product sourcing can make or break your business and Alibaba is a key player in helping you find a great supplier so this video will walk you through using Alibaba the right way helping you sidestep the mistakes that often trip up new sellers you'll learn how to identify and connect with reliable suppliers strategies to protect yourself from potential scams and the latest Alibaba features that enhance sourcing safety we'll also cover some Insider tips for negotiating better deals without compromising on quality so whether you're new to selling or looking to refine your sourcing process this video will
sharpen your Alibaba skills now if you've been following me for any length of time you know that I do a lot of my sourcing from China I've been to the Canton fair and guano China many times to look for suppliers and I've used many different sourcing agents to find factories as well but if you don't have the funds next best way is to use an online supplier directory like Alibaba and in case you aren't familiar with Alibaba Alibaba is a wholesale directory where you can find manufacturers to create products for you at wholesale prices make
modifications and apply your own brand name to your goods so basically Alibaba allows you to make your own custom private label products you get to work with real factories and be directly involved in how your product is designed built and shipped now the caveat however is that when you find a supplier on Alibaba the supplier is not affiliated with Alibaba at all Alibaba is not a retail website it is an online directory they don't sell anything instead they connect you with the manufacturers who are actually doing the selling now the good news is that any
anyone can use Alibaba for free and you do not need to have a company a seller's permit or any credentials whatsoever a website is not necessary either the only thing that an Alibaba supplier cares about is that you can buy in bulk now before you start using Alibaba you should already know your Niche and what you're looking to create because remember Alibaba is a B2B platform so you're going to be placing bulk orders in the hundreds or even thousands of units so it's important that you've already validated what you plan on selling make sure you've
done the research and know that there's a market for the products that you plan on selling because in general Alibaba is not a good place to shop for product ideas and you should also know roughly how much your product should cost in order to make an adequate profit selling online and here's a good rule to thumb ideally you want to have at least a 66% margin on your goods so if your item is selling for 21 bucks on Amazon you want to be able to buy it for less than seven bucks anyway once you know
what product you're looking for go to alibaba.com and create a free account now it's not explicitly necessary to join Alibaba in order to perform a supplier search however if you plan on using some of alibaba's other services like trade Assurance you will eventually need one now one thing that I always do is set up a separate email account dedicated to Alibaba because once you're active on the platform you're going to get flooded with a ton of emails now from here put your email in and then verify it next you'll have to provide all your other
information including your location the fact that you're a buyer your company name and more and as soon as you confirm you're ready to go now if you don't have a company name just yet just add a placeholder for now it doesn't really matter now at this point you're ready to find some suppliers in your Niche and the next step is to perform a search now as an example if I were looking for a supplier from my wedding handkerchief store I would just type in handkerchiefs in the search box and once you perform a search Alibaba
will spit out a bunch of suppliers for what you're trying to sell and at this point I always check the verified supplier box on the leftand column A verified supplier in Alibaba is a supplier that has been thoroughly vetted by a third-party inspection company commissioned by Alibaba this verification process includes an on-site check to ensure that the supplier's facilities operations and capabilities meet certain standards so basically a thirdparty inspection company visits the facilities to verify the physical existence of the company and their operational capabilities they also assess the supplier's production capacity to ensure that they
can handle large orders and meet deadlines and finally they review the supplier's quality control systems to ensure that they have processes in place to maintain product quality now after the inspection a detailed report is generated and made available on alibaba's platform for potential buyers to review now this report typically includes photographs assessment results and other relevant details about the supplier for example let's say you want to make sure that no child labor is being used or you want to make sure that you're not working with a sweat shop you would look for an sa8000 certification
in the supplier reports now make sure you have the verified supplier box checked because without it you will have no idea if the factory is real or whether it's just some random Chinese dude selling products out of his basement now optionally you can also select the verified Pro box which just means that it's a verified supplier that's been in business for at least 5 years now the next box that I would check off is trade Assurance now if this is your first time buying from Alibaba Alibaba provides an Esco Serv service where the supplier will
not get paid until you've received your merchandise and trade Assurance basically prevents you from getting outright ripped off and then finally I would have the less than 1 hour response time box checked off as well communication with your supplier is key and you want to work with a factory that replies quickly now with all those boxes checked Alibaba will filter out the best factories on their platform to show to you and from here you can click onto the listing and see examples of what the supplier offers how soon orders are ready and whether customization is
possible and specifically you should pay attention to the price and the minimum order quantity some manufactures may require a larger upfront purchase so you want to reach out to factories that are in line with your spending power and in general the more you can buy and bulk the lower your prices will be now you also want to do your due diligence on the supplier by looking at their company profile their certifications and their production capacity now for most verified suppliers there's usually a video you can watch that gives you a four of their facilities and
be aware that the prices you find on the Alibaba website are often wildly inaccurate and in general the prices listed on the website tend to be much higher than what you can actually get when you start negotiating with your supplier so overall you should reach out to as many suppliers as you can and get as many quotes as you can so you can get an idea of the range of prices for your product by the way if you're enjoying this video so far make sure you sign up for my free 6-day e-commerce mini course below
where I go into much greater depth on how to start start a profitable online store now after you narrow down your suppliers make contact product pages give you the option to contact the supplier and some even have a live chat function doing your due diligence on a supplier is a must before moving on with any order try to find out a little bit more about the product and obtain a sample all suppliers should be willing to send you a sample and if they refuse just don't work with them some product pages will have a button
that you can press to order a sample along with the price and keep in mind that the sample is going to be far more expensive than the production price because the supplier must create them by hand from scratch but it's always better to pay for a couple of sample orders to compare them then to place a large order and find yourself disappointed now while the sample is going to be expensive most vendors will allow you to apply the cost of your sample towards your first bulk order and here are some of the things that you're
going to want to find out as you contact your suppliers you're going to want to know the minimum order requirements and how much you have to order you want to know the price of a sample you want to know the production pricing once you buy in bulk you want to know how long it's going to take to put together the order and keep in mind that you also have to add in the shipping time understanding that overseas sourcing can take many weeks or even months to deliver and then finally you want to ask about the
payment requirements and if this is your first order make sure they accept trade Assurance now once you're ready to reach out to your supplier here's exactly how to approach them now first off you need to realize that most good suppliers in Alibaba receive hundreds of inquiries per day as a result you need to project confidence and know exactly what you want to buy and here's a sample script that I use when I reach out to a supplier for the very first time hey my name is Steve and I'm a buyer for bumblebee Linens we specialize
in selling handkerchiefs and in fact we're the largest seller of handkerchiefs on the internet we are interested in carrying many of the items that you have to offer and specifically I'd like to get pricing and availability for the following items please send pricing in 500 1,000 and 5,000 unit quanties if you could send a your product catalogs lead times for manufacturing and the minimum order quantity we would greatly appreciate it now you'll notice that this message is concise professional and to the point in addition I asked for multiple quotes depending on the size of the
order even if you don't plan on buying 5,000 units it helps to ask because it implies that you can and are willing to buy that many units now after they reply you're going to want to ask for a sample that matches your exact specifications and this is where you have to do your homework now for my company I mainly deal with with textiles and what I do is I create a Photoshop mockup of exactly what I want to make I'll take an existing photo from their listings and create a document of what changes I want
to make for example when we had napkins made I specified the fabric which I copied from one of their photos the thickness the shade of white and the exact dimensions now chances are the sampling process will take several iterations back and forth until you narrow down the exact specifications for the product that you want to make but once you've received a sample and you're happy you should negotiate prices with the seller all suppliers in China expect to have some sort of negotiation however your ability to negotiate largely depends on your order volume if this is
your first order and your order size is small you will probably have limited negotiation power realize too that your negotiated price might not include shipping so you also need to get the shipping price separate and make sure that it doesn't overwhelm your profit but overall if you've solicited enough quotes from different vendors you should have a pretty good idea of how much your product costs The Source now as you go back and forth with your supplier please keep in mind that you should never negotiate the price of your sample this will make you come across
as an amateur and leave a bad taste in the mouth of your supplier now it's going to take a couple months for your supplier to create your products and while your stuff is being made you're going to want to hire an inspection company like Kema to examine your goods before they are sent to you now personally I like to inspect the first product off the line and have the bulk order inspected at the factory before it's shipped because because once your goods are sent it's extremely expensive to ship them back to China in the event
of a problem now aftering the inspection you can either hire a freight forward or ship your goods or just have the supplier ship them to you directly there are pros and cons to both methods which is beyond the scope of this video but if any of you watching want a freight forwarder recommendation email me and I'll get back to you now once your order arrives it's important to thoroughly check it count the items to ensure that you got everything examine each of the products are any of them damaged are they clean is the packaging acceptable
most inspection companies only have time to examine a statistically significant sample size so there still could be defects and if there's a problem with your order especially damage you can reach out to the supplier and even to Alibaba to see about getting a refund now technically Alibaba trade Assurance protects the buyer in the event that the supplier fails to ship on time or if the product quality varies greatly from what has been agreed upon and if you follow these steps buying from Alibaba is pretty safe and I've never been outright scammed but if you're terrified
of getting ripped off there are a couple things that you can do to prevent this from happening altogether now recently Alibaba introduced a program called Alibaba guaranteed and Alibaba guaranteed is a service designed to enhance the security and reliability of shopping on their platform Alibaba guaranteed listings offer fixed pricing and shipping costs ensuring predictable expenses for buyers in other words A supplier can't come back later and then jack up the price for no reason and this happens sometimes all orders are guaranteed to be delivered by a scheduled date and they provide a money back guarantee
for issues like quality or incorrect orders plus all purchases are eligible to use alibaba's Easy return service which simplifies the entire process now the only disadvantage of Alibaba guaranteed is that it greatly limits your product selection but outside of Alibaba guaranteed buying from Alibaba is very safe as long as you use trade Assurance trade Assurance is a service offered by Alibaba that allows you to protect your online orders when you're pay is made through alibaba.com just make sure that you pay for your order online via Alibaba secure payment platform because if you do not pay
through Alibaba you will not be protected if there's an issue with your order you can request a refund within 30 days of delivery there are no additional fees to use trade Assurance but you may have to pay a payment processing fee depending on which payment method you select now after you pay your supplier via Alibaba if the supplier fails to ship on time or if the product quality varies from the greed upon terms Alibaba will investigate and help you resolve your claim now as I mentioned before I've never been outright scammed from Alibaba but what
is more likely to happen is that you'll get sent lower quality Goods than what you expected and this is why hiring an inspector in China is 100% worth it we hire inspectors even for suppliers that we worked with for decades to keep them in line even though trade Assurance protects you from monetary loss it can still take time to recover your funds and resolve supplier disputes not to mention the sales you are losing from not having products to sell but overall just use common sense when you buy and you should be fine be wary of
suppliers that ask for a full payment to be sent upfront and conducted away from the Alibaba website make sure you check the reviews and the ratings associated with all suppliers and Heen forbid if you have a supplier claiming to offer lowcost products branded with Nike Louis Vuitton or coach just run away as quickly as you can now that you understand how to buy from Alibaba safely make sure you watch this video here for all the potential problems that could arise when sourcing from China and how to deal with it
