Getting the most out of Alibaba
Part 1 – The Search
When it comes to sourcing product from overseas there is no better place to start than Alibaba. Alibaba is the world’s largest e-commerce platform for small business and as at the 30th of June 2012, there were a total of 2.5 million supplier storefronts. Think of it as the eBay for business to business and it should provide a good starting point if you are looking to purchase goods from overseas.
I am assuming here that you have your product you desire in your head and now you need to find someone to make it. So you head to Alibaba.com and start the search. This is where things get slightly overwhelming. 99% of the time you will get pages and pages of the same or very similar product come up in the search. It will make you happy to know this but also slightly terrified as in the end, you need to select just the one supplier.
Now this is the point where most people search down the images to find the product that looks closest to what they are looking for. This is a decent plan as you will find the product that is closest to the picture you had in your head. However, it may not be the best way to go about it. Let me tell you why.
When sourcing product from overseas, there are factories (the manufacturer), and there are trading companies (wholesalers/middlemen). Differences between the two:
1. Generally speaking, to place orders with the factories your quantity needs to be high, and when I say high, this will depend on the product you are sourcing. More expensive items will generally have a much lower minimum order quantity (MOQ) than say a $2 ceramic mug. Trading Companies usually have stock on hand or will have agreements with the factories to take on less stock than their usual MOQ. So if quantity is an issue, trading companies may be your only option.
2. As the factory will require you to place a larger MOQ, the factories price is normally lower than the trading companies’ price. Also the trading company will take their margin when they sell the goods onto you.
3. As the factory manufactures the goods themselves, they are more inclined to customise the product. Trading companies will normally have “off the shelf” products available, meaning the items are stock, and you take them the way they are. Dealing with manufacturers will mean a higher MOQ, but it will also allow you to customise the product to exactly how you want it.
4. Trading Companies are not specialists. They normally carry a wide range of goods depending on where they are located and what manufacturers they have relationships with. Trading companies sometimes lack the in-depth knowledge of the products they are selling.
In saying the above it will become clear exactly what sort of supplier you are looking for, and this is important to know straight off the bat, even before you start your product search. In my experience, I’ve discovered that you can spend a lot of time speaking to factories or trading companies and in the end find no workable solution purely because you are dealing with the wrong type of supplier for your needs.
To save this time and effort during your initial product search, look at the images to find a close match to what you are looking for but instead of clicking on the image it-self (or product link), click on the suppliers name. You will find this on the right of all the product information. Find out what sort of supplier they really are. You will discover here if they are the manufacturer or trading company (normally noted next to the suppliers trading name), and you will also get a feel for what products they largely deal with.
In the next part of the series we will delve a little deeper into finding the right factory for your killer product; what to look for in the supplier store front, and what are some of the warning signs.
The thoughts above are taken only from my own experience and I would love to hear your thoughts and other ways to make the search for product just that little bit easier!