Is Alibaba Safe/Legit? How To Buy From Alibaba Safely?

As we all know, the most commonly used tool for sourcing from China is Alibaba. It is easy to find suppliers using Alibaba.

The difficult part is choosing the right supplier and avoiding scammers and other middlemen.

Many international buyers are skeptical about whether Alibaba is safe and legit.

So in this blog post, we will introduce all matters related to Alibaba procurement in detail. Make sure you buy from China safely and economically.

What is Alibaba.com?

Alibaba is the world’s largest B2B cross-border e-commerce platform, where buyers and sellers from all over the world can connect and conduct transactions.

Alibaba, together with Taobao and Alipay, belong to the Alibaba Group and was founded by Jack Ma in 1999. Headquartered in Hangzhou, Zhejiang Province, China, its business covers more than 190 countries and regions, more than 40 industries, and provides more than 5,900 categories of products.

Simply put, Alibaba is a platform that provides a communication window for buyers and sellers around the world.

Alibaba itself does not participate in the transactions between buyers and sellers. Alibaba does not sell its own products like Amazon.

According to statistics, the total number of Alibaba suppliers exceeds 1 million, and the number of buyers exceeds 70 million. But basically the suppliers on Alibaba are all from China, and only a few are from India, Thailand, Vietnam and other countries.

So the following content is mainly based on dealing with Chinese suppliers on Alibaba.

Is Alibaba safe/legit?

Alibaba is safe and legit. Alibaba is trusted and reputable.

They have strict rules and regulations that keep most of the transactions secure on the platform. However, Alibaba is just an E-commerce platform that connects suppliers with buyers.

Alibaba will not sell any products to you. Therefore, like other e-commerce platforms, there may be some scammers on Alibaba, but this does not mean that the platform is unreliable.

According to this logic, you can say that eBay, Amazon, and Lazada are all scams, because you can also find many unethical businesses on these sites.

How to Know if Alibaba Supplier is Legit?(video tutorial)

There are 2 ways to be deceived on Alibaba.

• One is that you pay but the supplier disappears without delivering the goods. This kind of supplier is a scammer.
• The other is that the appearance, quality or parameters of your product do not meet your expectations, or your supplier does not abide by your promises of price, quality and delivery time. This kind of supplier is a low-quality supplier and cannot be called a scammer.

Alibaba First Scam

You paid, but the supplier disappeared without shipping.

You may have seen on Quora that some buyers shared that they were deceived by a Chinese supplier. They paid the supplier and the supplier disappeared. And they don’t have any other contact information of the supplier except the email. In the end, they can only bear the loss themselves.

This sounds really scary, but according to SourcingArts, this situation usually happened before 2016, because Alibaba was not a mature e-commerce platform at that time.

The reason why Alibaba was able to be so successful is that it had very low requirements on suppliers at the beginning. At that time almost everyone can become a supplier of Alibaba, and there is almost no cost.

Later, Alibaba became the most concentrated place for Chinese suppliers, attracting countless international buyers who wanted to source from China.

Alibaba had no restrictions on suppliers at the time, so some scammers were allowed to become suppliers.

Alibaba gradually became stronger and began to improve the mechanism and functions of the platform. Alibaba began to charge suppliers for access to its platform, and it also increased the requirements for suppliers.

As you can see on Alibaba, Verified Suppliers, Trade Assuarances, this shows that these suppliers are indeed genuine and not scammers.

Now, it costs hundreds of thousands of CNY to become a supplier on Alibaba, and Alibaba also checks a set of documents from the supplier, which means that it is almost impossible to encounter the first scam on Alibaba.

But we still recommend that you just work with Chinese suppliers on Alibaba. Because Alibaba is based in Hangzhou, China, and its headquarters is also located in China, they have better control over Chinese suppliers.

When you are deceived by a supplier on Atlibaba, you can complain to Alibaba. It is not difficult for Alibaba to solve these problems. They have the complete archives of all suppliers on Alibaba.

Alibaba Second Scam

The second type of scam still happens frequently. The appearance, quality or parameters of the products delivered by the supplier do not meet your expectations, or your supplier does not abide by your promises of price, quality and delivery time.

After all, Alibaba only restricts the conditions for suppliers to enter, rather than investigating the supplier’s product quality and moral quality. And this cannot be measured by some data and standards.

In our past dealings with overseas buyers, many buyers complained to us,

“Suppliers are dishonest and always cannot deliver on time.”

“My long-term cooperative suppliers always raise prices for various reasons， should I change the supplier? But it takes a lot of time to find a new supplier.”

“Why the quality of the bulk cargo I received is not the same as the sample? How can I protect my rights?”

The above problems encountered by buyers are basically difficult to solve.

• First of all, these issues are not illegal, but morally wrong. International litigation can be troublesome, even if they are illegal, you must ensure that you have sufficient evidence.
• Secondly, Alibaba will not be responsible for your product quality and only the delivery time and price can be guaranteed if you trade through a Trade Assurance order.
• Finally, you cannot return the goods to China, because in this case, the freight and taxes will even exceed the value of the goods. If you come to China to negotiate with suppliers in person, it is also a big expense

Therefore, although many buyers know that it is cheaper to buy from China, they would rather spend more money to buy locally or cooperate with some expensive large companies.

Many people have always wanted to try but dare not buy from China. The best way to avoid being deceived by inferior suppliers is to learn to screen and identify suppliers.

In the following article, SourcingArts will tell you “How to select suppliers on Alibaba“. Of course, the same is true for other B2B platforms.

Generally speaking, Alibaba is trustworthy.

Why buy from Alibaba?

Alibaba is Trusted And Reputable platform

The first is a secure payment portal. The transaction is backed by multiple guarantees on the Alibaba website, so buyers don’t have to worry about their credit card numbers and other sensitive information being leaked.

In addition, Alibaba provides a plan called Alibaba Trade Assurance.

The principle of Trade Assurance orders is basically the same as that of Chinese purchases on Taobao.

When you buy products from Alibaba suppliers, you first transfer funds to Alibaba’s Trade Assurance account and then wait for the supplier to deliver the product.

When you confirms the receipt of the product, the funds flow into the supplier’s account, and the you can evaluate the supplier’s product sales, such as product quality, delivery speed, after-sales service, and so on.

Simply put, Trade Assurance is Alibaba’s order protection service-providing a safe online environment for global trade between suppliers and buyers.

Buyers and suppliers make transactions through Trade Assurance orders, and Alibaba will provide buyers with the following supplier guarantees:

• On-time delivery: If the supplier does not deliver the goods after the contract confirmation date, the buyer can apply for a refund from Alibaba.
• The product quality is consistent with the contract: If the product quality cannot meet the quality standard specified in the contract, the buyer can apply for a refund from Alibaba.
• Payment security. Confirm that your payment is safe, the seller will send you an order.

In short, if the quality of the product or the delivery date is inconsistent with the agreement between you and the supplier in the online Trade Assurance order, you can file a dispute and Alibaba.com will mediate to achieve a satisfactory result, including getting your money back.

So when you buy a small amount of goods from Alibaba suppliers, please make sure to trade through the Trade Assurance order.

In addition, Alibaba also provides product inspection services, which is another measure used to ensure quality. But this is not the main business of Alibaba, and you may not be able to get one-to-one support.

Therefore, we recommend that you find a professional quality inspection company or a purchasing agent in China to provide you with this service.

Of course, we are also happy to serve you, Start Verifying Suppliers For Free Now

In short, buyers can safely shop online on Alibaba. Whether it is payment, delivery or quality issues, sellers can get a certain degree of protection.

Alibaba Very easy to use

The Alibaba platform is very easy to navigate, and the purchase process is much simpler than placing an order through a paper form or phone.

Buyers can choose to order products that are ready to shipp, which is as simple as adding items to a shopping cart, entering your payment information, and placing an order.

Or, you can send a message directly to the seller to negotiate a price or customize your product. Obviously, there are many steps involved here, but they are still very simple.

You only need to communicate with the supplier on the price, price terms, delivery date, quality standards and other conditions to reach an agreement.

Then you can ask the supplier to draft a PI for you. Usually the format of PI is as follows:

Then you can trade with the supplier through Alibaba Trade Assurance. This does not conflict with PI. You can upload the PI in the attachment of the Trade Assurance order.

Recommended reading: Alibaba Trade Assurance Guide (Avoid Being Scammed)

Multiple choices

As the world’s largest B2B cross-border e-commerce platform, Alibaba naturally has the most suppliers.

With millions of sellers, this means that there are also millions of products to choose from. Moreover, as a “World Factory”, the diversity of products produced by China is also amazing.

This is also the reason why Alibaba can develop into the world’s largest B2B platform. The wide range of products available on Alibaba allows buyers the flexibility to choose the suppliers and products that are most suitable for them.

For example, if you search for “power bank”, you will get nearly 180,000 results for this item alone. You can filter the results based on several different criteria.

Alibaba Pay Later option

Sometimes, startups need a small assistant to get started. Alibaba Pay Later is a new payment method of Alibaba, which is currently only available to US buyers.

When you use this method, a third-party financing institution will help you pay. Then you repay the loan.

In this way, buyers can purchase inventory to speed up the progress even if they have no budget. This helps retailers avoid resorting to investors or other financing options that may become more complicated.

Pay Later is supported by Kabbage Funding, providing a credit line of US$500 to US$150,000 and a 6-month financing. The minimum interest rate for the first month is 1.25%. Kabbage Funding will give you the loan amount you can get based on your business performance. .

But if you want to apply for a loan, you need to work in Alibaba for at least one year.

Alibaba Product Cheap(Low cost)

There are many ways to select suppliers from China, including B2B platforms, exhibitions, social media platforms, Google, purchasing agents, and so on.

But among these methods, the most concentrated suppliers are exhibitions and B2B platforms.

In the past, the exhibition was indeed the best choice for many medium and large companies.

The exhibition usually revolves around one type of product, so if you have a clear product, the exhibition is indeed the best channel for you to find industry suppliers.

You can establish contact with thousands of suppliers within 3 days, and you can also see real products at the exhibition. It sounds like you are visiting a supermarket.

However, due to the impact of the COVID-19 in the past two years, many exhibitions have been held online.

To be honest, this is not very different from your online shopping. And with the maturity of e-commerce, the effect of traditional exhibitions is getting worse and worse.

The benefits brought to suppliers by the exhibition are far from covering hundreds of thousands of costs. Therefore, there are fewer and fewer suppliers who are willing to spend hundreds of thousands and a week to participate in the exhibition.

For buyers, although the exhibition is free to participate, you need to budget for air tickets, hotels, translation, etc.

If you are far away from the venue of the exhibition, this is also a big expense for small and medium sellers.

It can be said that it is completely free for buyers to find suppliers on the B2B platform, unless you need to publish some urgent procurement requirements.

Alibaba also charges suppliers, and sellers only need to go online to browse thousands of suppliers on Alibaba and establish contacts.

So relatively speaking, it is usually the lowest cost to find a supplier on a B2B platform. And Alibaba is also the largest B2B platform.

What is the difference between Alibaba, 1688 and AliExpress?

Alibaba, 1688, and AliExpress are all Chinese online marketplaces composed of third-party sellers, and they all belong to Alibaba Group.

Alibaba vs AliExpress:

• Alibaba is used for business-to-business transactions. AliExpress is used for transactions between businesses-to-consumers.
• Alibaba is suitable for companies that want to buy a large number of products from suppliers at the lowest price. This is also a better choice for buying private label products, because the suppliers on Alibaba basically provide customized services. This is related to Alibaba’s market positioning. Alibaba is a wholesale website that prefers buyers who purchase large quantities and have customized needs.
• AliExpress provides direct selling products to anyone at retail prices, and there is no minimum order requirement. Items are usually produced in advance, so AliExpress suppliers usually do not provide customized services. AliExpress is positioned as a retail platform. Suitable for buyers who purchase a small quantity and do not need customized services.

The attributes of AliExpress are similar to those of Amazon, but because Amazon occupies most of the European and American countries, the main market of AliExpress is Russia.

Alibaba vs 1688:

1688 can be said to be the Chinese version of Alibaba. It is also a B2B platform, but its suppliers and sellers are basically Chinese, and its business is carried out in China.

The main difference between 1688 and Alibaba is that the buyers of 1688 are all Chinese, so the information is relatively more transparent.

Buyers can quickly find the supplier’s specific address and company registration information on 1688. So it is easier for them to identify the suppliers on 1688.

This also led to the fact that most of the suppliers on 1688 are manufacturers.

This is the biggest difference between 1688 and Alibaba.

80% of suppliers on Alibaba are traders, and 80% of suppliers on 1688 are manufacturers. This is why many overseas buyers want to purchase from 1688.

Recommended reading: How to buy products from 1688 (complete guide)

FURTHER READING

• How To Buy From Alibaba? (Step By Step Guide)
• Can Foreigners Buy From Taobao? How to Use Taobao Agent?
• How Can Foreigners Buy From 1688.com? (No Agent）
• 7 Best China Wholesale Websites (Clothing, Bags, Shoes…)

How to Use Alibaba? -Step by Step Guide

You have already understood the advantages and risks of sourcing from Alibaba.com. Below we will show you the complete steps of sourcing from Alibaba.

Create Alibaba account

To use Alibaba, you must first register an account. It’s very simple and can be done in two minutes.

1. Enter Alibaba.com.

2. Click on My Alibaba.

3. Click Register for free or use your Google or Facebook account to register.

4. Enter all the information

Notes:

• Choose your country
• Select the international code corresponding to the phone number according to your country/region
• When creating a website account choose “I agree to abide by the Alibaba membership agreement”, otherwise the registration will not succeed.

Now you have become a member of Alibaba. You can start looking for quality suppliers!

Alibaba Find a supplier

Using Alibaba to search suppliers should be easy for you. After all, it is just a tool. You only need to click some buttons. So we hope to share more tips to help you find the right supplier, not just one step.

The following are the 4 main ways to find suppliers in Alibaba. You can use the method that is more suitable for you according to your actual situation.

Alibaba Keyword search

Using keyword search, you can view all product and supplier information under this keyword, including product pictures, product names, supplier names, addresses, price ranges, and so on.

You can initially select suppliers based on the techniques we mentioned below, and then initiate an inquiry for suitable suppliers.

In this case, we sent a total of 20 queries to the wireless charger supplier. Methods as below:

Step 1: Go to https://www.alibaba.com/ and enter the product keywords to be searched.

What you need to pay attention to here is not to use a particularly broad keyword, otherwise there will be a lot of products searched out, and it may not be what you want.

For example, if you enter “phone case” in the search box, you can see a total of 155088 products. You must be at a loss, because you can’t choose from thousands of products, it’s dazzling, and you can’t choose.

(Alibaba updated the page after May 2021，the number of products will not be displayed now. )

Therefore, the first thing you should do is to narrow the scope of suppliers by finding product keywords that are more in line with your needs.

For example, liquid silicone phone cases, painted phone cases instead of phone cases. In short, the more accurate the keywords, the better.

At this point, you have narrowed your product selection by approximately 20 times.

Step 2: Click on the product you are interested in or select a supplier, and learn more product information and supplier information by browsing the product details page.

We recommend that you put product information first. There are many tips on the Internet to teach you to select suppliers, but don’t forget that the basis for selecting suppliers is that the supplier can provide the products you want.

So, first check whether this product meets your needs, and then check the supplier.

Step 3: Click the button on the Alibaba website to contact the supplier. You can easily contact suppliers and send them inquiries by clicking the “Contact Supplier” button.

You can directly use Alibaba’s inquiry template, but we recommend that you edit your own inquiry template, which will help you get a high-quality quotation.

Inquiry is the first step to get in touch with the supplier. It is also a skill to get the accurate quotation from the supplier quickly. When the supplier receives your inquiry, a dedicated salesperson will contact you.

Before sending a quotation, please make sure you have all the information required by the supplier, otherwise it may take 3 days or more to get an accurate quotation from the supplier.

In order to speed up your chances of obtaining accurate quotations, here are 2 tempates for your reference.

Inquiry template

Template 1:

Subject: “I am interested in (product name)” or “Inquiry for (product name)”

To SourcingArts,

I am Alice, the purchasing manager of SourcingArts Limited, which is headquartered in California, USA. I sell liquid silicone phone cases online and I am currently looking for new suppliers.

Please provide the prices, lead time of the following products:

Item 1: Wireless TWS earphones 3000 units(White0. With blister + color box pakage. The picture is attached.

Item 2: Wireless TWS earphones 2000 units(Black). With blister + color box pakage. The picture is attached.

If you can send more information and your product catalog, then we are very grateful.

Thank you,

Alice

SourcingArts Ltd

Template 2:

Subject: “I am interested in (product name)” or “Inquiry for (product name)”

Dear Sir Or Madam,

My name is [name]. I run Amazon Japan. My main products are…

I have a new product plan and I saw it on your website. I would like to inquire the following details about your products:

• Your product catalog
• Is it possible to put our logo on your product or product package?
• If so, what is the MOQ and the cost?
• My logo is attached. If possible, I would like you to send the entire package of information we requested into one file.

Thank you

I look forward to receiving the message.

[Your name] [Company Name]

Step 4: Collect and compare quotes from different suppliers

Please note that the price comparison is based on the same product of the same quality. Make sure that all suppliers clearly understand your needs for the product, otherwise the price will be meaningless.

To be on the safe side, we recommend that you eliminate the supplier with the highest price 1/3. Some suppliers with incomplete quotation information should also be eliminated.

For example, the supplier only responds to your price without mentioning any other terms. This shows that this supplier does not value your offer.

Generally speaking, a qualified supplier will not only answer your questions, but also give you some other insights about the product.

And those who don’t care at the quotation stage, cooperating with them may bring more troubles.

Step 5: Choose 2-3 good suppliers for further communication.

At this step, the important thing for you is to ask for samples to test the quality of the product. If you hesitate between two suppliers or say that you have found a suitable supplier but you are still not at ease, then the sample is the best solution.

No matter how high-quality the supplier describes itself, what you ultimately need is a high-quality product.

Although you may need to pay the sample fee, this is to avoid greater losses after you place the order.

In fact, the cost of samples is usually not expensive, but each supplier sending you samples individually may result in high shipping costs.

The best solution is let all suppliers send samples to the same place, and then ship them together, so you can save half of the shipping cost.

Browse product categories

If you have no specific requirements for the products you want to operate, you only have a general idea. Then you can search by category to get suppliers, or find inspiration for some products.

On the Alibaba homepage, you can see all product categories.

And there will be many sub-categories under each category.

If your product is a Bluetooth headset, you can choose the category All catagories-Consumer electronics-earphones &headphones, and you can see all the headsets on Alibaba.

Like direct search, if you find a product you are interested in, you can click on the product image to view the product details.

If you are still vague about the products you want to purchase, it is a good choice to browse the products under each category. Thousands of products will bring you a lot of new inspiration.

Alibaba Search by image

This is a new feature of Alibaba, which is very convenient for buyers.

In other words, if you see a product that you are interested in on other websites or social media platforms, you can search for the same or similar products in Alibaba through product pictures, and then find the supplier of this product.

The operation steps are very simple. For example, I saw this desk lamp with wireless charger on Amazon and I want to source it from China.

Click to upload the picture, and the same product was found immediately, and then I only need to contact the supplier.

When you already have product images, image search is a better choice than keyword search.

The speed of searching images is very fast, and you can find almost all similar products on Alibaba in just a few seconds.

The accuracy of keyword search is not so high. Even if you use very precise keywords, there are at least thousands of product styles found.

Because the product styles on Alibaba are so rich, you have to spend a lot of time browsing them. And it is basically impossible to find all the suppliers of a product on Alibaba through keywords, which means you have to browse tens of thousands of products.

Alibaba RFQ

The above three methods are for you to actively find and contact suppliers, and RFQ is a way for suppliers to contact you proactively.

You only need to draft your purchasing requirements in the buyer’s backend and publish them to the RFQ market, waiting for the supplier’s quotation. Specific steps are as follows:

Step 1: enter the Alibaba RFQ homepage: https://rfq.alibaba.com/

Step 2: Fill in the RFQ form

Please pay attention to some techniques for filling in purchasing requirements. You can use these techniques to make your RFQ more attractive to suppliers, thereby attracting higher-quality suppliers.

Because Alibaba imposes a limit on the number of RFQs that suppliers process every day, high-quality suppliers usually use opportunities for more valuable buyers.

1. Specify your product name or category, specification and quantity.

Accurate product names or categories make it easier for suppliers to find your purchasing needs in the market.

Alibaba’s suppliers also have different MOQs, ranging from 1 to several thousand. If the quantity is too small, then the supplier will have no incentive to send a quote.

2. Upload the photo of the product you are looking for.

With product photos, suppliers can more easily check whether they own or produce the same products you need. If you do not have the actual picture of the product, the design draft is also possible.

3. Main content: This is the most important part of the supplier’s analysis of your purchasing needs and evaluation of this RFQ.

You can follow the template below, which consists of 5 paragraphs, each of which points out a key point.

① Introduce yourself in the first paragraph and specify the product to be purchased in the clearest way. You can mention your company name here. Suppliers usually investigate your identity, and they are more willing to spend time and experience on potential customers.

② Specify the purchase quantity. If it is a trial order, it can also indicate that the quantity will increase in the future.

③ Point out the packaging method. By discussing custom packaging, you can also exclude suppliers who cannot provide custom packaging.

④ Ask about the freight. If you prove to the supplier that you have your own freight forwarder and you are a professional buyer, the supplier may not deceive you into paying the freight.

⑤ Explain the address in detail.

If you want your supplier to help ship products to a specific location in your country/region, the supplier’s freight forwarder will need a detailed address to calculate the exact shipping cost.

In short, quantity, packaging and transportation costs are all important aspects, so the supplier can provide you with a reliable quotation.

In addition to this information, you can also ask other questions before submitting the RFQ. In this way, you can also easily find professional suppliers by checking the answers to your questions.

Step 3: Click the submit button to submit the RFQ.

There are free and paid RFQ services, and you can choose the type that best suits your current purchasing needs.

Step 4: Check and compare quotes in the message center of the RFQ information center.

You can enter “My Alibaba” and click “Buying Leads” to enter “My RFQ”. All quotation information you receive is a form. Very easy to view and compare quotes to evaluate all quotes.

Step 5: Choose 2-3 good suppliers for further communication.

After checking the quotation and supplier information, if you are satisfied with 2-3 suppliers, you can directly contact them for further price negotiation, or you can start collecting samples to check the quality.

As mentioned above, if these prices are unfortunately unacceptable, you can start another round of RFQ, or you can try to send the inquiry directly on Alibaba.

It should be noted that unless the supplier can provide what you want, the price does not mean much.

Disadvantages of RFQ

• With the RFQ service, you will not be able to select the supplier type before quoting.

Usually trading companies know marketing better than manufacturers. Therefore, trading companies are more likely to find your purchasing needs faster.

With the RFQ service, the choice is in the hands of the supplier, not you. So you cannot choose the type of supplier you like, and you may receive more quotations from trading companies.

When searching directly, you can clearly see all the information of each supplier, including address, product category, factory video, company’s manufacturing business, etc.

Before contacting the supplier, you fully understand the type of supplier and you can choose whether to continue. You have more choices.

• It is difficult for you to determine whether the quotation is the best cost.

Usually only 10 quotations can be obtained at one RFQ. Although you have many inquiries, there are no suppliers to choose from.

Buyers always want to find the lowest price on a product, so only 10 quotations are usually not enough to meet buyers’ needs.

While using the RFQ service, you still need to combine it with direct search so that you can find the cheapest supplier at the lowest product price.

If you want to get more than 10 quotations, this is a technique that many buyers will use. That is include your email address when filling out the RFQ form.

When your RFQ is no longer accepted, the supplier can still see your purchase requirements. They can then contact you at the email address in your purchasing needs.

In view of the advantages and disadvantages of the RFQ service, you need to analyze whether you want to apply for the RFQ service before clicking the “Submit” button.

Our suggestion is that if you value supplier quality rather than price, you can try to quickly contact multiple suppliers through the RFQ service, and then select 2-3 excellent suppliers for further evaluation.

However, if you want to get the most competitive price at the beginning, it is recommended that you search for suppliers directly on Alibaba.

Screen Alibaba suppliers

We mentioned earlier that finding suppliers is easy. The difficult part is choosing the right supplier and avoiding scammers and other middlemen.

Below we take Alibaba as an example to show you how to quickly screen Alibaba suppliers, how to find lower prices, how to avoid encountering scammers, and how to buy a small amount of products from Alibaba.

Be sure to watch the entire blog, otherwise you will miss the opportunity to find the best supplier. Okay, let’s get to the topic.

Supplier location

Do not underestimate the location of the supplier, the location of the supplier determines whether it is a real manufacturer and its price level.

How to find the real address of the supplier on Alibaba? 

First, you need to enter the supplier’s homepage, and then click the blue triangle symbol in the upper left corner, you can see the company’s basic information, including business license. The business license is in Chinese, please translate it.

Checklist：

① 90% of companies whose business license address is room***,…community or…building are trading companies.

The actual factory address is usually in the suburbs, and the address is usually an industrial park without a house number.

How a factory in a certain room of the building?

In addition, being able to understand the urban and suburban areas of each city allows you to make more accurate judgments.

For example, Shenzhen factories are generally located in remote suburbs, such as Baoan District, Longgang District, Guangming District, Pingshan District, etc. Trading company addresses are generally in urban areas, such as Futian District, Luohu District, Nanshan District, etc.

Because the factory rents in the suburbs are cheaper than those in the urban areas, the office and production locations are generally together.

Conversely, if the office address and the production address are not together, it is mostly a trading company.

You can even use Google Maps to view the real environment around the supplier, whether it is a city or a suburb, at a glance. You only need to enter the Chinese address of the supplier to navigate to its location.

② Is the address on the business license consistent with the contact address?

If not, trading company!

If you see several different addresses on one website, so do trading companies.

Check the factory video and pictures on the website, whether the factory name on the video or picture is the same as the name on the business license, if not, it is a trading company.

But don’t completely trust factory pictures and videos, they are easy to copy.

③ Each product has a corresponding industrial cluster in China.

An industry cluster is a geographical concentration of companies and institutions that are related to each other in a specific location.

This means that you will find many factories in the same industry in a specific location. There are many different industrial clusters in China.

What are the advantages of working with suppliers in the industrial cluster?

• Industrial clusters are relatively rich in labor, and factories can save a lot of labor costs. Therefore, the production cost of the product is lower.
• And workers in this field are good at producing that specific product. Make product production easier. Most likely, it has also improved the quality of its products.
• In addition, there will be many manufacturers in the same industry in the same area, and there will be price competition among them, which allows you to have more choices and get more competitive quotations.
• The product infrastructure is good. Because there are many suppliers in the region that provide parts for the supplier’s final product, this helps factories to adjust their production cycles more flexibly. Usually also speeds up their production speed.
• With more advanced equipment, the industrial belt supplier’s machinery and equipment are definitely at the forefront of the industry, and can better meet your product style and process requirements.

So make sure you are cooperating with suppliers located in industrial clusters, otherwise your prices may not be competitive.

And the most important thing is that most of the suppliers whose addresses are not in the industrial cluster are traders.

For example, if you find a data cable supplier in Shanghai on Alibaba, the supplier is likely to be a trader rather than a manufacturer. Because the data cable industrial cluster is in Shenzhen, there is no advantage in manufacturing data cables in Shanghai.

Of course, there are some real manufacturers. But even if they produce products in their own regions, they may not be so attractive in terms of prices, have less experience in producing products, and their raw material suppliers are also far away. This ultimately reduces their price competitiveness.

So what you have to understand is the real address of the supplier and the distribution of China’s industrial clusters.

But remember that not all suppliers in industrial clusters are manufacturers, and there are also a large number of traders in industrial clusters.

For example, there are at least tens of thousands of trading companies in Shenzhen that specialize in exporting consumer electronic products.

So in addition, you also need to know how to analyze whether the supplier is a manufacturer or a trader.

Alibaba Supplier type

Suppliers on Alibaba are mainly divided into two types, gold supplier & verified supplier. To understand the types of suppliers of Alibaba, you must first understand the conditions for becoming an Alibaba supplier.

How to become a supplier of Alibaba?

As mentioned earlier, it is very simple to become a supplier of Alibaba in the first few years when Alibaba.com was established.

There are almost no thresholds, and the government will also give certain economic subsidies. There were no P4P advertisements in Alibaba back then, and there was no advertising fee.

However, becoming Alibaba now requires a certain amount of financial investment, and due to fierce competition, suppliers must pay a lot of advertising fees to get traffic.

Different from Amazon’s model of focusing on recommending less advertising, Alibaba attaches great importance to advertising, and advertising fees are also one of Alibaba’s main sources of income.

Conditions: It must be an enterprise operating entity products registered with the Mainland Industrial and Commercial Bureau. (Both production and trade types are available). And will be charged by Alibaba.

Cost: There are two types of members on Alibab.com. gold supplier & verified supplier.

• Gold supplier is the basic member of Alibaba, and the cost is RMB 29,800 per year.
• Verified is a higher membership type than gold supplier, and the cost is RMB 80,000 per year.

In addition, if the supplier need more additional traffic, they need to purchase traffic promotion products.

There are 3 types of traffic products on Alibaba.com:

1. Top sponsored listing

After buying the top sponsored listing, the product will rank first in the year, with a unique crown logo.

The cost ranges from several thousand to several hundred thousand, depending on the popularity of the keyword.

2. P4P (Pay For Performance)

Behind the top sponsored listing, suppliers can bid for the top 5 positions of the keyword, pay-per-click. There are several levels, such as 30,000 and 50,000 RMB.

3. Product Showcase

Product Showcase is the main product of the supplier, and it will have more exposure opportunities than other products of the supplier.

Product Showcase are those products you see after entering the supplier homepage. Usually, showcase products are behind the top sponsored listings and P4P products.

To understand the types of suppliers of Alibaba, let’s start with understanding Alibaba’s various icons.

Gold supplier

The Gold Supplier is a paying member of Alibaba.

The explanation given by Alibaba is that the basic information of Gold Supplier, including the company’s business license and ownership status, contact information and factory/company address, has been inspected by A&V and on-site.

However, it did not conduct in-depth inspections of suppliers’ trading capabilities, production capabilities, and R&D capabilities. It can be understood that

Alibaba guarantees that the company of Gold Supplier is genuine and legal, but does not guarantee whether he is a factory.

As we mentioned above, the cost of gold supply is about 28,000 yuan per year, which is cheap for suppliers.

Actually. Gold Suppliers are the most basic members of Alibaba. It is so easy to become a Gold Supplier on Alibaba.

Next to the Gold Supplier icon, you can also see the age of the company. We prefer suppliers that have been established for more than 5 years because they are a clear sign of a mature company.

Their chance of becoming a liar is very slim. Fraudulent accounts simply won’t last that long, they will be caught sooner.

Verified supplier

The Verified Supplier icon indicates that the supplier has been verified through a third-party agent. Including the on-site verification of its basic information, trading capabilities, production capabilities, research and development capabilities, quality control capabilities, and after-sales service capabilities.

Alibaba’s official interpretation of Verified Suppliers: Verified suppliers refer to suppliers that the business types and company structures (such as trading companies, manufacturers, or both), company profiles, management systems, production capabilities, and product and process control have been certified. Evaluation, certification and/or inspection by an independent third-party organization through online and offline methods.

As we mentioned earlier, the Verified Supplier is an upgrade of the Gold Supplier. The cost is more than twice that of Gold Suppliers, about 80,000 yuan per year. However, becoming a Verified Supplier is not that difficult.

The annual fee of a verified supplier is equivalent to the annual salary of a Shenzhen worker, and the average salary in Shenzhen in 2020 is 7,825 yuan.

This is only a small expense for a company, and it is actually more expensive to purchase additional traffic products.

It should be noted that Alibaba’s verification results for Verified Suppliers are not so credible. It is not difficult for traders to pretend to be manufacturers, they can cooperate with cooperating factories.

Whether the supplier is a manufacturer or a trading company does not matter to Alibaba. They charge a fee anyway.

If they only allow real manufacturers to become Verified suppliers, they will lose a lot of revenue. After all, 80% of suppliers on Alibaba are traders.

In addition to the above two icons, you must have noticed that there is another icon in the supplier information, which is the supplier that supports Trade Assurance.

It is not a separate type of supplier, but only to show whether this supplier supports Trade Assurance.

As we mentioned before, Trade Assurance is Alibaba’s own platform for placing orders and managing payments. Buyers and suppliers make transactions through trade assurance orders, and Alibaba will provide buyers with several guarantees.

However, if you do not use Trade Assurance orders correctly, they will still have problems, especially if there are differences of opinion on the quality of the goods delivered.

In order to minimize the problem, you must be very specific about the order, write down all the item specifications in the order, comply with the payment deadline, etc.

The best way to protect interests is to trade with suppliers through Trade Assurance orders on Alibaba.

You can directly select Verified Suppliers and Trade Assurance filters under the supplier type drop-down menu on the search page.

Trade Assurance, Verified Supplier does not guarantee that the supplier is the manufacturer. It is not difficult for traders to pretend to be manufacturers.

But this at least shows that these suppliers are real, because “Trade Assurance, Verified Suppliers” require suppliers to pay for applications.

Alibaba Product types

In addition to supplier types, Alibaba also provides product type filtering. Includes 3 product types: Ready to Ship, Paid samples, Fast dispatch.

Ready to ship indicates that this product is in stock and can be shipped immediately without production after you pay.

This is equivalent to retail, similar to your shopping on Amazon. This is also a new model developed by Alibaba in response to market changes.

If you want to buy a small amount of products on Alibaba for testing, you can choose Ready to Ship to filter the products.

But you can’t customize your own private label. And when you choose Ready to ship to buy a small amount of goods, the price is usually more expensive, and you have to pay high shipping costs.

If you want to buy a small amount of products from Alibaba for your own use, then this is not a good choice. The cost of the product plus shipping costs may be similar to the retail price on Amazon, and you have to wait a long time.

But if you really want to purchase a small amount of products from a supplier to test the market and product quality, this is a good choice.

If you have long-term purchase ideas, please remember to ask the supplier whether the product is available for a long time before buying.

Because some Ready to Ship products may be slow sellers of the company, the supplier may not purchase the goods after clearing the inventory.

Paid samples are easy to understand, which means that you can usually pay to customize your samples, and basically all suppliers can provide paid samples. This is not particularly important.

Fast dispatch means that for “buy now” orders, the supplier is required to arrange the delivery within the agreed period after the buyer pays (no more than 7 days for delivery), otherwise the supplier will be required to pay compensation to the buyer (10% of the order amount) ).

This is similar to ready-to-ship products, which are for products that are already in stock or that can be produced within seven days. It’s just that fast dispatch has an extra guarantee of compensation.

In fact, for orders directly through Alibaba “buy now”, Alibaba will require suppliers to ship within one week.

In short, when you want to buy a small amount of products from Alibaba to test, you can usually choose “ready to ship” to find a suitable supplier.

Price range

It is worth noting that, unlike the B2C platform, the B2B platform usually does not display the specific product price but the price range of the product.

Because for bulk purchase orders, buyers usually have their own customized requirements for product appearance, specifications, packaging, etc., which causes price uncertainty.

And the number of orders will also affect the production cost of the product. You can only get the final quotation after telling the supplier your detailed requirements.

And even the price range may not be true, because many suppliers will deliberately write prices very low to attract customers’ attention.

When you make an inquiry, you will find that the final quotation of the product is not within the price range displayed by Alibaba.

This is a common method used by suppliers

Transaction Information

Next to the company profile, you can see product transaction information. Including product sales in a year, number of transactions, number of customers, customer’s country and other information.

Of course, the statistics here are Trade Assurance orders, not including offline private transactions between buyers and sellers.

So this cannot be the only criterion for judging product sales. But usually suppliers are more willing to do business with you through Trade Assurance orders on Alibaba because it helps to improve the ratings of their products.

The higher the transaction amount and the higher the supplier level, the more supplier rights and business opportunities will be obtained. This is also a way for Alibaba to increase customer stickiness.

Custom comment

On the product homepage, you can see customer ratings and comments on the product.

However, most product reviews are still relatively few. Buyers are not very familiar with this after-sales evaluation function.

Only a few people will take the initiative to evaluate when they receive the goods. Because Alibaba does not use customer reviews as the basis for evaluating suppliers, and customer reviews will not have a significant impact on product rankings, suppliers do not pay special attention to customer reviews.

Some suppliers will invite customers to comment, of course, this is usually when customers are satisfied. Generally speaking, there are fewer negative reviews of products.

You can check this item carefully, and be extra careful with badly reviewed products.

The above 6 points can help you eliminate some traders and basically all scammers.

To find the most suitable supplier for you, you need to refer to more information, including product details, product videos, product certifications, and so on.

These all need to be based on your specific requirements for the product.

How to negotiate with Chinese suppliers?

After finding a suitable supplier in Alibaba through the above methods, all you need to do is to negotiate.

This is the same as when you buy something in the market. After you have fancy a product, the next step is to bargain.

What makes global sourcing unique is that besides price, you have many other terms that need to be negotiated and that will affect your interests.

For example, delivery time, quality standards, trade terms, transportation methods, etc.

Negotiations with suppliers are not limited to purchasing from Alibaba. No matter which way you find suppliers from China, the negotiation is the same.

There is no fixed process for negotiation. We can only transmit some of the experience we have accumulated through practice to you, and at the same time tell you what the supplier might do from the supplier’s perspective.

Please refer to another article to see the techniques for negotiating with Chinese suppliers.

How to place an order and pay for an Alibaba supplier?

When you decide to work with a supplier to place an order, the question you may encounter is which way to pay the alibaba supplier?

Sending thousands or even tens of thousands of dollars to someone you may never know can be a terrible step.

Although Alibaba offers a variety of payment methods, it is very risky to choose casually when you do not understand their differences.

Below we will take you to understand the advantages and disadvantages of each payment method provided by Alibaba, and help you make the right choice when paying

Alibaba Payment Methods

Paypal

Paypal is very suitable for making small instant payments. PayPal is offered as a mobile application and is a great way to make low initial payments to potential suppliers while developing business relationships.

Advantages:

Money safe

Just like Alibaba’s Trade Assurance service, if you find that the product is unqualified or there are other problems (for example, you did not receive the product), you can also apply for a refund through the PayPal platform.

If you pass the evaluation, you will receive a Paypal refund. Although PayPal is focused on protecting buyers, there are still some risks.

Their protection policies are complex, especially for international transactions. If there is a dispute, it may take some time to file a claim, of course, you may not win.

We recommend that you note your order and product name when transferring money, which will help you to solve the problem when there is a dispute about the order.

Fast and easy

PayPal payments are received instantly, and the supplier can receive the payment immediately after you pay.

And for you, paying with PayPal only requires you to move your fingers. You can arrange payment anytime, anywhere, without time or location restrictions.

Disadvantages:

Handling fee is relatively high

Paypal charges a certain percentage of transfer fees and uses its own exchange rate to increase funds.

As a buyer, Paypal may be a simple and convenient payment method, but Chinese suppliers must pay high fees when transferring funds from Paypal to a Chinese bank account.

So PayPal only applies to sample orders and small orders. Basically, the supplier will not accept you to pay for large orders through PayPal.

Out of Alibaba

If you want to use Paypal, the order will be withdrawn from Alibaba. This means you can send money directly to the supplier without using Alibaba.

In this case, Alibaba will only be a platform for information exchange. Therefore, it will not provide protection services for your order.

Wire Transfer (T/T)

International wire transfer

Wire Transfer (T/T) means that the remitting bank, upon the application of the remitter, sends a Tested Cable /Telex or via SWIFT to the receiving bank of the foreign country, instructing it to pay a certain amount to the beneficiary. T/T is one of the most commonly used methods of remittance.

Advantages:

Safety

Although there is no built-in payment protection, banks usually perform some kind of identity checks on companies and those who have accounts, so it is considered a safer payment method than many other companies.

Disadvantages:

There are expensive international transfer/SWIFT fees

The business process of T/T is the remitter submits a wire transfer application and delivers the money to the remitting bank, and then the remitting bank sends a telegram or telex to the paying bank. The paying bank sends a wire transfer notice to the beneficiary, and the beneficiary goes to the bank to redeem the payment after receiving the notice, and the bank conducts the payment. After the payment is completed, the paying bank will issue a debit notice to the remitting bank, and the remitting bank will also send a telegraphic transfer receipt to the remitter.

So T/T are usually from one bank to another bank, so payment methods may involve sending and receiving bank fees, high SWIFT bank fees, and handling unfavorable foreign exchange markups.

Generally, the transaction fee is usually between 20 and 80 US dollars per transaction, depending on the payment amount and policy of the paying bank. You can negotiate with the supplier, and the supplier or others will share the transaction costs.

Low efficiency

The arrival time of the T/T is the most relevant issue. The time for each bank varies greatly, ranging from 3 working days to one week. Depending on the route of the remittance, it may take a while for the money to reach the supplier’s account.

The supplier usually arranges production only after receiving the deposit. This will affect the efficiency of the manufacturer.

Partial payment

Several ways of TT：

1.100% T/T in advance, which is rare, is riskier for the buyer. Usually used for small orders.

2.100% T/T before shipment (after finishing the order), which is riskier for suppliers. Suppliers will usually not accept this payment method unless you are a large customer like Wal-Mart and Amazon.

3.30% deposit, balance against B/L copy, which is the most common and the fairest way of payment.

Suppliers usually insist on requiring a deposit to reduce their risk. The usual practice is that the buyer pays a 30% deposit to lock the order when placing the order, and then pays 70% of the balance before shipment.

Don’t worry too much about the supplier’s non-delivery or the supplier providing substandard products.

Because usually the supplier’s production cost is 50%-70% of sales, a 30% deposit is not enough to cover the supplier’s production cost.

In order to prevent receiving unqualified products, your best practice is to hire an inspector to inspect the goods before delivery to ensure that the goods meet your requirements and then pay the remaining balance.

Partial payment means that you need to pay the handling fee twice.

Wire transfer between banks is one of the most common payment methods.

If you have done some due diligence on the supplier (for example, verifying that they are the legitimate supplier of the registered business before you pay), this method is best.

Generally speaking, T/T payment methods are more suitable for large orders.

Domestic Wire Transfer

In 2018, Alibaba introduced a new payment method, domestic wire transfer. In this way, you can transfer funds to a domestic receiving account using Alibaba.com’s remittance channel partners with local currency instead of wiring funds to an overseas bank.

Currently, it is available in the USA, Canada, Australia, The United Kingdom, most countries of Europe.

If you have a domestic TT account, there will be 2 accounts for you to choose from when you are ready to arrange payment.

There are mainly 3 features for domestic wire transfer,

1. Low transaction fee
2. Faster processing time
3. Lock the exchange rate for 7 days

The following chart shows the differences between domestic wire transfer and international wire transfer.

Western Union

Western Union is the world’s leading express remittance company with a history of 150 years so far.

Advantage:

Fast collection, within minutes to reach the account.

Disadvantages:

Limitations of big

At the moment, Western Union is only available to US buyers. Only payments of less than $2,500 can be processed.

High fees

Regarding the cost, the Western Union handling fee is for the payer’s account, and the payment fee varies by country/region. You can refer to the following table to find out the handling fee you need to pay.

Unsafe

It doesn’t really offer them any payment protection。

While Western Union is convenient for individuals who want to send money around the world on an emergency basis, most serious buyers avoid this payment method. It is also rare for legitimate suppliers to demand payment through Western Union.

Therefore, if you hear any potential suppliers asking for payment in this way, please be on your guard.

If this is the first order between you, payment terms are not recommended. Unless you are certain that the supplier is reliable, you may consider this approach.

Online transfer

Online Transfer is a convenient online payment method which is applicable to large payment amounts.

By cooperating with recognized third-party financial institutions such as Trustly, Ideal and Sofort, you can complete payments in local currencies at any time without having to set up a separate payment account.

Advantages：

Convenient and quick

Performed on PC or app at any time, 24/7 service. Processing time is Usually 1-2 business days

Transaction fee fixed

No matter how much you remit, the transaction fee is $5000.

Disadvantage:

Restrictive

Each transaction is limited to $300,000 (Sofort currently only supports transactions below $5,000)。 And this payment method is currently available only to Alibaba.com users in Europe.

For more instructions, please refer to Alibaba’s official guide: https://activity.alibaba.com/page/4be999bb.html?spm=a2700.wholesale.0.0.2ae0254eFI7Zfn

Credit card

This is a very fast method of payment, and the payee can receive the payment within 1-2 hours. But it sets a limit of $12,000 per transaction.

You’ll need to pay a transaction fee: 2.99% of the payment amount (up to $40 for MasterCard paid in US dollars in Asia Pacific and up to 3.5% for American Express payments).

You can accept Visa, MasterCard, Diners, Discover, JCB, American Express. It supports many different currencies: USD, AED, AUD, BRL, CAD, EUR, GBP, HKD, ILS, INR, JPY, KRW, MXN, MYR, PHP, PLN, RUB, SAR, SGD, THB, ZAR.

Disadvantages：

That’s because credit and debit card payments incur charges for the supplier, which they may pass on to you.

The risks are low for you as the buyer, but high for the supplier. Fraudulent buyers can lead to high losses fAlibaba Payment Methods – or the seller. Which makes cards an unpopular way of doing business among Chinese suppliers.

Pay Later

Alibaba Pay Later is a new payment method on Alibaba, which is only available for buyers in the USA currently. When you use the method, the third-party financing institution will help you pay. Then you repay the loan.

But if you want to apply for the loan, you need to be in the Alibaba business for at least one year. Once approved, you can access up to a 6-month loan of $150,000 on Alibaba. The minimum rate is 1.25% for the first month.

The loan limit you can get will be given by Kabbage Funding according to your business performance.

In addition, there are no prepayment penalties, so you can prepay a loan at any time. There are no order transactions, origination, annual, or maintenance fees. ( The service currently unavailable)

Boleto

Boleto is the most commonly used payment method in Brazil. And users can complete the payment through online banking or offline banking agencies.

But the monthly payment amount should be within $3,000, the transaction fee is 1.5% of the payment amount.

What is the safest payment methods on Alibaba?

Choosing Alibaba Trade Assurance Service is the safest way to pay Alibaba suppliers.

If there is a problem with the product, you can apply the Alibaba Trade Assurance dispute, and Alibaba will mediate and resolve it.

In addition, Trade Assurance supports multiple payment methods, including credit card, T/T (bank transfer), online bank payment, online transfer, Western Union, PayLater and Boleto.

Some suppliers may refuse to trade with you through Trade Assurance for reasons of high handling fees and complicated procedures.

At this time, you need to pay attention. Usually, if the supplier does not have confidence in their products, they will refuse to trade through trade assurance.

They may exchange with you through some other conditions, for example, it is recommended that you use an inspection service to act as a Trade Assurance.

But they may go back after you pay, after all, you have already paid and there are no conditions that can threaten the supplier.

Therefore, we strongly recommend that you trade with suppliers through Alibaba Trade Assurance. Although Alibaba trade is not 100% safe, it can at least help you avoid 80% of the risks.

In addition, the most important thing is to choose a reliable supplier. Before placing an order, you need to comprehensively evaluate the supplier from many aspects.

Final thoughts

Buying from Alibaba is easy, but the difficulty is choosing reliable suppliers. Therefore, before placing an order, you need to comprehensively evaluate the supplier from many aspects.

If you want to find a China sourcing agent, you can contact us, With SourcingArts, You Don’t Have to Be an Sourcing Pro to Price Better And Genuine Manufacturer From China

Give me a shout in the comments below or on Facebook Group if you have any questions!