Using Chinese suppliers is one the most cost-effective ways to get products for your ecommerce business.
Two platforms people use for product sourcing are Alibaba.com and AliExpress. You can also get suppliers from other parts of the world on Alibaba, but mostly from Asia. You know how popular Amazon is here in the United States? That’s how popular these two platforms are in Asia.
Let’s take a closer look at Alibaba vs AliExpress.
If you haven’t heard of either one of these Alibaba group brands, you might be living under a rock. A lot of people mix them up. Probably because the same brand owns them, but they are different things entirely. Alibaba Group owns 58.2% of the market share of all e-retail sales in China.
In this post, we compared Alibaba and AliExpress to help you understand which Chinese supplier is better for your ecommerce business.
What Is Alibaba?
Alibaba.com is the world’s largest business marketplace. It is a B2B marketplace so you will see things like a minimum order quantity of up to 500.
The kind of sellers you’d see there are manufacturers, trading companies, and resellers. It works as a directory where you get suppliers’ information – product, certification, contact, and other details. You will also see verifications. One verification to look out for is the gold supplier membership. It helps you know suppliers who have been verified by a third agency and are legal in their locations.
For payment, there are various methods. To be protected, use one under the buyer protection service. Alibaba offers secure payment and trade assurance. Alipay, another brand of Alibaba group, serves as escrow for the secure payment system. It ensures that your supplier doesn’t get paid until you get your products. Alipay is limited to only suppliers in the wholesale program though. As for the trade assurance program, it helps you get a refund if your product has quality issues or didn’t meet the product specifications. But again, not every supplier uses it.
- Navigate to the official website.
- Sign up for an account. The website will walk you through the steps required to set up your account.
You are not required to have a business license to open your account. That said, your local government may need you to take care of a few legal requirements before you can sell the products you source from Alibaba. It’s your responsibility to find out what these requirements are and make sure you fulfill them.
After your account is set up, use the search bar to search for products or suppliers. Make sure you take advantage of the search filters because if you don’t, you’ll end up with unlimited results.
If you have a specific product in mind, you can post a request for quotations. Also known as an RFQ, this will alert suppliers that you’re looking for quotes. You’re basically advertising what you’re looking for, and letting the suppliers reach out to you.
Your draft should include:
- All your requirements
- Your preferred payment method
- Shipping destinations
After you receive quotes, you can evaluate them and choose the supplier that works best for you. Check their profile for the verification badge to make sure they are legit. Negotiate your price, and go from there.
What Is AliExpress?
AliExpress, on the other hand, is designed as a B2C marketplace. There’s a bit of business-to-business mixed in here too. It’s as popular as Alibaba, coming in as the world’s favorite shopping app. It works like most ecommerce stores; you can order as little as one item, use a cart, and pay through the platform.
Every payment made on AliExpress is under the buyer protection service with very few exceptions. The protection ensures that you get quality products. If you receive a nylon bag instead of a kimono, BYS could help you get your money back.
Items on AliExpress have a fixed price. Just like eBay and Amazon, you see $4, it is $4 for you. The only exception is if you are buying in bulk. Even then, not every seller will give a discount. However, on Alibaba, you can negotiate.
With all these connections, little wonder Alibaba is the 9th most valuable brand in the world.
By the time you are done reading this post, you should know which of these two marketplaces you would find suppliers and get your products from.
Visit the website or download the mobile app.
Create your free account.
Search for the products you want.
Read the information about the products before adding anything to your cart.
Read information about the seller themselves.
Pay close attention to the shipping terms. If you don’t see free shipping listed, you’ll see details about the shipping costs.
After you’ve finished adding the chosen items to your cart, complete the checkout process. Fill out the details including your name and shipping address. Choose your payment method and finish your transaction.
After your order is confirmed, you’ll receive an email with tracking information once it ships. After you receive the order, go back and rate the seller.
Alibaba Vs AliExpress: Business Model Breakdown
Alibaba is great if you want to sell private label products. You will not get that from AliExpress. Dropshipping and white label may be different. Essentially, either of them will suit you depending on the ecommerce business model you are going for. Another thing I’ll add is that the way they operate will also help you figure out which is best for you. I have explained all of that below.
With Dropshipping, you capture an image of the product from the supplier’s store, upload it on yours, take orders, and the supplier takes care of the fulfillment. You wouldn’t have to deal with inventory and shipping. Alibaba and AliExpress work differently in this regard.
AliExpress is great for dropshipping. You will see a lot of shops offering dropshipping services; you can order items separately to be delivered directly to your customers.
On AliExpress, you will have access to millions of products, even trendy ones like ‘make America great again’ face cap. In most cases, you can decide your retail price and control your margins, because you are not bound to a suggested price.
Also, you can choose to ship your products from either the US or China.
This is good for you if your customer lives in the US, making the delivery time shorter. All you have to do is copy the product from AliExpress to your store, set your prices, sell your product, purchase from Aliexpress and have it shipped directly to your customer.
Alibaba is not for you if you want only to run a dropship brand. Most suppliers on Alibaba do not dropship. What you would see is a bigger Minimum Order Quantity(MOQ) that will be delivered to one location. Delivering 500 t-shirts to one customer (except if ordered) makes no sense.
With dropshipping, many other people selling the same product as you. How do you differentiate? Although some brands have grown from it, its better you combine dropshipping with something else. If you are so into dropshipping alone, you should look into print on demand. None of the Alibaba brands are so great for POD though. You can use any of the print-on-demand sites in this article.
Very few sellers offer white label and none offer private label services. Most often than not, those offering white labeling are also on Alibaba. You will have to sift through a lot of sellers by contacting them to confirm if they offer that. If you are looking to build a brand from white label or private label products, AliExpress is not worth looking into.
When it comes to finding private label manufacturers, Alibaba is one great source. Manufacturers are all over the place looking to create custom designed products or add little modifications.
You can get suppliers by searching based on products or suppliers.
There are thousands of products listed. From the results, you can choose to find out more details about the manufacturer.
Or contact them to find out what modifications they provide with the products. You can also take a look at their feedback for response time and reviews by other buyers.
As for wholesaling, it depends on what you’re looking for.
Go to AliExpress if you are looking to stock up a few products, but Alibaba is better if you are looking to wholesale a ton of products at once. However, if you want custom-designed products, Alibaba is probably better for you.
Price differs though.
I tried it with mermaid leggings. This is the product on AliExpress.
The fixed price per piece is $6.30. Going to Alibaba gave me something way lower.
This is $2.50 -$5.00 per piece. If you negotiate well, that’s a lot of money saved.
The reason for the difference in price is that suppliers on Alibaba offer most products at factory prices. But, there is a minimum order quantity of 50 pieces against the one piece on AliExpress.
When searching, look out for the least expensive product. I know people say the lower the price, the lower the quality. While this is true in most cases, it is not always true for Alibrands. If you have found the lowest price of the same product, you have probably found the manufacturer. All others might be resellers who bought from the manufacturer and are selling on the same platform.
If you want to go into wholesaling, any of the platforms is fine. AliExpress is better for wholesaling because you are not branding anything.
Look around, read reviews and chat with the sellers before you make a decision.
Minimium Order Quantity
I have mentioned MOQ a hundred times already. MOQ is Minimum order quantity; it’s the lowest number of pieces you can order per item. This is an essential aspect of product sourcing that you must look out for. Both platforms are very different in this regard.
You can order one product on AliExpress. Very few sellers make theirs ten. This is because most products on AliExpress are already manufactured and ready for processing. Since the products are ready, suppliers don’t spend on customization. Hence, you can throw one item in your cart.
Most products on Alibaba allow modifications. To modify products, manufacturers require a certain number of units to be made at a time. That is the best way they can make profit. As a result, you will see products with MOQ of 50 or as high as 500(or more).
Note that some suppliers place an MOQ that isn’t really the MOQ. You may see one, but it’s actually ten. The reason is either they forgot to update it, or your modification request makes the MOQ go up. Either way, ensure that you ask suppliers before you pay for the product(s).
Time is money, is knowledge, is power. With every extra minute spent on your product, potential customers are taking their business elsewhere. You can’t rush it so much, but its best you know what you are going into before you make an order and curse at the manufacturer due to what you think is a delay.
Lead time is simply the time between when you make your order and pay a deposit and when your order has been made. Shipping time is usually calculated separately. Lead time varies with each supplier, each product, and each modification. It can be somewhere between 2 weeks to 6 months. Essentially, it is order preparation time and production time.
The products on AliExpress are already manufactured and ready for delivery. You wouldn’t have to deal with production time. Since you are using AliExpress, your item may not be so big to be shipped via sea freight. This takes a huge chunk away from order preparation time. The only time you should deal with here will be your shipping time which may be 5 to 40 days.
If you are not asking for any customization, your order preparation and production time is lesser than if you were. The order preparation time includes the time it takes the supplier to identify the products you want, correctly fill your order quantity and prepare the final product for delivery. This includes preparing for preservation throughout shipping, especially for complex products. This time can take anything from 15 days to 6 months.
Production time works with order preparation time. Just like the latter, the more complex your customizations are, the more time you will wait. Production could take up to 30 days. Confirm the number of days from your supplier.
For shipping, it depends on the method you choose. If you order 500 or more quantities, it may not qualify for ePacket. You will have to use sea freight, and that could take another month.
If time is very important to you, choose AliExpress. Just keep in mind that you wouldn’t be able to customize or private label anything. If building unique products is more important to you, choose Alibaba and get ready to wait.
You can use this time to build your ecommerce store and demand.
Shipping cost varies on both platforms.
It depends on the shipping company you choose. You may pay nothing or pay as high as $61 for a product that is just $6. I know. High.
If you really need to use AliExpress and you cannot make use of ePacket, the best way around it is to target items that are offering free shipping.
AliExpress still tops Alibaba in regards to shipping. You still have ePacket and in few cases AliExpress Standard Shipping that is free.
Alibaba is much different. Whatever cost you pay depends on what you and your supplier agree on. Your supplier may decide to ship the samples free to you, but don’t expect that with a bulk order.
If your supplier is so generous, wonderful. If they aren’t, get ready to pay. You’d have to agree on delivery terms.
If sea freight is chosen, you will pay up:
- Ship to dock
- Ocean freight to USA from China
- Unloading and trucking to your destination/warehouse.
All of this with taxes, peak season delays, and other transaction fees. You could pay up to $2,000 if not a lot more, especially if you are ordering a lot.
If you are using FedEx, DHL, or UPS, the cost is much lower.
Alibaba vs AliExpress: Side By Side Comparison
Both platforms have their uses. AliExpress is great if you want to start small and not order a lot or deal with customizations and lead time. So, if you plan on dropshipping, move to AliExpress. It is also good for a retail ecommerce business. In addition, the process of finding and connecting with suppliers is not complex.
Go to Alibaba if you are thinking of private label or white label. If you are going for Alibaba, there will be a lot of time spent verifying what you can get, what licenses are available and other details.
On either side, there are things you wouldn’t get and things you would. I have placed all of that side by side. Look at it, consider your plans and choose the most suitable for your business.
|Not so much interaction||Work directly with manufacturers|
|No MOQ in most cases||MOQ of at least 50 in most cases|
|Can only negotiate the price of bulk items||Can negotiate the price of any item|
|Lead time is not so long||Lead time can be long – up to 6 months|
|Private Label: Cannot modify products||Private Label: Can modify/customize products|
|White Label: Can Add Your Logo||White Label: Can Add Your Logo|
|Free shipping is very possible||Free shipping depends on the ‘generosity’ of the supplier|
|Shopping cart present||No shopping cart|
|The seller will handle fulfillment if you input your buyer’s address||You take care of order fulfillment yourself|
|Low startup costs||Low cost possible but higher than AliExpress due to higher MOQ|
So, there are high chances that you will find quality products from good suppliers on Alibaba or AliExpress. It’s up to you to choose the platform that best serves your motives. Look out for suppliers selling what you want to build your ecommerce business on, and contact them before making an order.
I know that it is easy to get caught up in excitement, especially on AliExpress, and order so much. But slow down, contact them, verify every information they have displayed and get a sample before you make a bulk order.
If you are looking to finance your next inventory order, consider Payability. They offer both accelerated daily payouts on marketplaces such as Amazon and capital advances based on your future eCommerce sales. There are no credit checks and you can be approved for funding in only 24 hours.
Are there any questions still lurking in your mind? Type away in the comments, I’ll answer them immediately.