Sourcing products online and making payments on Alibaba.com can be a daunting task for new wholesale businesses. This article compiles proven tips from 30+ experienced buyers who have spent more than 10 years sourcing products on Alibaba.com and have learned the hard way what mistakes to avoid and how to source products safely.
Table of Contents
Source online with product-level keywords
Ready to ship vs customized
Verified Suppliers vs Gold Suppliers
Experienced suppliers have long years of operation
Decypher the supplier’s name and address
Evaluate the supplier’s store and product catalogs
Evaluate the supplier’s capability and compliance
Negotiate the price and payment terms
Request samples to check the product’s quality
Make secure payments with Trade Assurance
1. Source online with product-level keywords
It’s no secret that the first step to finding the right suppliers is knowing what keywords they use when advertising their products. For example, when searching for “women beach dress,” other suppliers might use words like “ladies casual beach dresses” or “summer beach dresses” to sell the same product.
At this point, it’s easy to become overwhelmed with all of the products on Alibaba.com. This is why businesses aiming to source products successfully need to make sure they’re looking at relevant products. To do this, buyers can use the “Filter” feature, which allows them to quickly filter products based on price, material, and other factors.
2. Ready to ship vs customized
The next step for buyers is to determine which product type is best suited for their business needs and budget. There are two main types of products on Alibaba.com: Ready-to-ship and customized.
Ready-to-ship products, also labeled as RTS, are mass-produced and shipped directly from the factory, so they don’t require any special customization or branding. The main advantage of RTS is that the price is clear and fixed, and the products are usually shipped within 14 days. This makes them ideal for businesses that need to buy small quantities of products regularly, or for situations where the buyer doesn’t have a lot of time to negotiate with the vendor.
Customized products, on the other hand, are made specifically for each customer/order by the factory, whether that means adding logos or other branding elements or creating something completely new from scratch. While customized products may cost less price per unit than the RTS ones, they require large MOQs and have long lead times. In spite of that, they’re valuable for buyers who look for branded items that match their business identity.
3. Verified Suppliers vs Gold Suppliers
The first thing that buyers should look for when selecting their suppliers is whether the seller has been verified or has simply paid for a “Gold” membership. It’s important to understand the difference between “Verified” suppliers and “Gold” suppliers before making a payment on Alibaba.com. Gold Suppliers refer to sellers that have simply agreed to pay an annual fee to promote their products on Alibaba.com. The “Gold” membership is simply a protective layer that helps Alibaba.com to filter scammers and protect business buyers from fraudulent sellers.
In an effort to make the sourcing process as secure and successful as possible, Alibaba.com has introduced the “Verified” badge to help buyers find the right supplier that will meet their standards. The verification process simply means that Alibaba has had a third-party company visit the factory to check out its facilities. The verification report can be easily found on the company’s profile page. In the report, the company’s business information is clearly shown to the public, including production capacity, R&D, and quality control procedures. Hence, buyers can have a better understanding of the company’s background and capabilities.
4. Experienced suppliers have long years of operation
The longer a supplier has been operating on Alibaba.com, the more likely it will be able to provide a better service and meet buyers’ needs and demands. When looking for a manufacturer or supplier on Alibaba.com, it’s best to choose one that has been operating for at least five years. Buyers can easily find this information from the search list page or the product page, as shown in the images below.
If a supplier has been around for at least five years, it means that it has had time to grow and develop its operations. The longer the company has been in operation, the more experience it will have in all areas of business development and management, including customer relations and product development. This can be a huge benefit to buyers who are just starting out.
5. Decypher the supplier’s name and address
The supplier’s name and address are not just for show. They actually say a lot about the company and can help buyers decide whether or not it’s worth doing business with them.
For example, let’s suppose that a wholesaler is looking for a new supplier of jewelry. The wholesale buyer then finds two companies bearing the same name: “Zhejiang Tianmei Garment Co., Ltd” and “Zhejiang Tianmei Jewelry Co., Ltd”. Obviously, the latter is more likely to be an established supplier of jewelry than the former. That’s because professional suppliers tend to choose their names according to what they manufacture or trade. So, when coming across a company name that seems out of place, that could be a sign that something is amiss; or at least that the supplier isn’t as experienced as it should be.
In addition to the company name, it’s important to understand the location of the supplier. This information is often found in the supplier’s name, but if that’s not the case, buyers can visit the company’s home page to find the factory or office address. Why is the address of paramount importance? Because buyers will be able to determine if the supplier is located in an industrial cluster or not.
Industrial clusters are areas where manufacturing businesses are concentrated together to benefit from economies of scale and proximity. The advantage for business buyers is that by working with a supplier located in an industrial cluster, they can get access to a range of specialized services and materials which would be too expensive or difficult to source elsewhere.
There are many different types of industrial clusters; from electronic goods clusters in Shenzhen to automotive clusters in Tianjin. By choosing a supplier that specializes in similar products that they’re importing, business buyers and wholesalers will be able to better control costs and ensure quality control standards are met during production.
6. Evaluate the supplier’s store and product catalogs
When considering a new supplier, it’s a good idea to take a look at their online store and product catalog. If they’re professional, they’ll have a clear, well-organized catalog of products that fit in the same category. This means that if a supplier is specialized in selling “luxury handbags”, their store and product list should consist mainly of similar products such as “shoulder bags” and “clutches”.
Inversely, unprofessional sellers will have their online store and product list cluttered with unrelated products. This could be an indication that the seller isn’t very organized or knowledgeable about their merchandise. For example, an inexperienced supplier might sell “luxury handbags” along with children’s toys or even food items!
7. Evaluate the supplier’s capability and compliance
When evaluating a potential supplier on Alibaba.com, one of the most important tasks for buyers is to determine if the supplier is trustworthy as a business partner. The first step in establishing this trust is to ask for photos and videos that show the supplier’s office, warehouse, factories, and other facilities. Buyers with ample purchasing power can ask for a video call to see the factory in action, which can be incredibly useful for spotting defects and inconsistencies. Video calls are also an effective method to verify that the supplier is actually making the products themselves and not just reselling them from some other companies.
It’s also important to check whether the supplier can provide the necessary compliance certificates. For example, if the buyer is based in the USA or Europe, they will need an FDA certificate from the manufacturer showing that the product meets US or EU standards. This is important because some countries have very strict standards for importing goods, and it’s not uncommon for a supplier to be missing one or more of these documents.
Finally, it should be noted that there is no substitute for testimonials from previous customers. These customer testimonials will give businesses an idea of what other buyers think about working with a particular seller and help build their confidence in moving forward in the business partnership.
8. Negotiate the price and payment terms
A great way to save money on Alibaba.com is to learn how to negotiate with powerful suppliers. This is especially true for business buyers who want to order substantial quantities. They can use this purchasing power to their advantage and get better value for money by asking for a lower price per unit.
The negotiating process should not be focused solely on prices; this is the opportunity for buyers to develop a clear plan of action when a dispute arises. Disputes can arise when a customer isn’t happy with the product they received. It might be something as simple as a delay in shipping times or as complicated as an actual defect in the product itself.
If a business buyer is unhappy with the product quality or with the delayed shipping time, will the supplier work hard to help solve the problem? Is there a refund policy? Will they refund shipping costs? A clear plan of action will help ensure that everything goes smoothly during any disputes that arise with the suppliers.
Before finalizing a deal with the supplier, buyers must make sure they understand everything about the payment terms. Are there discounts for bulk orders? What about shipping costs? How much will buyers have to pay for customs? Buyers need to ask for this information upfront and make sure it’s written on the contract so there’s no confusion later on.
In addition to the above, knowing what type of Incoterm the supplier offers can be helpful. For example, Delivered Duty Paid (DDP) is the most common incoterm in e-Commerce. The term requires the seller to handle everything including shipping, customs, import duties, taxes, etc. Delivery is only complete when the goods reach the buyer’s door, and risk only passes at that point. As a result, this makes it a very convenient option for new buyers.
9. Request samples to check the product’s quality
When buyers are in the market for a new supplier, it’s tempting to make a snap decision based on price and availability. But before doing that, there’s one catchphrase to remember: “Don’t buy without samples!”
One of the most important steps in the buying process is requesting samples from suppliers. This will help buyers accomplish three things:
- They can see how long shipping times are compared to the estimated times listed on the supplier’s offer. This is especially important if the product has a short shelf life or if it needs special care during transit. The last thing buyers want is for their product to arrive damaged or expired!
- They get an idea of the packaging quality; will buyers feel comfortable with their customers receiving the package? This applies even if the product does not require special packaging because most consumers judge the product quality based on its appearance alone!
- They can see the product’s overall quality. How well does it hold up? Product quality is essential for long-term success; buyers don’t want to be stuck with lots of returns or unhappy customers because the product doesn’t meet their expectations.
As a general rule of thumb, buyers should consider ordering samples from at least three different suppliers to compare the quality, rates, and delivery times.
10. Make secure payments with Trade Assurance
Trade Assurance is a free escrow payment service and one of the most essential features when sourcing products from Alibaba.com. It’s designed to help create trust between buyers and suppliers. Buyers can pay their suppliers with peace of mind knowing that if the product is not delivered as promised, they can get their money back.
This protection system will protect buyers from fraudulent sellers by providing them with a full refund in case of faulty products, non-delivery, or shipment delays beyond what was agreed upon on the terms of trade. Buyers are entitled to a refund up to 30 days after receiving the package.
Time to get started
By following these simple tips, buyers will be able to find better prices, make secure payments, and establish trusty business relationships with reliable and leading suppliers. Still not sure how to go about sourcing products on Alibaba.com? The blog center is the place to go! Here, businesses will find all the information they need to get started on Alibaba.com.
- The best way to find the right suppliers is to know exactly what keywords they use when advertising their products.
- Knowing the difference between ready-to-ship and customized products is vital for businesses.
- Doing business with “Verified” suppliers can make the sourcing process more secure and trustworthy.
- It’s best to select suppliers who have been operating for at least 5 years on Alibaba.com as they have more experience in the industry.
- The suppliers’ names and addresses can help buyers decide whether or not it’s worth doing business with them.
- Visiting the online store and product list will help buyers differentiate between professional and unprofessional suppliers.
- Evaluating suppliers’ capability and compliance is the first step in determining their reliability and trustworthiness.
- A great way to save money on Alibaba.com is to learn how to negotiate price and payment terms with suppliers.
- Requesting samples is a critical step in the buying process to check the product’s quality.
- Trade assurance guarantees that buyers get their money back if the product isn’t delivered as promised.