How to safely and easily collect Products from the largest Supplier alibaba.com
Wednesday, March 16, 2016How to safely and easily collect Products from the largest Supplier alibaba.com
By SHAFIULLAH
In order to start a new business you need some awesome and different product. Sometime we buy it from world largest online market like alibaba.com or amazon.com or e-bay.com. In our global village, it has never been easier to find a manufacturing or wholesaling company who is so much trusted. So usually we use an entrusted fake business and ultimately we get loss in our business. However for a new online entrepreneurs, sourcing products from overseas can still seem like a daunting task. In today’s post, I will trying to look you that how to effectively and safely source a supplier for your awesome product idea using the popular e-Commerce site Alibaba. I will introduce you to the pros and cons of going overseas and show you how to navigate this new terrain. So you can easily maintain a safe business.
Advantages & Disadvantages of Sourcing product from Overseas market
There have some advantage and some disadvantage of sourcing product from Overseas market. The first and only most effective is our online market offer a very cheap rate and attractive design product. Here I point some of them.
Advantages of import product from abroad.
- Lower manufacturing costs
- Suppliers are (generally) much more open to working with smaller businesses and providing smaller quantities
- High number of suppliers to choose from
- For many products, China might be the only place that produces the item
- One-stop services like Alibaba.com have made it very easy to navigate and purchase from suppliers.
- But there have also so many disadvantages for sourcing product from alibaba.com. The big problem is the fake supplier. Who are not production company but when you contact with them, they said that they have production factory. But most of them are broker. Although alibaba.com have refund policy but it’s also too time consuming and boring system.
- Here some point I explain to you.
Disadvantages of import product from abroad.
- Perceived lower quality from customers
- (Usually) lower manufacturing and labor standards
- Almost no intellectual property protection
- Language and communication barrier can be difficult to overcome
- Difficult/costly to verify manufacturer and visit on-site
- Longer shipping time
- Cultural differences in business practices
- Product importation and customs clearance
- Lower level of payment security and recourse
Before read the article i suggest you to see the video for knowledge about practical alibab.com.
How to buy product from alibaba.com By this video, you can get a clear process about how can you buy from world largest e-commerce site alibaba.com.
What Is Alibaba.com?
Alibaba is a big e-commerce site in the world. Its Launched in 1999 in china. Alibaba.com is the leading platform for global wholesale trade. they serve millions of buyers and suppliers around the world. Alibaba.com brings you hundreds of millions of products in over 40 different major categories, including consumer electronics, machinery and apparel.
Buyers for these products are located in 190+ countries and regions, and exchange hundreds of thousands of messages with suppliers on the platform each day.
How Can you buy products from Alibaba.com?
Now I explain how to buy a product from alibab.com. It’s too easy process to buy a product from alibab.com. Because there have so many supplier and products in this site. Remember, Alibaba.com is a B2B (business to business) site. so from there you can directly contact with supplier.
I divided this buying process into several step.
Search your products.
There are two common approaches to doing a search on Alibaba.com. You can either search for items based on product base, for example: if you search a bicycle, they will give you thousands of results bicycle products. Alternatively, from the drop-down menu, you can select “Suppliers” instead of “Products” and instead search for manufacturers that specialize in that particular type of product supplier.
What we need to see on a Product Pages
In a product page you can see several things. As like below.
FOB Price :
The first point is FOB price. FOB is a special terms use for buying product from abroad. This term is use for importing product. Its means packing and sending product to consignee/ buyer expected import port expense is bear by exporter. No extra charge will be applied. But from exporter port to importer door freight charge expense will be bear by importer.
Min.Order Quantity:
The minimum order quantity (MOQ) is the smallest order the manufacturer is willing to accept. However, it’s important to note that this is almost always negotiable. In the above picture we see that the minimum order quantity is 150 Piece/Pieces 26inch 24speed bicycle in bulk from china. Its means this exporter accept minimum 150 piece order from the supplier. So you must be order minimum 150 piece for this price US $67 - 99 / Piece.
Supply Ability:
Supply ability means that the company able to supply you this amount of bicycle 10000 Piece/Pieces per Month . So it will be a big cycle factory in the china. And this ability will be a symbol of your trust. Because a company who produce 10000 Piece/Pieces per Month , they not to be fake.
Port:
Its means from which port the supplier want to export his nearest port. But remember this is almost always negotiable with the consignee. If you want to import by air cargo, it can be possible. But always remember, importing by a far port from the exporter is very high cost. So always try to make shipment fro9m a nearest port of exporter.
Payment Options
After understanding price and MOQ, I will explain you that how you pay the supplier. There are several common methods of payment, each have their pros and cons for both the buyer and the seller.
Let's take a look at the most common payment options below and the associated risk level to you as the buyer:
1. TT (Bank Transfer)
Risk Level For Buyer: Risky
By this money transfer methods, the supplier will receive full payment before start his production in factory. This payment method bears a high level of risk to the buyer and I strongly not recommended when dealing with an unknown supplier. TT is like as LC system but it’s not LC. Generally people use this system for bringing sample goods. For importing goods by TT, first you need to open a LCA form from the bank the against the supplier company. Then you need the below documents for submitting in the bank.
- Bank authorized latter
- LCAF ,
- Eleven digits vat copy
- Update IRC original copy
- authorization letter head pad
- packing list with bank endorsement
- C/O ( Country of Origin)
- PI (Performa invoice) with bank
- endorsement
- So the procedure is same. I will write about it in next post.
Risk Level For Buyer: Fairly Safe
A Letter of credit is fairly safe for both parties, however a letter of credit carries some complex procedures and but it is highly recommended for larger purchases ($2,000 and above). Some documents need for opening a LC. Below documents need for this procedure. Before you open this LC, you need to learn some procedure knowledge, such as HS code, customs duty and others.
Bank Authorized Latter
Bill Of Exchange
L/C , LCAF , Insurance/ Marine Policy, Insurance Money Receipt
Eleven Digits Vat Copy
Update IRC Original Copy
Authorization Letter Head Pad
3. Western Union
Risk Level For Buyer: Very Risky
A risky payment method for the buyer that's not recommended when it comes to paying suppliers if the payment is not protected by escrow. Western Union generally should only be used when dealing with people you know very well. Although some country should not accept to send money by western union like Bangladesh.
4. Escrow
Risk Level For Buyer: Fairly Safe
When using an Escrow service, the buyer's money is held by a 3rd party and is only paid to the supplier after the buyer confirms satisfactory delivery of their order. Escrow is a fairly safe payment method for buying and selling online because Escrow protects both the buyer and supplier.
Although alibaba.com doesn’t support local debit or credit card. So it’s not so easy to import from third world like Bangladesh.
What is Gold Supplier?
Why need a gold supplier?
Gold supplier is need for your safety. It is an official offer for alibaba.com trusted supplier. It need a high money for listing. Alibab.com team visit supplier factory, and certify them as a gold supplier.
Take all protection for prevent scamming
There have so much middleman in the alibaba.com. Let’s take a look at several things you can do to protect your money when sourcing from overseas:
Verified supplier:
Always seek for a verified supplier for buying products from alibaba.com. There have a highly cost process for verified a seller in alibaba.com. so the fake people cannot want to register in this way.
What is Trade Assurance?
Trade Assurance is a free service by Alibaba.com that’s designed to help create trust between buyers and suppliers.
•Your products are not shipped on time as per the contract with your supplier
•he quality of your products is not up to standards as per the contract with your supplier
Contacting Suppliers
After done all procedure, Now send a message to the supplier for contact with you.
Ask for free samples :
It should go without saying that before you invest any significant amount of money into inventory you need to get samples to check and verify quality. Feel free to even contact them through another (fictitious) name and email and get an additional sample so you can compare quality.
Confirm your sample:
After asking your sample, they confirm your sample and send you by DHL other currier. Remember, some of the broker use to send a highly cost process. Because you need to paid the freight cost. So be aware. After taking sample, please confirm all the standards of your product.
Place your final order:
After confirming your products standard, you need to place your final order to the company. Bt you must be connect with him through legal procedure. Also with chatting media, like skype, viber, wechat and others. So you can easily talk with them.
After all I recommend you to manage a local professional importer for taking suggestion about importing goods from china. Because if you miss any kinds of mistake in importing procedure, you must be fine or lost your profit.
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