Do you dream of setting up your own online shop or import business? In both cases, the best way is to begin your research on the internet.
But how to get started?
I asked my friend and business partner Fredrik, who’s been helping Western companies import from China since 2009, to write this article for my website. Here is what he has to say!
Alibaba.com and Aliexpress.com are well known among importing businesses worldwide. Both websites are owned by the Alibaba Group, based in Hangzhou, China. The difference between the two websites can be hard to spot at a first glance, but they have two very different business models with different strengths and weaknesses. This article will help you choose which one to use.
p.s. Here you can find my review of The Official Alibaba.com Success Guide, the only book that I was able to find on the topic.
Alibaba.com key facts
- A B2B (business to business) portal that connects manufacturers – mainly Chinese – with overseas buyers.
- No built-in shopping cart system, the order terms are negotiated and confirmed via email or the built-in chat function.
- No transaction fees or commissions are paid to Alibaba.com. Their main revenue source is the “Gold Supplier” membership fee paid by suppliers. Alibaba verifies that each Gold Supplier is a legally registered company. However, this is not a guarantee of quality products.
- Focused on “made to order” goods. In practice, this means that suppliers on Alibaba don’t advertise “ready made” products but rather manufacture products based on the specifications provided by the buyer. The suppliers are basically listing reference products.
Aliexpress key facts
- A transaction based on a B2B and B2C (business to customer) platform that connects mostly trading companies – mainly Chinese – with overseas buyers.
- Focused on small volume orders of “ready-made” products instead of “made to order” products and therefore more suitable for small and medium-sized importers who can’t afford to buy a container of goods.
Alibaba and Aliexpress comparison
Minimum Order Quantity (MOQ)
A supplier needs to manufacture a certain number of units before he can make a worthwhile profit. The raw materials and component suppliers also impose MOQ requirements on your supplier, since they also need to provide a certain amount of products to your supplier in order to reach profitability. This translates into the MOQ. If you can’t reach it, the supplier won’t do business with you.
Alibaba: Suppliers tend to have rather high MOQ requirements. The reason is that they don’t keep products in stock and need to purchase a minimum quantity from their suppliers. They also need to manufacture a minimum quantity of products in order to make a profit. Many consumer products, such as wristwatches, can easily have MOQ requirements of 300 units or greater. An MOQ requirement is usually valid for a specific product, so if you want to order two different products, you need to order 2 x the MOQ requirement. This is often too much for small businesses that don’t have fairly large sales volumes.
Aliexpress: Most suppliers here offer an MOQ starting at 10 units and greater. The simple reason is that AliExpress suppliers can split up a larger quantity between many small buyers. This eliminates the issue of reaching a high MOQ requirement, but will of course affect prices.
Pricing
The price paid for a product is based on two main factors: its quality standards and the quantity you buy. The approach an importer should have with regards to pricing is very different when comparing the Alibaba and Aliexpress portals.
Alibaba: There are no fixed prices, but everything is quoted from scratch to a various degrees. You send your product specifications (colors, dimensions, materials, certification requirements, etc.), the delivery terms, and the quantity you want to buy; then the supplier gets back to you with a price. A wristwatch can cost anything from $2 to $200 USD; the pricing is a question of what quality standards you require.
Assuming that you can reach the supplier’s MOQ requirements, you will also enjoy lower prices compared to if you are ordering 10 to 20 units at a time from AliExpress suppliers.
Aliexpress: The supplier lists a product and prices for different quantities. It’s usually not up for negotiation. Prices on Aliexpress are higher compared to larger quantity orders from an Alibaba supplier.
Custom designed and branded products
Creating a brand instead of just importing random no-name products can increase the customer’s perceived value of the product, even if it’s not a well-known brand name. A brand can consist of a logo, certain colors, or design. Some importers also want to develop a completely new product or modify an existing design.
Alibaba: Most suppliers can offer custom designs and logo printing. However, developing a new product from scratch is not easy and you’ll need to have very well-drafted product specifications and graphical material at hand. This includes, but is not limited to, material specifications, components, Pantone colors, product packaging designs, product body artwork, and logo designs.
Aliexpress: Products on Aliexpress are already manufactured and waiting for a buyer. It’s not possible to send back a few units to the factory to modify their design or print a logo. Therefore, Aliexpress is not the right choice if you’re looking for custom-designed or branded products.
Product certification
Most of the products, for instance, electronics, toys, plastics, and food require product standard compliance in most of the markets. Different countries (USA, Canada) and markets (EU) have different product standard certificates. Many importers assume that exporting suppliers are compliant by default, but this is completely wrong. Importing products that are non-compliant is illegal and can result in having your shipment confiscated, so you better take this part seriously. Below is a list of different product certificates:
- Electronics: CE, RoHS, EMC Class A and B
- Toys: EN71
- Plastics: REACH
- Fire retardant: FR B1 and B2
Alibaba: Since suppliers provide “made to order” products, you have the option of asking your supplier to make products compliant with a certain certificate by using the materials and components that are required for compliance. Remember that not all Alibaba suppliers have the experience or knowledge required to manufacture compliant products, but there are plenty that do. The conclusion is that if you are importing products to the EU or USA which also require compliance with a standard such as CE, then Alibaba is your next destination.
Aliexpress: The products listed on Aliexpress are already produced and it’s very unlikely that the supplier has made products that are compliant with Western product standards. Compliant products are more expensive and it would make the supplier less competitive to their Russian, African, and Latin American buyers (although note that also these markets often have regulations). This group tends to be larger than American and European buyers so it does make sense for the average Aliexpress trader to not bother with American and European certification standards. This is the reason for which, if you are importing in US or EU, it will be difficult to find a suitable supplier on Aliexpress.
Quality Issues and Risks
It’s risky to import products from China. A whole industry focused on quality assurance and fraud prevention has grown in China, unlike anywhere else. Anything from small details that are incorrect in the final product to outright fraud is a possibility of this business. This costs businesses money, and while some issues can be overlooked, others force businesses into bankruptcy.
Alibaba: Far from all suppliers are qualified to take your order, especially if you want to import custom-made products or have certification compliance as a requirement. You’ll need to invest many hours in questioning your suppliers on their manufacturing capabilities. The risk of quality issues will increase if you don’t know which product specifications define the quality of the product. In other words, the more you know about your product, the more quality issues can be avoided.
Aliexpress: It’s very straightforward to order from Aliexpress, and you get what the supplier offers, nothing less, nothing more. Keep in mind that “quality” is subjective, and you should order a sample before placing a larger order. Things considered to be good quality in Ecuador or Russia (no offense!) might not be considered good quality in the United States or Italy.
Unlike Alibaba, Aliexpress provides buyer feedback directly on the site. Review your supplier’s negative buyer feedback to get a rough overview of what kind of mistakes the supplier has made.
Lead Times
Time is money and that becomes especially clear when importing from China. Below we list the different lead times you need to take into consideration when buying from a Chinese supplier:
- 1. Order preparations
- 2. Production time
- 3. Shipping time
Alibaba: It can take months before you’ve identified the right supplier, confirmed samples, negotiated prices and have a signed and stamped Sales Agreement in your mailbox. On the other hand, you can just ask a random supplier to send a digital invoice and transfer your money right away, but that’s obviously risky. The order preparations can take anything from 15 days to 6 months. The larger the order and the more complex the product is, the longer it takes.
Production time is easier to predict since it’s usually around 30 days in total, counting from the day the supplier receives the payment.
How long it will take to ship the products from China is basically a question of the mode of transport. Airfreight usually takes 5 – 7 days while sea freight takes around 4 weeks. If you’re sourcing suppliers on Alibaba, you’re likely to order fairly large volumes and in that case, sea freight is more competitive than air freight.
Aliexpress: Since the products you see on Aliexpress are already manufactured and ready for delivery, you don’t need to worry about any time-consuming order preparations and production time. Since you’re sourcing from Aliexpress, your order is probably not large enough to make sea freight a viable option. Therefore, the only lead time you’ll need to take into consideration is the air freight delivery time. The Alibaba Group didn’t name this portal Aliexpress without a reason.
Summary
We recommend Alibaba.com if…
- You can buy a few hundred units of each product
- You want to import custom designed products
- You want to import products with your own logo print or custom product packaging
- Your products are very price sensitive
- You are importing electronics, toys, plastics or any other product to the EU or USA and therefore need to comply with certain certification standards (CE, FCC, etc.)
We recommend Aliexpress.com if…
- You buy 10 – 100 units per product
- Custom design, logo printing and custom product packaging are not important to you
- Your products are not that price sensitive
- You are not importing products to the EU or USA or your products don’t need to be compliant with any certification standard (but these products are quite rare)
- You need your products right away
Fredrik Grönkvist is the Co-Founder and Limited Partner of ChinaImportal.com, an information services company which provides start-ups and small businesses with an online system for managing sourcing and production in China and other Asian countries.
Disclaimer
This article is provided only for informational purposes only and neither the author nor any companies and/or service providers mentioned in this text make any representations as to the accuracy, completeness, currentness, suitability, or validity of any information in this article. This article only represents the views of the author and is not endorsed by any company and/or service provider mentioned in this text.
How can I order a sample on Aliexpress?
The Real Person!
The Real Person!
Just buying it as Aliexpress suppliers accept very low MOQ (minimum order quantity)
Interesting article, good also for PI but also to small and medium sized enterprizes.
Also be aware of freight forwarder charges, I ordered a sample generator on Alibaba, product and freight to NZ sea port was nz$270, the freight forwarding company then sent me an invoice for nz$483 to clear customs and arrange transport to me. The customs charges were nz$79 and the freight nz$ 57, the balance of the money were fees charged by the F/F to “rubber stamp” the process. I wasn’t informed there was the need for a F/F, let alone what the fees would be…an expensive lesson for a first time importer.
The Real Person!
The Real Person!
Yes, transportation must be taken into account too! Thanks for your comment
In EU one of dozen packages I have ordered was hold on customs as its value was high enough. Most sellers on aliexpress sellers make a disclaimer that customs clearance and other import costs are not included. Unless you order single unit of significant value, try to import shorter series in separate packages with value below custom-free limit specific to your country.
I agree that Alibaba has suppliers that offer custom logos on their products, while Aliexpress has mot. It’s an advantage for those sellers who target products with custom designs.
This is a book I found online (prob spent about 5 hours searching
for it) quite a good read on importing anything from China:
[Link Moderated]
Rachelle
Thanks for the comment Rachelle
Do you know of aliexpress logistic partners, for increasing time to delivery !?
thanks for such interesting article !!
Hi, Aliexpress is like eBay, it’s a directory of suppliers. Then every supplier will send the goods to you. You may also choose to get your own freight company, however this would work only for big quantities of products. And in this case I recommend you to avoid Aliexpress and get a real manufacturer (on Aliexpress there are almost only trading companies).
Great article. I believe there is another alibaba site which only lists the very elite companies and products but can’t seem to find it. Would you know the link to this site. Thanks
The Real Person!
The Real Person!
Hi, I don’t think there is “another” Alibaba site, beside Alibaba.com
Thanks 4 dix! @Isaac. That depends on your location and the courier u use
I would like to know if the shipping(free shipping or any other fast post) will get right to your doorstep, without any extra charges along the line.
I would like to know if the shipping will get right to your doorstep, without any extra charges along the line.
Usefull info.thanks a lot
Thanks for the info.
I have never shopped on either websites and I was wondering if more experienced people can answer my questions:
1. How do you know the name brands are original? or are they even original!
2. will you have importing problems in USA costumes?
Thanks,
Very Excellent article.
I Highly appreciate..
One thing i would ike to mentioned which was not very c;leared about alibaba.com
Same as aliexpress, you have protection at alibaba.com
Its called alibaba escrow service,
When you find a product on alibaba.com try to click on supplier who accept escrow via aliaba paltform.You are protected same as aliexpress,
Alibaba will release the payment only if you complete the order yourself.
I Never prefer Bank or WU directly to suppliers.
If you meet a supplier on alibaba or aliexpress
Do not bypass the platform,
I hope this helps
and thankful to author for great article.
yeah, for who is interested the service is called Alipay
Very interesting post indeed. Thanks for puting everything in easy to read format and compareing stuff.
I’m very far on my own plans becoming a importer. It looks like an interesting world. Your post certainly helped me to continue my plans. :)
: )
Hi, thanks for the useful information.
learned from this text, you must have buyed much times online and you are experienced. so i want to ask you if know the store newbuybay? because i want to buy one of productos in his web. is it advisable? what can you advise for me??
Hi Natalia,
nope, I have no experience with newbuybay
I beg to differ. Before I actually started purchasing for my small reselling business, I read lots of heartbreaking scam posts about Aliexpress. I love online shopping myself so I decided to see for myself. I started my first purchase on Aliexpress with 47 orders (each about 5 to 10 items each). To my surprise, I received 47 orders and 3 were not received because it was either returned by USPS or just stuck somewhere in the sorting facility. I was grateful and I saved those sellers that I had a smooth transaction with. As for refunds, I got all my refunds as long as I was able to open a case for it. The sellers refunded me without a fight.
So far, I have purchased items worth $1,900 and counting. It’s Xmas season and my business is booming so I have to stock up now. My advise is, if you have established with a good seller, they can even ship you an order over $70 for free through FEdex or Epacket! All I did was ask. I no longer wait forever for my orders. When the time is right, I shall go to China and meet my sellers and even strengthen our business until I can afford to import from Alibaba. By the way, most of the sellers on Aliexpress are manufacturers and suppliers on Alibaba too. So that means, if you are good with them you can get better discounts in the future for imports.
Hi there, thank you for sharing your experience!
Thank you. I have one question though, I’ve been buying from aliexpress for while now. But right now, my crafts hobbie is becoming more serious, and having a company I must have invoices of materials I buy, this has to be legally done. In aliexpress invoices, even if you request them to sellers, have no validity in Portugal, my country, because there is no fiscal number or identification, no VAT’s etc. Do you have the same problem? thanks in advance
The Real Person!
The Real Person!
Thus you shall consider real manufacturers, not the traders you find on Aliexpress : )
Here you may find much more answers: http://www.chinaimportal.com/blog/
Are you in US or Canada? I am in Toronto Canada. I want to start my small business and planning to go with Dropshipping first fro, China to mitigate inventory and import duty hassle for the items that are more than $20. For small and less expensive items I want to go for stocking them. Do you have any idea if i order them on one or two addresses do i need to complete the import formalities ? BOND,, import license etc. I will appreciate your quick answer.
Happy that you have had only good experience, in my case was rather opposite…
I have spent over 7.5K on goods from shoes, bikinis, clothes to electronics and camera gear… from all that only 250$ were well spent and quality gear – the rest… well the rest is gone… in most cases I was unable to launch a dispute, and in those that dispute was made I did not received my money despite returning the crap stuff to the seller(which obviously costed me more money) I never seen a refund… except of 2 occasions where the cost of item was below 10$… total scam… Aliexpress dispute system is set up in the way that it fully supports chinese vendors but for sure not us buyers…
Now in research of trusty place in HK or Taiwan…
as i have done my bit in thailand and indonesia too and would not suggest to go that way to anyone… world has changed and they all want to charge you exacty waht you willing to charge in Europe or Australia or US…
Hi there, thank you so much for sharing your experience! I’m planning to purchase through AliExpress very soon. And your feedback is reassuring!
There again though, you have become the shipper and your own warehouse, unless you are using Amazon FBA, of course Amazon FBA just got harder for slow moving items. Aliexpress just isn’t a great alternative for drop shipping single items especially when Ali sellers are also selling against you on Ebay. See my example above.
Alibaba however has gotten more affordable as many mfr. sell 10 items minimums and some even 1 piece.
Your comments are certainly worth taking on bored,
I have dealt with both AliExpress and Alibaba,,
One point you made is very important : buy your sample product from AliExpress first to test the quality of what you require, if happy with the product go ahead and order your large quantity from Alibaba.
I found a lot of your comments very enlightening,
Thanks,
Tony.
Hi Tony,
thank you for reading and commenting!
Thanks for your article, so I can considered where I will buy. Sorry my English not good enough.
Hi there, thanks for the comment!
Do not buy from them – is is a such a scam! and if you would like to return the junk they sent – you will never get your money back – just like me and couple other people i know!
By contrast I buy on aliexpress short series of electronic components and general accessories from different vendors and for more than 2 years I had only two incidents with wrong order and never trapped by scam. So if you want to scary people give specific examples. I agree that taking naive approach (like choosing product 10 times cheaper then other similar offers on this portal) can lead to disappointment and spread of negative opinions.
Not everyone will agree aliexpress is a scam site, it is the united state law penal code. Spaming ,commenting slander comments on a site it lead to fines if you dont believe me over view this law i will give you a direct link. If your brave enough to post aliexpress is a libel website then post a full picture of yourself to prove it and explain more. Its insane these kids are so immature of hiding there supplier. Its not like were going to buy it all gosh.
http://www.shouselaw.com/identity_theft.html
If you got scammed on Ali Express your a fool, they have a buyer protection program which is very strong plus you can always do a cc chargeback if your truly scammed.
Never apologize for your English when it is not your first language. Just knowing more than one language at all puts you in above average accomplishments. If you want to become stronger, just comment often. Ignore negative replies, but absorb honest corrections from positive people and learn from them, and also thank them.
Ciao, baby.
I meant sellers allow you to buy 1 pc.
You can buy only one piece from thousands of products on Aliexpress like on Ebay.
So the statement “10-100” is incorrect.
Hi, thanks for the visit!
You are technically right. However this article was meant for people that want to import goods for the seek of resell them. Hence buy only a unit make little sense (although is certainly possible on Aliexpress!)
As you say, you can find Aliexpress items elsewhere like Ebay for the same price and shipping time, it seems to me that Ali is competing against us resellers in Ebay as I see exact items for similar or same prices on both sites. For example Adeept 46 in 1 sensor kit for my product niches of electronics projects $79 on Ali and $78 on Ebay with the Ebay seller listed as Adeept. They denied they are the same products, but I examined them closely, so I ‘m not falling for it. With that kind of competition, I don’t know if I can be profitable now even though I can charge a little more, maybe $85 on my Shopify site since I have value added features like tutorials and articles, but that is a slim margin. Hence why I am searching for other sources. Adeept and Keyshot, both on Ali must be getting someone in China to make these kits from parts, and drop shipping them from Ali. I have found no kits at all on Alibaba. I also noticed the cutoff point for pricing in this case is 5 units to get a reduction from $79.19 to 71.27, (and no difference in price for even 100 units) so at this time I must buy 5 units for $356.35 to make any profit or competitive pricing, but then, “I become the shipper, warehouser, etc and I was hoping to drop ship using Oberlo etc.
Thanks for the article it was very useful. Puts everything in a nutshell.