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How to Evaluate Suppliers on Alibaba

how-to-evaluate-suppliers-on-alibaba

So you want to start an online business, and you’re looking to evaluate suppliers on Alibaba to source your products.  Alibaba is one of the biggest e-commerce platforms globally, and its goal is to connect wholesale suppliers to online businesses. You’ll find a whole host of products/services from different manufacturers which helps simplify the product procurement process.

But while the platform excels at offering amazing deals, there are a lot of scammers on the website as well. If you don’t know how to look for a trustworthy supplier, you can get burned big time. When it comes to finding the right supplier on Alibaba, you need a sound strategy in mind.

In this article, we’ll discuss how you can evaluate suppliers on Alibaba to source the best products available.

Why use Alibaba to source products?

Alibaba is the e-commerce goliath that allows sellers to discover low-cost products and sell them for huge profits. The platform connects you with thousands of suppliers that can help bring your dream product into a reality. Aside from the low manufacturing costs, Alibaba’s expanding network of suppliers means you can source any product you’d like.

The opportunity to build strong connections with suppliers is one of the main advantages of using Alibaba. Of course, not everything is rainbows and butterflies when it comes to the website. Since Alibaba has skyrocketed, plenty of inferior suppliers flooded the platform in hopes of deceiving the unwary.

To ensure you’re getting the best product possible, make sure to follow these steps in assessing a supplier’s credibility.

Step 1: Be specific with the product you want

Before you find a reputable supplier, the first thing you need to do is know what type of product you want. What materials should the product be using? What’s the ideal design that you want the product to have? Addressing these questions early on will lead you to a supplier that works with your specific needs.

From there, it’s a matter of evaluating the factory’s capabilities of providing you with the right product. Are you looking for an original design manufacturer (ODM) that already has existing designs? Or are you looking for an original equipment manufacturer (OEM) where you can build your product from scratch?

Most sellers go the ODM route because it’s simpler and less time-consuming. You can make adjustments to the manufacturer’s original design to make your product stand out. However, if you have a product concept that you believe is worth a shot, you should work with an OEM.

After choosing which type of manufacturer will create your product, you want to determine the factory’s location next. Alibaba is located in China where different regions specialize in different products. For example, Anhui province specializes in household appliances while Guangdong province specializes in electronics.

Step 2: Define your product search

Now that you have a solid idea of your product specifications, the next step is to start the search. Say you’re looking for leather bags, and you type it in the search box. The website will show mixed results ranging from genuine leather bags to leather bags for men/women.

You want to be specific with your searches so you can effectively narrow down your selections. Instead of using the search term “leather bags”, use “OEM leather bags” instead. Once the search results appear, you’ll need to filter the suppliers based on their location.

Like we’ve previously mentioned, it’s crucial to know the location of the manufacturer. In this case, both Guangdong and Zhejiang provinces specialize in leather goods. Make sure to do your research to identify the right manufacturers based on their location.

You also have the option of filtering suppliers based on three factors:

  • Alibaba Trade Assurance
  • Gold Supplier
  • Assessed Supplier

Alibaba Trade Assurance – This means you can submit a claim to Alibaba if you and the supplier reach a dispute. Alibaba will review the case, and if they determine the factory has not fulfilled their agreement, they’ll return your money.

(Pro tip: Be specific with the quality control and lead times in the agreement so that you can raise a dispute when the factory fails to meet them.)

Gold Supplier – Gold Suppliers enter a premium membership with Alibaba and undergo an authentication/verification process. It’s safe to say that Gold Suppliers are trustworthy suppliers.

Assessed Supplier – A third-party company verifies the supplier’s ownership of their business.

For the best search results, make sure to check all three boxes so you can find a legitimate supplier.

Step 3: Spotting legitimate suppliers from fake ones

One thing that sets legitimate suppliers apart from fake ones is the consistency of their branding. Authentic suppliers have well-structured pages, their product images look professional, and they have solid product descriptions. They will even share their factory’s location to let you know where their products originate.

It’s the small details that make a huge difference when spotting fake suppliers. For example, if a supplier uses low-quality images for their products, it’s a major red flag. Another example is when they stuff a bunch of irrelevant keywords in their product descriptions. If you notice these details, steer clear from the supplier at all costs.

Once you’re on the supplier’s website, make sure to check out their other products as well. If they specialize in leather products, their other offerings should be leather belts, wallets, etc.

There will be occasions where you’ll spot a supplier offering all sorts of products. When you see listings for pens, toys, and other random items, chances are it’s a trading company. Make sure you don’t engage in conversations with these suppliers as they cannot deliver the exact product you need.

Step 4: Determine if the supplier can create your product

The fourth step is to determine whether or not the factory can create your dream product. Remember how we asked you to figure out whether you want to work with an ODM or OEM supplier? Responding to their email is the perfect opportunity to ask about the product you’ve envisioned.

If you plan on working with an OEM factory, here are some questions to keep in mind:

  • What’s the cost of creating a new design?
  • How long will it take for them to create the product?
  • Have they made similar products before?
  • Are they willing to provide samples of the finished product?

If, however, you plan on working with an ODM factory, the questions might be different.

  • How much can they tweak the product?
  • What is the cost of customizing their design?
  • Are they open to an exclusivity agreement?

Remember, the success of your product relies on the factory’s ability to customize it. The last thing you want is to offer a product to the market that closely resembles your competitor’s. You want your product to stand out and have an identity that’s unique to you.

Once they’ve answered your questions, you can proceed to review the supplier’s licenses and documentation. If you can, it’s much better to arrange a factory visit so you can get a first-hand view of the product creation process.

Step 5: Contacting the supplier

Now that you’ve found a trustworthy supplier, you want to contact them for negotiations. You can use apps like Alibaba Trade Manager or WeChat to reach out. In our opinion, you should contact the supplier thru email for a professional approach.

When sending an email, you want to be as detailed as possible. List down all the things you’re looking for in the product and ask about their minimum order quantity (MOQ). Some of the questions you may also want to ask are:

  • Are you a factory or trading company?
  • Can you send some samples for us to evaluate?
  • Will the product meet the required standards in our location?
  • What is the unit per cost for xxx?
  • What’s the quotation?
  • How long is the lead time?

A legitimate supplier will email you back within 2-3 business days. Some may take up to a week, but they should be quick to respond. Use their response time as a sign that the supplier means serious business with their potential clients.

When the supplier reaches back to you, they should have clear answers regarding your inquiries. Their email should be well-constructed, and they should be able to explain solutions to potential challenges. A factory that knows how to communicate professionally is a good sign you’ve found the right supplier.

A supplier should also be willing to negotiate with you. The negotiation process will depend on how fair the deal is for both parties. Keep in mind that they have the product and want to sell them as much as you do. If you have the means to target a specific industry, they’re more likely to enter a partnership with you.

In summary

Finding the right supplier on Alibaba is by no means an easy task. You have to do your due diligence and establish solid communication to determine if a supplier is a good fit. By following this guide, you’ll be able to connect with reputable factories and create the product you’ve always wanted to sell.

If you’re an online seller and would like help breaking down the financial health of your company and getting your ecommerce bookkeeping done right, we can help. Just fill out the contact form below and we will be in touch with you shortly.

 

 

 

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