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.
Pretty! This has been a really wonderful post.
Many thanks for supplying this information.
We have a Hong Kong Company, we manufacture in China, and we have started to sell into Russia – they want to deal with us because the challenges with EU.
Who can help me set up the AliExpress account for our HK Company .. inside Ali-Express – for foreigners – and are there any tips and tricks / warnings etc ..
Cheers
Hi Furio Fu! I like your simplicity and i must appreciate your effort to enlighten many through this article! Am an intending online trader and i hope to shop in Aliexpress: but what am still not too clear about is how my goods can come to my very location? I beg to hear details on how it is done! Thanks.
The Real Person!
The Real Person!
Usually sellers offer you several possibilities for shipping
Do you have any advice or workarounds for people living in Washington State? I’ve read from multiple sources that Alibaba and Aliexpress won’t ship to the state of Washington. Supposedly it’s related to escrow services. Have you heard of this??
The Real Person!
The Real Person!
Nope, this is not something we have heard about
You were VERY helpful to me. Thank you so much!!! Really appreciate it.
This is a terrific article because it’s clear and spells out a lot of different scenarios the average person or the newcomer to this business would think of. Also, it reiterates all the various comparisons using a very tight graphic that is a great reminder of all that was written.
Trading with people from any foreign country can be tricky. There are vast differences in what is considered quality and safely produced products from area to area. I’d be happy to share this article with anyone needing more information before opening an import business. It’s that good.
Great article, I just made a Youtube video myself a Guide to Private Labeling, definatley a must watch for anyone looking to begin importing. https://www.youtube.com/watch?v=S2E47V0ydHc
still contemplating on which site among aliexpress and alibaba to do my business shopping with, pls at a start which of the site is advisable to start with?
The Real Person!
The Real Person!
Depends on what you want: Aliexpress is for small quantites, Alibaba for more serious importers that want to work with a manufacturer
Ali Express is also a great way if you want to test some products and see if you can actually get some sales prior to placing a larger order and customizing the item. I’ll typically place an order of say 10 or 20 units and see if they will sell without promotion. If they do I know that I can do even better private labeling and actually promoting the item. I talk about this alot in my blog rulesforrebels.com
Thanks for this article, Furio. And this discussion below your article adds more value to the subject. I’m on my way to start dealing with AliExpress and all of this helps a lot! Thanks again!
The Real Person!
The Real Person!
You’re welcome : )
I want to start businesses in Bangladesh for buying mobile tempered glass from china. Pls advice me. Thanks /Monir
Hey thanks man….that article is awsome.I have a small buisness and wud order through aliexpress.
Hi,
Such a useful article for those who have no clues to sort out their import business dream. Thanks for the great article.I am planning to start a small fashion business in Newzealand . I want to buy different makeup and jewelry products but in small quantity like 50pcs. as your article suggest I should go to ali express but can you suggest how can I work it out as I like to order multiple products from multiple suppliers . shipping cost will be very high if I will go for different packages so what should I do . how can I combine all orders to one shipping package . hope to hear you soon. Regards
Hey thanks for the article.
I have a small business and would like to order through aliexpress. I just need to know which is the best mode of payment you would recommend? Western Union or credit cards?
The Real Person!
The Real Person!
Western Union is the worst cause you can’t trace the payment.
Thank you for this informative read, it was very helpful.
I would like to add that Aliexpress does allow comments, but does not allow updated comments, so like me, when you get a bad batch of products failing after a few weeks, you can’t comment again how bad those products were. It’s not a fair system as far as I can see and very misleading.
I purchased a Tablet PC from a supplier on Aliexpress, the Tablet stopped working 8 days after I received it, I had clicked the confirm receipt button on Aliexpress as I had received the item, and because of this I was told by Aliexpress Customer Services that nothing could be done regarding this faulty Tablet as I had accepted the item by clicking the confirm receipt button, I feel this is utterly deplorable, the Consumer Law’s state that any defective goods should be Replaced, Repaired or a Refund issued. Neither the seller nor Aliexpress did any of these.
I then emailed the seller day after day for over 3 months and there was no way I could get him to issue a refund he even stopped responding to my emails, I also emailed Aliexpress Customer Services; they were just not at all interested in my problem. I finally got in touch with My Credit Card Company and they proceeded to do a Chargeback and after about 6 weeks the seller accepted liability and made the refund.
The point is it should never have taken as long as it did to resolve this matter the seller should have given the refund as soon as I informed him the item was faulty, also Aliexpress Customer Services should have taken more interest than they did in the matter or Aliexpress should have issued the refund and claimed reimbursement from the seller but they did not.
There is no positive way to communicate with Aliexpress Customer Services there are No email addresses, No telephone numbers even the online chat system is covered by Robots so it is near impossible to take to a Human. There are many people who have had a similar experience to the one I had with the Tablet and they have not been able to resolve their problems at all.
Alibaba is actually the Head Office for Aliexpress therefore it should be possible to escalate a problem like this to their Head Office for investigation but there is no way to do this because they will not get involved in any matter regarding Aliexpress.
Aliexpress needs to take a good look at the way their company is run and make huge changes before I will buy anything else from any of their suppliers.
How much did you pay for it? This is a website that you purchase items from when you want a highly discounted rate. You get what you pay for.
You clicked the button, expressing to your seller that you have received your item and that you are happy with it. That is what it means when you click the button. You need to know how a website operates before you just start throwing money around like that. Why is it the sellers fault that you are too incompetent to read the rules? They would have replaced or refunded your item if hadn’t clicked the button and told them that you were happy with it. Maybe it was defective, maybe it wasn’t. You can’t really prove that after 8 days of using it. Maybe you broke it? Who really knows. It’s really sad that you freaked out on this Company for what i’m sure was less than $100. Especially when you expressed that all was well with your order.
This probably isn’t a website you should be operating on, seeing as you don’t know how to use it properly.
All products on AliExpress.com have the Returns & Refund guarantee. Any product bought through the site is protected if the items you received are not as described.The following situations are not included:
1. An item you claim is not as described, but the seller can prove that it is
2. Items are as described, but you no longer want them (unless the seller offers Easy Returns)
You are #2. You no longer want this item, because you most likely broke it. Again, you get what you pay for. Stop being so cheap.
I have purchased quite a lot of goods from Aliexpress and most of it was crap quality, and I am aware of how to use this site.
I did click the confirm button but that was to confirm I had received the item ONLY. Also at that moment in time the item WAS in satisfactory condition but who could possibly foresee that A BRAND NEW Tablet PC would cease working after only 8 days? I was certainly not expecting this to happen.
The Tablet PC was later taken to a local electronics store for repair where the engineer found that most of the PCB board was held together with masking tape, the engineer stated that it had been very badly put together. In other words BOTCHED UP.
Regardless of how much I paid for the Tablet It is a well known fact that all NEW items are covered on some sort of warranty therefore items purchased on Aliexpress should also be covered with warranty
Hi Their..
Me Jayanth from bangaore- karnataka -india. i recently started business with under authenticated certification norms. i have seen few post that comparing b/w alibaba and aliexpress. can any one from bangalore suggest me, like if i order X product paying Y price from online ( alibaba or aliexpress) how hurdle free it will reach me … i mean again i need to pay additional amount for taxation,courier, warehouse etc.. for example in India how we order XYZ product from amazon and in span of 3 or 4 days the delivery will be given at door step without paying any extra amount. like wise it is??? or any stipulated regulation i need to follow. please if any one guide me with flow chart that highly appreciated. one again thanks to you allow me to comment..
ALIBABA.COM /ALIEXPRESS.COM THE “WORLDS LARGEST CRIMINAL ORGANISATION”
Hat’s off to JACK YUN MA the founder of Alibaba.com/Aliexpress.com these two companies form the “PROTECTION SHIELD” which allows sellers all over the world to scam anyone and everyone who buys products from their websites, with no one able to anything about it at all.
1. If you have a problem with an item you bought you can email the seller, BUT there is no guarantee that the seller will email back and if you are lucky enough to get a reply back he will not help you. (nothing you can do)
2. You can try to contact “Customer Service”, but you are most likely to get through to a robot chat system. Sometimes on (Alibaba ONLY) you might be lucky and get a live chat with a Human BUT of course this will not resolve anything at all they will just take you round and round in small circles and you will get nowhere.(nothing you can do)
3. There are ABSOLUTELY NO EMAIL addresses for any of these companies, so this method of contact is out the window. (nothing you can do)
4. You CAN NOT report a problem to the Police as they do not want to know
5. You CAN NOT get your government to look into it because they can not do anything because china has different law’s
6. It is most unlikely that you would find a Solicitor who would be willing to take on a case of this type and if you did there are suggestions on the internet that Solicitors fee’s for such a case would be well over $2000.00
7. If you’re purchase was on Aliexpress and you get a HUMAN customer service rep on Alibaba as soon as you give them your order number or mention Aliexpress they will pass you over to Aliexpress customer service quicker that yu are able to blink and yes you’ve guessed nothing will be done.
The website should be renamed to Alibaba and the on-line thieves
The only safe advice regarding these companies is
STAY WELL AWAY DO NOT BUY ANYTHING FORM ANY OF THESE WEBSITES
I know I’m probably the only person who doesn’t know this but can Someone please help me understand what Pieces,
Sets mean? I want to order about 400 bird cages but noone online seems to know how to explain what pieces mean.like is there a Legend for all the abbreviations or ordering lingo?
If anyone could help it would be much appreciated.
The Real Person!
The Real Person!
I guess in your case 1 piece is 1 cage. Just get in touch with the supplier to make sure it’s like that
What abbreviations are you referring to like FOB? OEM? etc?
The Real Person!
The Real Person!
FOB : Freight on Board, it’s an Incoterm
OEM: It means a custom product.
Oh dear – I just saw the comment about not recommending aliexpress for shipping to Canada. I didn’t know that. I just made 9 orders for individual items. The website doesn’t deter you from shipping to Canada. It outrightly says free shipping to Canada. Should I cancel? They are now in the middle of New Year celebrations, nothing has been shipped as yet and I don’t want to lose my money.
The Real Person!
The Real Person!
Hi,
we only recommend to buy from Aliexpress if 1) you are shipping to a country with not so strict regulations and/or b) the product is not very regulated.
Having said that, this article is meant for wholesalers that buy from China in order to sell in their country; we have not much experience on buying in China as a private citizen
How long does processing usually take I’m eager to get a jacket I bought off of aliexpress i live in Arkansas USA and its coming from shanghai