How To Buy Products From Alibaba
How To Buy Products From Alibaba As A Beginner
In this video I want to explain how Alibaba works, how to find the products you’re looking to source, how find suppliers to source that product, and how to correctly contact those suppliers.
I’ll give you my 3 biggest tips that I wish someone told me when I first started sourcing from Alibaba. And if you stick with me till the end of the video I’m including a free gift that will help you stay organized when you’re sourcing products from overseas.
My name is Mark and this is a new channel so if you could hit the like button, and if even just 1 person subscribes to my channel from this video, I’ll continue to post about how to help you make more money on Amazon every week. So please hit the like button, comment, & subscribe, and let’s dive in.
Just to be clear: your goal should be to look suppliers who can source your product and ship it out for a price point that allows you to make at least a 25-33% profit margin (including FBA fees). For example, if we were selling a $10 item, we want to find a supplier who can source and ship that product for under $3.33.
How Alibaba Works
Now with Alibaba, you can buy products at wholesale prices. There's a large selection of products. And the key thing here is that there's no branded products. You can create your own brand and logo and have it put on the products you get from Alibaba. This is what allows you to create custom products or “private labeled products”. You can even use your own designs as logos that enables you to create your own branded products
Now in Alibaba, you actually find and work with manufacturers, so you have a chance to be involved in how your product is designed, built, and shipped. And when you find a supplier in Alibaba, it's important to realize that you're working with a third party factory that is not affiliated with Alibaba at all.
Alibaba is not a retail website. Instead, it's an online directory. They don't sell anything. Just like Amazon who connects buyers & sellers, Alibaba connects sellers & manufacturers. Now, anyone can use Alibaba for free, and you do not need to have a company, a seller's permit, or any credentials whatsoever. You don’t need a website either. The only thing that an Alibaba supplier cares about is that you can buy consistently in bulk. When I say bulk, that means on average, you’re ordering around 500-1000 units. Now if you just ask them and try to negotiate, you can order smaller quantities around 200-300 for a reasonable price. So the first thing you need to do is to know your product niche. Ideally, you should already know your niche or potential product, before you use Alibaba. After all, one of the first things to do when you're starting an online store is to have an idea of what you're going to sell. This should be established before spending time on Alibaba.
Commercial Break
If you’re still trying to figure out what product to sell on Amazon, down below I’ve included a link to my Product Research Course that you can get access to for free. You can access this free course in the video description or the comment section.
Creating an Alibaba Account
Now it's not explicitly necessary to join Alibaba in order to look for suppliers or products. However, if you plan on using some of Alibaba's other services, like trade assurance, You will eventually need an account. So one of the best things that you can do before you head over to Alibaba, actually, is to set up a separate email account.
Once you're active on Alibaba and looking for suppliers, you will get a ton of emails. So a separate account specifically for Alibaba can help you keep these emails from taking over your entire inbox. So put your email in and then verify it. Next, you'll have to provide all your other information including your location, the fact that you're a buyer, your company name, and more.
And as soon as you confirm, you're ready to go. Now if you don't have a company name just yet, just add a placeholder name for now.
How To Look For Products
When it comes to looking for a specific product on Alibaba, there’s actually 2 ways to find suppliers to source your product. You can search by product or by supplier. The easiest way is searching by product keyword. So if you’re looking to sell a product on Alibaba from Amazon, search by using the best keyword. And when I say keyword, I mean the best way to describe that product, then search for it on Alibaba. For example, I’m wanting to sell this basket, , I can search for this product on alibaba by typing, “Wicker Baskets for Organizing, Medium Wicker Basket with Lid, Decorative Basket with Built-in Handles… etc
There have only been a few times I’ve searched for products on Alibaba by keyword search, and haven’t found the specific product I was looking for. How I got around that was searching for the product using other keywords. I usually just find a competitor listing on Amazon then copy and paste some keyword in the title to see if that will pull up the product I’m looking for.
How To Look For Suppliers
I think my biggest realization from sourcing products on Alibaba for years now, is that 99% of the time, the prices you see on on Alibaba do not reflect the real price of the product. If I message the supplier directly and ask them what the price is, It’s almost always cheaper than what’s displayed on Alibaba. I’m not sure why this is, but it’s just something I’ve always noticed. So when I’m trying to decide if it makes sense to source a product or not, I never ever pay attention to the surface level prices on Alibaba. I message them first, then make a decision based on what they say. So what exactly do I base my judgement on with which supplier to use? It depends on their price point, lead time, shipping rate, and how well they communicate with me in terms of response time.
How To Make Contact
When you decide to contact a supplier, all you need to do it press “chat now” or “contact supplier”. If you’re wondering what you should say to them? Let me share a quick story. When I started selling on Amazon, I got a hold of this long detailed supplier template with 10-20 questions ranging from “what’s the price, what colors do you have, how long have you been in business, what kind of packaging do you do… blah blah blah”. I ended up getting hardly any replies. My take-away was the more questions you ask in the initial contact, the more confused they’ll probably be and the less likely you’ll get a reply, or even a partial of all the information you were looking for.
So the only things you need to ask a supplier, to know if your potential product is worth pursuing & sourcing, is 1. what is the price point for 500 units & 5000 units. And the reason you want to ask for the price of 500 & 5000 units, is they’ll probably quote you a better price at buying 5000 units instead of 500, so now you know how low in price they can go with your product, so you have a slight upper hand when you start negotiation. 2. what is the product lead time (how soon can they make and ship the product out), and 3. what would the shipping cost be to the US.
I would just give them your home address since you most likely haven’t created a shipping plan yet, and don’t know what Amazon warehouse to send the product to. But asking just those 3 questions, will save you a lot of time spent with suppliers who’s prices don’t end up aligning with your profit margin. In this phase you’re sifting out suppliers who prices are too high or don’t make sense.
So remember- your goal is to look for suppliers who can source your product and ship it out for a price point that can allow you to make at least a 25-33% profit margin (including FBA fees).
Placing an Order
When it comes to placing an order, a way to really safe guard yourself is to use Alibaba’s Trade Assurance filter. This in essence gives you a protection against unforeseen product and shipping issues with your product purchase. Also if you click “verified supplier” this will filter out suppliers who don’t meet specific credentials or are verified from third-party entities. Overall, it will protect your money and your product. It’s always safe and smart to order a sample of your product. Usually if you end up placing a larger order with a supplier, they will refund you the cost of the sample. I highly recommend doing this, especially with any kind of battery oriented products or products that require to be assembled together.
Real Talk
Real Talk - Just to be completely honest with you- I’ve placed many orders on Alibaba without using “trade assurances” or even placing a sample. Why would I do that? Honestly if I find a product I’m really excited about, I don’t want to waste any time. I want to get it launched as soon as I can. I know this seems risky, but the other reason I’m okay with this route is I’ve learned from working with suppliers, that they really do want to do a good job, to win your trust and win your business. They fully understand if they provide an inferior product or screw up, they’ll lose your business in a second. I’m not suggesting to source with this approach, I’m just telling you first hand my honest experience. It’s not anything I would do when I first started selling on Amazon, but I’ve gotten comfortable with this.
My 3 Tips For Sourcing
Now my first tip was actually mentioned previously, but that is to create a new email account. I would also use this email for your Amazon seller central account and helium 10. This really is helpful because once you get suppliers messaging you back and forth, you’ll be getting email notifications left and right.
The 2nd Tip is actually the most important, which is you should be messaging at least 10 different suppliers. Because in reality, you don’t really know what the “normal” or “market” price is for your product. So messaging 10 different suppliers will give you a good idea on what a good price & bad price is for your product. I’ve always learned that the more suppliers I reach out to, the better price point I end up getting. Is it more work? Yes. Will it help you get a better profit margin? Absolutely Yes.
My third tip is keep track of all this information from Alibaba, on a spreadsheet. For starters, you should be keeping track of the product price point, shipping cost, lead time, shipping lead time, estimated amazon fees, profit, and profit margin %. Feel free to track other indicators, but you should at least be tracking these numbers. I have a basic template that I use and the students in my program use. I’ve included this template down below in the video description as well as free access to my product research course. If this video has been helpful to you please hit the like button, comment, and subscribe, and i’ll see you in the next one.
⏰Timestamps:
0:00 - Profit Margin 0:40 - How Alibaba Works 2:45 - Free Course 2:57 - Create An Account 3:43 - How To Find Products 4:38 - How To Find Suppliers 5:35 - Contact Supplier 7:32 - Placing Orders 9:03 - 3 Tips For Sourcing
