In this lesson you will learn:

What is Aliabab What you should know about ordering products through Alibaba

Alibaba is the worlds largest B2B eCommerce website. In a nutshell, Alibaba connects buyers with suppliers. If a product exists, it’s for sale on Alibaba.com.

If you’re thinking of importing products from China (or anywhere else) through Alibaba, here’s what you need to know:

Alibaba is not the Chinese Amazon

Alibaba moves more products than Amazon and eBay combined! But how they do it is very different. Amazon in a US-Based B2C site meaning products are sold in small quantities directly to the end user (i.e. the customer).

directly to the end user (i.e. the customer). Alibaba is based in China and it’s the world’s largest B2B (business to business) eCommerce site meaning products are sold wholesale (in bulk). While there are exceptions, for the most part- you can’t buy single units of a product.

Suppliers and Manufacturers aren’t the same thing.

Just because a supplier can ship you a product, doesn’t make them a manufacturer. Many companies on Alibaba are just middlemen who buy products from manufacturers and pass them on as their own.

In fact, some agents aren’t really employees of the manufacturer they represent. They’re just intermediaries/freelancers who’s job is to communicate with customers, understand what they want and provide the information back to the manufacturer(s). Having said all that, if you’re going to order a product from a manufacturer, verify that they really are the manufacturer and not just a supplier or freelancer. You can do this in any number of ways:

Ask them. “are you an agent? do you work ONLY for this company?”

Ask for paperwork “Can you send me proof that you work for this company?”

Ask for detailed catalogue. Catalogues should have very detailed information.

Ask if they can customize the product. Manufacturers will yes. Agents will say no.

Always negotiate! The two things that buyers focus on are MOQ and FOB. MOQ stands for Minimum Order Quantity.

FOB means Freight on board which in plain english means the price per unit of a product including all shipping and fees. What most people don’t know is that both the MOQ and FOB are negotiable, VERY negotiable. Don’t get scared off by a high MOQ and don’t get too excited over a low FOB. In the picture above, it says the FOB is $1.5 – $5.2/pc and the MOQ is 500. What that actually means is that the price is $5.2/t-shirt if you order 500 pcs BUT you can get for as little as $1.2/t-shirt IF you increase the volume of the order. No matter how much the supplier insists, the MOQ is always negotiable unless the product has a really low margin. I’ve ordered quantities of 1, 3, 5 and 10 from suppliers whose posted MOQ was 500-1000. How to negotiate with Alibaba suppliers to get low FOB and MOQ: Offer them long term value. Suppliers will offer discounts and low MOQ if they think you will become a high volume prospect. I usually say “I need to see a few samples and if they’re good, I’ll place a large order in the near future” Flash the cash. A line that works me is “if you agree to this price for this many pcs, I will pay right now by PayPal“ Pin suppliers against one another. All suppliers want to sell to you, even if it’s for small quantities. Small orders are better than nothing. Create a sense of urgency by letting your agent know that you’re talking with other suppliers and whoever can meet your asking price.

Record keeping is essential There a number of ways to communicate with suppliers; messaging, chat, email, skype and my personal favorite, whatsapp. Negotiating by phone and messaging is one thing, but a purchase agreement or terms of sale needs to be more official and must be traceable. So talk, discuss, negotiate all you want on any device you want, but a purchase agreement or terms of sales must be on the Alibaba messaging service. This way, if you ever need to dispute a transaction you’ll have clear evidence to support your case. [su_spacer size=”10″] Ripoffs and copycats are inevitable Any product on Alibaba can be customized, tweaked or personalized. The problem is, anything you order will be produced in bulk and the manufacturer will keep extra stock behind which will inevitably find its way on a product catalogue or as part of a showcase. Even if your supplier agrees not to re-sell your products (which means nothing) it won’t prevent others from copying it. [su_spacer size=”10″]