What is Alibaba?
Alibaba.com is a B2B (business-to-business) online platform allowing Chinese suppliers and international buyers to meet together. Alibaba websites account for over 60% of the parcels delivered in China and is a search engine for products made in China.
The company was founded by a Chinese entrepreneur called Jack Ma. Ma now serves as CEO of Alibaba Group. Alibaba, a China-based business-to-business marketplace website, currently serves more than 79 million suppliers and buyers from more than 240 countries.
Alibaba Group is a privately owned Hangzhou-based group of Internet-based e-commerce businesses including business-to-business online web portals, online retail and payment services, a shopping search engine and data-centric cloud computing services. In 2012, two of Alibaba’s portals together handled 1.1 trillion Yuan ($170 billion) in sales, more than competitors’ eBay and Amazon.com combined. The company primarily operates in the People’s Republic of China, and in March 2013 was estimated by The Economist magazine to have a valuation between $55 billion to more than $120 billion.
Alibaba.com as a leading B2B e-commerce website in the world is an open source website for suppliers to use it to reach customers around the world. Some of the services provided by the platform can be accessed for free while other services demand premier membership.
Due to rapid development of China economy accelerated by industrialization, nowadays there are about thousands of Chinese suppliers available on Alibaba.com. Therefore, a wide range of suppliers to choose from is available. However it can be very hard to distinguish between legitimate suppliers and illegal suppliers (or scams) on Alibaba.com.
Some suppliers on Alibaba mostly trading companies are just there to represent other companies especially manufacturers and are not owned by the actual supplier, on top of that, some tends to act as other companies and get a kick from them when they bring in customers. Moreover other companies out there are not real companies are just names only and non-existent. It’s not easy for Alibaba group to manage all the suppliers on their website because those companies have no premier membership with Alibaba.
How can you avoid being cheated by suppliers on Alibaba website?
There are so many ways to that; the followings are some of ways that importers can consider:
First, hire a sourcing agent in China to work for you; a sourcing company like TEW will help you to find a right manufacturer according to your budget and requirements. A sourcing agent not only helps you to save time but also money that you would spend on hotels and flight tickets.A sourcing agent can assist you with market research, quality control, pre-shipment inspection, shipping documents preparation and sending these documents to you.
A sourcing agent will also help you to eliminate communication barriers with Chinese manufacturers. So having a reliable sourcing agent to work for you in China is a good way to go if you want to avoid illegal suppliers and get products of satisfying quality.
Second, this way is good for importers with business experience. In this case a buyer himself or herself acts as sourcing agent. Being in a foreign country, this will take you uncountable internet hours to search for the Chinese suppliers.
I assume that you have enough experience to find the right supplier, once you find the supplier then you can negotiate prices, quality, and packaging as well as delivery terms by yourself.
After that’s done, you will have to fly to China and visit the Chinese supplier before the production of your products commence. In case you cannot travel to China, you will need to involve a sourcing agent or a quality control agent to ensure what you have negotiated with the supplier get done accordingly. You can also send the money to your agent in China to pay the Chinese supplier; this is also a good way to avoid payment scam with illegal suppliers on Alibaba.com.
In fact, TEW deals with some of its customers in a similar way especially those who can source themselves but have no time to travel to China.
In the case you cannot travel to China or hire a quality control agent, you are probably going to do regret. Because most Chinese suppliers know very well that products that are exported from China to other countries can’t be returned back to their country so some Chinese suppliers will take advantage of that and supply you with low-quality products simply because they want to save money by reducing your specifications or standards.
Third, this method works well for the buyers who dedicate all their time on business and know well how to interact with Chinese supplier directly without involving a sourcing agent. It’s also very important to know some common Chinese business tips, which will make you to get along well with Chinese suppliers. In this option, you do all things yourself, that is, sourcing, price negotiation, product quality checking, and other business matters depending on you.
This will cost you lots of money, because you have to stay in China a couple of months, visiting the factory, checking the production and so on. Most buyers usually don’t choose this option because of too much cost that can be incurred.
Hope this write-up will be useful. Any comments are welcomed! For more information about importing from China, click here and leave us a message.