Alibaba VS Aliexpress: How to import from China through the web

alibaba

Are you looking for new and interesting products to import from China? Click here to visit Chinaimportal.com and get a discount of 20% using the coupon “SDC2014″

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 re 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, it’s 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 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.

Click here to visit ChinaImportal.com and get the free e-Book “Six Steps Towards Profitable Import Business.”

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 and 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 degree. 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 suppliers 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 customers 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 colours, 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

Certain products such as electronics, toys, plastics and food require product standard compliance. 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:

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 Americans buyers. 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. Plenty of consumer products are not required to comply with certification standards in the US or EU, so simply avoid buying those that do from 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 a 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 offence!) might not be considered good quality in the United States or Italy.

It’s not unheard of that Aliexpress suppliers have cheated their buyers by sending wrong or defective products. Unlike Alibaba, Aliexpress provides buyer feedback directly on the site. Review your suppliers negative buyer feedback to get a rough overview of what kind of mistakes that 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 mode of transport. Air freight 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

Alibaba

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
  • You need your products right away

Fredrik Grönkvist is the Co-Founder and Limited Partner of ChinaImportal.com, a Shanghai-based 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.

Are you looking for new and interesting products to import from China? Click here to visit Chinaimportal.com and get a discount of 20% using the coupon “SDC2014″

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Comments

  1. Z says

    You can buy only one piece from thousands of products on Aliexpress like on Ebay.

    So the statement “10-100″ is incorrect.

    • Furio Fu says

      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!)

    • renata says

      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!

      • andy says

        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.

      • @renata says

        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

  2. Tony says

    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.

  3. mabrowo says

    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.

  4. Natalia says

    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??

  5. Viltsu says

    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. :)

  6. alexa says

    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.

  7. Amir says

    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,

  8. Isaac says

    I would like to know if the shipping will get right to your doorstep, without any extra charges along the line.

  9. Isaac says

    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.

  10. Nick says

    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

  11. maxy says

    Do you know of aliexpress logistic partners, for increasing time to delivery !?

    thanks for such interesting article !!

    • furio says

      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).

  12. rachelle says

    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

  13. tmic says

    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.

    • andy says

      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.

  14. Father Abraham says

    Thank you for this great article. I have been buying from Aliexpress since 2010 and total value of my purchases till date stand at $15,178.51 for about 70 orders in number. With a very effective escrow service in pIace, I think aliexpress.com is a great place to shop. I have never been scammed. Aliepxress recently cancelled one of my orders when they found that that supplier has suspicious motives.
    It is wise though to buy mainly(or only) from suppliers with positive feedback rate of over 95%.
    Once again thanks for this article.

  15. Kind says

    I ‘ve been studying and reviewing aliexpress for the past 4 months, reading both positive and negative feedbacks, chatting with some of my selected or preffered sellers and communications has being great. I ordered for a laptop yeterday and my order is yet to be shipped with effective communication with my client.
    Thanks for the review!

  16. Andres says

    Thank you for this helpful article. I also have question.
    I am registered on one of these sites and already trading a little with China. Everything is going well but right there I also have account which is providing my primary business. It is tour operator. People from one of these two sites calling me and asking to upgrade in something like a gold member etc.

    But I am not sure that in any of these sites people can sell tours for 1000-1500€ excluding flight ticket, per a person. Am I wrong?

    • Furio Fu says

      Hi Andres, Alibaba and Aliexpress are websites for trading companies and manufacturers selling hard goods; I’ve never heard of a tour agency on Alibaba so I don’t think it’s the right choice for you

      • says

        Thanks for that Furio it is exactly what I though and what I wanted to hear. They make pressure on me to upgrading for 699$ but I wont just because travel packages and tours are product different than coffee wholesaler for example. .

    • non says

      I have noticed that this guy will only answer you if you feed his ego. Thank him so much for his geniusnes, and he will answer you. Dont believe me, look trough ALL of the comments here…

      • Furio Fu says

        Incorrect.

        I’ll only answer if 1.) You ask something that wasn’t ask before AND 2.) You want to import decent quantities as a business and not one jacket or one smartphone as a private citizen (this article was written for small businesses, not for private citizens).

        But don’t believe me, just look through all the comments : )

      • Furio Fu says

        Also, sometimes I just miss comments… this websites gets many comments every day and I have limited time to answer. It’s written nowhere that I shall reply to everybody!

  17. Beth says

    Great article, you can’t imagine how helpful it is to me right now!! I am looking to do business with a company on Alibaba to manufacture a piece of jewelry. I’m nervous about the quality as I would like it to be a bit more upscale than the pictures of their products reflect. Can I tell them the materials I want them to use?

  18. Benjamin says

    Hi Furio

    Thanks for the article. I’m a young professional that is looking to practice my entrepreneurial skills rather than spend my life working at the corporate ladder. Presently I and researching and investigation all options and elements of the trade.

    It appears that Alibaba/AliExpress are the most prominent. Can you please suggest any other sites that perform a similar function? I understand that these will likely be less reputable however despite that, significant opportunity can arise.

    Another thing, an earlier post was made suggesting the following article for information on this business model.

    [Link Moderated]

    Are you familiar with similar pieces or have you written your own?

    Thank you in advance.

    • Furio Fu says

      Benjiamin,

      I deleted the link because

      1. I think that the owner of the e-book requires you to optin to his newsletter in order to get the e-book link so you can’t publish it (it goes against his copyright)

      2. That e-book is totally useless cause all he does it’s to tell you to open a website, list some incoterms and general stuff about shipping and then post photos of people that became rich importing from China using its empty system. Sure, and I’m Santa Clause : )

      Here you find the best resources to import from China (check the 3 websites at the end): http://www.saporedicina.com/english/doing-business-with-china/

  19. lynnest says

    Hi Furio

    Thanks for great article. After went through the comment, one thing that I dont see is tax/tariff. I plan to order stuff from alibaba and ship to the US worth about $500, I want to know how is the tax works. The seller ask me pay for the shipping cost $90 for express shipping. Is this shipping cost cover everything like custom fee, etc. Thank you for your advice.

    • Furio Fu says

      It depends on the Incoterm: if it’s DAP or DAT, then it covers everything. If it’s CIF (usually it’s CIF) than you’ll pay duties and other American taxes once the goods land in US. Ask to your supplier what Incoterms he’s offering to you.

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