Alibaba is the world's largest online marketplace. In addition to be a shopping destination, Alibaba is where people who want to buy manufactured goods at the best price can find them.

Even if you make your own products by hand, you need to get your materials from somewhere. Alibaba may have the raw materials to start making your products. If you're looking to make a new product, Alibaba has hundreds of thousands of products you can customize and brand, as well as salespeople who can design and produce your custom products.

If you're a wholesaler, you're likely to find products in Alibaba that are ready, and your role is to import them, find your customers, and resell them. If you're a dropshipper, Alibaba is your new best friend, because you can fully integrate it into your dropshipping store and start having manufacturers ship products directly to your customers.

Below are certain business models that have had success on Alibaba.

DIY CRAFTS

Manufacturers of DIY products, including crafts, art, cosmetics, food, and jewelry.

Pros:

• It costs little to place an order, as the minimums are few
• High levels of quality control

Cons:

• A lot of your time and energy is spent doing things
• A manufacturing company is more difficult to expand, as it focuses on handcrafted products rather than mass production

MANUFACTURING

Those with money to invest in a product idea that they are confident will sell.

Pros:

• Lower unit costs
• The ability to quickly scale and sell globally
• Quality control when creating a new product
• High-profit margins

Cons:

• Many additional steps in management, storage, and quality control
• High levels of financial investment due to large minimum orders and, therefore, high risks
• Linguistic and cultural barriers to manufacturing abroad

WHOLESALE

Wholesale involves buying from other brands at discounted prices and reselling them. It is good for those who have found a niche.

Pros:

• Quite good profit margins
• By choosing a previously created brand, you'll be sure you've chosen something that meets your quality standards

Cons:

• Saturation of product sales
• Management of more complex warehouses and inventories
• Less control over prices

DROPSHIPPING

It means curing a collection and creating a brand but outsourcing everything else. Orders on your website go directly to a manufacturer, who then places the order without you having to deal with any aspect of quality control, production, shipping or inventory management.

Pros:

• Low risk
• Low time and financial investment
• Low management and attention to your business

Cons:

• Lower profit margins
• No quality controls
• Limited customer service capabilities

KNOW WHAT YOU'RE LOOKING FOR

Before entering Alibaba, keep in mind what you want to look for, otherwise, you can easily get lost in the millions of options you will have in front of the screen. If you're looking for a manufacturer who basically makes some adjustments to an existing product, you're looking for an Original Equipment Manufacturer (OEM). If you want to build something from scratch, look for an original design manufacturer (ODM).

SUBMIT A QUOTE REQUEST (RFQ)

After being clear about what you want to buy, it is important to know its production characteristics in order to be able to request several total budgets. When you get this first answer you will be able to investigate more about each manufacturer.

SEARCH AMONG PRODUCTS TO FIND SUPPLIERS

From the search bar, you can simply type the product you are interested in getting, you will get a page with two tabs: Products and Suppliers. After doing that search, you can start to see which products are close to what you are looking for. If there is one that you like, it is likely that the manufacturer will be able to make some changes to make your desired product.

USE FILTERS

You can use the "Gold Provider" and "Trade Assurance" filters to start reducing the number of providers with some additional insurance. Keep in mind that if you are interested in a "Gold Provider" it does not have much to do with the quality of the products - it is more likely that the company has paid to be one.

"Evaluated suppliers" means suppliers that have been inspected by a third party. It's another good way to avoid scams.

EXAMINE TRANSACTIONAL LEVEL AND RESPONSE RATE

You can also filter by transactional level, a measure of how much business you do and how often, and the response rate. Having a high response rate means you're more likely to work with a partner with whom it's easy to do business and easy to have an ongoing conversation.

HOW TO AVOID UNRELIABLE MANUFACTURERS

Alibaba, being such a large market window, is also a window to unloyal manufacturers. It can be easy for scammers to get going as they are probably in a different country, so it is less likely that you will meet with them.

Here are some things you should do to reduce your chances of fraud.

Manufacturers tend to have competitive prices, and unit prices tend to vary a few cents, but you should be suspicious of someone who has them at half price.

Always order a prototype first. High-quality sellers will first give you samples or a prototype. It's the best way to ensure quality before investing a large amount of money.

Make a secure payment. You always want to send the payment using a secure payment processor. Avoid paying personal accounts, much less giving out your debit card details or passwords for your PayPal accounts.

Are you currently using Alibaba for your online business? Comment below and let us know!