What is Alibaba?

Alibaba is an online supplier database on steroids. By this we mean it´s the world´s largest B2B platform, in it, you can find basically every Chinese supplier with registration and export license, so naturally, it represents an ocean of opportunities to find anything you want to produce customized or buy finished goods to resell.

Alibaba is not limited just to Chinese suppliers, there are factories offering their products from many countries, for example, India, Pakistán, Vietnam, Thailand, Indonesia, Japan, Cambodia, among others. Many importers have specific origin preferences, mainly because of taxes and tariffs to the import at the destination country, others choose the location of the factory based on logistics and transportation cost efficiency, or because the industry is better specialized in some countries.

Even though the Alibaba structure counts with a solid and reliable system for avoiding frauds and scams, it is not by law that buyers are spared from surprises, so you should think about developing a relationship with the supplier, maintain constant communication and be smart; sometimes the distance and the anonymity of the internet makes it hard to be “smart” but if you are thinking on spending large amounts of money as an investment for your business, then don´t spare extra pocket change and invest a little extra on safety.

Our suggestion is that if you are not well acquainted with the supplier and there is no previous relationship with whoever says is representing the factory you are looking to make business with, then you should rely on the advice and support of an expert to increase certainty and avoid getting ripped of. Globex Asia Inspections has been auditing factories and companies for the past fifteen years, with a Supplier Factory Audit, you can make sure your partner is being truthful and can, in fact, satisfy your production needs in terms of price, quality, delivery time, international and local regulation compliance and that most importantly, there is a professional and well-established company at the other side of the screen, not just some pirate that´s going to rip you off and run away with your money, because you can be sure, people never find those guys.

Actually Alibaba offers to its users an online payment system to “secure” delivery upon any orders, this means that allegedly you will receive your goods, and on time, allegedly the suppliers are held to their word, meaning that if they commit to deliver on a date and they don´t, Alibaba´s influence will put pressure on them to deliver, and will, in fact, protect the buyer, leaving a gap in case you change your mind and don’t want it anymore, then you get your money back.

But, cancellation of the order depends on several factors, usually, the buyer would need to submit a dispute through the platform and present evidence on how the supplier did not fulfill the agreement, even so, most of the times damage will not be amended because the buyer acted upon ignorance of the website´s rules.

To increase the possibility of a refund, buyers must pay through the platform´s system, any transactions made by a third party, won´t be subject to dispute. Other expenses not covered by the group are transportation, logistics or any other added-value services offered through the platform.

How to proceed when buying from an Alibaba supplier?

Buying on Alibaba can be tough, specially because there literally thousands of options to choose from, the profile of a company, the pre-existing model they have to offer on stock, the attention they provided and the interest shown when contacting their sales, the capability of understanding each other, are some qualities to take under consideration when selecting a supplier.

If you write to a factory inquiring about their products and prices and they take days to answer and/or they answer vaguely, it is not a good sign. There are many scenarios, but most frequently they are not that professional, which means they probably don’t speak an acceptable level of English and they don’t count with a basic Customer Service team and CRM,  or they are not that interested in your request, this may be because their sales and profit margins are quite big compared to the business your bringing to them and so they will attend to your inquiry almost as if they were doing favors, because sometimes they don’t even care about receiving negative comments or evaluations on the site.

Buying at Alibaba: Step 1 

So, at the beginning, select a few options compared on their prices, their MOQ (minimum order quantity), their delivery time, and their designs or availability to produce and supply what you are looking for, you don’t have to settle, what one factory or five can’t or won’t do, there another five that will. Once you´ve pulled a 3 to 5 candidate list, is time to move for the next step.

Buying at Alibaba: Step 2

Sampling is always a vital element when developing a new product or manufacturer, this is your chance to verify the supplier´s capability to match your design and produce based on your quality, assembly and functionality standards, but also to improve, correct or change anything about the product before placing a deposit and starting the production; making changes and correcting defects during the production or at the end, might cost tons of time and money, and usually the relationship with your partner is hurt.

Rejecting lots, and holding payment is not a pleasant situation for anyone, make sure you take your time and plan ahead so you can get the results you are aiming for.

Buying at Alibaba: Step 3

Negotiating is crucial for your supply chain management, it is at this stage that you will agree upon the terms and conditions settled for the transaction, again, establishing clear rules, expectations and demands will save you from economic loss and headache. 

Most of the factories work around the clock and supply for multiple customers shipping to multiple destinations, production lines can jammed, there can be a shortage of raw material, worker strikes demanding better conditions, but most frankly bigger customers monopolize the attention and production capability of the factories.

Let the shipper know when are the goods expected to be finished, what are your Quality Standards and defect limit, and try to aim for a lower price than the one quoted in the beginning, as it is very probable that something is going come up during the production and the quotation will result in higher costs, but by no means sacrifice the quality of your products.

Buying at Alibaba: Step 4

Verification of the identity and production capacity of the factory is the most important task if you want to prevent a scam or unpleasant surprises down the road. Globex Asia Inspections is an international company dedicated on providing trade assurance solutions to our customers around the world.

We will visit the factory personally and inspect, their production lines, production processes, raw material warehouse, finished goods warehouse, workshops, the conditions of the machinery and the workers, showroom, and the entirety of the facilities; also we will request certificates, bank account registration, government registration and activity license, export license, and any documentation the company audited can provide in order to confirm the veracity of their sales pitch.

Every importer can make the most of globalization and international trade by following these simple steps. If you are interested in knowing additional suggestions and strategies to improve and secure the results of your operations, visit: www.globexasia-inspections.com