Today I’m doing a post on the things I have learned about Alibaba, the reason for this is that there are so many things most people don’t know, plus, it’s very different doing business with the Chinese than it is doing business as a westerner.
What is Alibaba?
I’ve spoken about Alibaba before (here), however, I’ll do so again here. Pretty much Alibaba is the worlds largest manufacturer search engine. You can go to Alibaba and type in a product you want to get made, and Alibaba will return thousands of manufacturers that make your type of product.
Why Use Alibaba?
As much as it pains me to say this, but the main reason why you use Alibaba is because most the manufacturers on Alibaba are Chinese, and the products they produce are significantly cheaper than what can be made almost anywhere else in the world.
You might be thinking, but what about shipping it across the other side of the world, surely that makes up the cost? Unfortunately not, even with shipping, doing business this way is still significantly more cost effective.
How to Engage With Manufacturers?
Engaging with manufacturers couldn’t be easier. You search for an item you want to buy, then at the bottom of the page there is a chat box. What I tend to do is ask the following:
My name is Glen Stephenson, I am interested in doing business with you regarding “product X”. Can you please answer some of my questions below:
- What is your MOQ?
- What is the price for MOQ?
- How much to add my brands logo on the product?
- Do you offer any custom boxing options?
Thank you, I look forward to doing business with you.
So what is MOQ – it stands for Minimum Order Quantity, and it’s important. Most suppliers will respond with something quite high like 2000pcs (2000 pieces). Be sure to respond telling them that this is too many and that you wish to do a trial order of 200 first. Most manufacturers will be OK with this, but some won’t. You need to be prepared to walk away. Also note: it will cost more per unit for the smaller trial order.
The other questions I ask about logos and boxing is things that I want to do when I private label a product. This allows my product to look more professional, and normally doesn’t cost all that much more.
The other key message to take away from all this is to note how I am speaking with them. I am regularly stating that I want to do business with them. For some reason, the Chinese really like this and I get a lot more positive responses when dealing with them.
- Don’t forget to order samples before ordering larger amounts. This allows you to confirm the quality of a product before committing to buying large quantities of something that might not be at an acceptable level of quality – it does happen.
- When dealing with suppliers, always push things back onto your manager. If their price is too high or their MOQ too high, say that your manager thinks this is too high. This allows you leverage and also keeps your relationship with the supplier in good stead – you aren’t the bad guy, plus it makes you look like a more worthy business partner if you are part of a big company (even if you aren’t).
- Try to use PayPal wherever possible. There are scammers on Alibaba, and this will allow you to get your money back.
- Learn about all the safety features on Alibaba, like Gold Supplier, Trade Assurance. I’m not going to go into them all here, but it’s worth understanding before engaging with a supplier.