What is Alibaba?

If you’re new to selling on Amazon, odds are you’ve encountered the e-commerce giant Alibaba.  

Alibaba is effectively a wholesale internet mall, where it’s possible to buy inexpensive bulk products from overseas that you can then brand, and re-sell for a profit on sites like Amazon, Shopify, TikTok, or ETSY. 

Alibaba connects e-commerce sellers with manufacturers in China, Vietnam, India, Thailand, Pakistan, Bangladesh, and Japan. 

The company is headquartered in China and is a major influence on the worldwide e-commerce market. That being said, it operates under a completely different set of rules and policies than US-based retailers. This makes navigating the websites a bit more volatile and prone to risks. As a result, it’s easy to make mistakes or get confused about best practices. 

Why Do I Need a Guide For Buying From Alibaba?

Buying from Alibaba isn’t as simple as adding products to your cart and checking out in a few clicks. Sellers have much to consider before finalizing orders. This is especially true as changes in supply chains have made buying from overseas slightly more difficult than before. 

For example, I once mistakenly hired a trading company (rather than an actual manufacturer) to produce a product, resulting in thousands lost in botched inventory. 

But that’s the tip of the iceberg. There are countless elements to consider before typing in your billing information, and just as many after the purchase has been made. I’ll go deep in this guide, but here’s what you’ll learn. 

• Properly vetting the supplier to ensure the highest possible standards
• Best practices for contacting suppliers
• Ordering product samples
• Advantages of product research software
• Having a shipping plan

Product Research

The first, and often most frustrating, step of the Amazon journey is finding a profitable product to sell, which begins off Alibaba. 

The goal is to find an in-demand product that assumes the least amount of business risks. So to find that product, I eagerly endorse the help of product research software. Trying to find a product without such software is like trying to paint a wall with a toothbrush.  

I praise and recommend Helium 10 for its usability and customer service, but you can choose from a variety of others including Jungle Scout, Viral Launch, Keepa, CamelCamelCamel, etc. They’ll all have similar functions. 

The software allows you to sift through millions of Amazon products, and if you know what to look for, it makes finding a profitable niche or market much easier than blindly guessing. 

For in-depth tutorials on how to begin product researching a profitable Amazon or e-commerce product, check out my tutorials on my YouTube Channel. 

What’s The Difference Between Alibaba and Amazon?

Alibaba differs from sites like Amazon for a few key reasons:

• Negotiations for the final price are normal on Alibaba
• The listed price is rarely what you’ll pay. In my experience, it’s almost always lower once negotiations are finalized. 
• Alibaba focuses more on business-to-business transactions, whereas Amazon is more geared towards business-to-consumers
• When purchasing a large order, you’ll likely have to figure out a shipping plan to get your inventory into an Amazon warehouse. 

What to Look For in a Supplier: 

There are a few key elements to look out for when digging through possible suppliers/manufacturers to reduce your chances of your experience ending in disaster. 

• Make Sure Suppliers are Trade-Assured and Verified – Alibaba gives suppliers the option to opt into these programs, which greatly reduces the chances of being ripped off by a sketchy company. 

• Years in Business – Always go with the more experienced suppliers. Only consider suppliers who have been in business for more than five years (the more, the better). Go with experience, even if it ends up costing more. It’s also a good indicator of how easy the company is to work with. 

• Location – Different Chinese regions specialize in manufacturing specific types of goods. As a result, it’s possible to negotiate a better deal in regions that specialize in certain types of products. 

• Product Specialization – Avoid suppliers that manufacture a wide variety of goods. Ideally, your supplier specializes in a small number of products directly related to the items you wish to sell. 

Check out an in-depth guide on Chinese manufacturing on my blog page here. 

Contacting Suppliers

Once you’ve narrowed your options down to a handful of promising suppliers, the next step is reaching out to them. 

But approach this step with caution!

These companies are bombarded with inquiries 24/7, and most are from non-serious sellers looking to get rich quickly. I won’t lie, it’s sometimes hard to get a response. But here’s a checklist of pointers to up your chances. 

• Begin with a Request for Quote (RFQ). See the template below. 
• Avoid first contact with a @gmail.com email address (or similar domains). Make sure your business has a custom email domain. They’ll take you more seriously, and you’ll stand out against the list of unprofessional emails 
• Clear communication – Use clear, concise language, and avoid ambiguities. Don’t forget, your supplier’s language is most likely not English, so make sure your emails or messages are easily read. 
• Ask Questions – Asking questions provides them a reason to respond. 
• Record video conversations if possible – Video calls are great for building relationships. If you choose to use them (I recommend doing so), try to keep a recording of each call. This will ensure you’re not forgetting or missing valuable information, and that you communicated everything correctly. 
• Write in an Easy-to-Understand Format – Use bullet points, summaries, paragraph breaks, etc. to clarify points and be more easily read. 
• Focus on Relationship Building – If suppliers know you’re a serious seller with plans to scale and expand your brand or product, they’ll be more likely to do business with you. 
• Be Flexible and Patient – Don’t forget, that suppliers are businesses as well. That being said, be open to compromise, and understand reaching a deal might not be a quick as some think. 

That being said, if you can’t finalize a price within two weeks, that may be a sign to move onto a different supplier. 

Are you Confused by Amazon Terminology? (You’re Not Alone!)  Check out a full list of terms and definitions about the business in here.

RFQ Example  (Feel Free to Copy/Paste This and Use It For Suppliers). 

Hi there,

My name is [Name] and I am the Lead Purchasing Agent from [Company Name]. Our CEO asked me to contact your company about working together in a potentially lucrative business venture.

We’re a USA Toys & Games company based out of Phoenix, Arizona. We’d like to introduce ourselves and express an interest in creating a long-term profitable partnership between two companies.

We would like to have you be the sole nationwide manufacturer for our company of a

product similar to the link below:

[Amazon Link to the Product you are trying to sell]

Specifications we are looking for:

• 512pcs of 5mm Magnetic Balls

• Magnets made of Neodymium/Rare Earth Material and Coated with Nickel and Copper

• Includes a Cut Card

• Includes a Carrying Bag or Tin (quote both if you have both)

• OEM Packaging and Options

• Color Card Insert – Will want to make paper insert with instructions thank me for after you

Can your factory meet all these specifications? Please provide details or example photosthat show your product, OEM packaging, cut card, carrying bag or tin, Paper Insert Card

Do you manufacture this/these type(s) of Magnetic Balls? If so, please respond with red text below the following questions:

Do you have the ability to package our product in OEM package with our color logo

and UPC Barcode printed on it? 

Please explain the type of packaging and how the logo and barcode will be applied. Include photos if possible.

What is the EXW cost of this product per unit for an MOQ of 500, 1500, and 5000

units? Please break down the cost for each of the following: EXW Price, OEM Color

Logo/Packaging, and Color Product Paper Insert Card.

What is the lead time to manufacture and package 500, 1500, and 5000 units?

What is the shipping information for this product for our freight forwarder? Please

include Master Carton Dimensions, Master Carton Weight, # of units in each Master

Carton, # of Total Master Cartons, Total and Unit CBM, Pickup/Factory Address, and HS Code.

Ordering Product Samples: 

Once you’ve settled on a supplier, I recommend ordering samples and personally ensuring quality is up to standard. This will also give you a chance to request tweaks or alterations before the order is mass-produced. 

Make sure you order samples from your Amazon competitor’s listings to get an idea of their product quality as well. You’ll want to improve on it to stay as competitive as possible. 

Purchasing

Once you’ve confirmed high-quality samples, don’t be so quick to draw when it comes time to bust out the wallet. Here’s a checklist of things to consider: 

• Negotiate 30% of the total costs to begin production – Once production is finished, and products have been inspected, pay the remaining 70% before shipping. 
• Always use a credit card for extra protection – Never, under any circumstances, use a debit card. All major credit card companies should provide some type of consumer protection. 
• Document everything –  Doing so is necessary to dispute changes, and will also come in handy for tax and organizational purposes. This includes invoices, emails, messages, and recordings of video conversations if applicable. 
• Stay Vigilant of Scams – Scams are unfortunately becoming more intricate every day.

My best advice is just to stay up to date on current e-commerce and Alibaba scams so you’ll know what to look out for. 

Pro Tip: As of 2024, many Chinese suppliers and companies are requesting payments through Payoneer.

Product Inspections

Don’t overlook the importance of hiring an inspection company to oversee the production of your order. 

Here’s how it works. 

1. Locate a Chinese-based, well-reviewed inspection company to visit the manufacturing site physically. This can be done for as little as USD $200. 

2. They’ll provide you with a detailed report, including pictures and videos, to make sure your investment is taken care of. 

There are countless advantages to this: 

• Manufacturer Reliability – Suppliers are less likely to cut corners if they know an inspection company is involved in the process.

• Defect Prevention – Reduces the amount of defective products, which will likely be returned and end up impacting margins and negative reviews. 

• Brand and Reputation Protection – Amazon is becoming increasingly more competitive, so ensuring top-quality production and setting a high standard only helps in the long run. 

Shipping Your Product to Amazon

There are two main options for getting your finished product from the supplier into an Amazon FBA warehouse. 

• Option #1, Use the Supplier’s Shipping Service. These are hit or miss, and it’s sometimes hard to determine if you’re getting a good deal or not. 
• Option #2. Hire a Freight Forwarding Company – A quick Google search will show hundreds of U.S. and Chinese-based freight forwarding companies.

I recommend shopping around for the most reputable companies with the best prices. Experience matters here as well. 

However, this will make things slightly more difficult. Make sure you have the following information ready when shopping around:

• Master Carton Dimensions
• Master Carton Weight, 
• Number of units in each Master Carton 
• Total Number of Master Cartons 
• Total and Unit CBM 
• Pickup/Factory Address
• HS Code

Shipping options have unfortunately dwindled since the events of 2020. As such, the main way is by slow sea freight. Expect around 40 days to get from China to the US as a result. 

Alibaba FAQs

The Supplier Wants to Go Off Alibaba, What Should I Do? 

Under no circumstances should you negotiate payment outside of Alibaba. This is how a great number of scams and fraud cases begin. 

Going off-platform means you’ll lose the ability to dispute issues, and greatly increases the risks of a botches product investment. 

How Much Should I Expect to Spend on My First Order? 

Don’t believe lies that say this business can be started for a few hundred bucks. 

I won’t sugar coat it, you’ll need on the higher end of a $10,000 to $15,000 to start a successful Amazon business correctly. 

I break down the first-year costs in a blog here. 

How Long Are Shipping Times?

Shipping times vary, but one can expect around 40 days for shipments to get from China to the U.S., However, these times increase for the Lunar New Year. 

Lunar New Year falls in January or February (or both) each year. Many Asia-based companies will shut down completely for 1-3 weeks during this time. 

Plan accordingly, and best of luck! 

Are You Ready to Start Selling on Amazon? 

My Amazon Wealth Accelerator (AWA) mentorship guides you through the entire Amazon FBA process and provides a community of support with others on the exact same journey. 

You’ll get hands-on support from experienced sellers with your same goals and aspirations. 

AWA gives you a much-needed safeguard from costly mistakes, dead ends, and failed product investments to efficiently reach your passive income goals. 

So whether it’s solving issues with your Seller Central account, creative approaches to product research, scaling to new markets and niches, validating product ideas, customer service issues, and more, we’ve got you covered. 

Learn more about it here.