One of my first questions when I started digging deeply into selling on Amazon concerned where all these new Amazon products were coming from. In my mind, since everything seemed to come from the ecommerce giant, maybe Amazon had a big free-for-all wholesale component where entrepreneurs bought from Amazon, then resold the products at a profit.
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 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.
A (Very) Short Alibaba Users’ Guide
Do Use Alibaba if:
- You’re trying to create a private label product that is unique to your brand
- You’ve taken the time to develop your own custom logo and/or design specs for an Amazon product you hope to launch
- Looking for a supplier or manufacturer to make that Amazon private label product you’re sure will be a hit? Alibaba’s the right place!
Don’t Use Alibaba if:
- You hope to quickly make a killing with branded products. Trying to resell counterfeit Disney products is a ticket towards becoming permanently banned from selling on Amazon’s platform. They’re famous for their vigilance in upholding their anti-counterfeiting policy
- Your intention is simply to test product ideas by purchasing small lots (or single) products. While it’s possible, AliExpress is a much better option for this
Amazon Product Research
Do you already have a product idea? Or, are you still wondering what to sell? Of course, high demand and low competition is the combination that everyone is looking for, but it’s not really as straightforward as that.
Many very successful Amazon sellers promote the idea that the real sweet spot lies in the middle. High demand is probably going to mean a LOT of competition. And, not all those sellers are white-hat (or ethical) sellers. High demand attracts the highly competitive as well as those willing to do anything to make the sale. Steering clear of those high octane product niches will make for a less bumpy ecommerce road.
Instead, look for a balance between demand, and competition, then, make sure to include the important last element of that ecommerce trifecta, profitability.
When it comes time to launch your Amazon product, AND invest in Pay per Click (PPC) advertising, a product with JUST ENOUGH volume, and SOME competition is going to help you find that level of profitability that helps you succeed, while flying under the radar of rabid, unscrupulous sellers..
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.
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 Rolling Stone’s “The 100 Best Albums of the Last 20 Years” 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
CANOPY Management is a “full service” marketing agency for Amazon sellers, and our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts. When you consider the ways in which CANOPY Management is able to help you grow your Amazon business, you’ll know why.
- Strategic Growth Planning
- Listing Copywriting Optimization
- Listing Photography
- Product Videography
- Advertising Management
- Customer Service
- Demand Side Platform (Amazon DSP)
- Amazon Posts
- Full Service Management
- Amazon Review Aggregation
Are you looking to expand your income stream, or transition away from your primary career? It’s a new year and with the growth of ecommerce, now is a great time to reap some benefits yourself!