How to start dropshipping on Alibaba?

Tuesday, April 6, 2021 - 3 min read

If you are new e-commerce merchants or dropshipping entrepreneurs, roaming for a wholesale partner or manufacturer, Alibaba is the right place to solve this daunting task. Alibaba is the leading global marketplace hosting millions of merchants and products with very competitive prices.

Why not other marketplaces but Alibaba?

1. Alibaba – leading B2B trade marketplace.jpg

Alibaba – leading B2B trade marketplace

Alibaba is a safe place for large-scale dropshipping businesses. Running a business on Alibaba, you can ensure that your payment will be processed conveniently and securely. In particular, Alibaba offers Trade Assurance which ensures that you will never receive unqualified products or be scammed, plus refunds are absolutely possible and available if products provided by the Trade Assurance suppliers do not satisfy your requirements.

How to start Alibaba dropshipping?

Searching for products

2. Search products on Alibaba.jpg

Search products on Alibaba

Principally, Alibaba is pretty similar to other marketplaces, you can directly search for a specific product, pick one among thousands of results or look for and select suppliers or manufacturers from the drop-down menu for a particular item.

Evaluating products

  • Reviewing product descriptions: this step is crucial to have basic information about the products for product quality evaluation.
  • Unit price: the first thing to review must be the unit price. Commonly, the price that the suppliers offer is FOB, which means Free on Board – the sellers will pay all costs to get products on port and buyers will pay the fee transferring products to the final destination.
  • Minimum order quantity (MOQ): it means the smallest order quantity that the manufacturer can accept. You need this for price negotiation. Specifically, the minimum order is 500 units, multiplying with the unit price and plus with the shipping cost, then you have the total amounts and get negotiation started.
  • Payment gateway: Luckily, Alibaba offers several payment options to choose from, such as Escrow, Paypal, Letter of Credit or Upfront TT.

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  • Supplier’s contact: you can contact suppliers via email or WeChat. The manufacturers mostly use automatic translation applications which might cause some errors and misunderstandings, so every content must be short, concise, well-formatted and free of any spelling/grammar mistakes.

Quotation

When you have an overview of products, prices and a list of suppliers, you can start to ask for quotations. Sending an email with the following essential information:

  • MOQs
  • Sample price
  • Production pricing
  • Production period
  • Payment terms
  • Short-list and negotiation

Once you receive information from the suppliers, you can start to choose suppliers that mostly match your expectations, make a short-list and negotiate.

Alibaba retailers or manufacturers are open to working with even small-scale business merchants. You can enjoy low manufacturing cost, diversity of suppliers and manufacturers and one-of-a-kind products that cannot be produced at any other places rather than in Asia. However, from time to time, you might be struggling with intellectual property issues, cultural differences or geographic hindrance. Passing these difficulties will bring you a wealthy dropshipping future!