How to Buy Products on Alibaba
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Alibaba is the world's biggest B2B ecommerce portal with 50 million users in 240 countries and, importantly for buyers, it showcases manufacturers from China offering products in bulk at low prices. You will save time by buying on the Alibaba marketplace.
There are problems buyers can face. One is that though Alibaba vets its sellers, it is not thorough and sellers can sell substandard products or ship defective products or not ship at all. To avoid this you must choose sellers with care when you signup at Alibaba marketplace with the intention to make it your sourcing platform.
Types of sellers on Alibaba
There are different types of sellers on Alibaba.
Manufacturers: These are actual manufacturers of the products with manufacturing facilities, selling direct to business buyers. Manufacturers can guarantee quality of products and will back it.
Dealers/wholesalers: These dealers or wholesalers may or may not be accredited by actual manufacturers and simply buy from them and sell in bulk.
Agents: They may not even maintain inventory but will simply display products and then, when you order, they will procure and sell to you.
Then there re accreditations:
1. Unverified seller: These are simply registered sellers who have not undergone Alibaba's specific vetting processes. You buy at your risk.
2. Gold suppliers: Suppliers pay Alibaba for the Gold rating and must pass Alibaba's stringent qualification requirement.
3. Assessed suppliers: These suppliers are monitored by third party inspection agencies that furnish a full inspection report.
4. Trade Assurance suppliers: Products of these suppliers are inspected prior to shipment and Alibaba offers timely delivery guarantee with the promise of refund if this does not happen.
The takeaway from the above is to choose a seller who is a manufacturer and one who has all the three accreditations mentioned above.
This is followed by evaluation of various points in the buying process.
Price
You may be tempted to buy a certain product that is offered at the lowest price on Alibaba. However, unless the seller matches the criteria stated above, it is a risky proposition. It is best to select a middle level price point or a higher one if you want a quality product. Sellers will specify a minimum order quantity. However, you can contact sellers and request samples of 10 pcs or so. Physically check how they ship, how fast shipment arrives, the packaging and the quality of the product itself. Better still, buy the same product at two price points to know the differences in quality and price.
Supplier review is a must. You must check about their ratings which should be higher. Check the feedbacks from their buyers and that will give you a good idea whether it is worth doing business with that seller or not.
Long term supplies
Sellers and also buyers are looking for long term relationships and continuing business. However, building trust is necessary. Therefore, assure the seller that you are going to buy in bulk and on a regular basis. You may request for a small sample and pay for it in advance and then approve the sample and place bulk order.
Keep in touch through email, phone call and video chat. You will get to know the supplier and they will get to know you.
Once you are satisfied with the first couple of shipments you can suggest long term contracts and lay out vital factors such as packaging and shipment. You can discuss about damaged products and compensation and the seller will agree to some sort of compensation by sending free replacement in the next lot.
Branding
You can buy from a manufacturer and sell in the same brand. However, it is better to establish your own brand. Suppliers will be ready to brand the item and develop specific packaging for you if you request them. Make sure to register your brand in India. Digitalcommerce can assist with all these formalities as well as guiding you on how to negotiate with Alibaba sellers.
Import formalities
It is easy to think of buying and selling. However, each country has import restrictions and formalities. First, you must find out that the product you intend to import is not banned or prohibited. Two, you must find out the customs duties involved and calculate your final cost to find out if it is competitive for you to sell at a certain price after including all such duties and GST. You must also add the clearing and forwarding agent's fees and transportation costs to arrive at a fair market price.
To summarize:
In order to buy from sellers on Alibaba and sell in local or global markets you need to:
1. Register as a business entity in India and register with Alibaba
2. Start the process of finding products and suppliers on Alibaba
3. Vet the supplier and conduct due diligence
4. Contact, get quotes, get samples and finalize supply pipeline.
5. Set up proper payment methods convenient to both
With proper care you can find the right supplier on Alibaba and establish a thriving business. If you are not familiar with all that is involved then it is better to engage services of an ecommerce expert like Digicommerce.
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