8 Tips for doing business via Alibaba.com

When you have found a profitable product for your e-com webstore, Amazon account or Bol.com seller account, you might want to know where to find this product online for your inventory. There is a large chance that your product comes straight from Alibaba.com. Therefore, we have written you a quick list of tips what to take into account when you do business on Alibaba to make your business more secure and profitable.

1.????Be friendly and professional

Welcome to the world of international trade. That's a term that will blow your mind. You are now doing business through a platform with over 200,000 factories and suppliers, and you are also involved in the world's economy. No matter how small your order is, you are playing along, making you an entrepreneur!

It is essential in this world to be mindful of decency and professionalism. You will negotiate prices with multiple suppliers through the chat function on Alibaba.com, with rules involved. Thus, you will want to appear successful and vital to claim a dominant position in the negotiation. Do not let it be known that this is the first time you have purchased through Alibaba.com, but act as if you have been doing this for years for mega orders.?

Always be neat and correct and address the person as "sir" or "madame" unless otherwise indicated by the other party. When naming a bid or price, consider the exchange rate and also keep in mind to add a symbol for the currency you mean. 10,000 Yen is fine, but 10,000 Euros is money.?

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2.????Approach several parties for the best deal

If you can't work it out with one party, approach another and start again. You could check again in a few days whether the first party now wants to drop the price. You could also indicate to the parties that several suppliers have been approached, so they had better come up with the best price. They also play sellers off against each other by being open about the bids. That way, the party knows they are not the only one and have a less dominant role in the negotiation.?

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There are often several parties offering the same or a similar product. So this increases your chances of getting a reasonable price and conditions for your product. It also helps in product quality. Suppose you place a trial order with both companies. In that case, you can compare the quality and choose which strategy (cheap or quality) suits you best.?

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3.????Pay exclusively through the platform Alibaba.com.

By paying through Alibaba.com, you can be sure that you are taking advantage of trade assurance. Payments and communications outside this platform are not covered if a company fails to meet its commitments or delivery. Therefore, we recommend communicating only through Alibaba.com. Even if the supplier promises to offer better prices or they approach you via email or WhatsApp. Indicate this to the supplier via the chat function. If they consistently continue with questionable actions, report the company to alibaba.com and continue your fantastic e-commerce adventure with another supplier! After all, there are over 200,000 of them!?

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4.????Keep in mind shipping times and time zones in Asia.

You will want to start your shopping early in the morning, as it is still midday in China and South East Asia. Some negotiations will take several days as the supplier may also need to check availability and current prices. So be patient and wait. The more you come across as a hasty customer, the more they will see that you need this order, so they will be able to raise prices.?

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In addition, you will want to negotiate not only on price but also on the various delivery methods. If a price by ship or train takes twice as long as the plane, it's okay to indicate that you expect a lower price for this. Ultimately, you need to be aware that the seller on the other side of the platform also has a bottom price. It's up to you to discover this without cutting the deal. Then again, remember that there may be 100 other buyers before you. So suppliers have significant dominance in a conversation. If their floor price is not close to your expectations, redo the calculations and remain objective and professional.?

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5.????Also, think about the environment.

When you have found your product and are going to pay via the payment systems of Alibaba.com, the last thing you have to do is to agree on a price with the supplier for your shipping method. There are three standard methods: air, sea and land. Depending on your choice, you either have faster delivery for a higher price or later delivery for a better price. The size, weight, number of products, material and value, are essential. Sometimes you can also specify which supplier you prefer to use for this. Where one is a fan of DHL, the other strongly prefers UPS. This is usually based on experience.

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What you might additionally want to consider is the CO2 that your business emits. Even though e-commerce is effortless and you don't need a physical location with light and heating except for your living room or attic, there are still steps in your business where the environment is burdened considerably. Parcel planes, for example, are a real scourge on the climate. It is, therefore, better to make an environmentally conscious choice and have your products delivered via train. This is cheaper than the plane and faster than sea freight, but it still often has a delivery time of over four weeks. However, the climate will thank you for the choice!?

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6.????Order a test order first.

Because most suppliers allow you to order a small test order first, you can first gauge the quality and demand in the market with a minimal investment. Use the aeroplane for this small order so that your stock arrives quickly. Then, order more extensive supplies with other shipping methods to save costs. The advantage of a test order is not only the quality, but it also looks professional if you don't just buy something haphazardly from a supplier. You could ask them to add or modify something in the large order and indicate that you will place multiple orders for the large order.

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By mentioning loyalty and the long term in the conversation, you get more willingness from the supplier to negotiate prices and nice extras to offer with your product. A typical example could be an extra pair of socks, stickers, or even the possibility of adding your logo to the packaging or the product. You can also ask for a manual to be included if the product turns out to be complicated. Test orders may be more expensive than large orders. Still, the possibilities and risks you take away for yourself make it worthwhile. Plus, you can still sell these test products.?

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7.????Use PayPal and look at the seller's company profile.

PayPal has its dispute department. That is, PayPal decides whether a transaction will be refunded or not if there is something wrong with the delivery. This is an added security for you as a buyer. The PayPal buyer protection is often in favour of the buyer, and you, therefore, have a better chance of a refund if the delivery is broken, late or did not arrive. The latter is fortunately not often the case. Still, to increase your chances of finding a good supplier, you will also want to look for "gold suppliers" on Alibaba.com. These companies have been working with Alibaba.com for a long time, get a lot of good reviews and make many transactions per month.

Just as you might be a third party selling on Bol.com or Amazon, Alibaba.com also has a platform role where supply and demand come together. The supplier you buy from is an authenticated seller who has to create a complete company profile on alibaba.com. Here you will find the number of employees, the company's ISO and CE requirements, the turnover and the number of transactions this party makes through Alibaba.com. You will also find pictures of the factory's working conditions and several products the company offers. By reading up on these details, you can decide whether the company appears to be of good quality.?

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8.????Calculate for how long you want to stock

Before you enter into negotiations, you will need to plan what selling price you want to handle, your costs, and how much stock you want to keep. By being sharp with the numbers, you know precisely how far you can go. If, for example, your orders arrive by train, ensure that you have enough stock while waiting for a new delivery and that you do not sell out before your new stock arrives. This not only means that you lose the buying block but also that you don't make any sales.

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If you don't get to the price you had in mind while negotiating, make sure you set up a BATNA for yourself beforehand. A what! A BATNA is a "Best Alternative to a Negotiated Agreement. That is, you should always have a plan B that you can live with. That doesn't mean if you think a price of $1000 is too high, your BATNA is $1001. But for example, suppose you can sell 200 products in 4 months, and party A has 100 products he can deliver monthly for $1 each. Then you might want to keep Party B in reserve, which can provide 50 products for $1.50 each with a 2-week delivery. Party B's price is higher, but they can respond more quickly if you suddenly sell more than expected.?

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In this way, you not only keep your options open but also ensure that you are flexible if party A raises its price or an error in the delivery results in the delivery of the wrong products. Also, if negotiations with party A fail, you can always fall back on the best alternative. With a BATNA drawn up in advance, you never have to put all your money on one horse.

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