How to buy from Alibaba is one of the major concerns of newbie Amazon sellers. Since the Alibaba Amazon FBA transaction has become a trend in recent years, more and more sellers rely on Alibaba for their inventory to further grow their Amazon FBA business.
This article intends to give Amazon sellers an overview of what Alibaba is and how to navigate the seemingly complex Alibaba to Amazon FBA method to avoid scams when buying Alibaba products and mitigate the risks involved in such a business transaction.
What is Alibaba?: Alibaba vs Amazon Comparison
Alibaba is a leading global eCommerce platform that predominantly operates on a business-to-business (B2B) model. It has been considered a trendsetter in the eCommerce landscape because instead of following the existing trend of connecting consumers to retailers, Alibaba connects manufacturers and suppliers with sellers, including those individuals selling on Amazon.
Unlike Amazon, where consumers purchase products on a retail basis, Alibaba facilitates bulk purchases for businesses to resell either in an online store or in physical stores. By linking resellers with suppliers, Alibaba allows for purchasing quality products at very low prices on the Alibaba website.
Alibaba paved the way for a much easier and quicker turnaround time for buying and selling bulk products. As a testament to Alibaba’s dominance, it ranks as the largest eCommerce platform as of 2022. Alibaba has an estimated $780 billion in annual online sales compared to Amazon’s $691 billion in sales as of last year.
Top Reasons Why Alibaba to Amazon FBA is Popular Among Online Sellers
Both traditional retailers and online resellers turn to Alibaba for their product-sourcing needs. In particular, the vast majority of Amazon sellers turn to Alibaba.com for their inventory items. And here are some of the reasons why sellers prefer Alibaba to Amazon FBA setup for their eCommerce business.
Lower Price: Unlike other wholesalers or distributors, Alibaba offers lower prices to business owners. The company offers the advantage of connecting resellers directly to Chinese manufacturers, in a way cutting the middleman in the process.
Comprehensive Product Option: Business owners choose to buy from Alibaba due to the product variety it offers. Alibaba can offer sellers a massive selection of inventory items that may not even be available through traditional and local suppliers, which sellers can purchase at a competitive price.
Customization: In relation to product options, Amazon sellers prefer Alibaba for product sourcing because of the availability of item customization. Alibaba allows resellers to customize their orders according to specific requirements, such as adding a custom logo or packaging improvements.
Minimum Order Quantity: Typically, dealing with suppliers means committing to a strict order quantity. However, an Alibaba to Amazon FBA transaction allows resellers to try out new products without committing to large orders with its Minimum Order Quantities (MOQ) feature.
Versatile Marketplace: Amazon sellers buy from Alibaba because of its flexibility. Alibaba offers flexible payment and shipping methods and other customization possibilities beneficial to the seller’s branding.
Payment Methods Available When Buying from Alibaba
As mentioned above, Amazon sellers buying their inventory can pay Alibaba suppliers through multiple payment methods available on Alibaba, including the ones listed down below:
- Bank Transfer (T/T)
- Credit Card
- Online Bank Payment Western Union
- Online Transfer
- Paypal, Apple Pay
- Letter of Credit (L/C)
- Documents Against Payment (D/P)
Since you will be dealing with suppliers abroad, it is best always to use secure payment methods. To avoid any delays or being victimized by bogus suppliers, it is best to avoid paying outside the platform.
In dealing with suppliers who require upfront payments, it is highly suggested to pay only 30% of the cost. The remaining 70% should be paid when your order is completed via a third-party holding account like Alibaba Secure Payment service.
Keeping Your Alibaba to Amazon FBA Transaction Secure
Aside from answering the common question concerning how to buy from Alibaba, you must first take into consideration the things you need to secure your Alibaba to Amazon FBA transaction. Here are some of the things you should remember when buying from Alibaba for your Amazon inventory.
Checking Supplier’s Profile
When buying from Alibaba for your Amazon inventory, it is a must that you should scrutinize the profile of the supplier. When checking the supplier’s profile, you should take note of how long they have been in business and the number of completed transactions they have made throughout such years of business.
Go for Alibaba Trade Assurance
Although not mandatory, it is still more secure to go for reputable suppliers who are offering Trade Assurance. Trade Assurance is Alibaba’s free transactional protection service.
The Trade Assurance protection benefits Amazon resellers when the inventory items or ordered products are not shipped on time or when the products shipped do not meet the quality standards as per the contract agreement.
If there is an issue concerning your Alibaba purchases, you can be assured of favorable action, including potential reimbursement or reaching another agreement with a supplier.
Look for the Verified Supplier Tag
Similarly, you should also look for suppliers with a Verified Supplier badge or tag. When an Alibaba supplier has this tag, third-party institutions have already inspected the supplier’s company profile and production capabilities and processes.
According to Alibaba, they partnered with leading inspection companies such as SGS and TÜV Rheinland to perform the verification and quality control services.
Avoid Brand Name Product
When dealing with suppliers, as much as possible, avoid suppliers that offer branded products. It is best to avoid such a supplier, for there is a great chance that such branded products are fake or imitated. Buying counterfeit items will not only merit a penalty that can adversely affect your Amazon seller Account, but may also lead to a lawsuit if you sell counterfeit items online.
Ask Questions and Additional Proof
In order to further appraise your potential supplier, you can ask them additional questions. Do not simply limit your knowledge about a supplier to what they present on their company profile.
Once you have narrowed down your supplier list, try calling them or setting up a virtual conference with them. Ask about their business and also ask for a copy of their license, factory, and sample products.
Since you will be doing business abroad, asking for everything that will make you feel comfortable conducting business with suppliers is better. Some ideal questions to ask suppliers are about the refund policy, payment details, actions in case of disputes, and seller guarantees.
Walk Away If Needed
In general, if something appears too good to be true, it is likely not genuine. It is important to be cautious of pricing and promises that seem unusual or significantly different from what other suppliers offer for their Alibaba products. Be prepared to walk away from a deal if you have any doubts about it.
Alibaba To Amazon FBA: Additional Buying Tips
Since you are dealing with a foreign supplier, buying from Alibaba comes with risk. To help you mitigate the risk of dealing with product sourcing issues, here are some additional buying tips you should note if you wish to sell Alibaba products.
Product Inquiry
You should thoroughly inquire about the product you plan to sell on Amazon before placing an order. If you have already found a potential Alibaba supplier for your Amazon inventory, be sure to ask for more details about the product apart from what you see in the product description.
Send the supplier questions about the product, including its quotation, variations, and options for customization. However, leave the supplier with a manageable number of questions upon first contact.
Remember that you are building a business, and as part of any business transaction, you must establish a rapport with your suppliers whom you could be dealing with for a long time.
Additionally, ask for product samples to help you check product quality. Suppliers usually charge you for a product sample, especially if it is a customized item. A pro tip would be to stick to a reasonable price and not to bargain too much to not appear like a newbie.
Apart from helping you check the product quality, having product samples can help you determine whether or not you are on the same page with your supplier. It can help you ensure that the one you see on the product detail page is the actual product. It can also be helpful if you intend to buy custom products.
Confirm Price and Shipping Costs
Once you have received a quotation from the supplier, be sure to ask for any potential additional expenses you may incur. When it comes to shipping, ask for multiple options available.
As much as possible, shipping costs must be reasonable, depending on your target date. However, evaluate your options regarding shipping, and do not simply stick to the cheapest option, for it can sometimes sacrifice handling quality.
Hire a Translator
If you are dealing with large orders, it is best to hire a translator to assist you in communicating with your suppliers. Having a translator can help avoid miscommunication that drastically affects the product-sourcing process. Try to break the language barrier with the help of a translator with knowledge about the industry.
Check Details
Since your communication with Alibaba suppliers is primarily via email or chat, it is best always to review the details you will send to them. Crucial information such as warehouse addresses, names, and phone numbers should be double-checked to avoid costly errors.
How to Buy From Alibaba for Amazon FBA | Essential Steps To Familiarize
As you will be searching how to buy from Alibaba online, it is safe to assume that you have already done your research about your niche and potential products to sell on Amazon. With that in mind, learning some essential steps when buying from Alibaba.com is crucial.
STEP 1: Like Amazon.com, you should create an account on Alibaba.com to proceed with your Alibaba Amazon FBA transaction. As requested, provide the necessary details, like your personal and business details.
STEP 2: After creating an account, you can now start searching for the products you have narrowed down on through your Amazon product research. Similar to Amazon, simply search for the product you want to buy by using the search bar or browsing through product categories.
STEP 3: As mentioned earlier, examining your product and supplier is best before proceeding with an order. Check first the product details and supplier information, including product specifications. Also, verify the minimum order quantity (MOQ), unit price, and delivery time of the exact product you have in mind.
STEP 4: You can contact the supplier for more information and clarification, especially with the MOQ, price, and shipping time. Use the “Request a Quote” feature to contact the supplier and request a quotation for the product.
STEP 5: Once you have reached an agreement with your chosen supplier, you can now place your order by using the “Place Order” button on the product detail page of Alibaba.
STEP 6: Subsequently, you must choose your payment method. As mentioned above, Alibaba offers various payment options, including credit cards, PayPal, and bank transfers. Choose the best payment method that fits your online business.
STEP 7: Use Alibaba’s protection service to protect your payment. The service holds your payment until you receive your goods and confirm that they are satisfactory.
STEP 8: After payment has been made, you can track your order using the “My Orders” section on Alibaba.com. Additionally, for updates, you can also contact the supplier.
When you receive your order, inspect the goods to ensure they meet your specifications. If you find any issues, contact the supplier immediately.
New Product Launch Advertising Tips After Alibaba Amazon FBA Deal
Strategically launching your new product on Amazon is crucial for the overall success of the Amazon business. One of the keys to a successful product launch is to have a solid advertising campaign. To help you navigate the Amazon advertising landscape, here are some tips you should know.
Aim for Product Discoverability
Improving the visibility of your recently purchased products is a fundamental goal for launching a new product. With the help of Amazon advertising solutions, your products can be strategically placed in relevant shopping results for better discoverability.
Increase Product Awareness
Educating customers about your new product and its unique qualities is crucial to any new product launch. It is vital to select the advertising strategy or strategies that are most effective in conveying this information. Some options to choose from include Amazon Sponsored Ads and Sponsored Brands.
Enforce Remarketing Methods
Remarketing refers to targeting individuals who have shown interest in your product but have yet to purchase. By combining different advertising solutions, such as Amazon display advertising, you can increase your chances of converting these potential customers into actual sales and expand your customer base.
Creative Optimization Is a Must
When launching a new product, incorporating lifestyle images and video content can effectively convey your product messaging and give potential customers a more comprehensive understanding of your new product beyond what can be communicated through the text in the ad copy.
Final Thoughts
To succeed in your Amazon FBA business, conducting thorough product research and effectively managing your inventory is essential. By following the advice and recommendations provided earlier, you can make the most of Alibaba.com to enhance your Amazon business.
Moreover, apart from offering high-quality products, setting a reasonable retail price for your products is crucial for succeeding on Amazon. Using an Amazon repricer can help you provide competitive prices to attract more shoppers and improve your sales performance.