How to Buy from Alibaba and Sell on Amazon
How to Buy from Alibaba and Sell on Amazon
If you’ve ever thought about selling on Amazon one of the first questions you probably asked yourself was “where would I get my products from?” While there are a number of ways you can go about sourcing items, buying from Alibaba is by far the most common strategy for successful Amazon sellers.
So, what is Alibaba and why do so many sellers use it? And most importantly, how do you go about buying from them?
In this guide, we’ll go over everything you need to know about sourcing products for your Amazon business. We’ll explain how to buy from Alibaba, what to do with your items once you purchase them, and share some additional tips and tricks to give you a better chance of success.
Table of contents
- What is Alibaba?
- Why Do So Many Amazon Sellers Use Alibaba?
- Things to Know Before Buying on Alibaba and Selling on Amazon
- A Step-by-Step Guide on How to Order from Alibaba
- Tips and Tricks
What is Alibaba?
Alibaba is a massive online wholesale retailer based in China. In fact, the company is one of the few retailers that can rival Amazon.
The difference between the two is that Alibaba is intended for business-to-business (B2B) transactions. (The company also owns Aliexpress which is designed for consumers). The sellers on this site are all manufacturers and wholesalers with factories that specialize in selling products to resellers.
While some sellers on Alibaba may offer the ability to purchase one item at a time, most only sell in bulk and have minimum order quantities that must be met before you can do business with them.
Why Do So Many Amazon Sellers Use Alibaba?
First and foremost, Amazon sellers use Alibaba because of their low prices. In many cases, you’re dealing directly with a manufacturer so you’re able to cut out the middleman and lower your costs. The fact that they’re based in China also helps lower the prices of their items.
Another reason is convenience. Say you decided to sell a kitchen knife on Amazon and wanted to find a manufacturer to source it from. Where would you go to find one? If your answer is “I don’t know” you’re not alone. Most people have no idea where to start.
But with Alibaba, all you have to do is go to their website and search for “kitchen knife” to instantly find hundreds of manufacturers of that type of product. It saves sellers tons of time and makes it easy to find a supplier that offers the product they want at the price-point they’re looking for. The site makes it easy for anyone to source products for their business.
It’s not just Amazon sellers that use Alibaba. People who sell on eBay, Etsy, and their own online retail stores use them as well to source products. While there are other alternatives there isn’t a single other platform that offers the same kind of experience as Alibaba.
Things to Know Before Buying on Alibaba and Selling on Amazon
Alibaba is a great place to source products for an Amazon business, but you likely have some questions before you get started.
Here are some common questions people have about buying stuff from Alibaba:
Is buying from Alibaba safe?
If you’re buying products for your Amazon business it’s likely going to be a fairly sizable purchase. Because of this, you want to make sure whoever you’re doing business with is trustworthy and won’t take advantage of you.
Alibaba is one of the world’s largest retailers. They’re a highly respected company that’s listed on the New York Stock Exchange. However, just because the company is reputable doesn’t mean every seller on there will be, so you do need to be careful.
Luckily, Alibaba offers their Trade Assurance program which guarantees your money back if you don’t receive your products or your order doesn’t meet your expectations. So, the best way to stay safe on the platform is to only do business with sellers that participate in this program.
Do you need to start a business to buy from Alibaba?
If you’re an individual it’s possible that you don’t actually have your own business. If that’s the case, you’re probably wondering whether you’ll be able to purchase items from Alibaba.
While the platform is designed for B2B sales you can still order from them without a company. When you register an account you can just use your own name as your company name. You’ll never be asked to provide a business license.
That being said, there are some tax benefits that come with starting a business (mostly the ability to write off your expenses) so it might be a good idea to create a business if you plan on selling on Amazon.
Do you have to pay taxes when you buy from Alibaba?
While you won’t have to pay sales tax when you purchase items from Alibaba, you will have to pay import duties since you’ll be importing products from another country.
These fees vary depending on what you’re buying. If you want to estimate what your import duties will be you can do so at simplyduty website.
What are the best things to buy from Alibaba and Sell on Amazon?
Since Alibaba is such a massive retailer with thousands of suppliers you can buy pretty much anything from them.
So, if you’re a new seller the selection could get overwhelming and you might have trouble deciding what you should choose as your first product to sell on Amazon. It’s not just about what’s hot and trendy at the moment. There are so many other things you need to consider.
Ideally, you want to find products that are in high demand but don’t have a lot of competition from other sellers. You also need to consider shipping costs. Since you’re importing your items from China you’ll need to get them shipped to you which can get expensive. Products that are small and lightweight are a lot cheaper to ship, making them the best choice for Amazon sellers.
Thankfully, there are a number of tools that can help you choose products that are profitable for sellers. One of the most complete solutions available is the Amazon Seller’s Toolset from AMZScout. It includes the Pro Extension, the AMZScout Product Database and other innovative software that will help you find winning products.
Here is how you can find profitable product ideas using the AMZScout Product Database:
1. Open the AMZScout Product Database
2. Start a free trial. If you’re new to the platform, you’ll see a sign up form. Complete the form to begin a free trial.
3. Determine product criteria. Use the filters to set the criteria for your search. For example, you can filter by estimated revenue, price, number of sellers, and more. If you don’t know what filters to use, start with some of the pre-made Product Selections.
4. Review the results. Click Find Products to see the results.
5. Look for interesting products to check with the PRO Extension.
If a single product sells well, it doesn't necessarily mean that other products in that niche will also perform well. When you need to check competition, prices, sales, and other metrics for similar products, you can do so using the PRO Extension.
1. Get the AMZScout PRO Extension.
2. Open the PRO Extension
Amazon will automatically open after you install the extension.
Start a free trial. If you’re new, you’ll see a registration form. Fill out the form to start a free trial.
Find a product or niche that you researched in the Product Database.
When the results are done, click the AMZScout button in the lower corner of your browser window to open the extension.
3. Review niche and product potential. Check niche metrics like net margin and estimated sales at the top of the screen. You can also check specific products in the results table.
4. Review estimated monthly profit.
Click on the row for a product and new icons will appear.
Select Profit Calculator.
Enter the necessary data: sales price, product cost, additional unit cost, etc.
Check the estimated monthly profit.
5. Check the niche demand. Select Niche Score to see a breakdown of the niche’s total demand.
6. Look for consistent demand. Review the Niche History to see if demand is strong throughout the year, not just certain seasons.
7. Check the competition. Look at the number of sellers or reviews:
If you want to sell products from existing brands, look at the number of sellers. If the listing only has a few sellers, then the product is likely good for resale. However, if there are more than 20 sellers, the competition is likely strong
If you're launching your own brand, look at the number of reviews. When competitors in the niche have a lot of reviews, it will be harder to compete with them.
You can discover suppliers for your items after you research them straight from the PRO Extension. Simply click Local and global suppliers on Alibaba.com to open a list of suppliers. You can then filter the results by location, price, minimum order quantity, and currency to find those that match your needs. Plus, you can save your favorites for quick access.
By using these tools you should be able to identify one or more products that will be a good fit for your Amazon business. Once you know what to buy it’s just a matter of finding a supplier on Alibaba that can provide you with the product you want.
A Step-by-Step Guide on How to Order from Alibaba
Okay, so let’s assume that you’ve done your research and you’ve decided on a product that you’d like to sell. How do you go about buying from Alibaba and selling on Amazon?
We’ve outlined all the steps below to make it as easy for you as possible:
1. Register an Account on Alibaba
Before you can buy anything on Alibaba you’ll need to sign up for an account with them. To do this, simply go to Alibaba.com and click the “Join Free” button at the top of the page.
On the next page fill out the form. You’ll be asked to enter your country, email address, name, phone number, and company name. If you do not have your own company just enter your name as your company name.
You’ll also have to indicate whether you’re registering as a buyer, seller, or both. Make sure to select “Buyer.”
Once all your information is entered click “Agree and Register” at the bottom. You’ll be sent an email to verify your email address. Click the link in the email to verify it and then you’re ready to get started.
2. Select Your Supplier
As mentioned before, if you’re using the Pro Extension you can simply click the “Search Suppliers on Alibaba.com” button once you find a product or niche you like. This saves you from manually searching for suppliers on Alibaba and helps you instantly find the suppliers you’re looking for.
After clicking this button in the Pro Extension you can:
Set your desired price range to filter out suppliers that are too expensive.
Compare suppliers by review rating to find the best ones to partner with.
Add the suppliers you’re most interested into your favorites list so you can review them later.
Search Alibaba suppliers button
You can also search for suppliers on Alibaba. Enter the name of the product you’re looking for in the search field at the top of the page to see all the suppliers that carry that product. In most cases, there will be hundreds of different suppliers available so you’ll have to do your research to find the one that’s right for you. Here are some things to look for:
Price: Obviously, the main thing you’re going to be looking for is a supplier that can offer you your product at a price that works with your budget. You’ll notice that most suppliers will advertise a price range. This is because the price per piece will vary depending on the size of your order. The more you order the less you’ll pay per piece.
Minimum Order Size: Most suppliers will have a minimum order size. This could be a few dozen or it could be a few hundred. So, you’ll need to make sure the minimum order isn’t more than the amount you plan to purchase.
Trade Assurance Suppliers: As we mentioned earlier, Alibaba offers a program called Trade Assurance that allows buyers to collect a full refund if something goes wrong with their order. Look for sellers who participate in this program.
Gold Sellers: This is a premium membership for sellers on Alibaba. It costs $10,000 USD and gives companies more ways to promote their products. Because the price of this membership is so high it’s a good way to filter out fraudsters, as only legitimate businesses are willing to pay that kind of fee.
Verified Suppliers: These suppliers have been certified and/or inspected by accredited third parties. This is yet another way to guarantee yourself that you’re dealing with a reputable company.
When searching for products on Alibaba, you can use the filters on the left side of the screen to search for suppliers based on the criteria listed above.
3. Contacting Suppliers
When you find a supplier that interests you don’t just go ahead and place an order. You’ll want to talk to them first to discuss your order and make sure they are able to meet your expectations.
When looking at a product page click “Contact Supplier” to send them a message. Here are some questions to ask them:
Are you able to customize or alter your products? If you’re looking to create a slightly new version of an existing product you’ll need to ask them if they’re able to do it. In most cases, suppliers are happy to work with you on this (assuming your requests are doable), but you’ll want to make sure before you start the process.
Are you able to add my logo and branding to the product? This is similar to the last question, but still important. If you have a logo that you want to be placed on the packaging or product be sure to ask them if they’re willing to do that.
What’s your best price? It’s important to note that the price listed on the product page isn’t final. In most cases, the supplier will be willing to negotiate with you, especially if you’re placing a larger order.
Do you have a refund policy? Hopefully you’re dealing with a company that’s a part of the Trade Assurance program, but this is still a good question to ask. If you’re able to get a refund through the supplier then you won’t have to go through Alibaba if something goes wrong.
When can you deliver the order? If you have a date that you want to receive your products by make sure that the supplier you choose will be able to meet that deadline.
Only work with suppliers that meet all of your criteria. If anything about their response seems suspicious move on to another supplier.
4. Getting your products shipped to you
Before you place your order you’ll need to decide how you’re going to get your items shipped to you once they’re ready. Most suppliers will be able to coordinate this for you and will usually include the price of shipping into the total cost of your order.
There are two ways to have your products shipped to you:
Sea Freight: This method is generally cheaper but will take a lot longer. Keep in mind that getting your products shipped to you by boat can take up to 40 days. If you want to get your shipment as soon as possible you may need to look into another option.
Air Freight: This method generally only takes 5-9 days if you’re shipping to the USA but it can get very pricey depending on the size of your items.
Generally speaking, if your order is under 200 kgs air freight will make the most sense. Anything more than that and it will likely be more cost-effective to have it shipped by boat. Your supplier will be able to price out all the options for you and then you can choose the one that best fits your budget and schedule.
Also, if you live in India or Europe train freight may also be available. This could be a nice compromise between air and sea freight.
How to track my order: As this is a very important shipment, it’s a good idea to track your order. Your supplier should provide you with a tracking number once your products have been shipped. If you don’t get one make sure to ask them for it.
5. Shipping your products to Amazon
If you’re an individual seller working out of your home you’ll likely be using the Fulfilled by Amazon (FBA) program.
How it works is you’ll ship all of your inventory to Amazon and they’ll store it in one of their warehouses. When someone buys one of your products they’ll package and ship it for you. You’ll have to pay an additional fee for this, but the convenience is more than worth it, as individuals rarely have the space to store inventory or have the time and resources to ship orders to customers.
Once you’ve worked with your supplier for a while and trust them it might make sense to have them ship your inventory directly to Amazon. However, your items will need to be packed a certain way for them to be accepted, so initially it’s best to have them shipped to you first so you can inspect them before sending them to Amazon yourself.
To start, you’ll need to go to your Seller Central account and create a shipping plan. This will tell Amazon:
The type of products that you’re sending them.
The number of products you’re sending them.
The shipping method you’re using to send the products to them.
Whether you’ll be labeling your products yourself or if you want Amazon to do that for you.
Once you do that, you’ll need to ensure your products are packaged according to Amazon’s specifications and send them to the address provided to you.
For a complete guide on how to send inventory to Amazon, go to the Seller Central Website.
6. How to sell your products on Amazon
The process doesn’t end once you’ve shipped your inventory to Amazon. You’ll have to create a listing for your product, create ads to market your items and maximize sales, and complete a number of other tasks to ensure you’re successful.
To learn everything you need to know about selling on Amazon, check out our article How to Sell on Amazon for Beginners.
Tips and Tricks
If you follow the steps above you’ll be well on your way to becoming an expert seller, but there are a few more things you should consider before you get started.
Here are some additional tips and tricks that will help you during your selling journey:
Sell private label products
Private label products are items that have your own logo on them and are sold under your brand name. While there’s a little more work involved in this strategy at the beginning, it also has a number of benefits:
Separate yourself from competitors: Selling a private label product ensures that you’re selling something different from your competitors. Your product might have a custom feature that no one else has, or it might just have more attractive branding. Either way, it’s a big advantage.
Own the buy box: If you’re selling the exact same product as other sellers then you have to share a listing with them. Whoever offers the lowest price is the one that makes the sale when someone clicks “Buy Now.” However, if you sell a private label product you’ll have your own listing, so when someone goes to buy your product they’re always buying from you.
Build your own brand: If you can develop a quality product that people like they’ll start associating your brand with it. Then you can start releasing other products under that brand, which will allow you to grow your business a lot quicker.
Order a sample before you place an order with a supplier
Pretty much any supplier will tell you they can meet your requirements and produce a quality product for you. But in order to be sure you’ll want to test it for yourself before you invest your money.
Most sellers will be happy to send you a sample of your product (if they don’t then move on and find another supplier). You’ll have to pay a fee for this but it’s more than worth it. It’s hard to really get a sense of something just from a picture. You need to hold it in your hand and see it in person to be sure everything is how it should be.
Once you get a sample that you’re happy with you can place your order with the confidence that your supplier will live up to their promises.
Don’t buy and resell counterfeit products
While Alibaba is a reputable retailer, you’ll still find a wide variety of counterfeit items and cheap knockoffs of popular brand-name products being offered there.
If you’re looking to sell existing products and brands beware of this. Alibaba isn’t the place to get brand name and officially licensed items. You’re much better off dealing with local suppliers and wholesalers for those types of items.
Selling counterfeit items can lead to a number of legal problems for both you and Amazon, so if they catch you doing it your account will be banned and you’ll no longer be able to sell on the platform. The risk isn’t worth the reward so just avoid these products altogether.
Choose a safe payment method
There are a few different payment methods you can use when buying products on Alibaba, and some are safer than others. In most cases you’ll have five options:
PayPal: If the supplier accepts PayPal then this is usually going to be your best option. It’s very convenient and the company offers buyer protection.
Escrow Service: Escrow services are also a good option. Your money will be held by a third party and will only be released when you receive your order.
Letter of Credit: This is a very safe option, but it can be fairly complicated to set up so it’s not recommended for everyone.
Bank Transfer: This is usually only advisable if you know the seller well. Bank transfers offer you little or no recourse if something goes wrong with your order.
Western Union: Similar to a bank transfer you won’t have any recourse if something goes wrong so it’s not usually the best option.
Make sure to do your due diligence and choose a payment option that you’re comfortable with.
Sourcing products from China can seem complicated at first. But as you can see, Alibaba makes the process a lot easier and more convenient. Like anything there are pros and cons, but the positives far outweigh the negatives.
If you follow the advice discussed here it won’t be long before you have a large inventory of profitable products that can make money on Amazon.