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Alibaba: IMer's New Gateway to China ... or Great Wall

by The Niche Man
33 replies
I've had many clients ask me about Alibaba the mega giant company that is said to be bigger than Amazon and Ebay combined.

Many small to medium sized internet marketers are salivating at the possibilities of having access to the billion plus Chinese market plus 240 countries - through Alibaba (or Taobao, its shopping site)

Has anyone done business with Alibaba recently. I'm starting to see more ads, products and income programs associated with it.

Any opinions, pros or cons concerning Alibaba?
#alibaba #china #gateway #great #imer #wall
  • Profile picture of the author MikeAmbrosio
    Originally Posted by The Niche Man View Post

    I've had many clients ask me about Alibaba the mega giant company that is said to be bigger than Amazon and Ebay combined.

    Many small to medium sized internet marketers are salivating at the possibilities of having access to the billion plus Chinese market plus 240 countries - through Alibaba (or Taobao, its shopping site)

    Has anyone done business with Alibaba recently. I'm starting to see more ads, products and income programs associated with it.

    Any opinions, pros or cons concerning Alibaba?
    It's been a lot of years since I was on the Alibaba site, but we've known about it since probably 2004 or so. Not sure about these days, but back then you had to buy things in "bulk". It was popular for Ebay sellers for a while.

    Like I said, not sure how it is these days, but it was a goldmine back then.
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  • Profile picture of the author valdorion
    I buy stuff on Taobao sometimes using my Alipay account. To be honest if you want to get into the Chinese market you need to speak Chinese as barely anyone there speaks English. I would recommend getting a Alipay account as a first step as most Chinese use it for online payments (>80%) and on many Alibaba sites it is the only accepted form of payment anyway (to receive your money).
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  • Profile picture of the author Chris Worner
    Without actually going to China and visiting the manufacturers facilities and observing how they operate, what their quality control is like etc. You are crap shooting and opening yourself up to getting ripped off.

    -Chris
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    • Profile picture of the author agmccall
      They have been around for quite a while and you can find some great deals, but you need to proceed with caution and spend some time investigating any company you want to do business with.

      Better sites are hktdc.com and made-in-china.com

      al
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    • Profile picture of the author The Niche Man
      Originally Posted by Chris Worner View Post

      Without actually going to China and visiting the manufacturers facilities and observing how they operate, what their quality control is like etc. You are crap shooting and opening yourself up to getting ripped off.

      -Chris
      That's a good point. But I heard they have an escrow account, where an escrow company hold the funds until the product is delivered and signed off by the recipient. That's what seems appealing to me, if its actually true. But vetting the seller is still wise even with escrow account protection.
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    • Profile picture of the author Floyd Fisher
      Originally Posted by Chris Worner View Post

      Without actually going to China and visiting the manufacturers facilities and observing how they operate, what their quality control is like etc. You are crap shooting and opening yourself up to getting ripped off.

      -Chris
      Alibaba doesn't just have Chinese manufacturers there.

      I was doing some research for a project I was kicking around, and used Alibaba to find a german coffee company.

      Just one of the many amazing uses for that site.
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    • Profile picture of the author RyanJohnson1
      Originally Posted by Chris Worner View Post

      Without actually going to China and visiting the manufacturers facilities and observing how they operate, what their quality control is like etc. You are crap shooting and opening yourself up to getting ripped off.

      -Chris
      totally offbase. Don't take advice from people who haven't done it.

      the thing to do is most of the bigger companies send their reps to trade shows in the US you can meet their reps and actually buy products in person to establish your relationships with manufactures

      or secondly you can make sure you have th manufacturers send you sample products before you actually make a sizeable order.

      hope that helps.

      and as long as you pay with PayPal or your credit card you can always get some type of resolution if you ever did not receive your products.
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  • Profile picture of the author jemacb
    I personally have not dealt with Alibaba on a business level. But I would suspect that they (and the original owner) must have done something right in order to command such 'respect' from investors with their recent listing on the stock exchange.

    From an off-line perspective, my own brick & mortar business in the past did purchase product from China and continue to do so. Yes one has to be very careful with ensuring quality control. But once you iron that out, you can get really attractive deals from there.

    I think that this strategy applies to any procurement from any vendor in any country quite frankly.
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    • Profile picture of the author tziahs
      Alibaba is quite astonishing, it really shows the vastness of the Chinese economy. Unfortunately, it also shows the shoddiness of their products. Of course, not all!
      But you are looking at a high chance of being ripped off, especially if you don't speak Chinese fluently.
      I know friends who did try to "do business" with alibaba manufacturers.
      example one: one guy bought 300 surveillance cameras for the EU market (220 voltage) and the Chinese manufacturer sent them for the American market (110 voltage). Of course, there are converters, but they cost money
      example two: another friend tried to buy granite for sculptures and other construction work. Their advertised prices were 10x smaller than in my country, but slabs of granite arrived broken and chipped. What's more, they weren't even granite, so no sculpture work either.

      My advice:
      Always watch out and always try to visit the manufacturer before sealing the deal!!!
      ps. - there are companies that can act as middlemen for you, some are good.
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  • Profile picture of the author valdorion
    I think most people here don't realise that Alibaba is much more than the Alibaba.com website. Most of the companies business comes from Taobao, T-mall and Alipay. If you want to enter the Chinese market those are the websites you need to get familiar with.
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    • Profile picture of the author discrat
      I read a small article about the Founder Jo Ma in Time recently.

      He started Alibaba out of his small apartment in 1999.

      Ma states that anyone who has reached the age of 35 years old and is still struggling financially then...well they are pretty much losers and have no excuse for it.

      I think there is some truth to that. But there are people who have had foreseeable events happen to them later in Life beyond their control causing them to be in poverty


      - Robert Andrew
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  • Profile picture of the author benrick
    alibaba is good for physical products than
    digital ones..
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  • Profile picture of the author PLR365
    Originally Posted by The Niche Man View Post

    I've had many clients ask me about Alibaba the mega giant company that is said to be bigger than Amazon and Ebay combined.

    Many small to medium sized internet marketers are salivating at the possibilities of having access to the billion plus Chinese market plus 240 countries - through Alibaba (or Taobao, its shopping site)

    Has anyone done business with Alibaba recently. I'm starting to see more ads, products and income programs associated with it.

    Any opinions, pros or cons concerning Alibaba?
    Alibaba.com was instrumental in allowing us to source goods and suppliers before venturing abroad. I've been to China on numerous occasions to meet with manufacturers that we found through Alibaba. Based on my own personal experiences, I highly recommend the website. If you are looking for manufacturers on Alibaba search for companies that are listed as Gold Suppliers, they are normally vetted and certified as genuine companies, NOT middlemen.
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    • Profile picture of the author DWolfe
      Originally Posted by PLR365 View Post

      If you are looking for manufacturers on Alibaba search for companies that are listed as Gold Suppliers, they are normally vetted and certified as genuine companies, NOT middlemen.
      I would be careful with that last statement.. It only costs a few hundred $$'s when they are promoting to join as a Gold Supplier. Some cash on hand and you are in business. I would take a look at this thread in the E-commerce section. There are a ton of very similar threads like this. http://www.warriorforum.com/ecommerc...ibaba-com.html

      With the middlemen in so many different areas it is a tough market place and due diligence is required !
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    • Profile picture of the author Importexport
      Originally Posted by PLR365 View Post

      Alibaba.com was instrumental in allowing us to source goods and suppliers before venturing abroad. I've been to China on numerous occasions to meet with manufacturers that we found through Alibaba. Based on my own personal experiences, I highly recommend the website. If you are looking for manufacturers on Alibaba search for companies that are listed as Gold Suppliers, they are normally vetted and certified as genuine companies, NOT middlemen.
      There is a lot of misinformation in this thread relating to Alibaba but I have chosen to elaborate on this one first because it is a total myth.

      The verification process on Alibaba is designed for one purpose only -- to convince buyers that the supplier is safe to deal with. Here's how it works:

      Verified Suppliers. These suppliers actually exist! That is what the verification process proves. Their premises may be a rent-by-the-day office, and they may be registered as a business entity, but the "onsite inspection" carried out by Alibaba is cursory at best and I would never suggest that any of my students should rely on it.

      Gold Suppliers. These suppliers actually exist and they have a few hundred dollars to spend to get a Gold badge. Alibaba state (to vendors) that the Gold Supplier status draws more buyers because they believe it shows that the supplier is trustworthy.

      How do I know? I am registered as a vendor on Alibaba, although I don't sell anything, and I get all the bulletins that the vendors all get. There has been a massive increase in the number of Gold Suppliers since Alibaba began discounting the fee to buy the Gold trustworthy status badge down to $299.

      I generally advise my students against sourcing through Alibaba, or any of the popular B2B sites for that matter, but there is one vendor category on Alibaba that I believe is safe to buy from.

      If a vendor has a red tick in a blue circle, they have been properly assessed by a reputable independent company (usually TUV Rhineland) and you can download the full report. It may run to 9 or 10 pages, but it is worth reading right though. For one thing, if they really are manufacturers, which most claiming to be are not, the report will confirm it.

      Finally, most suppliers listed on Alibaba are middlemen, very few are real manufacturers.
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      • Profile picture of the author PLR365
        Originally Posted by Importexport View Post


        I generally advise my students against sourcing through Alibaba, or any of the popular B2B sites for that matter, but there is one vendor category on Alibaba that I believe is safe to buy from.

        If a vendor has a red tick in a blue circle, they have been properly assessed by a reputable independent company (usually TUV Rhineland) and you can download the full report. It may run to 9 or 10 pages, but it is worth reading right though. For one thing, if they really are manufacturers, which most claiming to be are not, the report will confirm it.

        Finally, most suppliers listed on Alibaba are middlemen, very few are real manufacturers.
        Thanks for elaborating further, you've offered some sound advise. Apart from the obvious drawbacks (middlemen and shady traders) I don't understand why you advise your students against sourcing through Alibaba, do you care to share?
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        • Profile picture of the author Importexport
          Originally Posted by PLR365 View Post

          Thanks for elaborating further, you've offered some sound advise. Apart from the obvious drawbacks (middlemen and shady traders) I don't understand why you advise your students against sourcing through Alibaba, do you care to share?
          The main reason is that it is extremely difficult to find genuine manufacturers there. There are places I recommend to my students where they can find genuine manufacturers without the hassle.

          Profit potential is the main reason for wanting to avoid wholesalers, but MOQ is another. Traders and wholesalers are much more inflexible than manufacturers in relation to the big MOQs that they quote. I will explain how many wholesalers work:

          Wholesalers theoretically carry inventory, but in practice that is often not the case.

          Many are opportunists who identify popular products and advertise them while rarely having inventory. They will often do so without any formal agreement with a manufacturer. After obtaining an order and deposit from you they then search for a manufacturer who will sell to them at a good price.

          This partly explains why they will not reduce the big MOQs that they specify. Firstly they want to make as much profit as possible in one sale, because they know their chances of repeat orders are slim. Secondly, the big numbers make it easier to persuade a manufacturer to supply them. If they can't do that, they will have to refund your deposit. This is the reason for the large number of orders cancelled by suppliers after a deposit is paid. Refunds can take a long time.

          They use illustrations from a manufacturer's website or printed catalog. If they send out a printed catalog when requested it may have the supplier's contact details cut off the page, or obscured with a label carrying the trader's name.
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  • Profile picture of the author cyberzolo
    Alibaba sells counterfeit goods, you have to be careful as to what you buy on that site.
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  • Profile picture of the author mrrightme
    If you want to sell products to China, don't sell them on alibaba.com because we don't shop on it, you should sell your products on taobao.com , in fact, alibaba.com is built for Chinese to sell things to the world.
    If you need help about importing from China ,you can pm me.
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  • Profile picture of the author Importexport
    Originally Posted by The Niche Man View Post

    I've had many clients ask me about Alibaba the mega giant company that is said to be bigger than Amazon and Ebay combined.

    Many small to medium sized internet marketers are salivating at the possibilities of having access to the billion plus Chinese market plus 240 countries - through Alibaba (or Taobao, its shopping site)

    Has anyone done business with Alibaba recently. I'm starting to see more ads, products and income programs associated with it.

    Any opinions, pros or cons concerning Alibaba?
    For westerners wanting to sell to Chinese consumers Alibaba is not relevant. Alibaba is a site largely occupied by Chinese vendors falsely claiming to be manufacturers, but it also has a lot of suppliers from other places, most notably India, Taiwan and the USA.

    Their English language retail site Aliexpress has been accessible to sellers from all over the world for years. It does account for a massive amount of sales to Chinese consumers, but the volume is eclipsed by Alibaba's main Chinese language consumer site TaoBao which has been mentioned on this thread a few times already. TaoBao is similar in many ways to eBay.

    Rather than salivate at the opportunity, IMers might find that they will face increased competition. Many Chinese companies currently sell on eBay, often under the guise of being located in the US or UK etc. Once Alibaba establish a direct competitor to eBay, I expect huge numbers of Chinese merchants to start selling on their new site. I don't refer to Alibaba's T-Mall which began in China but is being pushed by Alibaba as an upmarket B2C site in the US already.
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    • Profile picture of the author The Niche Man
      Originally Posted by Importexport View Post

      Rather than salivate at the opportunity, IMers might find that they will face increased competition.
      That's a good point about increased competition. But many of my salivating clients have patented or patent pending products unique to most competitors.

      So, they're seeing it as a way to expand in areas they've never had an opportunity to before now. Or even the potential customers in relation to the increased competition has many of them panting.

      But I'll email them this thread, it's has good heads up information in it. Thanks to all whose participated so far. I'm sure they'll appreciate it as well.
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      • Profile picture of the author Importexport
        Originally Posted by Chris Worner View Post

        Without actually going to China and visiting the manufacturers facilities and observing how they operate, what their quality control is like etc. You are crap shooting and opening yourself up to getting ripped off.
        -Chris
        Face to face contact is always best when buying, but it is not essential to visit China to get a good deal and to do it safely. I have hundreds of students now buying from China and very few of them have the time or money to travel to China.

        Originally Posted by tziahs View Post

        Alibaba is quite astonishing, it really shows the vastness of the Chinese economy. Unfortunately, it also shows the shoddiness of their products. Of course, not all!
        But you are looking at a high chance of being ripped off, especially if you don't speak Chinese fluently.
        I know friends who did try to "do business" with alibaba manufacturers.
        example one: one guy bought 300 surveillance cameras for the EU market (220 voltage) and the Chinese manufacturer sent them for the American market (110 voltage). Of course, there are converters, but they cost money
        example two: another friend tried to buy granite for sculptures and other construction work. Their advertised prices were 10x smaller than in my country, but slabs of granite arrived broken and chipped. What's more, they weren't even granite, so no sculpture work either.

        My advice:
        Always watch out and always try to visit the manufacturer before sealing the deal!!!
        ps. - there are companies that can act as middlemen for you, some are good.
        As I wrote above, it is not essential to visit China, but you need to have a reliable process for choosing suppliers. Also, bear in mind that most of the "manufacturers" listed on Alibaba are in fact traders, so if you want maximum profits you deal direct with real manufacturers and that means looking in other places instead of Alibaba.

        Those middlemen that can act for you will add to your cost and you have no idea whether or not they are taking commission from the seller as well as charging you.
        Originally Posted by The Niche Man View Post

        That's a good point. But I heard they have an escrow account, where an escrow company hold the funds until the product is delivered and signed off by the recipient. That's what seems appealing to me, if its actually true. But vetting the seller is still wise even with escrow account protection.
        Escrow costs the vendor 5% and they will want you to pay that. There is also the problem that many vendors have learned how to work the system and they will procrastinate when negotiating a dispute. They make soothing noises at first and finally their tone changes or they don't respond any more to emails. Buyers try to escalate their claim only to find the allowed time for negotiating a claim has elapsed.

        Originally Posted by RyanJohnson1 View Post

        totally offbase. Don't take advice from people who haven't done it.
        the thing to do is most of the bigger companies send their reps to trade shows in the US you can meet their reps and actually buy products in person to establish your relationships with manufactures
        or secondly you can make sure you have th manufacturers send you sample products before you actually make a sizeable order.
        hope that helps.
        and as long as you pay with PayPal or your credit card you can always get some type of resolution if you ever did not receive your products.
        Only small numbers send their reps to trade shows in the US, so if you only look there you will be severely limiting your options. Also, the situation at trade shows is similar to what you find on the popular B2B sites like Alibaba, most if not all will tell you they are the manufacturer but they are not.

        Genuine manufacturers will rarely accept payment via PayPal or credit card. You must learn how to do your due diligence, That is your best protection. I have only had one of my hundreds of students report being scammed, but he went against my advice in every way possible. He sourced through Alibaba which I advise against, he placed a large order first up, and he paid via Western Union. WU is the scammers' route to riches.

        Originally Posted by cyberzolo View Post

        Alibaba sells counterfeit goods, you have to be careful as to what you buy on that site.
        They are now tightening up on suppliers offering counterfeits, but it does still happen. Vendors on their retail site Aliexpress still offer a lot of fakes.

        Originally Posted by nameless7 View Post

        Alibaba is a huge platform, but if you look for suppliers you should check everything twice. I had problems even with some gold suppliers
        The Gold Supplier tag gives absolutely no protection. See my post #18 for more information on that subject.
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        • Profile picture of the author Alex Blades
          Alibaba is a good place to buy stuff by the container, but stay away from electronics and brand names. Another thing you have to watch out for is quality. It takes alot of research to find a good company there.
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          • Profile picture of the author Importexport
            Originally Posted by Alex Blades View Post

            Alibaba is a good place to buy stuff by the container, but stay away from electronics and brand names. Another thing you have to watch out for is quality. It takes alot of research to find a good company there.
            There is a myth that is often repeated on the forum, saying that you have to buy huge quantities if you want to deal direct with manufacturers. Please see my post #30 about the reasons why wholesalers are less flexible than manufacturers in relation to the MOQ.

            You certainly don't have to buy container loads to get good prices provided you deal direct with genuine manufacturers, but Alibaba is definitely not the place to find them.

            Quality is an interesting issue. I began importing from China in 1987, with one of the main reasons being that I could buy much better quality there than I was buying from local manufacturers. As a bonus I also got better service, faster delivery, and prices that allowed me to laugh all the way to the bank.

            Many factories in China produce both high quality and poor quality. If on your first contact you tell them that quality is important to you they will be less likely to offer you the cheap stuff that goes to some of the big retail chains or to dollar stores.
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  • Profile picture of the author Importexport
    Duplicate so I removed text.
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  • Profile picture of the author nameless7
    Alibaba is a huge platform, but if you look for suppliers you should check everything twice. I had problems even with some gold suppliers
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  • Profile picture of the author Adauser
    Alibaba is a good platform with many resources. There are good and bad suppliers.
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  • Profile picture of the author Randall Magwood
    You gotta watch who you do business with on Alibaba. Even those "gold star" vendors are sketchy. It's a great site, but you have to find someone that you can trust - and that can trust you. You might have to invest a bit of money finding a reliable partner.

    I know a guy who used to buy MP3 players from a supplier on Alibaba. Everything was beautiful. Product came, my friend put them on Ebay, and sold like crazy. Everything was good with the world until Ebay stopped his operation.

    Another guy i know... LOL... found a supplier on Alibaba and paid for some brand new PS3's to sell on Ebay. When the guy got his package from the supplier, it was nothing even CLOSE to a PS3's. Scammed him hardbody. If you've ever seen one of those video game consoles that are sold in dollar stores and pharmacies... that's the crap that he received.

    Be careful, invest wisely, and ALWAYS pay via escrow.
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    • Profile picture of the author The Niche Man
      Originally Posted by Randall Magwood View Post

      I know a guy who used to buy MP3 players from a supplier on Alibaba. Everything was beautiful. Product came, my friend put them on Ebay, and sold like crazy. Everything was good with the world until Ebay stopped his operation.
      Just curious, why did Ebay stop his operation? What did he do or what did they find out about the MP3 players that was selling like crazy?
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      • Profile picture of the author Randall Magwood
        Originally Posted by The Niche Man View Post

        Just curious, why did Ebay stop his operation? What did he do or what did they find out about the MP3 players that was selling like crazy?
        He didn't do anything wrong. Before selling the MP3 players on Ebay, he sold *adult* DVD's in the "raunchy" area of Ebay. He sold those continually until he wanted to build a real business and make more profit. But just bad luck i guess.

        He's not comfortable with building a website and selling the MP3 players there - and i'm not comfortable with him asking me for free advice (seminar style) over lunch about how to market online. I told him i charge $5,000 for consulting - he declined - and now he's working through a temp agency at some manufacturing job. Dude is really lazy.

        Have you ever heard of Ebay shutting down powerseller accounts who have 99% and above feedback rating... for no apparent reason? Maybe such was the case. Of course he tried calling and emailing... but didn't succeed.
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        • Profile picture of the author The Niche Man
          Originally Posted by Randall Magwood View Post


          Have you ever heard of Ebay shutting down powerseller accounts who have 99% and above feedback rating... for no apparent reason? Maybe such was the case. Of course he tried calling and emailing... but didn't succeed.
          I still haven't grasp why sites like Ebay Google and others nuke you without explaining why? No chance to defend yourself, no mistakes allowed, no slip ups. Zero tolerance for non-perfection.
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  • Profile picture of the author warinwarin
    i agree with importexport about that
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