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Sourcing On Alibaba: A Quickstart Guide for Ecommerce Sellers

Step out of the Amazon bubble and learn how to leverage Alibaba to source products, and expand your online business!

  • May 2, 2024
  • /
  • CANOPY Management
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A graphic image of a large downtown with two big buildings. One of them with an Amazon logo, and one with an Alibaba logo.

A big question that a lot of prospective ecommerce sellers have is – where do these new Amazon products ideas come from? 

It seems that every time I look up from my phone I see another Amazon van double parked in the middle of the street, its driver off making a round of deliveries. That’s why it might be easy to think that everything comes from the ecommerce giant. 

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Not so. 

It turns out that when it comes to the ecommerce jungle, there’s another big animal out there.

It’s called Alibaba. 

While at first glance they appear to have similar business models, they are in fact quite different.

What is Alibaba?

Alibaba is a global business-to-business ecommerce platform that connects sellers and brands with manufacturers and suppliers. Unlike Amazon, where buyers have gotten into the environmentally troublesome habit of purchasing a single toothbrush at a time, Alibaba is a platform where businesses tend to purchase products in bulk to resell online or in a brick-and-mortar store.

We know Amazon as an ecommerce marketplace. It’s also the home of the incredibly profitable Amazon Web Services (AWS), Amazon’s cloud computing megalith.  Another big chunk of Amazon’s revenue comes from electronic products and digital media content (including Amazon Prime). 

On the other hand, Alibaba uses a wide range of companies (under the Alibaba umbrella) to reach various ecommerce niches. For example, Alibaba’s Taobao is one of their most profitable marketplaces and is responsible for more than 80% of Alibaba’s sales. 

Another difference is that while Amazon is famous (or depending on who you speak to, infamous), for its enormous warehouses, Alibaba isn’t involved in direct sales and does not own any warehouses. Their very specific goal is to help small businesses and branded manufacturers reach consumers. 

5 Reasons Why Ecommerce Sellers Might Want to Use Alibaba to Source Products

In the highly competitive world of ecommerce, sellers are constantly seeking the best platform to showcase and sell their products. While Amazon has long been a dominant force in the industry, Alibaba has emerged as an interesting alternative for many sellers. 

Here are five key reasons why ecommerce sellers might want to use Alibaba’s vast product inventory to source product ideas:

1. Lower costs

One of the most significant advantages of selling on Alibaba is the potential for lower overall costs. Compared to Amazon, Alibaba generally offers lower fees and commission rates, which can translate into higher profit margins for sellers. 

This is especially beneficial for businesses dealing with high-volume or low-margin products, where even small differences in costs can have a substantial impact on the bottom line. By opting for Alibaba, sellers can potentially reduce their expenses and allocate more resources towards growth and expansion.

That creates a lower bar of entry, and contributes to the tens of thousands of good product ideas in the early stages of developement.

2. Access to global markets

Alibaba’s strong global presence is another compelling reason for sellers to take a closer look at this platform. With an extensively developed network of buyers and suppliers across Asia and other international markets, Alibaba provides sellers with access to a vast and diverse customer base. 

This global reach can be particularly valuable for businesses looking to expand beyond their domestic market, where Amazon may have a more dominant position. By tapping into Alibaba’s international network, sellers can explore new opportunities, diversify their revenue streams, and build a global brand presence.

3. Fewer restrictions

Navigating the complex world of ecommerce can be challenging, especially when dealing with strict policies and guidelines. Amazon is known for its stringent requirements that sellers must adhere to, which can sometimes be a hurdle for businesses. In contrast, Alibaba tends to have fewer restrictions, providing sellers with more flexibility in their operations and product listings. 

This can be particularly beneficial for businesses with unique or niche products that may not fit seamlessly into Amazon’s standardized categories and requirements. With Alibaba, sellers can have more control over how they present and market their products, potentially leading to better visibility and sales.

4. Business-to-business (B2B) focus

While Amazon primarily caters to business-to-consumer (B2C) transactions, Alibaba has a strong emphasis on facilitating business-to-business (B2B) deals. This focus can be a significant advantage for sellers who specialize in wholesale or bulk orders, as they can connect with other businesses looking to purchase large quantities of products. 

Alibaba’s B2B orientation provides a platform for sellers to establish long-term relationships with other companies, secure recurring orders, and scale their operations more effectively. By leveraging Alibaba’s B2B capabilities, sellers can tap into a lucrative market segment and diversify their customer base.

5. Branding and visibility

Ecommerce is becoming more competitive every day. Establishing a strong brand identity and achieving high visibility can be challenging, especially on platforms like Amazon, where sellers often compete with Amazon’s own branded products and a multitude of other third-party sellers. 

Alibaba, on the other hand, provides sellers with more opportunities to showcase their unique brand identity and gain visibility. Without the overshadowing presence of a dominant marketplace operator, sellers on Alibaba can more easily build brand recognition, connect with their target audience, and differentiate themselves from competitors. 

This increased control over branding and visibility can be a significant advantage for businesses looking to establish a strong and lasting presence in the ecommerce space.

Again, that encourages brand vitality and makes Alibaba a prolific breeding ground for product ideas.

Before You Start

Before making a big order on Alibaba, smart ecommerce sellers take the time to validate their product ideas. Here are a few ways that you can do just that. 

As I mentioned earlier, AliExpress is a great platform on which to purchase small quantities of a product to run tests. Next, you’ll want to take steps to make sure that you’re buying from a reputable, vetted manufacturer or supplier. 

Specifically, make sure that these boxes are checked for the supplier:

Trade Assurance is a free service offered by Alibaba.com that’s designed to help create trust between buyers and suppliers and covers you in the event of shipping or quality-related disputes. 

Gold Suppliers is a paid membership program offering benefits and assurances to both manufacturers and buyers.

Assessed Supplier designates suppliers verified by the world’s leading inspection companies. 

Then, put Google to work for you. You can even use websites such as Supplier Blacklist that (despite its ominous-sounding name) can give you background information on suppliers from customers who leave their impressions. Or, simply type in your supplier’s name accompanied by words like ‘scam’ or ‘fraud’ to see the results on the page.

Vetting Your Amazon Product Idea

Let’s choose a niche. 

If you’re looking for a niche idea, here are a few great places to start. 

Helium 10, JungleScout (and Other SaaS Companies)

Software as a Service (SaaS) superstar Helium 10 has a number of ways that Amazon sellers can research individual product niches, a Chrome extension, a product research tool, Black Box, and Trendster. All three tools offer different ways to search and ultimately identify opportunities. JungleScout’s Opportunity Finder has similar abilities. 

 

Amazon

If Amazon is the final destination of your product, it just makes sense to do a little research ON AMAZON to see what the terrain looks like. Many Alibaba products are already selling on Amazon’s platform, so you can see how they’re doing in real time. While you’re at it, check out the reviews. If this is a product you’re really considering, those reviews will help you build the final product. 

Be sure to look at the dates of the reviews. Are people still buying the product or has it run its course? I have been curious about a new technology used by this inline skate company. A five-star buyer helped me to understand that with innovation comes the occasional challenge. 

“Listicle” Blog Posts

Listicles, such as Cosmopolitan’s “The 60 Amazon Must Haves for 2024” in the screenshot above are short form content that uses a list as the basic foundation of the post. Even though there are occasionally posts that reference new products, in most cases, the products occupying these lists are evergreen in nature. A quick search on Google will show that ecommerce writers are particularly passionate fans of listicles. 

Google Trends, a website by Google that analyzes the popularity of top search queries in Google Search is another way to get up-to-date, relevant information. You’re able to filter by sub-region, time, and category, as well as compare trends and related searches. Coincidentally, a couple of “listicles” are two of the top trends associated with the search term, “selling on Amazon.”

Selecting an Alibaba Manufacturer 

Here’s an interesting hack that more than a few Amazon sellers use to source successful products. Start with the manufacturer, not the product. After all, selecting the supplier is often the most challenging aspect of selling on Amazon. Maybe there’s a language barrier, or it’s just a matter of trust. In either case, once you’ve found a manufacturer that you feel comfortable with and that you trust, it might be worth your time to see WHAT ELSE they sell. 

Type in the Product You’re Searching For

For example, I’m looking for a cutting board manufacturer. After getting the results, I can choose to filter them further using a variety of differentiators such as capabilities, ratings, staff size, and gross revenue. 

You can then further narrow down your suppliers to filter for Trade Assurance, Assessed Supplier, and/or Gold Suppliers.

Contacting the Supplier or Manufacturer

After selecting a manufacturer/supplier, the next step is to make contact. As seen on the screenshot above, in the upper righthand corner there’s an orange “Contact Supplier” button. 

It’s similar to sending an email, but it’s through the Alibaba site. You’ll receive an email notification for every response the supplier sends you. You can also attach pictures of examples, etc. Amazon pros familiar with Alibaba recommend keeping the communications as short and clear as possible. When arranging for samples, understand that this is NOT the time to show off your negotiating skills. It’s the perfect time to begin to build a relationship. 

Save those negotiating skills when you’ve gotten to the point where you’re talking about larger orders. They’ll be more welcome at that point in the business relationship. 

Lastly, remember that selling on Amazon (as well as working with your supplier on Alibaba) isn’t a cash grab. Instead, you should focus on building lasting relationships and a sustainable, business model. Taking the time to ask about your suppliers’ family, or sharing stories of your respective countries isn’t just the right thing to do, it’s also good business. 

How Canopy Management Can Help

What would adding 67% more organic sales mean for your brand?

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Canopy Management is a full-service marketing agency for Amazon and Walmart sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts.

When you consider the many ways that Canopy Management can help you grow your business, you’ll see why selling on Amazon is much easier “under the Canopy.”

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