We have been working as an agent in China since 2010.
During this period, we used the services of Alibaba and gained insight into what to pay attention to. We quickly realized that not everything is so great and fabulous, so we decided to warn you and create a collection of Chinese sites or Chinese firms which were then on Alibaba and which, in addition to the presentation on Alibaba, also had their own website.
Today, you can see how many of those companies are still in business, whether they exist online, and how likely you are to run into a problem in independent trade with China.
In addition, we had the opportunity to see what the injured clients complained about who bought independently through Alibaba and later when things went wrong, they asked for our help. Not so long ago (at the end of 2022) we were contacted by a company from BiH claiming that they bought through Alibaba and that they were fairly damaged for about €50,000. They contacted us asking for our help in resolving the dispute.
Fraud by sellers from Alibaba happened to us as well, during a personal purchase by Mr. Mice. You can read the text about it on our blog Alibaba and its bandits
Not everyone's experiences are like this, but we draw your attention to the fact that it can happen to anyone!
Today we use Alibaba relatively little (we hardly use it at all, you will find out why in the last paragraph of the text) but we look at it from time to time and contact sellers mainly at the insistence of our clients.
We had our company represented on Alibaba, and therefore we think we can give our opinion and share our Alibaba experiences with you.
On this occasion, we present you with a few useful tips.
Image by Valdas Miskinis from Pixabay
Why are products on Alibaba so cheap?
Alibaba is an online marketplace where suppliers from around the world can sell products directly to customers, often in large quantities. Prices offered on Alibaba can be very competitive due to several factors:
- High volume of purchases: Many products on Alibaba are sold in large quantities, which can lead to lower prices per product unit. Customers who buy larger quantities can often negotiate better prices with suppliers.
- Lower overhead costs: Many suppliers on Alibaba are located in countries where labor and overhead costs are lower than in the West. This can allow them to offer products at lower prices while maintaining a profit margin.
- Direct selling: By selling directly to customers on Alibaba, suppliers can cut out middlemen or distribution channels, which can lead to lower prices for customers.
- Intense Competition: Alibaba is a highly competitive marketplace, with thousands of suppliers offering similar products. To remain competitive, suppliers may lower their prices to attract more customers.
- Quality variations: Some of the products on Alibaba may be of lower quality or not meet the same standards as those found in Western markets, which may result in lower prices.
It's important to note, however, that not all products on Alibaba are cheap and it's important to research and evaluate suppliers carefully before purchasing to ensure you're getting a good deal on a high-quality product.
Is Alibaba safe to trade?
Alibaba is a massively used wholesale transaction platform. It connects companies with suppliers from all over the world and offers a wide range of products at competitive prices.
However, as with any online marketplace, there is always a risk of scams or fraud.
To be confident when shopping on Alibaba, it is important to take precautions such as: checking the credibility of suppliers, reviewing their ratings and reviews, and using secure payment methods.
Alibaba also has measures in place to protect customers, such as their Trade Assurance program, which provides a level of protection for payments on the platform itself.
Nevertheless, it is always advisable to pay attention and take appropriate precautions when transacting on Alibaba or any other platform.
Image by Gino Crescoli from Pixabay
What are the risks when buying from Alibaba?
Purchasing from Alibaba can carry certain risks, as in any online market.
Here are some of the risks you should be aware of:
- Fake suppliers: There is always a risk of dealing with fake suppliers on Alibaba. Some suppliers may be misrepresenting their products, offering counterfeit or substandard products, or simply not delivering as promised. It is important to research and check the credibility of the supplier before making any purchase.
- Quality Control: As a customer, you may not have the opportunity to inspect the merchandise prior to purchase. This can lead to quality control issues, such as receiving products that are damaged, defective or out of order. It is important to communicate clearly with the supplier about your expectations and ask for detailed product specifications before purchasing.
- Shipping and Logistics: Alibaba deals with suppliers from all over the world, which can make shipping and logistics a complex process. There may be delays, customs issues or additional fees associated with importing products from overseas. It is important to research the shipping and logistics process and work closely with the supplier to ensure that products are delivered on time and in good condition. It is a very common case that sellers on Alibaba include transport in the price, but do not mention that it is only transport to the port, for example. Rijeka or Kopar, so you may have additional costs and complications in the process of purchasing goods.
- Language and cultural barriers: Alibaba is an international marketplace, and language and cultural barriers can sometimes make communication with suppliers difficult. Misunderstandings can lead to problems with quality control, delivery or payment. It is important to work with suppliers who have good communication skills and use translation tools when necessary.
- Payment security: There is always a risk of payment fraud when shopping online. Alibaba offers payment protection through its Trade Assurance program, but it's still important to use secure payment methods and verify the authenticity of payment requests before sending money.
Overall, shopping from Alibaba can be a great way to get products at competitive prices, but it's important to be aware of the risks and take the appropriate precautions to mitigate them.
What percentage does Alibaba take?
Alibaba charges fees to both buyers and sellers, but the percentage they take can vary depending on the specific transaction and the type of service used.
Here are some examples of fees that Alibaba charges:
- Membership Fee: Alibaba charges a membership fee to sellers who wish to access premium features on the platform. These fees can range from a few hundred dollars a year to several thousand dollars.
- Transaction Fees: Alibaba charges transaction fees to sellers based on the value of products sold. These fees can range from 2-5% of the transaction value, depending on the type of product and the payment method used.
- Advertising fees: Alibaba offers various advertising services to sellers to help them promote their products on the platform. These services come with additional fees, which may vary depending on the scope and duration of the campaign.
- Transportation and Logistics Fees: Alibaba offers transportation and logistics services to help sellers deliver their products to customers. These services come with additional fees, which may vary depending on the size and weight of the products being shipped.
- Payment Processing Fees: Alibaba offers payment processing services through its subsidiary, Alipay. These services come with additional fees, which may vary depending on the payment method used and the country where the transaction takes place. It is important to note that the fees charged by Alibaba may vary depending on the specific transaction and the type of service used.
Customers should carefully review the terms and conditions of any transaction prior to purchase to ensure they understand the fees involved.
Buyers outside of China are generally unaware of these costs and take it for granted that Alibaba has the best prices for products in China, but in fact this is not the case.
This is why we avoid Alibaba when looking for products for our clients!
If you need help or advice on sourcing goods from China write-us, we will be happy to help.