If you have landed here, you are definitely not looking to shop the products for the sake of personal use. You must be looking for the best ways you can get products to resale or retail for your eCommerce (or any product-based) business.
And the reason I have written this long article on the topic is that – buying things from Alibaba is going to be different from buying things on Amazon. You don’t just simply go to the website, add to the cart, pay the bill & wait for the items to be delivered.
If you don’t be careful during the buying process from supplier directories like Alibaba, things can go terribly wrong.
There is no doubt that India is amongst some of the greatest manufacturers in the world. We have a massive product catalog to offer the world and there is a lot eCommerce enthusiasts can do with it.
However, if you’re looking to buy products in bulk for a lower price, it is going to require you to import products from overseas. This is where Chinese supplier directories like Alibaba come into the picture. This is a place where you will be able to find almost any damn product that can be sold. From pins to a plane (not literally though), they have it all.
There are several ways you can import products from Alibaba. However, I have seen many people get scammed in the process. This is because you will need to deal with a lot more vendors, make sure that you look for the right one and you do all the due diligence in the process.
In this article, we will walk through the entire process of how to import products from Alibaba to India and look into – how to find the right vendor, how to negotiate with them, and the compliances you need to fulfill to import products to India.
But before we start, let me address a very common question a lot of people have in their minds. Why go with a complicated marketplace like Alibaba? Why not with Aliexpress which has similar products and seems easier to deal with? So let’s take a look at the difference between both the platforms first.
Alibaba vs Aliexpress – What’s The Difference?
I can explain this in short – Alibaba is the big brother of Aliexpress. It’s that simple!
Though you will find a lot of similar products on Aliexpress that are on Alibaba, there will be a limit on the number of items you can order.
You cannot buy products in bulk from Aliexpress. On the other hand, due to the order quantity being low, the products will be far more expensive on Aliexpress than on Alibaba.
Imagine Aliexpress as an online retailer like Amazon or Flipkart and Alibaba as a business-to-business (B2B) wholesale marketplace like IndiaMart. When it comes to buying a handful of items for personal use we of course go to Amazon or Flipkart. But when we require the same for reselling or business purposes, going to IndiaMart makes sense, right?
So now that we are sorted, let’s ditch Aliexpress and focus on Alibaba. Let’s take a look at what are the prerequisites needed before you place your order on Aliexpress.
The Prerequisites & Import Compliances in India
If you are importing things for personal use, then there are no prerequisites for importing products from overseas. But buying things from Alibaba in bulk doesn’t seem like ‘personal use’. Thus, it comes under ‘transaction for re-selling and trading’ purposes.
Thus, for importing products that way from any country to India – you will mainly require 2 very important registrations that will make your further process go smoothly. They are –
- GST Registration – You will have to share your GST number during the process.
- IEC – Import Export Licence Code issued by DGFT department.
The most frequent question I get asked when it comes to importing is – Can Individuals Buy Products From Alibaba? So looking at the compliances above, we now have an answer.
The good thing about applying for both, GST & IEC is that – the formation or registration of a company is not required. You can apply for them as an individual or a sole proprietor. There are a lot of online services available that will be able to help you with the same.
And finally, once you have everything in hand, it’s time to step on the ground.
Step By Step Process Of Importing Products From Alibaba
Directly going on Alibaba.com and starting your research might overwhelm you at first. So in order to make you comfortable with the terminologies used there, I will list down an Alibaba ‘dictionary’ for you which will prepare you and bring clarity while you scan through the website.’
Following are the widely used terms you will find on Alibaba –
- A Verified / Gold Supplier – A supplier verified by Alibaba after checking their factory, business licenses, supplier identifications, etc.
- Trade Assurance – Alibaba’s ‘safety’ program for buyers where the money paid is held by Alibaba themselves until the buyer receives & confirms the order. They also provide a money-back guarantee if the supplier fails or tries to scam you.
- Response Rate – How often does the supplier respond to the inquiry.
- Transaction Level – For how many times has the supplier conducted transactions for the last 6 months.
- Costs Insurance Freight (CIF) – It is the agreement of international shipment between the buyer and the seller which states that – the responsibility & insurance of the shipped goods should be borne by the seller till they reach to the buyer.
- Freight On Board (FOB) – In this agreement, it is stated that the responsibility & insurance of the goods when in transit, if lost or damaged is to be borne by the buyer.
- Minimum Order Quantity (MOQ) – This is the minimum amount of units a supplier will sell for a particular product.
There are many more terminologies. But the above 7 are more than enough for now. Once you get comfortable with them, let’s talk a bit about finding the right products.
Finding Good Products
As an eCommerce entrepreneur, you want to import high-quality products at the best price. But how do you know what’s high quality? How do you know what your customers want?
Product research is one of the most important things that you have to do before importing products. Without it, you are just gambling with your money by importing random ‘well rated’ products from random Chinese suppliers & hoping to make it big.
Product research is important because it will help you build a solid business plan & make it easier for you to plan your journey ahead. Here are some tips for finding good products, especially when you’re just starting out.
- Check out Google Trends for the specific products. Only if the trend is going upwards, go for the product.
- Spy your competitors. Look at what they are selling. Look at what products they are running ads for.
- Conduct your research on the marketplaces like Amazon or even Aliexpress for that matter. Look at what products are ‘best sellers’ there.
- Once you have a solid understanding & a short-listed product catalog, try to look for similar products on Alibaba.
- Make sure you only find the products that have more than 4.8-star ratings & a good number of reviews on Alibaba. Don’t settle for anything lower.
Choosing & Verifying The Seller
Choosing the right seller from whom you are buying the products is equally important as choosing the right products. A seller can make or break your importing experience.
It is during this part where a lot of enthusiastic buyers make mistakes and get disappointed later. Thus, you need to be very careful while finding one.
But choosing a trustworthy seller doesn’t have to be difficult if you follow the steps given below while carrying your process –
Step 1 – Apply ‘Trade Assurance Filter’ without fail while conducting a product search. If you make a transaction with the sellers registered with Trade Assurance, your money will be safer with Alibaba & will not be released to the seller till you receive the items as described in the contract.
(Note – Opt only for the sellers with ‘Verified’ or ‘Gold Suppliers’ batch.)
Step 2 – Sort out the results page as per the sellers with ‘Best Response Rate’. This will ensure that you will be seeing the results of sellers who respond to the inquiries in the quickest time on the top.
Step 3 – Shortlist at least 10 to 12 suppliers filling up the criteria mentioned above. Don’t assume the best one just by seeing the listing. Connect with all the suppliers and only then, shortlist the best of them.
How to connect? How to negotiate? How to shortlist? Ok, hold on! I will cover all of that below.
Request A Quote & Negotiate
As a first-time buyer, knowing this is important. Don’t fall for the prices mentioned on the product page. They mostly are clickbaity. The supplier just wants you to land on their listing and bring you to their funnel. Expect the prices to be somewhat higher (or even in some cases lower) than what is mentioned.
Another thing you should be careful about is that not all the listings are done by the manufacturer. There are even a few traders who just appear to be like manufacturers but they actually resell the products from other manufacturers. These people will generally charge you high to make profits for themselves.
But fret not. I have laid a step-by-step path for you. If you follow exactly the steps that I have given below, you will probably be able to find the best suppliers and get the best deals.
- Search for the product you want to import & add a Trade Assurance Filter. Sort the results as per sellers with Best Response Rate.
- Most of the sellers will be offering similar products for different prices and with different Minimum Order Quantity requirements. Open multiple listings in new tabs that seem promising.
- Now click on Contact Supplier for each listing and fill in the inquiry form. Type in your demands regarding the products & request the quote in the message.
- If you want to automatically reach multiple suppliers without manually contacting them, tick on Recommend Matching Suppliers before sending. Just beware that your email inbox will get flooded with emails from all the different suppliers.
- Connect with at least 10-15 suppliers and ask for the best possible quotation. This will ensure that you will not fall into the trap of traders. Now compare the prices of all the 10-15 suppliers & choose the best 2 or 3 out of them.
- You can chat 1 to 1 with these suppliers by clicking on ‘Chat Now’ on the product page. Personally connect with them by asking them to connect through Skype, as they will not be available on WhatsApp and we will not be available on WeChat.
- Build a relationship with the shortlisted suppliers and negotiate with them for the best price.
Once you feel like you are getting the best deal, do not simply rush to place an order. A very important step is remaining. A step of ordering the samples.
Once you have at least 2 to 3 suppliers shortlisted whom you think are offering you the best deals & with whom you have built good relations through skype, just go ahead and place an order for the samples first.
Even though the suppliers seem decent enough doesn’t mean that the products will be ideal as per your expectations. A lot of entrepreneurs make their biggest mistakes here and order the products before even checking the samples.
So again, not from one supplier, but you have to place the sample order from at least 3 suppliers so that you can judge the quality. The suppliers will guide you with how you can place the sample order. You have to place the order officially through Alibaba and make the payment as required.
You will also get a trial of how the service of a particular supplier is. And now finally you can choose a single supplier based on the following 4 criteria –
- Who offered you the best pricing?
- Who’s product sample had the best quality?
- To whom have you built the best relationship?
- Whose service was best?
And finally based on who wins all the 4 criteria as per your experience, choose the ONE supplier and place your first order through Alibaba!
Start Importing Products From Alibaba
So let us once again summarise what we learned in this article so that it stays on top of your head while you go to Alibaba after this.
- It is compulsory to have GST & IEC in order to import products from overseas. Company formation is not required though.
- Make sure you conduct your product research before finalizing your catalog.
- Choose the products only with ratings of more than 4.8 on Alibaba.
- Always buy your products only from the suppliers who have Trade Assurance with Alibaba and are Verified or Gold Suppliers.
- Ask for quotations from at least 10 to 15 suppliers & compare the prices.
- Personally connect with 2 or 3 of them and order the samples.
- Place your final order only after you are satisfied with the sample quality and the pricing.
People have been using Alibaba for years now. Be it small local traders or big eCommerce brands. When it comes to bulk buying the products for the cheapest price, it is still by far the best place online.
So next time you think about buying from the same for your eCommerce or any product business, make sure to follow the steps given above in this article.
So did you find the above guide helpful? Or do you think I have missed anything? Go ahead and let me know in the comment section below so that we can keep the conversation going.
Also if you have any queries regarding eCommerce, dropshipping or product research, just shoot an email here – firstname.lastname@example.org and I will be more than happy to help you.
To Your Ecom Success,