The success of an online business relies on the ability to offer customers quality items with competitive prices. It all comes down to how to source reliable suppliers for your commodity, especially when you need new suppliers to help you develop brand new products for decent margins.
Then where to start? More and more business people across the world go to Alibaba, the world’s largest directory of suppliers, for supplier solution and create their success stories there. Meanwhile, you must also hear there are plenty of scam cases happening even today.
No matter which stage you are at in your international business, as a business owner, you’ll always think are there better ways to search for suppliers on Alibaba more efficiently? How to avoid common scam traps for safer business transactions? To answer this very question, we come up with this article to share tips and knowledge to help you make a safe purchase on Alibaba.
What are the top 3 Alibaba scams you should be alert to?
Each business transaction is unique. People who got scammed on Alibaba have different stories to tell. With years of experience in this industry, we conducted research into various scam cases and would like to draw your attention to below scam types, which are easy for you to fall into if you are not aware of.
1) Increase price after placing an order while quoting competitive price at first.
Some suppliers lure customers with extremely low price at first but put up the price after the order placed. This is rather common, as the suppliers know sourcing other alternatives and repeat the sampling process again can be real time-consuming. So it can be necessary to back up another 1-2 suppliers in case of some unexpected situations.
2)Agree to use trade assurance, but insist on changing a new bank account. After you sending money, they can lie they do not receive the payment for various reasons, asking you to cancel the previous order, then arrange a new payment to their bank account. Once you agree, you’ll lose all the protection trade assurance provides.
3)Buy Alibaba gold supplier account to sell poor quality or fake products.
A gold supplier on Alibaba doesn’t necessarily mean it is a “good supplier”. To know if it is a reliable supplier you should better entrust the third party to visit the factory and examine their facilities, production capacity, compliance certificates and so on, rather than relying on the “gold supplier” badge only.
What are the best ways to find suppliers on Alibaba?
When you open the Alibaba web page, it is very natural for you to type in the product name in the search bar, then start your direct searching of suppliers. Actually, there is another way of getting suppliers on Alibaba: using Alibaba RFQ service.
What is Alibaba RFQ?
Alibaba RFQ (Request for Quotation) is a service provided by Alibaba to global buyers to post buying requests and manage all quotations on the RFQ service platform. It is a free service, and you can also pay a little money to buy its value-added service.
When to search directly VS when to use Alibaba RFQ?
1)Using RFQ, if it is your first time to use Alibaba. For every buying request you sent through RFQ, you can expect to get 10+ quotations very quickly even within 10 minutes. You can probably select 2-3 good suppliers to continue your talk with and request for samples to check quality.
2)Direct searching, if you are very experienced in selecting suppliers. After you click the product search, there are thousands of suppliers coming up. You’ll need to browse their webpage, check the catalogs, review the supplier qualifications, etc before sending over the inquiry. Sometimes you’ll just get dizzy to select good ones and takes lots of time to develop a long list of potential suppliers to talk with.
How to distinguish factories and trading companies?
For most first time importers, they’ll be struggling with how to know the salesperson they are talking to online is from a manufacturer or a trading company. Below we highlight 5 most important aspects to look for from a supplier to help you develop a better sense of knowing who they are.
1)Check the Products Catalogue. A factory usually specializes in certain categories of products, if there are lots of vastly different types of products in your supplier’s catalog, then it’s more likely to be a trading company. Sometimes, if you cannot find a satisfactory manufacturer and have to cooperate with trading companies, it is also important for you to know how to select good trading company to work with.
2)Check Supplier’s MOQ. Factory’s MOQ is normally larger than that of a trading company, which is a common sense in the trading field. Generally speaking, the MOQ of a factory won’t be less than 1000pcs. You can verify your suppliers by asking if they can sell you smaller quantity products.
3)Check the Business License. When checking a supplier’s business license, pay special attention to the column for “Business Scope”. A factory’s business scope must include words like “manufacture or produce” (生产，加工，制造), while a trading company’s business scope won’t have.
4)Check the ISO 9001 Certification. Most companies who have this certification are factories because the trading company has no need to have it. Some trading companies also get this certification, you can take them as factories, for they are pretty much the same with the factories specializing in one product category.
5)Check the Factory Auditing Reports. If the supplier told you that they have supplied products for companies like Walmart, Target, etc, then you can require them to send you the factory auditing report.
If they refuse or hesitate to do so, then they are probably trading companies. If they send you the factory auditing report, you’d better check the company name on the report. If it’s the same name as the one on Business License, they must be a factory.