Alibaba has become over the last few years, one of the first reference points for many buyers looking to find products in China. Online trading platforms can be a cost effective and easy way to touch base with suppliers without leaving the comfort of your home computer.
Lets face it, trying to find any product online today through Google or Yahoo and you are likely to come up with a first page full of listings that direct you straight back to trading platforms like Alibaba, Tradekey, Made in China and a string of other B2B websites. They are here to stay so it is best to learn how to deal with them and benefit from the experience.
I use Alibaba frequently as a reference point to assess basic market pricing, production areas and get preliminary quotations from potential sellers. The online trading platforms are a fantastic tool if used wisely and can greatly improve your chances of getting the right product from the right source for the right price.
But there are some problems with Alibaba and it is important that buyers know how to differentiate between the manufacturer and the trading companies which act as middle men and sometimes charge over the top mark ups by simply placing an order with your money.
In some instances these trading companies and wholesalers are necessary as the volumes of products that factories prefer to deal with are usually based on full shipping container loads. Many small businesses cannot handle this volume of product and are better suited to dealing with wholesale sellers that hold stock. One other advantage with trading companies is that they usually have relationships with factories and can often negotiate smaller lots at prices better than many new buyers can get if they deal with the manufacturer direct.
If you are a high volume buyer and can handle the quantities that factories will agree to sell , then it is important to know how to differentiate between the manufacturers and the traders.
The most important thing to note is that most factories specialize in usually one product type. They will usually have a name that is kind of boring and does not reflect an international flavor. A typical Chinese factory name would be Beijing Glass Products Co. LTD. The cool sounding and professional sounding companies are usually traders that sell product from the factories at a mark up. This is not always the case but is generally the rule of thumb I apply when searching online.
Check the product listings that the company offers. If you see products that require a big variety of materials that do not seem related then chances are they are a trader. Any company that sells a thousand different items from children’s toys to clothing to rubber sandals is probably not going to be anything more than a trader or a wholesaler.
One other deceiving part of Alibaba is the membership types that are able to be purchased. The fact that a company is a “Gold Supplier” in no way reflects that they are a manufacturer or can be trusted. Gold membership or premium membership on these sites require only a payment in order to verify a sellers authenticity. Alibaba for instance will not take away a members company listing if they commit fraud or cheat someone. All that is important is that the Gold Member pays their membership each year.
If i am searching for a product type for example peanuts I would first research the areas that peanut production is centered in China. I would contact companies dealing with products of an agricultural nature from these areas. If they are offering products outside of the agricultural field I would still talk with them. But only if they are able to supply me with upfront export quality certification in their name.
Real producers are happy to show you their certificates and usually have copies of them on their websites to show buyers. They are proud of these certificates , so any potential supplier that is avoiding showing you this is either not the certified party or does not have the export license.
These are a few of the techniques I use online when looking at the online trading platforms. They may not be exactly right but they may help you to save some money and time when talking to potential suppliers.