. Thousands of suppliers come to display their products from different industries. You’ll find products from fashion, beauty, artificial flowers, electronics, accessories, etc.
Besides, most of the suppliers on Alibaba state a minimum order quantity (MOQ) rule. Usually, this MOQ ranges between USD$1,000 and USD$3,000. So, if you want to buy goods below that amount, it’s better to use the other sites we mentioned earlier. Those sites have lower or no MOQ rule. Also, they allow single item purchases. Although most of Alibaba’s suppliers are Chinese, there are many overseas suppliers from European, American, Southeast Asian countries.
Also, note that though Alibaba has an incredible range of items, there are some items that you should avoid buying there. Such items include high-end branded products like iPhones, designer bags and shoes. Others are food products, alcohol, cigarettes, drugs, etc.
Buying these kinds of items means you could get fakes or face serious importation headaches.
2. Searching for suppliers on Alibaba; Direct Search vs. RFQ.
Let’s discuss the two primary ways that you can find suppliers on Alibaba. We’ll also conduct a real search for sports water bottles. After seeing both methods, you can choose the most suitable one for you.
Method 1: Direct Search
Direct search is the most common way buyers can search for suppliers on Alibaba. There’s a search bar on the platform. Type in what you’re looking for and you’ll see thousands of Alibaba suppliers.
You’ll also see the price range stated by each supplier. Select those that are offering an acceptable price range. After that you can contact them by sending over inquiries. Let’s walk through a typical example below.
We are sending out 15 inquiries for sports water bottles. Here is how:
Step 1: click on https://www.alibaba.com/ and enter the name of the product you need.
Step 2: Select top suppliers to send inquiries to (e.g., gold suppliers)
Step 3: Contact your chosen supplier by clicking the “Contact supplier” button on Alibaba.
From the above image, you can see that there’s a lot of information. Scroll down each supplier to check things like their transaction histories and qualifications. Based on your findings, proceed to send inquiries to those that look good for further selection.
You can easily get in touch with and send an inquiry to the supplier by clicking the “contact supplier” button.
Step 4: Collect all the quotations from different suppliers and compare them.
Step 5: Narrow your list of suppliers to two or three for further communication.
As you may have noticed from the search results above, there are different types of suppliers on Alibaba. They include:
- Gold Supplier,
- Trade Assurance Supplier
- Verified Supplier, etc.
To ensure a smooth buying experience, we recommend that you deal with suppliers that have these qualifications. We’ll talk more about this later.
Method 2: Alibaba Request for Quotation (RFQ)
Alibaba’s RFQ service platform allows global buyers to post buying requests directly to suppliers and manage all quotations. Whereas in direct search you’ll need to contact each supplier separately, with RFQ, you can send out many quotations simultaneously.
Once again, we are using sports water bottles. You can compare this with the results from direct search.
Follow the steps below:
Step 1: Go to Alibaba’s RFQ main page: https://rfq.alibaba.com/
Image: Alibaba’s RFQ platform
Step 2: Complete the RFQ form.
Step 3: Submit your RFQ. Shortly after, you’ll start getting quotations from different suppliers.
Step 4: Compare the quotations in the message center of the RFQ dashboard
Step 5: Select two or three of the most suitable suppliers for further communication.
Comparing both methods, it’s clear that RFQ will give you faster results. With direct search you’re spending hours on reviewing suppliers one by one. Then, you’ll send out inquiries and wait another one or two days to get their replies. RFQ allowed us to get more than 10 responses within 15 minutes. From there, we quickly selected three good supplies for negotiation.
On that note, we recommend that you use Alibaba RFQ, especially if you are a newbie. It will save you from many hours developing a long list of suppliers. RFQ will also deliver more efficient results. However, if you find yourself still struggling with finding good suppliers, you can outsource that task to a sourcing agent.
3. Choosing the best supplier for you
Whatever search method you use, eventually, you’ll need to move to the next step. That is, selecting the best-matched suppliers among several choices on Alibaba.
Referring back to the examples we did above; we pay particular attention to things like their responsiveness, product specialization, and professionalism when we review supplier profiles. We’ll discuss this more later but before that, let’s talk a bit about the types of suppliers on Alibaba. This information will help you quickly exclude unqualified suppliers
1) Types of suppliers on Alibaba
There are generally three types of suppliers on Alibaba: Gold Suppliers, Verified Suppliers, and Free Suppliers. In addition, there are suppliers that support trade assurance. Their icons easily identify each type of supplier. Under each category, there are manufactures and trading companies for you to choose from.
Image: Icons for Different Types of suppliers
- Gold Supplier: Gold suppliers have paid premium membership on Alibaba. These suppliers have been authenticated by third-party inspections and Alibaba staff through onsite checks.
- Verified Supplier: Verified suppliers have been accessed and verified by a third-party agency. Conducting these checks ensures that gold suppliers are registered and existing companies, but this doesn’t actually verify their business reputation.
- Trade Assurance: When a supplier supports trade assurance, the supplier agrees to protect the buyer’s interests. In case of disputes such as discrepancies in quality, quantity, logistics and supply problems, etc., the buyer can get a quick resolution.
2) Our top three considerations when choosing suppliers
Over the years, our time spent working with thousands of suppliers has improved our skills in selecting only the best suppliers. The following sections will help you to choose a supplier that will partner with you effectively. This way, their expertise will help to make the entire process faster, more efficient, and cost-effective.
Timely and good communication is a key requirement for successful importation from Alibaba.
When suppliers respond to your inquiry, you can sense how efficient they will be from how detailed their reply is and if they respond quickly.
For example, let’s assume you asked a supplier about pricing, packaging, and shipping costs. Ideally, a great reply should clearly address everything you asked about clearly with no ambiguity. On the other hand, a poor reply will address very little and likely leave you more confused.
For newbies to China importation, it’s best to use suppliers with experience and professional knowledge about international trading. Working with a business like this will save you tons of headaches and stress further down the road. The fact is, problems may arise regarding your order or shipping. But a professional supplier will step in to help you.
- Specialized product portfolios
Once we get replies and quotes, we focus on pricing and their product categories. We do this to ensure that we’re dealing with a product specialist. In the image below, the company gave us a good price. But after checking their products, we realized that sports water bottles are not their specialty. We quickly left them out since it’s possible that they’ll lack the capacity to fulfill our order.
Image: This company has too many product categories
Note that many newbies make the mistake of choosing a supplier just because the price is good. Instead of focusing on price, why not try using our recommendation as a guideline. You’ll be in a better position to get the best results.
4. Negotiating the best price and discussing your customization needs
Now that you’ve narrowed down your search to two or three suppliers, the next stage is price negotiation. To get the best in this stage, note some techniques that improve your bargaining power. For instance, be flexible about things like quantity, mode of payment, customization, packaging, etc.
Also, we know that trade-offs will help. For example, ordering larger quantities will help. Also, using favorable payment methods like T/T telegraphic transfer in advance (T/T 100%) can boost your bargaining power with most suppliers. In the case of customized packaging, they’ll typically ask you to meet their MOQ rule for customization. If not, you’ll need to pay more.
- Communicating with suppliers
Alibaba allows you to communicate with suppliers via several routes after such as:
- Clicking “Chat Now” on Alibaba’s website.
- Sending emails (we recommend this medium for more serious documentation).
- Instant messaging such as WeChat or Whatsapp.
- Customizing your pre-production sample (or PP Sample)
After settling price issues, you’ll need to discuss customizing your pre-production sample. Pay special attention to this because your pre-production sample’s quality will determine the standard for mass production. Skipping or rushing this step could cost you dearly later. Here’s how it works:
- Create your PP sample order.
- Provide important information such as product specification sheets and other information.
- Confirm quantities one for the buyer and one for the supplier.
- Receive and check the PP sample quality. Thereafter, seal it and return it to the supplier for production reference.
- Ask for re-submission of the PP sample if you discover any variations. If not, send confirmation that bulk production can start. Remember to include any comments for corrections in mass production.
- Expect to pay full price in advance and shipping costs for your PP sample.
5. Placing your order
It’s finally time to place your order. You may choose to place a normal order or create a trade assurance order.
All about Alibaba Trade Assurance
Trade assurance is a built-in protection service offered by Alibaba. It covers orders placed and paid for through their website. Trade Assurance protects buyers if disputes arise about substandard quality products or failed shipment deadlines. In these situations, you can open a dispute and ask for a refund after uploading evidence.
- Paying for your order
Getting the trade assurance order protection means that you can only pay through Alibaba.com via five different methods:
- Telegraphic Transfer (T/T),
- Online Bank Payment (ideal for larger orders),
- Credit cards like Visa, Master Card, etc.
- Western Union money transfer,
- Pay Later credit.
- A note about Paypal
Although Paypal is widely accepted worldwide, on Alibaba, it’s only recommended for orders below $500. Most Chinese suppliers don’t accept Paypal for large orders because of the risk of being defrauded owing to PayPal’s 180-day refund protection policy.
Besides that, using PayPal and other offline methods means that your payment is not protected by trade assurance.
6. Find the best freight forwarding service from Alibaba suppliers to your address.
Congratulations on getting this far; your work is almost done!
Shipping your goods raises another set of considerations such as the most suitable shipping method, customs documentation, etc. This may sound scary and complicated. Fortunately, you can get it all done by hiring a freight forwarder.
- How to hire a freight forwarder
Freight forwarders are service providers that handle all aspects of storage and shipment on behalf of shippers. It’s usually a wise business decision to use them since they will save you time and money by handling everything from export documentation to shipping, warehousing, insurance, and much more.
- Finding a suitable freight forwarder
Finding a freight forwarder is a relatively straightforward process. You may ask your supplier to recommend one or find one yourself.
1. Finding a freight forwarder by yourself
Start by typing “freight forwarders” on Google, and you’ll immediately get thousands of results to look through. Alternatively, to make things faster, you can ask other experienced importers (e.g. your friends and acquaintances) for referrals about reputable freight forwarders. Keep the following in mind:
- Check the freight forwarder’s connections and network in the destination country. So, if you’re importing to the US, it’s more important to confirm that they have a strong network and experience in the US rather than in China.
- Use a freight forwarder with evidence of being in the industry for years. This will literally save you from the many problems that often arise along the way.
- How responsive are they to your questions? Ensure that you are comfortable with their customer service and communication before making any decisions. International shipping can be tricky; if the freight forwarder communicates poorly, it’s better to try another company.
- Lastly, confirm the free on board (FOB price) with the supplier.
2. Getting a freight forwarder through your supplier
Your Alibaba supplier is in a great position to arrange for a freight forwarder. Just ensure that you clarify the Cost, Insurance, and Freight (CIF) price with them.
7. Hiring a 3rd party to inspect the quality of your goods
One of the worst things that could happen is to go through all these processes then end up with a shipment of defective products. It can be difficult to verify quality based on pictures from your suppliers. Thus, we advise that you hire a 3rd party to handle your quality control inspection.
- Finding a 3rd party quality control inspector
Try any of the following methods:
1) Alibaba’s inspection service. Alibaba offers an inspection service that applies when you order under trade assurance. You may also use this option if you added the service before making your initial payment. Two companies handle these inspections. They are China Certification & Inspection Group and Bureau Veritas (BV). Their fees are lower than other inspection services. But, they check small quantities of products and the inspection time is rather short. Expect to pay less than $200.
2) 3rd party inspection company. These are professional companies that specialize in quality inspection of finished goods. They include Asia Quality Focus, Asia Inspection, Services, V-Trust Inspection Service, etc.
Usually, their inspection fees cost $300 per person daily.
Image: Inspection services from Alibaba vs. 3rd party companies.
There are still other reliable companies that conduct inspections; however, their fees are much higher. These companies check products using very specific quality inspection standards, such as acceptable quality limit (AQL). They include SGS Inspection Services, Intertek, and TUV.
3) Sourcing company. A trusted sourcing agent can also handle the inspection for you. Sourcing agents are generally cheaper to use compared to the larger companies. They can be quite thorough, and they may also help you negotiate with the suppliers directly on your behalf if there’s any need to correct significant quality defects.
Finally, let’s discuss what you can do about substandard quality goods because sometimes, despite the best efforts, defects may slip through.
- Resolving quality problems
For orders covered by trade assurance, you can open a dispute with the supplier to address the problem. Alibaba staff will review the matter and arrange for a refund once your evidence is approved. For more information, please refer to the trade assurance article.
Where your order isn’t covered by trade assurance, the process becomes a bit complicated. You’ll have to discuss redoing the production or ask for an outright refund from the supplier. This back and forth communication can become complicated. Using a sourcing agent is a good idea here. They can represent you in handling this difficult negotiation with the supplier. Or use some other reliable acquaintance based in China to help out.
Importing goods from Alibaba to your country involves several steps and processes to be successful. We hope that this article gives you the information you need to get your desired products in a cost-effective manner and avoid many of the common mistakes that people often face.