This is a complete guide to sourcing
products on Alibaba, the world most popular e-commerce site and shipping down
to Nigeria without any issue. This post is a mini-series, created to give you a
very deep understanding of how Alibaba works and how you as an importer can
source products directly from the manufacturers in countries like China,
Vietnam, Turkey etc. The general belief is, Alibaba is only meant for Chinese
suppliers, but this is wrong because Alibaba also cater for suppliers from
other manufacturing-oriented countries. I will show you later on in this
series.
I’ve broken this articles on sourcing
products on Alibaba into several parts as outlined below:
Part 1 – We shall look at
the fundamentals of Alibaba trading. What is Alibaba? And how can I start
sourcing products on Alibaba
Part 2 – Shall focus on how
to find products and suppliers. How do I find reliable suppliers and buy good
products?
Part 3 – We shall have a
look at private labeling. What is private labeling? How can you use it to grow
your brand and build your product line?
Part 4 – In this part, I
will show you how to place an order and how to negotiate with suppliers.
Part 5 – We shall look at
how to pay for your products safely and securely.
Part 6 – In the final part
of this mini-series, we shall look at how to handle issues with your supplier
and make sure of quality.
So, in this post which is part 1 of the
series, we shall be looking at the fundamentals of sourcing products on
Alibaba. This is important so as to have basic understanding of what the site
is all about and how you can use it to your benefit.
Let’s get started…
What exactly is Alibaba?
Simply put, Alibaba is the world’s
largest business-to-business (B2B) e-commerce website that connects buyers and
sellers.
Let’s look at this simple illustration,
you have a company that’s located somewhere in the world that produces a
product, they will list these products on Alibaba.com. You have a buyer who’s
located somewhere else in the world that will buy these products in bulk and
will sell them their local market or through online platforms like Konga, Jumia
or their own e-commerce site.
This buyer could be me or you or even a
big retail outlets like Shoprite, Mr. Price or Slot. It could be just
anybody. The only thing Alibaba wants to do is facilitate a transaction
between the buyer and the original supplier of the product. What you do with
the product afterwards is none of Alibaba’s business.
There are few other things you should
know about sourcing products on Alibaba.
1. Alibaba is not used
for single unit purchases. You buy goods in bulk
2. Alibaba is primarily
used to source products from China and other parts of Asia
3. Alibaba is not your
regular e-commerce site. Say for example, you are buying a product on Jumia, it
comes with a Jumia backing. A policy that ensures that if the product you
purchase is defective, you can easily ask for refund by contacting Jumia (even
though the seller might just be a merchant on Jumia). But in the case of
Alibaba, you will have to talk to your supplier directly for any issue
concerning refund.
4. Buy at your Risk.
Alibaba to an extent will help resolve a dispute between you and your
suppliers. However, there is a limit to how much they can do. You have to have
it at the back of your mind that you are buying at your own risk. It’s
important you know that when you order goods in bulk, some of them are going to
be defective. That’s just the nature of manufacturing.
Why do People Use Alibaba?
I like to categorize people who use
Alibaba into three categories.
The first is, someone who is just
looking to buy and sell a product. The process is quite straightforward.
You import products and sell them in the local market or through online
platforms.
This is fairly easy to do, you buy and
just resell. You are not making any changes nor are you making any
modifications. Obviously, the earning potential for this type of transaction
will be low because there are no barriers to entry and a lot of people are
doing this.
The capital investment is also low, you
don’t have to buy large quantities of products and therefore the risk is low as
well.
The second category of people that use
Alibaba are those who are looking to create a private label. Private labeling is
taking an existing product and applying your own label or your own brand to
that product.
Let’s say you are interested in selling
cell phone cases. Now, you have a few options; the first one is to find a
supplier in China or another country and you simply import that product and
sell it as it is (First category of people I explained above). The second
option is you create your own private label by telling the manufacturer or
supplier to put your logo on the back and add your brand.
Private labeling is a great way to
start your own business and it’s what I use Alibaba for the most.
You can do this with just about any product, be it blender, grater, mobile
phone cases, shoes, wrist watches just about anything.
It’s a little bit more work than the
first category. You will have to invest a little bit more money because you are
going to be ordering products in larger quantities. Therefore, there’s going to
be a little bit more risk as well but the earning potential is a lot higher
than just buying and selling. (I shall explain extensively on private labeling
in part 3 of this series).
The last category is for people who are looking
to create a unique product. A unique product could be something
you invent from scratch or it could be an existing product that you want to
modify and tweak to make it somewhat unique. The level of difficulty is going
to be a lot higher with this type of product because you have to work very
closely with your supplier and you have to have some creativity or technical
ability to let the supplier know what it is that you are looking for.
You might
have to produce some drawings or some engineering documentation. But it can be
done with just about any product. The earning potential is going to be a lot
higher but so too is the capital investment and the risk.
If you are going to engineer or
re-engineer a product, there’s a lot of costs for the supplier. They might have
to get new tools and some other things. They are definitely not going to sell
in low quantities, they would want high volume purchases only. It will be
difficult to tell them you want 50-100 pieces of the product, they are surely
going to be looking at a minimum purchase of a thousand or two at a time
because that’s how they are going to make money, otherwise it’s not worth it
for them.
I don’t advise taking this route, but
if you have the right product, something that is going to be in demand, then it
might be worth taking the risk and investing a significant amount of money.
However, this is definitely not for
mini importers. I would recommend starting with private labeling for mini
importers. This we shall look into in part 3 of this series.
So, that is that about the basic
fundamentals of sourcing products on Alibaba. If you have any question, kindly
use the comment box below and I shall try to provide answers to your questions.
In the next part, we shall get into the process of finding a product and
contacting suppliers.
SOURCE: http://importationwealth.com
