How Does Alibaba Work?

Alibaba shipping is different from what shipping may look like on a standard ecommerce website. If your business orders bulk orders from a supplier on Alibaba, you'll follow typical freight options for shipping. Usually, you'll have two primary shipping options.

The first is air freight. This is ideal for lightweight products or for samples. Since air freight shipping costs are usually determined by weight, heavy products or large volume orders are a poor fit. 

The second is sea freight. This involves booking a container and shipping products via large freight ships. This style of shipping is slower but far more economical than air freight. Most businesses who regularly source products from China-based suppliers will use sea freight as their shipping choice.

After you've confirmed details, like pricing, MOQs, and lead times, and after you've received samples and confirmed the supplier can make your product to your specifications, you'll place your full order.

You still need to remain in contact with your supplier during this process, since you need to be available to troubleshoot production issues, manage quality control, and make sure that products are properly packaged for efficient shipping.

You should not go on auto-pilot and assume your supplier will handle all aspects of production. This can be a recipe for disaster with quality or packaging issues, and you won't know that these issues have occurred until after products have been delivered. You should be physically present during production, but if you can't, you should at least regularly requ

Trade Assurance is Alibaba's guarantee that protects buyers who buy through their platform. If your supplier fails to ship on the agreed time, or if there are quality issues with your product, Alibaba will remediate the issue and will issue refunds, as needed, to you. This is built-in protection, so it's not a program that requires you to sign up or opt in.

However, this protection only applies to purchases that have been made through Alibaba's payment platform. If an Alibaba supplier asks you to pay via PayPal, wired payment, or any other method off Alibaba, this is a red flag. While there may be issues where a wire is necessary (like for large orders), you should only pay off the platform if you have 100% trust in the supplier.

Pricing may look like a steal on Alibaba, but you need to keep in mind that the pricing may vary on a number of factors:

You may want your products made with specific raw materials, and if the materials you need are more expensive than what's advertised, you'll end up paying a higher per-unit price.

MOQs, or minimum order quantities, will also determine the final price of your order. First, you need to be able to meet the MOQ (so if you don't have the capital to order enough products, you may not be able to work with a chosen supplier at all). However, if your budget is flexible, the more units you purchase at a time, the cheaper the price tends to be.

Many suppliers on Alibaba offer to ship products on your behalf, which may be included in the overall pricing. While this may seem convenient, it is almost never worth it to leave shipping up to the supplier. They may not have the right documentation for U.S. customs, and you'll almost certainly be paying an inflated price for the help. 

Finally, the pricing you see on Alibaba is up for negotiation. As we mentioned, you may be able to negotiate the price down by using different materials, organizing shipping yourself, and ordering higher MOQs. You may also be able to negotiate pricing based on the kind of commitment you're willing to make with a supplier, or if you can demonstrate to the supplier that your business is healthy enough to be a long-term partner. 

Alibaba is safe to use, but that doesn't mean there aren't Alibaba scams. As long as you perform due diligence in vetting suppliers, outright scams are pretty rare on Alibaba. Be sure to keep a watch out for some of these red flags while you're working with a supplier on Alibaba:

Alibaba offers buyer protection in the form of their Assurance Trade Program, which will refund buyers if products don't get delivered or have quality issues. However, buyers only get this protection if they pay for the order through Alibaba's payment platform. 

If a supplier is asking you to make a payment off-site, they may be trying to avoid being held accountable by the Assurance Trade Program when they deliver low-quality products (or if they take your money and run).

You should only make payments off-site if you have 100% trust in your supplier, or if you're working with a sourcing specialist, like Kanary, who can verify the supplier's credibility for you.

Usually, you won't pay for your entire order upfront on Alibaba. Instead, you and the supplier will agree to pricing, and you'll pay an initial deposit to get production started. The agreed pricing should not change unless a significant change is made (for example, you request a major design change, or you request a raw material change). 

Less-trustworthy suppliers may accept your deposit and then demand a price increase without explanation. They're hoping that you'll be too vested to restart the process of finding a supplier and will eat the higher cost. However, even though it will take effort to look for a new supplier, you should. Trying to trick you into a higher price may mean the supplier is looking to trick you in other areas, too, like product quality.

Finally, there is absolutely no reason that a supplier would deny you access to their factory, either in-person or through videos and pictures. It is normal, standard practice for a business to ask to see the production process, see units as they are complete, and confirm that quality control protocols are being followed. 

If you have a supplier that won't send photos or videos (or otherwise grant access to the factory), this is a huge red flag. They could be hiding major quality issues, or your "supplier" could actually be a trade company, and the reason why they're not offering access is because they don't have access themselves. 

Either of these possibilities are huge problems, and you should not partner with these kinds of suppliers.

Alibaba and AliExpress are both enormous ecommerce platforms, but the major difference between the two are the customers they aim to serve. Alibaba sells bulk, large-volume orders to businesses (in a traditional B2B model), while AliExpress sells smaller orders (or even individual products) directly to consumers (in a traditional B2C model). 

If you're an established business with high order volume, then Alibaba will provide suppliers that have the capacity to meet your large orders. If you're a new business, a business with very low order volume, or operating a direct-to-consumer business (like dropshipping), then AliExpress is where you'll find suppliers that can cater to your specific needs.

Alibaba offers several benefits to established, medium to large-sized businesses, including:
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●  A wide variety of suppliers from which to choose
●  Buyer protection through their Trade Assurance Program
●  Suppliers who have the capacity to handle large, bulk orders
●  Suppliers who are looking for steady, long-term relationships with reliable clients

Most of the disadvantages of using Alibaba will impact inexperienced or smaller businesses the most. Some of those disadvantages include:

●  A lack of supplier options for small businesses, start-ups, or direct-to-consumer     businesses
●  Potential language barriers (many suppliers speak little to no English)
●  Possible payment scams
●  Suppliers who require an MOQ that smaller businesses may not hit
●  Quality control issues that inexperienced businesses may not know how to prevent     or navigate

If you've never worked with an overseas supplier before, it can be rough getting started on Alibaba with no experience. This is why so many businesses come to Kanary for help, since we have years of experience to eliminate risk and to easily find a supplier that is perfect for your specific needs.

Alibaba Gold Suppliers have undergone a significant verification process to prove they're real factories. In order to achieve this designation, suppliers have to pay for a third-party to conduct a thorough investigation, which includes on-site verification for suppliers who are located in China. 

Suppliers who become Gold Suppliers are usually real, trustworthy suppliers that will insist on payment through Alibaba's payment platform and will be accustomed to working and negotiating bulk orders with businesses. Keep in mind, being a Gold Supplier is not a guarantee that the supplier is trustworthy, though it certainly is a positive sign.

An MOQ is a minimum order quantity, which refers to the minimum amount of products you can order with a specific supplier. Oftentimes, the higher the MOQ is with a factory, the better your per-unit pricing will be. However, high MOQs can be problematic for businesses that can't afford or simply don't need that high of order volume. 

Part of looking for a supplier on Alibaba will be to find a factory that is the best mix of a per-unit price with an MOQ that makes sense for your business. If you've found finding that perfect-fit supplier to be challenging, contact us! Kanary would love to help, and our expertise lies in connecting high-quality suppliers with businesses. 

If you know for sure you want to work with a certain supplier, but you can't meet their MOQ, you may still have some wiggle room for negotiation. You could offer to pay a higher per-unit price that would be less than meeting their MOQ, but still a better deal for the supplier.

For example, if a supplier's MOQ is 1,000 units at $1 (for a total of $1,000), you could say you are willing to pay for 500 units at $1.50 a piece (for a total of $750). Suppliers will often accept this kind of pricing negotiation, so it doesn't hurt to offer if you really want to work with a certain factory.

You do not have to use Alibaba to find a supplier in China. However, if you've never worked with a China-based supplier before, then Alibaba is usually the easiest place to start. Other avenues where you could find a supplier in China include:

●  Personal referrals from other businesses
●  Trade shows
●  Through a sourcing agent (like Kanary)

For businesses new to the industry, we recommend using a sourcing agent to cut the guesswork out of finding a supplier.

There are other online platforms that offer the same kind of service as Alibaba (Alibaba is just the largest B2B platform available). Other platforms where businesses and suppliers can connect include:

●  AliExpress
●  DH Gate
●  1688

This is not an all-inclusive list, but it's a good place to start if you want to shop for a supplier on multiple platforms. Keep in mind that not all platforms will have suppliers that are a good fit for large, bulk orders (for example, AliExpress caters more to a B2C crowd).

Since we're so experienced in finding and working with suppliers in China, we have multiple ways to find a factory that's a perfect fit for your business.

We've been connecting suppliers and businesses for years, so it's possible that we already know of a supplier that will be a great match for your business. Kanary only works with the best, most reliable suppliers, so that's where our search will begin.

If we know of a business similar to yours that sources from China, we may ask them to refer their supplier to us. This is a common practice, and it's often how businesses find suppliers on their own.

That's right! We may use Alibaba ourselves if we don't have a connection to a supplier that's a good fit for you. We know how to vet suppliers to avoid headaches, and we're aware of the typical red flags to avoid. Since we have a bilingual staff that speaks English and Mandarin, we can also easily negotiate terms and confirm details with potential new suppliers. 

While any business can order from Alibaba, the general consumer would struggle to hop onto Alibaba and make an order. That's because Alibaba is primarily for businesses to connect with factories for bulk orders, and those factories usually have an MOQ (a minimum order quantity). This can be hundreds, or thousands, of units, which a general consumer won't need.

However, there is no membership or application required to purchase from a supplier on Alibaba. If your business is looking for a bulk order supplier and you aren't sure where to start shopping, Alibaba is an excellent starting place.

The prices on Alibaba may appear inexpensive compared to platforms like Amazon, but it's not like a general consumer could contact these suppliers and order a single product at the advertised price. The pricing you see on Alibaba is usually connected to an MOQ (minimum order quantity), so the price per unit may be great, but you may need to buy hundreds, or even thousands, of units at a time. 

For businesses looking to make large volume, bulk orders, the pricing on Alibaba can be enticing, even though it can be hard to navigate using Alibaba without the proper experience. That's why businesses often choose to work with a sourcing specialist, like Kanary, that can help them navigate the process of finding a supplier and placing orders.

The process of ordering on Alibaba is straightforward, but some of the steps can take time and energy to finish. Here are some general steps that you can expect to follow when you want to place an order on Alibaba:

First, you'll need to search for suppliers that offer the kind of product you want to order. You can use Alibaba to search by supplier or by specific product to see what suppliers are in your targeted industry. Suppliers will have an Alibaba profile, including what products they sell, pricing, and other important bits of information.

After you've found a handful of potential suppliers, you'll make contact and begin the vetting process. You'll want to confirm details like:
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●  Required MOQs
●  Lead times
●  Per unit pricing
●  Physical location to preferred shipping ports

You'll also be looking to make sure the supplier will be easy to work with. Some of those positive qualities include:
●  Quick responses to questions
●  Clear communication
●  Transparent pricing and order requirements
●  Easy sampling process 

Finally, you'll also make sure that you avoid red flags, like:

●  Asking for payment off of Alibaba's platform (unless working with a sourcing     specialist or you otherwise have 100% faith in a supplier)
●  Inability to clearly answer direct questions
●  Unwillingness to show videos or photos of the factory

When you have a few final candidates (or potentially one final candidate), you'll go through the sampling process, which will help to confirm that the factory is capable of manufacturing your products to your specifications. When you're happy with the sample, you'll place a deposit with your preferred supplier, and they will begin making your products.

Shipping can be expensive on Alibaba for several reasons. First, you may be seeing air freight rates instead of sea freight rates (air freight is almost always more expensive than sea freight). Next, you may not be seeing the most efficient way to ship. Factories aren't going to work hard to make sure you get the best deal on shipping, so it's not uncommon to see inflated pricing. 

If you want to get your shipping costs down, it's best to handle the shipping on your own. That usually involves booking a shipping container on your own, ensuring that products are packed on the container, and navigating the customs process. 

The most efficient way to ship products is through consolidated shipping, but you'll need to set that up yourself, or get help from a third-party, like Kanary.