How To Use AliBaba For Dropshipping
If you’ve made up your mind about who your overseas source is for products you’re selling online, then it’s probably Alibaba that you’re doing business with. According to the numbers, Alibaba is the biggest eCommerce company worldwide. That means bigger than even Amazon and eBay put together.
So what is Alibaba? It’s a very comprehensive directory connecting buyers and suppliers (mainly Asian suppliers) all across the world. They have millions of products to choose from and tons of suppliers ready to fill your orders.
Start Your Search
Purchasing items on Alibaba using their directory is pretty well self-explanatory. It is not so much different from a marketplace like eBay. You can browse through the categories or perform a more ‘item-specific search to find what you want.
You have 2 options when performing a search on Alibaba. One is to utilize the product descriptions for your search, like with ‘dog collars’. That will bring up lots of results in the dog collar category.
The second option is to utilize their drop-down menu and search for suppliers rather than for products. That way you can find the manufacturers who specialize in whatever type of products you’re looking for.
I wrote about eCommerce & drop-shipping in another article where I give away my top-selling products lists and niches. Read about that list by clicking the button below.
How to Use the Product Pages
Before you begin searching around on Alibaba you should know a few things about those product pages. As our former example was ‘dog collar’ we’ll keep that as our example here as well.
This will be one of the first pieces of information you’ll want to have. Price is always a good place to start. We can see that this listing has a price of $2 – $3 FOB. The ‘FOB’ is the abbreviation of ‘Free on Board’, which means that the seller is also going to pay the costs associated with getting this product to the marine port (For Asian products this is the cheapest way to go) and you (as the buyer) will pay costs associated with the actual transporting of your goods across the ocean blue to its final destination.
MOQ (Minimum Order Quantity)
The next source of information you’ll need is the MOQ, or ‘minimum order quantity. This is the smallest number of items this particular manufacturer is willing to sell on one order. The thing to remember about MOQs is they’re not chiselled in stone and are usually negotiable. The MOQ in our ‘dog collar’ example is 200 units. When we multiply that using the high-end side of the price, which was $3.00 we are looking at an overall figure of around $600 plus the shipping if we choose to go with this supplier.
This is a good thing to know going in so you have a starting place for your negotiations.
Once you understand how the MOQ and pricing work, you’ll probably need to know how to make payment to a supplier. There are pros and cons to the methods of payment available, so you would decide to choose the one that works best for you.
Alibaba verse Amazon
Both platforms serve millions of customers and have a staggering amount of product listings. You can get lost on each platform. Amazon does not like drop shippers whereas Alibaba and AliExpress serve drop shippers very well.
Each platform has a very intelligent CEO overseeing the operations making sure that their platform is at the forefront of eCommerce. You can use whatever platform makes sense to you to sell on or buy from to resell.
I have a strong dislike for Amazon as a selling platform because of Amazon FBA and the sad affiliate percentages that Amazon pays its affiliates.
How To Use Alibaba To Dropship
One of the best ways to fill in gaps in your product line is the dropshipping business – learn the ropes and you won’t be disappointed.
Although I would never use drop shipping as the sole base for my online store, the top platform for locating quality drop shippers is a service known as Worldwide Brands.
Dropshippers get pre-vetted by Worldwide Brands so that you can rest assured that you won’t get scammed.
I suggest using a mix of Alibaba and AliExpress for dropshipping because you can get a better mix of products and suppliers/manufacturers.
How To Dropship on AliExpress
- Sign up for a product automation software like OBERLO
- Connect OBERLO to your website and connect your AliExpress account
- You search the AliExpress platform for your product
- Review the products that catch your eye
- Review the number of orders they have
- Review that sellers reviews
- When happy go into OBERLO platform and find that product
- Setup your product details and then import this product into your store
- When you have products on your store you need traffic. Visit Learn page to learn how to do that.
- Once you make a sale you will have the money to now buy that product from the AliExpress vendor. Go ahead and do that.
- Use your new customer’s details as the shipping address and complete the AliExpress order.
And in a super summary that is dropshipping on Alibaba and AliExpress.
To learn more about how dropshipping works you can check out this mini course on ecommerce.
Purchasing Wholesale Goods Domestically
“Wholesale” is a word that I hear often. A lot of people reach out to me about wholesale prices and they want to know where they can buy products wholesale. “Wholesale” apparently means purchasing items at the lowest possible price.
Do you want to hear something surprising? This could not be further from the actual truth. When I shopped vendors for my online sales, every US wholesale dealer had incredibly high prices. They had high minimum quantity orders that didn't match my numbers.
Yet, these companies were less costly than MSRP, but their prices were still so high that I wouldn’t have been able to attain or maintain a high-profit margin on any of the items that I was interested in selling.
Given that very few things are currently being made in the US, wholesalers can handle all of the problems in importing and storing items from product manufacturers.
It won’t be necessary for you to go to a foreign location. There is no need to deal with customs or shipping. You simply submit orders and wait for your merchandise to arrive. I prefer to order some example items from the manufacturer in the research phase and run my assessment on them as a partner. I monitor shipping time, invoicing and then the quality of products when delivered.
Another benefit gained by buying wholesale is the ability to sidestep time-consuming quality control measures given that your wholesaler will have made these checks on your behalf.
Buying Direct From Manufacturers Overseas
Purchasing from the manufacturer direct is by no means the holy grail of this industry, but it additionally requires the greatest amount of dedication, work and time. Currently, nearly all products are being made overseas due to cheaper labour costs.
My general rule for textiles and other goods is that if you’re working with a US vendor, you probably aren’t going to get the absolute lowest price. I will even say that if you’re working with someone who speaks excellent English, the prices aren’t likely to be good (All right, that may be pushing things a bit too far).
Tips When Opening Your Online Store
The #1 question I get regularly from readers interested in opening up their online stores, is what methods to use to locate suppliers and vendors. They want to know if they should buy wholesale or should they give Dropshipping a try as well?
In my early days of online commerce, I had this exact question as well. To be honest the entire drop-ship model was confusing until I actually got my hands dirty and did it. I spent hours assessing vendors and products, but when I decided to push ahead I just followed the data of the top-selling item.
I always order the product I plan to sell first. This lets me assess the vendor, the shipping times and the quality of the product and its packaging.
Most of my experiences deal mainly with clothing, appliances and gadgets. I have diversified a lot since then and have my hand in many categories of product. However, the principles should be the same regardless of what your topic or product may be.
Lots of people fall into the old trap of having everything dropshipped when they first start their online store. Well, it’s hard to blame them since it sounds so good when you first hear it. Not having to keep many items in stock yourself is a big load off. All you do is pay for the item and pocket the difference between your wholesale price and your customer’s price.
You have no inventory to keep track of and no obligations of fulfilment, it’s all done for you by the drop shipper. Sounds great huh? Until you have to start dealing with other types of customer problems that you do not fault in.
Many new store owners fail to realize that those profit margins are not so good and if they should screw up your order or ship something too late – it’s YOU who gets to deal with the customer. You also don’t want to be dealing with a drop shipper who makes a habit of shipping faulty items. These kinds of problems become YOURS once you put yourself in that position.
Add in the fact you have very little wiggle room in the profit margin and combine that will all the stress and headaches you have to go through, suddenly things regarding dropshipping just don’t look so good.
Even when you manage to locate a reliable drop shipper, your customer issues are still going to be popping up and when you have little control over regarding your products things can get difficult.
To sum it all up, you are putting your online store’s reputation into the hands of a 3rd party, who more than likely DOES NOT have your store’s best interests at heart.
Thanks for reading and as always if you like this and found it helpful drop a like a comment or give a bro a share. Peace!