Are You Prepared to Jump Into the World of eCommerce?
I’ll tell you right off the bat that I’m most certainly not an expert. I’ve only worked on a few projects, but I have successfully went through the process of sourcing physical products from Alibaba, so figured I would share.
Here are a couple things to keep in mind as we move forward:
-Can you sell?
What’s your plan for actually getting your product in, and then getting it out? After all, the whole point here is to generate sales and make a profit on our cheaply sourced products.
-Alibaba is great.
It’s a behemoth of an eCommerce store and it presents an opportunity, even for the small guy. But that doesn’t mean it’s 100 percent secure. Be wary of shady sellers and work on building trust with your supplier rather than taking a shot in the dark like I did.
-Expect this process to take longer than you expected.
Initially, I figured it would be a maybe a month or two before the product was in front of me. It ended up taking 4 months from initial contact to the finished product on my doorstep. As with all business in any sector anywhere in the world -- a startup takes time.
-Use a different email!
I can’t stress this enough. Unless you want your personal email to be destroyed like mine, create a separate Gmail account for Alibaba use. Otherwise, you’ll be unsubscribing from random supplier mailing lists for months -- and maybe forever.
This article is more of a guide on Alibaba and how to get products for cheap. But I’ll touch on this very quickly. Have you already asked yourself the following questions?
-What product do I want to sell?
-What range am I looking for in terms of price?
-Will people buy my product?
-Have I validated the idea?
-How will I get customers to my eCommerce store?
Hopefully, you can answer all those questions.
My suggestion would be to go out and chat with friends, family, and then strangers on forums, social media, and even via cold email. Test them. Ask them if they’re interested in your product ideas or not. Can you actually get sales? Try running a launch giveaway to entice people to give you their email.
Validate your idea and start growing an initial list of potential customers as soon as possible.
Okay, now we move on to the fun part…
Product Searching and Supplier Outreach
There are millions of products available on Alibaba. With these products, there are a lot of manufacturers and trading companies.
You have to watch out though. Because despite all the opportunities, there are a lot of sketchy dealers out there who wouldn't mind taking your money and vanishing from the face of the internet.
As you may already know, Alibaba is a robust eCommerce marketplace with a wide array of product options available. Luckily (hopefully), you have a good idea of what you’re looking for before we jump into this.
Let’s say that you want to create an eCommerce store and sell wooden cases for all sorts of devices. You’ve decided that your first product will be a wooden iPhone case.
Time to do some sorting and find more relevant results.
There are filters based on a whole series of elements, including the location of the supplier, free samples offered or not, the certifications they have earned, minimum order quantity, and product prices.
Take advantage and narrow down your search using the sidebar and the top filter bar:
As you can see above, I’ve selected many of the supplier type checkboxes to make sure that I’m finding reputable dealers. Furthermore, I’m sorting by MOQ (minimum order quantity), free samples, and price.
Supplier Types and Verifications
Here are the definitions of the available suppliers and verifications on Alibaba:
“Trade Assurance is a free service offered by Alibaba.com that’s designed to help create trust between buyers and suppliers. Trade Assurance covers Alibaba.com buyers with 100% payment protection from their selected Trade Assurance suppliers.”
“Gold Supplier is a premium membership for suppliers on Alibaba.com. Members are provided with comprehensive ways to promote their products, maximizing product exposure and increasing return-on-investment.”
You shouldn’t trust a supplier based solely on their Gold Supplier status, as it is not necessarily an indication of their ethics or the quality of their products. For more, check out this article.
“Assessed Suppliers are China Gold Suppliers, Hong Kong Gold Suppliers and Taiwan Gold Suppliers who have been inspected onsite by a third-party inspection company. They offer all the information of our Factory Audits and more, including Assessment Reports, Verified Videos and Verified Main Products.”
“A&V Checked suppliers are Gold Suppliers who have passed authentication and verification inspection by Alibaba.com as well as a third-party verification company. All legal business licenses and contact persons are verified for those who have been A&V Checked.”
“Onsite Check is a verification process for China Gold Suppliers. The supplier’s company’s premises are checked by Alibaba.com’s staff to ensure onsite operations exist there. The suppliers’ legal status and other related information are then confirmed by a third-party verification agency.”
Some clarification of the major differences in verification via Alibaba:
At this point, you should have a good idea of the type of supplier you’re looking to find and hopefully your searches have lead to products that are similar to what you were looking for.
Most likely, there will still be a lot of suppliers to pick from, especially if you are doing something as generic as a wooden iPhone case.
Even with filters, we’re looking at hundreds of results.
Now it’s time to do the manual part: Outreach.
Now, before I get into the manual outreach, let me briefly discuss a quick way to do this without messaging 100 suppliers.
There is a feature called RFQ (Request for Quotation) available as you can see here:
This feature prompts you to provide information such as product type, price, quantity, payment terms, etc.
Then, your RFQ will be reviewed and, if approved, will give suppliers the opportunity to contact you.
You’ll have a list of supplier quotations that you can select from and reach out to for requesting samples, asking questions, negotiating, etc.
For a more in-depth explanation of the RFQ feature, you’ll find this Quora answer helpful.
Depending on what you're looking for, you may get inundated with quotations. Due to this, it may be best to do manual outreach and specifically message suppliers that interest you.
Luckily, this is easy to do on Alibaba’s platform.
After searching for relevant products and finding possible suppliers, go to the product page and review the details. Here you can get more information on what the supplier offers, along with details like MOQ.
If you’re interested still, hit the “Contact Supplier” button.
This will open a new tab with a messaging interface. Here you can ask all sorts of questions.
This is easy enough. However, once you send out a whole lot of messages to suppliers, it could get a bit hectic.
Luckily, Alibaba is outfitted with some useful features that help you keep track of it all.
If you scroll over your account, you’ll see that you can access inquiries, contact requests, orders, and messages.
Here in the message center (pictured below), you can see that there is access to other segments that you'll find helpful, especially as you move from questions and inquiries to samples and orders.
Quality is the big question.
One of the major reasons (maybe the only reason) that you’re sourcing products from China is that they’re cheap.
But cheapness often means that the products are low-quality.
Finding the perfect middle area between affordability and quality is most likely what you’re looking for.
It’s extremely difficult to determine the quality of a product without holding it in your hand. This is why samples are so important.
After finding several potential suppliers, it’s time to request samples.
There’s a filter to find suppliers that offer free samples, but I wouldn’t suggest relying on it.
A majority of suppliers will include a small fee for samples, so choose wisely.
Once you get the product in hand, then you’ll be able to decide if this is a company you want to go forward with.
Now you can jump back into the message center on Alibaba and start talking about terms.
Placing an Actual Order and Paying
Now it’s time to put your money on the line...in the safest way possible.
Before you actually make a payment, negotiate.
Talk out the terms of the deal and see if it’s possible to lower the cost of the order, or perhaps lower the MOQ if you don’t want to take on so much inventory.
When you do decide to go forward with a deal, there are a few ways you can place orders:
This type of order ensures that you will be covered in the event of shipping or quality-related disputes with the supplier. Additional information, including payment types, are included below:
Similar to trade assurance, secure payment offers protection for buyers and sellers and actually holds fees until a transaction is successfully completed on both sides of a deal. It is used on Alibaba Wholesale.
Payment methods include Visa, MasterCard/Maestro, T/T (Bank Transfer), Western Union, QIWI, Web Money, Yandex, and TEF.
Just to touch upon it quickly, there are actually 3 Alibaba platforms: Alibaba, AliExpress, and Alibaba Wholesale.
Basically, Alibaba is designed for the largest orders and therefore has the lowest prices, but high MOQ’s. AliExpress, in contrast, is designed for consumers and has the highest prices. It’s similar to a normal eCommerce experience. Alibaba Wholesale falls somewhere in the middle.
There is a great article by Shippo that describes their differences in detail and offers a product example to show off the range in pricing/MOQ among the platforms.
At this point, hopefully you have a giant box of wooden iPhone cases on your doorstep.
Celebrate your very small success with a big cup of coffee, because the hard part has just begun.
Now it’s time to start building your brand and selling your wares.
Best of luck with your eCommerce efforts!