It doesn’t take long to find a horror story about sourcing Amazon products from Alibaba.
From Reddit to YouTube, the internet is brimming with tales of Alibaba fraud, deceit, corruption, and tomfoolery.
And although the platform has made great progress in protecting buyers in recent years, sourcing from any online marketplace, especially an overseas one, comes with a fair amount of risks.
But if done correctly, the rewards can be huge.
So can you trust Alibaba for sourcing Amazon products? The answer is yes! (so long as you utilize my tips and tricks below)
After all, it’s the world’s 3rd largest e-commerce marketplace after Amazon and JD.Com.
The cheap price of bulk goods is what draws many Amazon sellers to the platforms, and it doesn’t take a mathematician to figure out that margins can be huge given the ridiculously low price of products.
So why isn’t everyone flocking to Alibaba and racking in thousands?
Entering in credit card details, and clicking ‘pay’ is what stops many potential sellers dead in their tracks, and is likely the first major purchase for new Amazon FBA sellers.
“Ok, no biggie. I’m just about to spend $6,000 dollars to buy 20,000 neon-pink plush toys from China in hopes of selling them online…”
*Deep Breath*
Relax. It’s not uncommon to feel this way.
But no worries! Here are 6 steps you can take to avoid pitfalls when sourcing from Alibaba.
1. Make Sure Suppliers are Trade Assured and Verified
When searching manufacturers and suppliers, make sure that both the Trade Assurance and Verified Supplier buttons are checked.
When ticked, you’ll only get results from suppliers who have opted into Alibaba’s trade assurance program. This means that you can buy with more confidence than with non-assured suppliers.
Verified sellers have been audited by Alibaba and confirmed to be legitimate and trustworthy companies.
| How Does Alibaba Trade Assurance protect buyers? Alibaba’s Trade Assurance protects buyers in two pivotal ways: If products are not shipped by the agreed-upon time. If product quality is not up to standards based on agreements. |
2. Experience Matters
Experience equals customer trust. It’s a no-brainer.
So if you’ve got the choice to buy the same product at a similar price from a 2-year-old company versus a company with 10 years of experience, go with more experience, even if you’re paying a bit more.
Here’s why experience is so important in this space.
First, communication isn’t always easy. Cultural, language, and time barriers are unavoidable when buying in bulk from across the planet.
You can assume a company that’s been around for a long time has optimized its communication and has adopted best practices to get products out of their warehouses and into Amazon’s the quickest, and without mistakes.
| TIP: Take extra precaution with suppliers that have only been operating in the 1-2 year range. A common tactic used by scammers is creating fresh accounts and running their scam for as long as possible before getting found out and booted off the platform. The time frame for this is typically 18-24 months. |
Next, for many Amazon products, time is of the essence. And in certain situations, delays in shipments can have potentially hazardous impacts on profits. The same is true for failing to adhere to Amazon’s labeling requirements.
The responsibility to get these right is ultimately on you, but a trustworthy and reputable supplier will make this process much simpler. This is exactly where experience comes in handy.
Moreover, in the case of seasonal products, you risk losing your entire investment if products are not shipped on time.
The bottom line, go with experience. Pay a bit more. You’ll thank me later.
3. Examine Main Categories
Have you ever visited a restaurant that has literally everything on the menu?
Sicilian-Pizzas, hand-twirled pastas, super-smash burgers, tornado gyros, quadruple decker clubs, salted Himalayan gnocchi, and everything in between.
Sounds great on paper, but the food is usually overpriced garbage.
Why?
In my opinion, it’s difficult to focus on producing quality products when you serve everything across the board.
The same logic is true on Alibaba.
If you’re looking for a high-quality item, keep an eye out for suppliers that work within a specific niche.
For example, if you’re sourcing podcast microphones, avoid companies that also manufacture vacuum cleaners, tennis rackets, and hair gel. Instead, radar-in on suppliers that mainly sell microphones.
The idea is that you focus on manufacturers that specialize in one specific area.
This will increase the likelihood of sourcing a high-quality product that will outsell your competition.
4. Order Samples from Alibaba AND Amazon
Before purchasing in bulk, it’s vital to order samples from the manufacturer. This is important for a host of reasons:
- Makes your manufacturer know you are serious about the order
- Allows you to self-inspect products for any defects or inconsistencies
- Samples can help determine the supplier’s legitimacy.
- Can help reduce buyer’s anxiety
- Being knowledgeable of your product will only help with sales in the long run
But don’t make the mistake of only ordering samples from Alibaba.
Remember, this is an investment, and you’re in competition against others selling the same or similar product.
Make sure to order the products from the top-selling competitors on Amazon as well. This way, you’ll be able to compare and contrast the products’ advantages and disadvantages against competitors’.
5. Stay on the Platform
Many Alibaba horror stories are a result of moving off of the platform.
Imagine this scenario.
You find an unbelievable deal on products from a seemingly trustworthy supplier. They’re verified, trade-assured, and are willing to cut you an even better deal if the business is conducted through wire services like Western Union.
This makes sense, right? Cut out the middle person, and both parties win.
Spoiler alert: It’s likely a scam.
Once you’ve been lured off Alibaba, consider yourself unprotected from fraud and scams.
My opinion? Don’t risk it. The potential issues that could occur are not worth saving a few extra bucks. Moreover, your entire investment, as well as your Amazon account could be in jeopardy if your off-platform deal turns sour.
6. Use Common Sense
The possibility of life-changing profits can work anyone up in a frenzy.
I’m not kidding. There’s certainly a thrill to it all.
Entering a new market, finding the best deal, racing to source your product and have it listed before your competition creeps in…I get it.
It can be addicting, and just like any addiction, impulses can take over.
Just be careful not to turn these impulses into regrets.
Learn from others’ mistakes, immerse yourself in online resources, and be prepared to navigate potentially difficult business hurdles.
Just keep your guard up, and happy selling!
Are you interested in building a $ 10,000-a-month e-commerce business in less than 6 months, without all the costly mistakes?
Click here to learn more about how my Amazon Wealth Accelerator can help!
