Welcome to the third part of my Amazon FBA Series

Today I like to introduce you the B2B Marketplace Alibaba.com
Alibaba is a place where almost every business in the world, which are trading physical products, finds its factories and supplier.
Basically, every factory and trading agency from China is promoting their products on this platform.
A little fun fact:
Everyone knows the Prime Day on Amazon.com right?
Just look at the next Infographic :)

Alibaba is the world largest marketplace on the whole planet.

How do I use Alibaba to find my supplier

I'll use the product from my last post as an example: The Toilet paper Holder with Smartphone Shelf.
So let's use the Keyword: "toilet paper holder with phone".

As you can see we found 412 products which match the keyword.
In every list item, we see the company information and product attributes like the material, place of origin, photos and much more.
The really important attributes are:

• The price
• The Min. Order (MOQ = Minimum Order Quantity)
  Most of the prices are a range since it depends on the quantity and packaging you'll order.

So let's take a look at one of the items.

Now we are going to send a message to this supplier.
We need to write a nice little letter to him with some more question about this item.

The Supplier replied by email. This happens often but I like to keep the conversations on Alibaba since there is the risk of a scam lower as off the radar.
Here is her reply:

So next we like to check if we need any certificates for our target market. Its often important to have TüV, SGS or similar certificates.
Next, we like to know how to customize the packaging and how to fit our necessary information like the name, barcode, company origin and security texts on the product. So, in this case, we keep it lean and just want to add a printed sticker on the packaging.
Then I like to know the price if we order 200 items of this product.
And at least we like to get a sample so we can check the quality by yourself.

Her reply:

So basically she does not have any certificates for this product. This is a sign that this supplier didn't have many professional customers as certificates for strong glue is important.
Also, she is offering a black and white sticker which is not very beautiful and professional but it might be enough to start out but not to build a brand.
Then, she calculated the price which is a way to high for this product.
The total price is 1994$ which means each item cost at least 10$ without tax and import fees.
The sale price on Amazon is between 13-19$
There is not much space to get a rentable net revenue if we calculate all fees and taxes.

Order Process

If you found a good product on Alibaba with perfect attributes order a sample to check out the quality.
Most of the supplier accepting PayPal for sample orders.
Just ask to order a sample. Sometimes you only have to pay for shipping.
If everything is fine you need to provide all artworks for the packaging such a header card design. That depends on the packaging type.
Then you have to choose between Air Express, Railway or Sea Shipping.
DHL Express: 2-4 Days Delivery but the costliest.
UPS Specialised Railway: 15-20 Days Delivery Good for heavy items. I never used railway shipment.
By Sea: 30-40 Day Delivery
You need to find a logistics company which will handle the Sea Shipment. It is more complex than DHL, TNT, UPS, and Fedex.
Your supplier will help you choose the best shipment for your order.

Payment

The Payment will mostly by T/T Wiretransfer or Paypal
I also saw some supplier which offered Western Union.
At the beginning, you'll have to pay first, otherwise, the Chinese Suppliers won't do anything. So you have to trust your supplier or use the Alibaba Middleman Service.

Conclusion

There are only a few good and professional suppliers on Alibaba.
Most of them only speak very bad English and the communication is often very bad.
I'll post a Hall of Shame of Alibaba soon ;)
But that's the way we get in touch with a supplier and how to source a product.