How to Source Products From Alibaba to Sell on Amazon
China is on pace to surpass the United States as the largest retail market in the world by year-end. Total retail sales for the country are on pace to reach $5.636 trillion. Alibaba is the Chinese e-commerce company that provides manufacturing and sourcing options for businesses of all sizes. It owns more than half of China’s total e-commerce sales. Retailers that are new to Amazon and those that are scaling and diversifying their businesses use the platform. They can use it to source items from an extensive network of suppliers and manufacturers. In this post, we will discuss how you can do so.
While it may seem like a seamless business strategy, importing items wholesale from Alibaba to sell on Amazon does have considerable safety risks. To get started, you need to choose a product to buy from Alibaba. Ask yourself if there is a demand for the product, if consumers need it, what the competition level is, and if you stand to make a profit after you invest in its production. Once you have done your market research and identified a profitable product that may make sense for your business, move onto the next step. That step is deciding on a sourcing option that makes the most sense for the product and your operation as a whole.
Is It Safe to Buy From Alibaba?
With the proper due diligence, you can ensure a secure e-commerce experience with Alibaba. You can choose from a significant number of reputable manufacturers and suppliers who have been in the industry for years. Alibaba has established a positive reputation and credibility for itself as an established global marketplace.
When sourcing products from Alibaba, you can help maintain security by only trading with gold suppliers, the company’s premium suppliers. These suppliers pay Alibaba to appear higher up in the search results. Despite deals or factory certifications that non-gold suppliers may have, buying only from gold suppliers will help you avoid scams and bad suppliers. To find out if they are reliable, ask them how many products they have supplied, if they can customize the product to your specifications, if they have a minimum order quantity, and what their lead time for production is.
Next, with Alibaba’s trade assurance program, your orders are protected. It mitigates risk by guaranteeing money back if a supplier fails to meet the terms of your order contract, such as with delivery delays, quality and quantity discrepancies, or other processing issues. If you have a problem with a supplier, you can submit a claim to Alibaba. The company will then review it and if they agree that the factory has in fact made a mistake, you can get your money back. Keep in mind that any step in the process that can cause a potential roadblock (quality control, lead times, etc.) need to be documented in the sales agreement.
Additionally, when buying on Alibaba to sell on Amazon FBA, you should avoid branded products. Alibaba’s marketplace is not a legitimate source for branded products and is instead meant for generic goods. If something is on Alibaba as a branded item, it is likely that it belongs to a national brand. Selling it would be illegal, as you would not be an authorized seller.
Considerations to Vet Before Buying From Alibaba
Alibaba works to pinpoint “middlemen” who are masquerading themselves as manufacturers. They mark up prices and buy from the suppliers themselves, allowing more room for miscommunication between the buyer and actual manufacturer.
When importing from Alibaba to sell on Amazon, you should always be on the lookout for scammers who will take your money. Although Alibaba works diligently to remove scammers from their platform, there are still dishonest suppliers that can botch an entire sourcing process. The marketplace has its own verification program in place, which includes several levels of verification. The chart below summarizes the three different levels of verification and the badges will appear on product listings and supplier profiles if they have them.
As you get closer to deciding on a supplier, be sure to ask the suppliers detailed questions about their overall business, as well as specifics about their products. Do not hesitate to ask for a copy of their business license and a phone number to test to make sure it is valid.
If you can not take a trip overseas to have a face-to-face meeting with your manufacturer, you can have a Skype meeting with your contact. Ask for photos of the factory and sample products before the physical samples are sent. If a supplier mentions they want to be paid right away, be cautious through the entire transaction to make sure you aren’t taken advantage of.
Product quality is another valid concern if you are importing products from overseas. While items are listed on Alibaba as “premium” or “high quality,” there have been instances where the buyers discover that their impression of “premium” quality and the supplier’s opinion are drastically different. To combat this, you should always get samples to verify an item’s quality, look, and feel before investing any money into inventory for that item. You can also contact the supplier through another name and email to get another sample, and compare quality from there.
Finding the Right Products
You can not succeed solely by importing the same products via wholesale that competitors are selling on Amazon. Look for something unique that can be private labeled, that fills a gap or a need, or that people actually want to buy. With thorough analysis, you will be able to identify an item — or many items — that make sense to source via Alibaba and add to your Amazon catalog.
You can work with your supplier to ensure that the product is in the proper packaging for Amazon, to avoid double work. You can determine if a product is right for your business if it fits your unique sourcing criteria. For example, you might be looking for items that are light, that you know the market and target customer profile for, and that can be sourced at an affordable price and resold at a competitive price.
On Alibaba, you can choose from products in over 40 different major categories. Keep in mind that the quality and brands of products you decide to sell will ultimately build your reputation. With a strong and diverse sourcing model and supply channel, you will be able to diversify your inbound revenue streams, establish new industry relationships, and identify unique products that can drive growth to your bottom line.
Catie Grasso is a marketing content writer at Feedvisor. Previously a B2B product marketing specialist, she enjoys running, trying new restaurants, and planning her next trip overseas.[/vc_column_text][/vc_column][/vc_row]