Ever considered dropshipping using AliExpress but found the profit margins are way too small to really make it work? Perhaps you’ve already started up, making some consistent sales, and are looking to take it to the next level.
But before we go over how to start dropshipping with Alibaba, let’s first have a quick look at what Alibaba exactly is and how they have helped many businesses worldwide.
What is Alibaba?
Because there is someone between you and Alibaba, they too are marking up the product, thus reducing your profit margins.
What is the difference between Alibaba and AliExpress?
The main difference is that Alibaba was created to sell to businesses, and AliExpress is for individuals like you and me.
This is why when you go to Alibaba, you will often see a MOQ (minimum order quantity) listed on the product page.
As you can see above, the more you buy, the more you save with Alibaba. But don’t be deterred by the MOQ, as this is usually flexible when you ask the supplier.
The pros of dropshipping with Alibaba
There are numerous benefits to using Alibaba for your ecommerce store; we have compiled a few of them for you here.
1. Cheaper costing products
You will be buying further up the supply chain, cutting out unnecessary middle persons; this will give you much greater flexibility on your profit margins.
2. Flexible suppliers
As discussed earlier, the MOQ is not set in stone with many suppliers, reach out to them, and you will find a great deal of flexibility with most.
Above, we have an example of a supplier who initially wanted a MOQ of 100 units for $8.50 per set. One thing to note here is Alibaba won’t tell you the shipping cost unless you ask.
Alibaba is flexible because suppliers encourage business with smaller buyers, and they genuinely want you to make it in the hope of more future business. So don’t be afraid to ask!
3. Choice of suppliers
Similar to Amazon, Alibaba has thousands of sellers literally. This means for any product (providing it isn’t ultra-niche), you will have many sellers to compare from. Each store has a profile page where you can find a great deal of information on them.
The metrics to look out for are the year established, total employees, and on-time delivery rate. This will help you figure out how reliable and trustworthy the business is.
4. Buying at the source
When dropshipping from Alibaba, you are buying either from the manufacturer or their direct distributor. Because of this there the product cost will be a lot cheaper as fewer middle persons are involved.
Ironically, as you can see above, many products from Alibaba can eventually end up in AliExpress and Amazon stores.
You can really see the difference in the prices as they pass through different sellers. This is for the same set quoted earlier at only $7.85 on Alibaba!
The cons of dropshipping with Alibaba
There are many great benefits listed there, but unfortunately, there are also a few cons to consider.
As with many other dropshipping methods, some of these cons will be out of your control; the best you can do is hope for the best and prepare for the worst.
1. Long shipping times
However, you can discuss your shipping methods with suppliers to see which one best suits you.
Alternatively, you can hire a dropshipping agent who can handle all of that for you. We have an article on what is a dropshipping agent where we give a lot more information on this topic.
2. Lower quality products
This part is significant. Always ask for samples beforehand, especially before committing to a MOQ and putting down any kind of deposit. The product you see may not always be the product you get.
Dropshipped products from China comes with a bad rap, largely because dropshippers either don’t know or don’t care about the quality of the products they sell.
On the flip side, this can be perceived as an opportunity for you to stand above your competitors simply by selling a better product.
3. Verifying your supplier
Alibaba has thousands of sellers, so sifting through them to separate the good from the bad can be tedious work. To add to this, you will likely never physically inspect their facilities yourself to validate their legitimacy.
However, as mentioned earlier, you can find a great deal of information on each supplier by visiting their store’s profile page. This ensures that when you decide to get started, you can do so with confidence.
Shop around and see which one is a good fit. You also can find a great deal of information on the seller by looking at their store’s profile, as shown above.
4. Language and cultural barriers
Speaking to suppliers on very different timezones to yourself can be exhausting, more so when the responses come back partially or muddy. This can take a little extra patience and a considerable amount of back and forth.
Be prepared to push questions further if you are still unclear on something and rephrase questions should your supplier not understand completely.
Finally, the way people conduct business in the far east is considerably different to that of the western world, a topic truly worthy of an article on its own. Just be conscious that better prices and relations come with time after the trust has been built.
Is Alibaba safe?
In a nutshell, yes. However, it’s only as safe as your choice of payment method. It is strongly advised to pay by either PayPal or Escrow as this provides a layer of security that ensures your supplier fulfills their end of the deal.
PayPal is well known for being very buyer-centric and will support you if you run into any problems. They also won’t hesitate in banning accounts that are perceived to be dubious.
You would want to steer clear of bank transfers or Western Union payments as it will be quite hard for you to get the money back should your supplier decide to move the goalposts further on down the road.
Suppliers that won’t do business in a way that offers you the level of security are probably better off avoiding for obvious reasons.
How do you start dropshipping from Alibaba?
We have now gone through the fundamentals of Alibaba; you may be wondering how to get started. But before we go into this, it’s important to note that not every supplier will want to bother with dropshipping. Some companies are just too big to want to deal with it.
Because of this, you will want to, first and foremost, look around for suppliers who actually facilitate dropshipping, then create a shortlist of them. You can do this by following the suppliers on the store’s profile page.
When requesting a quote, it’s important to get as much information on your requirements, to avoid unnecessary extra back and forth.
Plan out your email; you can then copy/paste this to all of your shortlisted suppliers. It’s also handy to number your questions. This ensures they all get answered the first time around.
Fortunately for you, we have put together a template for you to amend as you see fit to do so:
When the supplier replies with their MOQ’s and prices, there will normally be a little wiggle room on the prices; you can use quotes from other suppliers as a bargaining chip.
You are then encouraged to have patience and develop a sound relationship first before pushing terms any further. This comes back to what we discussed earlier on cultural barriers.
But how will they handle dropshipping?
You are excepted to have had some sort of dialogue with your supplier if you’ve come this far. Each supplier may handle dropshipping differently, so it’s crucial this is discussed with your supplier.
From my own experience, in many cases, they will provide you with a CVS (Comma-separated values) template sheet to load your orders into and email over to them daily.
Once they receive the order, they will deduct this from your balance with them, including the shipping costs. Don’t worry, apps can handle this kind of automation which we will go through now.
Integration with ecommerce platforms
A useful application that springs to mind is called Syncee. It will handle the automation of fulfilling orders, importing products to your store and you can even use it to search Alibaba products in the first place.
The great thing is that you can use for Syncee for other dropshipping suppliers as well; it isn’t just for dropshipping with Alibaba.
So if you’re interested in learning more about Syncee, then check out this article here.
So what did we learn?
We learned that whilst AliExpress is convenient as they don’t have a MOQ, they don’t give the best value. The product will likely pass many middle people beforehand, each one adding more to the product cost.
By buying from Alibaba, you are buying as close to the source as possible, if not from the manufacturer directly.
We also learned of the many benefits of Alibaba when dropshipping and pointed out a few things to watch out for.
There are cultural and language barriers when doing business with Alibaba suppliers, as many are based in China. So when doing business on this platform, you should try and exercise a little patience whilst being as clear and concise as possible.
We provided you with a template to complete and send to your prospective suppliers so that you can shop around for quotes.
Finally, we gave you a handy tool to try out to help with the automation of the work involved when using Alibaba to dropship for your ecommerce store.
So, that’s about it. We hope you have found the tools you needed at Do Dropshipping to get started dropshipping with Alibaba on your ecommerce store.