Are you considering starting a dropshipping business but don't know where to begin?
Alibaba has become increasingly popular for its growing selection of product suppliers.
Their wide range of products and efficient supply chain makes for an attractive opportunity for dropshippers wanting to get into the ecommerce game.
This article will walk you through everything you need to know about Alibaba dropshipping in 2023, including getting started, setting up your store, sourcing products, and more!
Read on to find out how you too can leverage the power of Alibaba!
An Introduction to Alibaba
So let's start by looking at who Alibaba is and sharing some interesting facts about them.
What is Alibaba?
Alibaba was founded in 1999 by Jack Ma and is currently predicted to take $137 billion in revenue at the time of writing this.
It is a wholesale marketplace aimed largely at retailers who purchase large quantities of products at a much lower price.
What's great about Alibaba is it allows buyers to negotiate directly with manufacturers and wholesalers with the additional option to create custom products while making significant savings.
How does Alibaba work?
You will find that most suppliers on Alibaba have something called a MOQ (Minimum Order Quantity) on their products.
This means that they will require a minimum purchase from you before you can benefit from the great savings they offer.
You will also find that the scale of the savings depends on how much you order from them. This is usually demonstrated on the product page in a tiered fashion, as shown above.
If you want to learn a little more about this topic, check our article on Minimum Order Quantity (MOQ) For Dropshipping: What to Know.
What's the difference between Alibaba and AliExpress?
The main difference between Alibaba and AliExpress is the MOQ mentioned above. Alibaba is better set up to supply to businesses (B2B), while AliExpress sells largely to individuals (B2C).
You will likely find the same suppliers between both platforms, with the only difference being the MOQ and prices, but did you know they're part of the same company?
That's right, Alibaba and AliExpress both belong to the same parent company, the Alibaba Group.
Our dedicated article on Alibaba vs. AliExpress is certainly worth checking out if you're still unsure which is better for your business needs.
But is Alibaba safe?
Alibaba is safe to use, providing you trade completely within the platform; only then will your transaction be guaranteed.
You may sometimes encounter a supplier that may request payment directly and outside of Alibaba's platform. We strongly advise against this until you first build a solid rapport with the supplier.
Why use Alibaba for dropshipping?
Now that we know a little more about Alibaba, let's take a look at why many entrepreneurs are choosing Alibaba to dropship from.
Low cost per unit
The cost per unit is the main benefit of using Alibaba.
Yes, you'll have to commit to a MOQ in most cases, but in doing you, you get access to the lower cost per unit. This will give you much greater flexibility with your profit margins.
Buying at the source
When dropshipping from Alibaba, you buy either from the manufacturer or their direct distributor. Because of this, the product cost will be much cheaper as fewer middle persons are involved.
As the product trickles down the supply chain, you'll find the same products on platforms such as AliExpress or even Amazon further being listed for substantially more than the initial cost per unit.
Huge range of products
Alibaba has one of the largest online marketplaces, boasting millions of products sold by thousands of suppliers.
This drives a hugely competitive market, meaning that the suppliers will always offer their best prices and demonstrate greater flexibility during negotiations.
Providing the product you want to sell isn't incredibly niche; you shouldn't have an issue finding it at Alibaba.
Branded products
An additional cool thing about Alibaba is its branded products. This is where you can have your company logo on the product and its packaging.
Because, in most cases, you'll be buying a MOQ, the suppliers will have no issue providing branded products as they have essentially been paid for already, so they have nothing to lose.
The supplier will typically ask for an upfront cost to set up the branded products and packaging on top of the cost of the MOQ purchase. This cost can usually be negotiated depending on the size of your initial purchase.
Branded products help you establish your company's identity and set yourself aside from your competitors. You should seriously consider this if you plan to build on a brand.
How to get started dropshipping from Alibaba
Now that we know the benefits of using Alibaba, you're probably wondering how to start dropshipping from them. Here we take a step-by-step look at how to do this.
Finding suppliers
You'll first want to search for your product(s) on the Alibaba marketplace, as shown below.
You can then click on the supplier name, which will take you to their profile. Here you will be able to see a great deal of information about them.
It would help if you looked out for their reviews, the number of employees, and the number of transactions; in all cases, the higher, the better, demonstrating business continuity.
What you don't want is a new business with a few employees and few transactions, as this suggests they could be a pop-up business.
If you like what you see, you can shortlist the supplier by clicking the ‘Follow' button on their profile page. You can find them later on your ‘Favourites' page, as shown below, by clicking on your Alibaba profile. The same can also be for products.
Please note that adding products and suppliers to your account can only be done using a created Alibaba account. If you have a Gmail account, this can be made very quickly by logging in using Gmail.
We've gone into this topic in a lot more detail in our article on How to Find Great Dropshipping Suppliers on Alibaba in 2023.
Talking to suppliers
Once you've found and shortlisted a few suppliers, it's time to talk to them.
We can't stress the importance of this step enough; not doing this will cause you many problems further down the road. As Alibaba suppliers are based predominantly in China, there's no better time than now to identify any communicational barriers.
You should ask the suppliers a few questions and be prepared to re-phrase your question if they don't initially understand. If there is a very clear language barrier that you can't work around, then this could be a problem for you later, so perhaps look elsewhere.
Without having these conversations first-hand, you may find yourself in an embarrassing situation, as I mentioned in My €300 Dropship Experience.
The first, and most important question, is whether the supplier actually facilities dropshipping; some won't, and if they don't, then it's a non-starter, so move on to the next supplier.
You can also ask the supplier about estimated delivery times to your target countries and ask for tracking numbers for completed deliveries to verify this.
Another good topic to raise is how the supplier intends to handle returns should you decide to use them for your dropshipping store.
The point here is that no matter what the question is, ask something to gauge the response time and quality. This is a great opportunity to build a rapport for what could be a long-term business arrangement.
Getting a quote
So your shortlist of suppliers should be quite a bit smaller now that you've spoken to a few of them. The next step is to get quotes from them and compare them against one another.
You may be asking at this point, ‘but they have their prices on the product page. Why do we need a quote?'
The answer to this is that the prices are not fixed. The price you'll get will scale based on your buying power, so naturally, you'll benefit from a much better cost-per-unit if you buy in bulk.
So you will need to reach out to the supplier and ask them if you buy x units, what price can they do for you. The first price will be your benchmark, which can be used when asking for quotes from other suppliers.
Don't be afraid to tell the supplier that you have a better quote from another supplier; they will try and better it if you do. The above example was quite a high quote, but it helped get a better one from a different supplier.
Order sample products
One point we haven't covered is product quality. How do you know the quality is adequate when your supplier is located on the other side of the world?
The most straight forward solution to this is ordering sample products. This is applicable no matter which sales platform you decide to dropship from and is your only way to manage the quality of the product you'll be selling.
Fortunately, Alibaba facilitates ordering sample products, and there is no need to purchase a MOQ to do this either. You can find the button for this, as shown above, on the products page.
You will need to purchase this, but it will be immensely cheaper than the refunds you may need to issue if the product quality is poor.
An additional benefit to ordering a sample product is this will take you through the same buyers' journey as your would-be customers.
If you receive a damaged/defective product or it has taken a very long time to arrive, use this as food for thought; your customers will likely have the same experience.
How do you integrate Alibaba with your store?
So if you've come this far, you've likely decided on a product and a supplier to dropship from.
However, if you're planning on making many sales or adding numerous products, then the last thing you'll want to do is handle all of this manually. So let's take a quick look at some apps that integrate with your dropshipping store.
The top Alibaba dropshipping apps
In no particular order, the most popular Alibaba dropshipping apps are as follows:
- Spocket
- Modalyst
- Syncee
- Dropified
- Sezam
More detail on the pros and cons of these apps, including pricing, can be found in our article on the 5 Best Alibaba Dropshipping Connection Apps & Plugins.
Finding products
Earlier, the main way to find products available for dropshipping through Alibaba would be through the Alibaba Dropshipping Center.
This has since changed, and the apps, as mentioned earlier, will scrape Alibaba for this information:
What's great in the above example using Syncee is they have numerous filters that can be added for much more in-depth product research.
Adding products
These apps will add products to your store in just a few clicks.
Most will do this by having a browser plugin that will pull the data and images from the product page to your ecommerce platform.
Without this integration, you're in for a very hard time if you have a store with several products.
We've gone over a few different options for adding products to your store in our article on How Do You Import Products From Alibaba to Shopify?
Automating orders and fulfillment
Can you imagine having several orders a day, then having to fulfill each one, entering your account details on each order, one by one? Sounds painful, right?
Fortunately, the above apps offer order integration and fulfillment. Below is an example with Spocket, demonstrating how to fulfill an order using their platform.
Pricing Rules
As prices from your supplier may fluctuate, it's important to have some pricing rules in place on your store to avoid the fluctuations falling off your radar and you consequently selling at a loss.
What's great about pricing rules is that you can make them quite advanced using features such as the cost-per-unit multiplied by x and even rounded up or down.
Monitor remaining stock levels
Knowing when your products are about to run out is very important in dropshipping. The last thing you'd want to do is sell a product that has run out.
This wouldn't be as problematic with Alibaba as on other platforms, as you usually buy at the source. But it's always a great practice to have this integration in place should this ever happen.
Modalyst handles this effortlessly, as shown above. How this reflects on your store will, of course, depend on your store's platform.
With Shopify, this will trigger the ‘out of stock' message to your customers on the product page, provided you've set it as such.
FAQs about Alibaba dropshipping
Let's now go through a few of the frequently asked questions on dropshipping through Alibaba:
Does Alibaba allow dropshipping?
Yes, most suppliers facilitate dropshipping now, but it's always worth checking if unsure.
Is Alibaba dropshipping free?
Yes, the service is free to use. Just be wary of the shipping costs, as these can affect your profit margin.
Can I use Alibaba on Shopify?
Yes, you can, but you may need a third-party app to help import products and fulfill the orders.
Can I buy from Alibaba if I am not a business?
Yes, however, some suppliers may require MOQ (Minimum Order Quantity) to take advantage of their best prices.
Summary
Before we go to the conclusion, we've created a quick summary of this article for you, so you can easily remember it:
- Alibaba is a wholesale marketplace focused on B2B (Business to Business).
- It's safe to use, provided you operate entirely within the platform.
- Alibaba offers the best cost-per-unit; however, you'll need to purchase a MOQ (Minimum Order Quantity) to benefit from this.
- Taking to suppliers first is very important.
- The prices on the product page are not the final prices.
- Order sample products before selling them in your store.
- Automation apps are a must if you plan to scale your business.
Conclusion
In this article, we first looked at who Alibaba is, and we soon learned that they're an ecommerce giant similar to Amazon but focused largely on B2B.
Again, similar to Amazon, they are a completely secure platform to use, but this is on the condition that you don't deviate from Alibaba; your money won't be guaranteed outside of it.
Alibaba offers, by far, the best cost-per-unit out there. As demonstrated earlier, the same product is being re-listed for a much higher price on other platforms. To get the lowest cost-per-unit, you will have to commit a MOQ. As your MOQ increases, you're cost-per-unit will lower.
We explained in this article why speaking to your suppliers is important; opening this dialogue early on is very important to ‘separate the wheat from the chaff,' so to speak.
The prices shown on the product page aren't always the final price available to you, so be prepared to negotiate, even if this means committing to a MOQ. You can explore your options on prices when speaking to suppliers.
Ordering product samples is crucial, even when dropshipping from other suppliers. This will ensure product quality and delivery times are where you expect them to be.
Last but most certainly not least, we laid out a few options for automation apps with Alibaba.
If you plan to make it big, you can't do this without automation because adding numerous products and fulfilling multiple orders manually is, quite frankly, a waste of time when you should be focused on higher-level issues.
For more information on starting your own online store, check out our in-depth guide here!
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