Sourcing through Alibaba 101

 

Alibaba brings the vast production capabilities and expertise of Chinese manufacturers to small businesses worldwide. However, it can be tricky to navigate.

Once you have found a seller who can produce your product, you want to make sure that your order is accurate and complete. Here are 7 tips to help you source through Alibaba the right way.

Hit them with your best shots

A picture tells a thousand words, especially when you and your seller don’t speak the same language. If you have a sample of your product, send 5-10 clear photographs to your seller. To ensure the best representation of your product, shoot your photographs in natural light for accuracy and verisimilitude. Be sure to include images of zippers, hardware, joins, seams, studs, and buttons.

Pro Tip: Photograph your sample alongside a measuring tape to show scale. China uses the metric system, so make sure your measuring tape is in both inches and centimeters.

Link it up

If you are sourcing a product that is sold online, send your seller links to example websites. Not only will the detailed images and specifications save you both time, but the seller will know that you are doing your market research (and offer comparable pricing).

Pro Tip: Make a note of how other online retailers are shipping your product. This will help you design your shipping methods and packaging.

Show your hand

Be honest about the number of units you are looking to source. A seller must decide if your order is worth dedicating their materials, time, equipment, and staff. Promising an order of 100,000 pieces when your budget is for 1,000 is a waste of time for all involved.

Pro Tip: If your order quantity is short of their MOQ, ask for the minimum price per unit at which they will produce your order. Some sellers will accept smaller orders for a higher price per unit.

Know the costs

Do your research and know the rough cost per unit before you contact a seller. Check retail websites, including Amazon, and even brick-and-mortar stores. As a rough guide to find the cost price of items you find in stores, halve the retail price for the wholesale price, then halve the wholesale price for the cost price. Online sites have lower margins and tend to price somewhere between the retail and the wholesale price.

Pro Tip: AliExpress (Alibaba’s shopper-friendly sister site) is your best friend when it comes to per unit costing. If your seller offers a cost price close to the best price available on AliExpress, you are probably getting a good deal.

Pack it right

It is important to know how each unit in your order will be packaged, as well as how the entire order will be packed. The cheapest option per unit is typically a mailer box—a white cardboard box with no labeling (think IKEA). The cost increases as you add color, vacuum packs, and customization. Ask the seller for their recommendation.

Pro Tip: Check how other websites are packing your product. Do they use protective packaging? Do they dismantle longer sections into shorter-sized pieces (e.g. mop handles)? There could be some invaluable information taken from other packaging methods that are influenced by experience and hard-learned lessons—let these experiences guide you.

Set the date

A seller might be willing to produce your hexagonal beach towel, but that won’t be of any use if they can’t deliver until the end of summer. Give the seller the date by which you need your product (typically 3 months before it will go on sale) and have them provide you with confirmation in writing.

Pro Tip: Sellers use the acronym ‘E.T.D.’ in conjunction with dates. Do not confuse this for ‘Estimated Time of Delivery’. It means ‘Estimated Time of Departure’, i.e., the date it will leave China.

Get tested

Have you seen those faulty hoverboard videos? If your product contains electrical components make sure they meet National Standard Testing. An untested product is not only dangerous, but is also likely to languish in customs while they figure out if it should be released. Products that have been tested for export come with certification and testing documents—ask for them!

Pro Tip: Do not place an order for uncertified products. A reputable seller will have all the certifications on hand or be willing to get them. Make sure you have copies before you place the order.

When navigated properly, Alibaba is an incredible resource for your business. Make a note of these tips and be on your way to placing accurate and complete orders every time.

 

By Laura O’Laughlin