You can’t start an online business without a product right?

Well… Alibaba is the world’s biggest supplier marketplace.

But is Alibaba safe?

The short answer is yes, Alibaba is absolutely safe.

…the longer answer is that Alibaba is completely safe only if you know the signs to look for.

Truthfully, the hard part is choosing the right supplier.

And the most dangerous obstacles to finding the perfect supplier are the scammers and middle-men.

Luckily, it’s not difficult to avoid these low lives.

Below, you’ll find a step-by-step guide on how to safely buy products on Alibaba.

Step 1 – Review the Company Profile

Alibaba Manufacturer Home Page

The Company Profile has information that is both verified and unverified by Alibaba.

However, you can get a good idea about whether the supplier is legit or not by looking at the following sections:

Payment Terms

Looking at the image above the first thing that stands out as a positive sign is that the supplier accepts “Trade Assurance”. Trade assurance protects your payment until you verify that you received the products you ordered and they arrived in good condition.

Alibaba Trade Assurance

Another way to be safe on Alibaba is to make sure the supplier accept secure payments.

Legit suppliers on Alibaba will accept these payment methods:

  • AliPay (Fairly Safe)
  • PayPal (Most Safe)
  • Credit Cards (Fairly Safe)

Truthfully you’re 95% safe on Alibaba by making sure the payment terms are protected until the products are in your home. If you never receive the products then they will credit you back your money and open a dispute with the supplier on your behalf.

Alibaba-Must-Have-Payment-Methods

Supplier Status

Another way to quickly check if your Alibaba supplier is safe to work with is by seeing if they have onsite checks and are gold suppliers.

Alibaba Safe Supplier Verification

Suppliers cannot put these icons on their listings. Alibaba has to send third party inspection companies to their factories and verify everything they claim is true and there is an actual business in the registered address.

Legit suppliers make sure that their businesses are verified by multiple inspection companies so you feel completely safe and comfortable to  with them.

Alibaba Supplier Company Website

The supplier below went a step beyond Alibaba onsite checks and paid for their own  verification from a company in France (Bureau Veritas) to come in and inspect their factory.

Staying Safe on Alibaba with Gold Suppliers

Next:

Company name

(Note – Applies to companies registered in Mainland China only)

  • City: Small and medium-sized companies have the city they are located in as part of their company name. For example, “Ningbo Trading Co., Limited”.
  • Province: Larger companies can be named after the province where they are located. For example “Zhejiang Trading Co., Limited”.

Business Type

Business-Type

  • Manufacturer: This means the supplier is only selling products it manufactures.  A manufacturer is limited by its production line, set-up and tooling. Because of this, manufacturers tend to be highly specialized in their field of products.
  • Trading Company: Some Trading Companies are independent while others own, or are owned by, a manufacturing company.  So while everybody wants to cut out the middleman, keep in mind that many factories in Asia don’t have the knowledge or experience for exporting what they produce. On the other hand, some Trading Companies offer no added value and will only raise your costs.
  • Manufacturer & Trading Company: Many factories have expanded their operation by not only selling and marketing products made in their own facilities, but also by trading similar products manufactured by other factories. While this Business Type indicates that the company is indeed a manufacturer, you cannot be sure whether they are manufacturing or subcontracting your products. So it’s tough to be sure if this supplier is a safe choice or not.

Management Certification

Certifications for Alibaba Suppliers
Quality is a serious risk when importing from China.  In fact, quality issues are a bigger reason to lose money than getting scammed. Quality issues can never be completely eliminated, but they can be minimized if the supplier applies a Quality Management System (QMS) such as ISO9001.

  • A “good manufacturer” is continuously monitoring quality. You know it’s time to walk away from a Chinese supplier when they claim to be completely free of defective and damaged products.
  • ISO compliance is more than having a quick check up before the products are packed and shipped. The supplier must inspect incoming raw materials and components before production, set up inspection stations during productions and do final inspections after production.

Registered Address

Contact Information for Alibaba Supplier

  • City, Province: Many cities in China are highly specialized in one or more industries.  A manufacturer is dependent on the surrounding support industries such as logistics, component suppliers, raw material suppliers and labor. For this reason, a supplier that is based in an industrial cluster is likely to be more competitive than a supplier that is not.

Now:

What are the exact things you need to do to protect yourself from middlemen, scams and low quality products and be safe on Alibaba?

Focus on this next step.

Step 2 – Safely Order from Alibaba by Properly Communicating with Your Suppliers

First, why this is important…

It’s always the buyer’s responsibility to make sure your Alibaba supplier is legit and that the products are high quality. Because if you’re thinking about buying a product in bulk, you might want to do deeper research and make sure.

Top 3 Tips to Stay Safe on Alibaba

  • Reach out to them and begin a relationship. Ask for photos of their business license. Contact the phone number in the company listing on Alibaba and ask them what their procedure is for sampling products.
  • Get samples. There is no way that you can confidently invest in a product without samples or “small test orders”. That’s the only way to verify the quality. Be wary of suppliers that only allow you to place large orders.
  • Think abundantly. There are plenty of suppliers out there. If one doesn’t work out then you can move on to the next one.

It Gets Better:

Communicating with the companies on Alibaba is a quick way to sift through the safe ones to work with and the fakes.

Initial Outreach

You want to keep your emails numbered, short, and minimal errors (if any). Doing so will give the representative the best chance to properly communicate with you.

Alibaba Communication Tip: Number your questions.  The representative will see and answer your questions easily.

Requesting a Quote

Here are a few important questions to consider for your email:
Alibaba MOQ

Minimum Order Quantities (MOQ’s) – If you notice in the picture above the minimum order is 50 pieces. You can negotiate MOQ and suppliers can send one or two items for free if you ask.

Pricing For Samples – Make sure that you ask what their price per unit is when they are sending samples.  Because sometimes it’s much higher than their production pricing.

Production Pricing – Above you see that the production price is anywhere between $3.5 to $5 dollars.  It depends on the large order that you place if you get the lower price.

Payment Terms – You want to make sure that the supplier accepts the payment terms you’re most comfortable with.  If they don’t then you should move on to another supplier.

If you want the in-depth to negotiating and communicating with Alibaba suppliers then I highly recommend the video below!

Step 3 – Review Supplier’s Product Selection/Niche

This final step is icing on the cake when looking to be safe on Alibaba.

Look:

An Alibaba suppliers product catalog can give you a lot of information.

And it’s the most important factor when selecting a supplier. Product specialization comes with a number of benefits that will have a large impact on your business.

Checklist

  • Is your product mentioned in the supplier’s company name?
  • Does your product making up the majority of the supplier’s product catalog on Alibaba?
  • Is the supplier listing products that are completely different from the type you’re looking for?

Example: (E.G. Shenzhen Golden Watch Factory Co., Ltd) shows me the factory mostly makes watches.

Legit suppliers that are highly specialized in a certain product are better at managing quality. Pricing can also be cheaper since they buy large volumes of materials, components and tooling that is used only for the manufacturing of your product.

You can’t use the same workforce or tooling for the manufacturing “a little bit of this and a little bit of that”.

An “opportunistic” supplier is also more likely to discontinue products than a professional manufacturer.

How to use the Alibaba supplier search to identify specialized suppliers

supplier-search
Alibaba introduced the suppliers search, a useful feature for finding specialized manufacturers. In the beginning, all it did was presenting a list of suppliers with the product in the company name. Now, it also searches the suppliers product catalog and shows the number of matching products each supplier have!

  1. Go to Alibaba.com
  2. Change the search box from “Products” to Suppliers
  3. Enter the product name and search
  4. Now you will get a long list of all suppliers selling the product you just searched for. This can save time when sourcing suppliers since you can skip the manual review of the product catalog.

Case Study

Staying Safe on Alibaba Example

Guangzhou Guanghao Watch Co., Ltd is manufacturing and exporting LED watches. That’s in fact the only thing they do since they have listed 900 different models. When you work with this company, you can be sure about the following:

  • This supplier only cares about wristwatches, and certainly LED watches. They will develop new models and your company can grow your product selection together with them.
  • 900 different models equals hundreds of thousands of different components. This supplier certainly know how these things work, and more importantly – what doesn’t work. Perhaps not today, but in the future you might want to create your own product with its own unique design and features.

Is Alibaba Safe Example
This other supplier offers only 6 different LED watches.

So how can they be competitive?

Thousands of first time sellers fall for the trick of low prices and positive answers to every question.  Don’t be one of these people that think they’ve are smarter than everybody else – until they realize they just got what they paid for.

Alibaba itself is not the problem. There are people that use the platform to scam people out of their hard earned money.  If you take these tips and put them to good use then there is not reason that Alibaba can’t be a safe place to find a profitable product to sell.

Any other questions?

Feel free to comment if I’ve left anything unanswered!

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Author

Will Mitchell

Will Mitchell is a serial entrepreneur and Founder of StartupBros. You can learn more about him at the StartupBros About Page. If you have any questions or comments for him, just send an email or leave a comment!

  • […] the necessary precautions to avoid scams on Alibaba and move forward. You want a supplier that you can communicate effectively with and is willing to […]

  • Maggie F says:

    I purchased a Virtual Reality machine from a company in China. I paid through Alibaba..the company was listed with trade assure and the whole works as good. When the machine arrived, it was cheap junk computers, breaking down every other day. They assured me when I purchased it that it was top quality, not 10 year old computers. Although they give tech support, it is very inconvenient because of the 12 hour differences. if this machine had quality components theses problems would not be happening. They also are using Open-source software which may illegal to use for commercial purposes. I want a refund and I was under the impression Alibaba would protect me when it came to quality problems. Was I miss informed or do you think Alibaba will help to refund my money?

  • Andrea says:

    Please… help.
    I have a very small business, so i can’t afford to be conned. I want to buy contact lenses from Guangzhou Winis Import & Export Co., Ltd. i found them on Alibaba. Gold supplier for 6 years, trade assurance. It even says Alibaba has checked the onsite offices. Registered capital is 500,000 RBM.

    But when i send an inquiry or chat with the sales manager, and there are several, the same guy Gabriel Tegha answers. His IP appears to be in Cameroon.

    What can i do? 🙁 i really want to buy these products, they are the only ones who sell theses lenses.

    Also, their transaction history says they have made just 2 sales these last 6 months.

    I you could help me i would be grateful, what do you recommend? Oh i can pay via Paypal. But even the mail of the paypal account seem sketchy: [email protected], as far as i know smalto is an african surname, not chinese.

  • […] How to Avoid Scams, Middle-Men, and Fraud on Alibaba […]

  • […] Personally, I understand the role of B2B sites for any business, they can be a boon. But precaution is always better than cure. If our little attention can save big losses then I believe it should be done. […]

  • Derek says:

    Hello do you have any reputable manufacturers that you deal with???

  • luke n says:

    hello im buying some products from this company based in mainland china but once a get payment details, company name is different from that on alibaba, they suggested paypal but name is also different. i asked them why bank account in different name but also bank in hong kong..i’m not sure if i should trust this company/person.

  • […] you want to learn how to avoid this scam check out this article by StartupBros on avoiding fraud on Alibaba. Scammers will often pretend to be a company from the UK, US or EU, which might make you trust […]

  • Alexandros says:

    I have a client who is a supplier of restaurant equipment, both producing his own products as well as reselling for others. If entering alibaba as a supplier, should he include his own products or the products he resells as well?

  • Dane Serbia says:

    By the basis of my inquiry on the Alibaba site, on nov.2017. the first person from cpmpany Wenzhou Best Rigging Co., Ltd who contacted me is one woman – introduced as JoJo. After that, another person who contacted me introduced himself as Huang See. I agreed the business with him. That person contacted me through Whatsapp – on my mobile number. JoJo confirmed to me in writing that Huang See was their supervisor. I paid to him an agreed amount for the semple of climbing carabiners, rope and herness – by the invoices. I paid on his paypal account. After that, I never got the goods and the person Huang See stopped communicating with me through Whatsapp. After that, I again contacted JoJo through the Alibaba site and explained her this situation. First, she told me that they don’t have Huang See in their company, and after that she told me that Huang See did not tell her about me. She was confused in the reply.
    When I started an investigation about this case of scam, by Alibaba site, JoJo told them that there is no Huang See in them company and that she did not tell me that Huang See is supervisor in your company. The person JoJo is lying.
    After that I sent mail to the company several times, but they never reply me.

    But the even bigger problem is that people from Alibaba did not want to approach this case professionally.  Although I provided them with all the written evidence of this fraud ( screenshots of my communication with JoJo on Alibaba site and with Huang See by Whatsapp, invoice, proof of my payment to paypal account of Huang See ) they persistently demanded from me to provide proof that I made the payment to the company account.
    I opened the case on Alibaba website 4 times, but they asked me the same thing – proof that I paid it to the account of that company.
    So be careful! People, be sure that people from Alibaba will not help you if someone deceives you on their site – although you have very clear evidence.

  • James ola says:

    I want to buy babe puzzle from this company Yiwu Feisheep Import & Export Co., Ltd.,but I am not okay with there profile. The MD (Melody Zheng)gave me his WhatsApp contact, I called him on video to see his face, but he never pick. I told him to snap the products he sent he sent internet downloads.

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  • Kayizzi Nicholas says:

    I have contacted a supplier and on a Turkish invitation letter and he sent his WATS up number,we talked on WATS up and I asked how am I secure he told me that he has no time to waste with me

  • […] it was always hard to find the right factory to work with and manage production.  Managing production runs takes thousands of emails and Excel spreadsheets. […]