If you want to know how to make money with Alibaba and start your own online business then you’re in the right place:
Yes it can be scary, difficult, frustrating, and down right painful, but if you follow our guide and stick to it, you will reap all the rewards and then some…
That’s why the first thing we’re going to talk about is how to find your first product. Then you’re going to learn how to negotiate prices, where to sell the products, and finally the best marketing strategies!
Step 1: Look for Product Ideas Everywhere
The first thing you need to do is identify products you want to sell, there are a lot ways you can do this, and the hardest part is usually coming up with ideas to research. I usually do the following.
Ask people what problems they are having Facebook and reddit are both great places for this, usually I just ask people questions about what things they use in their everyday lives that they have trouble with or could use improvement. Check out this reddit post here,.
Keep a notebook where I jot down things that I see everyday that I think are cool or interesting.
Try to solve problems that you have. The most obvious problems are hard to solve because you have been dealing with them forever, so next time something seems a bit annoying or dumb take a second and think if there is a way to improve it.
These are the kinds of items we’re looking for….
Light weight: This is important because it saves on shipping charges from China and if you do have to deal with a return for some reason it will not kill you to ship stuff back, the last thing you want is to ship something heavy all over the country.
Simple: You want an itme with a large margin for error. If there is a defect in the product ideally you should still be able to sell it. That is why we do not do electronics, a small defect with electronics and the whole product is worthless.
Price Between $15 – $200: This is where the majority of the world purchases products.This is the ‘middle class’ of products and the middle class is what we are after.
Terapeak is an awesome tool for identifying products on eBay and Amazon. It’s also simple to use, all you need to do is input the product you want to research and TeraPeak will give you some sweet analytics. Like sell through ratio, sales volume, and the trend over 30, 60 and 90 days.
Another awesome tool is Camel Camel Camel. CCC is a free tool that allows you to track pricing trends from Amazon over time so that you can easily see whether a product is trending up or down. Another great thing about CCC is you can get an idea of where to price your product in order to be competitive.
Here is a screenshot of MorphSuits, I use to sell a ton of these:
As you can see the price is trending down, so I would not do this product now. When you see a chart like this it usually means there are too many sellers now and the market has been oversaturated.
Step 3: Use Alibaba to Search for Manufacturers
Alibaba is without a doubt the holy grail of Chinese bulk wholesale factories. The Chinese suppliers that are listed on there are either (A) Serious Factories or (B) Serious Scammers. Below I am going to show you, step by step, how to vet suppliers and make sure you are not dealing with a scammer.
There are basically two ways you can search for wholesale suppliers on Alibaba.
1. Search Engine
You can search through their search engine to do this. Simply type in the product that you are looking for.
Once you have done this, look just above the first product and you will see five boxes. Check the following:
On Site Check
The reason we check these boxes is to begin weeding out the good from the bad. Typically if they accept all four they are pretty legit supplier!
The first contact with a Chinese wholesale supplier is VERY important, Your objectives are:
Don’t sound like an amateur
Make a good first impression
So how do we do this?
Here is a template I use when contacting Alibaba wholesale suppliers for the first time:
My name is ______. I am a purchasing agent for XYZ corp. We are very interested in learning more about your company and it’s production capabilities. If you could send us more info as well as your product catalogs and MOQ requirements we would greatly appreciate it.
We look forward to speaking with you.
Of course you can tweak this to fit your needs, but this is a good start.
Build Slowly, Gradually Increase Orders!
DO NOT buy in bulk from China immediately, that is the quickest way to get screwed. What we want to do is buy a few samples, sell them, get feed back, and then move to the next step.
Building your importing business gradually and methodically will ensure that you stay in business and are able to grow quickly later on. Here is the process from start to finish:
Lower the Minimum Order Quantity
The first thing that your Chinese wholesale supplier is going to ask is how many pieces you want to order. This is where the ‘fake it till you make it’ phrase is VERY important. I know it might be hard and uncomfortable for some, but if you do not play this correctly no one will want to work with you. Normally their response will be to ask how much you are selling per month or how many pieces you would like to buy. Below is a great example of an email one of our students (Daniel) and I worked on when we were recently in China together.
As I am sure you can understand, we cannot divulge secretive information like monthly sales volume. Based on what you have told me, your volume is enough for us to be interested in your factory, especially given your broad range of products and your focus on quality control.
However, my boss is not willing to switch accounts to any new supplier until we prove things out by moving slowly. The steps he would like to follow are:
1. We test a normal and high capacity cartridge internally in our office
2. We test on a broader scale with 100 units, preferably with a different printer line
3. We move to 1,000 units to test happiness with customers in our many channels of distribution
4. Assuming all goes well, we go to 5,000-10,000 units and really begin to migrate to your factory fully for that line
Hook, line, and sinker.
This factory replied back that they were more than willing to work with Daniel and he was able to get any MOQ (minimum order quantity) he wanted because they needed ‘prove themselves’ to him.
Step 4: Coordinate the Shipping from the Alibaba Supplier
One of the biggest hang-ups and mistakes people make importing from China wholesale is trying to learn everything about shipping. I have been working in importing for 8 years and I definitely do not know everything and, to be honest, I don’t want to know everything.
Shipping laws and regulations change all the time and to keep up with it is a full time job itself. So… DO NOT try to learn it all or you will drive yourself crazy and worse, you’ll scare yourself out of ever sending a shipment.
When you use any one of the above companies, they will take care of almost everything. With DHL and FedEx, you might have them contact you about filling out some forms when clearing customs, but most everything else is covered.
Someone like Sure Freight will take care of everything. You literally do not have to worry about a thing and they will make sure that your product gets from point A to point B without a hiccup. Also, when they give you a shipping quote it will include all taxes and duties, so you are getting everything all in one price.
In the beginning a lot of people ship by Air, but you can also do it by Sea–it just takes a bit longer. There are advantages and disadvantages to both.
Go to DHL.com and use their shipping and rate quote tool
After Clicking on the ‘Get Rate and Time Quote’ button you will be taken to this screen:
Next fill out the form. You will need a pick up and drop off zip code as well as the size and weight of each of your packages. Press the ‘Search’ button and you should get something like this.
DHL will give you different shipping options and this is a good baseline for comparing against other companies and your factory (you can also ask your factory to ship, they sometimes get really good deals).
If you get an error message like this:
This is DHL telling you one of two things.
1. Your box is too big for the weight that you are shipping, or
2. This is NOT a good product because it is too big!!
Play with the dates. Importing is like airline tickets, prices change with days and seasons, so mess around with the dates of shipping.
Remove excess packaging. When shipping by air you are being charged by weight and size, so ask the factory to remove anything that is not needed in the packaging.
Remove any unnecessary pieces. I once cut my shipping cost by 43% on a product when I realized the factory was including mounting brackets inside that NONE of my customers were using.
Step 5: Coordinate Product Inspections
Once you start buying in bulk from china and sending more money to your supplier you are going to want to start getting inspections done for your shipments.
Inspection companies will go through the packaged goods ready to ship and check the packaging and the product. Typically inspection companies will cost anywhere from $250 – $300 for one inspector for one day.
However, it is well worth the cost because they will go through and tell you everything about your shipment and send you a very detailed report about the minor or major flaws that your shipment may or may not have. I personally like the following companies:
All three of these companies do a great job, charge more or less the same, and will send you a very detailed report about your shipment.
Help your Inspection Company be Awesome
Inspection companies will check your wholesale order top to bottom, but in the end you should know exactly what you need.
Send your inspection company the following info:
Really any and all info that you have about the product. This will make their job way easier and ensure that you get exactly what you want.
That’s it for the importing…
Now we have to look at how to sell the products you decided to buy.
Step 6: Sell Your Products
Sign up For an Amazon Account
Most people already know how to use Amazon to some degree. You have probably bought something on there at some point and thus probably already have an account. If you click under ‘Accounts’ you will see a button that says ‘My Seller Account’, click on that and it will take you to this page:
Here you have two choices:
(1) sell as a professional or (2) sell as an individual.
The first thing I would suggest checking is what category your product is listed under.
“Sell as a professional” has ten more categories than “sell as an individual” has. However, individual is cheaper but you can only sell up to 40 products a month under it. Do not stress about this too much as you can always change it later.
Once you do this you will have to do a few things.
Enter Personal Info
Enter a credit card number
Verify your mobile number
The next thing you want to do is begin adding your products. To add products all you need to do is click on inventory and ‘add a product’.
When you click on ‘Add a Product’ you have two options. One is to piggyback on an already existing listing, the other is to create a new product.
If you choose to piggyback on a listing, you do not have to do much other than type in the type of product into the catalog, pick your product and then add the amount that you have, the dates you want to sell, and your price for the product.
You will get this form once you choose a product to piggyback on:
Once you fill out this little bad boy and press ‘next’ your product is live on Amazon! Simple as it could be.
If you want to create your own product listing you will have to jump through a few more hoops in order to get your product up, but nothing too crazy.
If you want more insight into every step needed to sell on Amazon then check out the post below:
Automatic Targeting – Amazon targets all relevant customer searches based on your product information.
Manual Targeting – Your advertisements are targeted based on the keywords you choose.
You appear alongside search results if you own the the Amazon Buy Box for your product.
Shoppers who click are taken to the detail page where your product is offered.
You pay only if your ad is clicked. Applicable Selling on Amazon fees will apply.
Complete end-to-end metrics are available.
Here I searched for ‘Yoga Mats’. Once I clicked on a mat I liked a bunch of listings came up at the bottom of the page for similar products. These are ‘sponsored products’ and users are much more likely to click one of the below suggestions than they are to go back to the main page and look at the first search results.
Run Facebook Ads
Facebook ads are awesome, I rarely use anything but them. Their targeting is far more effective than almost any other tool on the market and Facebook knows everything that its users do–thus you are able to target exactly who you are looking for.
There are a million things you can do with Facebook ads but here we are focused on one thing and one thing only, ‘How to make money’. Because money makes us happy and buys us nice things.
So after you have your product listed on Amazon and you are ready to send an ad to it, follow these 5 easy steps below.
1. Click here and click on ‘Create Ads’
2. Click on the Objective for your campaign
This really depends on what you’re after, but in our case we are going to be looking to get ‘Website Clicks’ because we will not be able to implement our own tracking pixel on Amazon.com
3. This will take you to this page and all you need to do is enter the URL you are trying to direct people to.
4. After you enter your URL you will be taken to this page, and this is where the fun really begins.
On this page we are going to focus on a few things.
How old is our audience?
What gender are they?
Where are they from?
What are they interested in?
But what we are really focused on is this little guy here:
So as you can see the little arrow thingy is in the green, which is actually BAD… We want it in the red. We want really, really specific customers, because those are the ones that convert the best.
For example we do not want the girl that just likes ‘Yoga’ we want the girl that likes ‘Bikram Yoga’ or ‘Brooks Yoga Studio’ because these are the people who are actually doing yoga and practicing on a regular basis.
As you can see below, we are starting to get more defined–and the more specific we get the better results we will see.
Here I am targeting specific types of yoga. In the next ad set I might target specific yoga studio pages, or yoga mat companies and so on. Also, you can see above my little ‘speedometer’ is more in the middle now and the more specific I get the more defined my audience will be.
5. Pick your spending
Once you have a couple ads you feel good about pick your budget. Personally I would start off with a bigger number $150 -$250 for the day so you can test very quickly which ones are working and which ones are not.
Above is a VERY beginners intro into Facebook ads, once you get better at them you can start using more powerful tools like Custom Audiences, Power Editor, Sumome.com, and so on.
By door to door sales I mean Facebook, Craigslist, or whatever way you can sell. Do not be too proud to ask for money. That is what business is all about.
While at Canton Fair this year Will and I took a group of 25 people and we had a lot of people saying they were having trouble navigating the waters of Amazon, so I went about showing them how I would do it. First thing I did was post this ad on my Facebook.
ehhh… 9 likes, not really what I was hoping for, but I was not going to be detoured so I kept on keepin on. Next I went into our Jumpstart Facebook group and posted the same ad and got a few more sales and likes.
Use Reddit to Create Demand
Next I went to reddit, because I had a feeling I could make some magic happen over there.
but to no avail, my fellow redditors were not picking up what I was putting down. 🙁
But that’s ok, I still had more tricks up my sleeve, I started to hit up friends directly in my network that I knew would be interested in my new product.
Reach Out to Your Personal Network
AND SINKER!!!!! BOOM!
I ended up selling 40 of these Alibaba desk organizers, I negotiated with the Chinese supplier and got them for $7 a piece and sold them for between $20 and $30 each.
I used this super simple spread sheet I made in Excel to keep track of my sales:
Most of the bulk items that I imported were sold in my home town so I was able to put them into my suitcase for free shipping. The rest cost me around $280 to ship. I used a bunch of different companies to get quotes and that was the best I could find on international freight.
All in all I probably spent about 12hrs of hard work on this, so if I spend about 24 hours a week on this I could probably get WAY more efficient. But worst worst case scenario I make an extra $1,025 on this a week, which is $4,100 a month and could be done on my time off on the weekends.
It’s possible to make money with Alibaba, the hardest part is starting.
Thanks a lot for reading!
Edmund Lowman is a former rockstar turned entrepreneur. He's started several successful companies including Kekai Express. He also likes doing anything that he might get hurt doing and has an extremely hard time sitting still for more than 5 minutes...