Selling on Amazon: How to Source Products from Alibaba

Alibaba is a Chinese ecommerce behemoth serving both consumers and businesses. It has revolutionized product sourcing, enabling hundreds of thousands of businesses across the globe to access millions of products at prices previously available only to big-box retailers. To optimize your success as an Amazon Seller, we strongly encourage you to become familiar with Alibaba, where you’ll often find the best deals.

Start by conducting some basic product research to answer the following questions:

• What kind of products do you want to sell — clothing, tools, toys, household products?
• Which products have the greatest sales and profit potential?
• What price are consumers willing to pay for each product?
• How much will it cost me to sell each product? Consider the product’s cost, Amazon selling fees, and any FBA fees.

When you have a pretty good idea of a product you want to sell, visit Alibaba.com, open the drop-down list to the left of the Search box, and choose Suppliers (see the following figure). Click in the Search box, type a brief description of the product, and press the Search button. (The Search box also has a camera icon you can tap to search for a product by uploading an image of it.)

Alibaba displays a long list of suppliers that sell products like the one you searched for. Use the filters above the list of suppliers and those on the left side of the page to narrow your search. You can narrow your search by product category, supplier type and location, company size (by revenue or number of employees), and more.

As shown in the figure, for each supplier in the list, Alibaba displays its name, how long it has been in business, and other details to help you make an informed choice of supplier. Details about each supplier include the following:

• Badges: A supplier may have one or more of the following badges to indicate its credentials:
  • Trade Assurance indicates the supplier supports Alibaba’s Trade Assurance service, which protects your order from payment to delivery.
  • Gold Supplier indicates the supplier supports Trade Assurance and has passed one or more onsite checks to verify the business type and commercial or industrial capabilities. The Gold Supplier badge gives the supplier more credibility, but it doesn’t guarantee product quality or authenticity.
  • Verified Supplier indicates the supplier has been assessed and certified by independent third-party entities via online or offline methods. Again, this badge gives suppliers more credibility but doesn’t guarantee product quality or authenticity.
• Transaction Level: The more diamonds a supplier has the greater the number of transactions it has on the Alibaba platform.
• Response Rate: This metric indicates the percentage of buyers who have received a response within 24 hours of contacting the supplier.
• Transactions: This metric indicates the number of transactions and their total dollar value over the past six months.

If you need additional information from a supplier, press the Contact Supplier button for the chosen supplier and use the resulting form to compose and send your question.

To obtain quotes from a number of suppliers, submit a request for quote (RFQ). Return to Alibaba’s home page, open the Services menu, select Submit RFQ, and use the resulting form to enter the details of your RFQ, including the product name and category, quantity, and terms. Within hours and over the course of the coming days, you’ll receive quotes from suppliers. You can manage your RFQs by going to My Alibaba and choosing Manage RFQ.

As you evaluate prospective suppliers, follow these best practices:

• Arrange a phone call or videoconference with the supplier before placing an order, so you can get a feel for how trustworthy the supplier is.
• Ask questions to obtain all the details you need to make a well-informed choice. Legitimate suppliers won’t hesitate to provide the requested details.
• Visit the supplier’s warehouse, if possible. If an in-person visit isn’t possible, request a video tour of the facility.

Big suppliers may have warehouses in multiple countries to avoid the hassles and headaches of dealing with customs and taxes. Ask the supplier if it has a warehouse in your country that would be more convenient for you to visit.

• Search the warehouse and business location online to verify their existence.

Beware of fraudsters, even on Alibaba:

• Compare the supplier’s name and address on its website and any correspondence you receive from the supplier with the name and address on Alibaba.
• Verify the supplier’s email address and website. Reputable suppliers often have email addresses associate with the domain instead of “google.com” or “yahoo.com.”
• Think twice before moving forward on any offer that seems to be too good to be true; it probably is.
• Avoid suppliers who ask for early payment, because fraudsters often want to grab the money and disappear. Legitimate suppliers won’t ask for payment prior to signing an agreement.

Also, before contracting with a supplier, order product samples. Getting your hands on actual products is a great quality assurance precaution.

After deciding on a supplier, you’re ready to start negotiations and work out the logistics, such as agreeing to payment terms and methods, customs and import process, and any arrangements to ship products to Amazon fulfillment centers.