Alibaba is an online outsourcing company that connects thousands of manufacturers and consumers all over the world. Manufacturers and trading companies simply sign up and post whatever they can make for consumers, and it's usually a wide variety of things. Alibaba is also unique in that consumers can order custom made designs of whatever it is they're looking for at lower prices.
Alibaba has many significant advantages over other online companies which reflects in the close to 1 billion people per year who visit the site. This makes Alibaba even more susceptible to crime involving online shopping and fraud. It also begs the question: Is Alibaba safe for consumers and companies?
Should I Shop on Alibaba?
The answer is simple: Yes! Alibaba is a safe space and can be trusted for all your needs. Like anything on the internet, Alibaba users are at risk of encountering fraudsters and cons. However, the company has strict rules that ensure that all consumer transactions are safe and legitimate. The platform has also put in place measures to cushion its users if they do run into people who are just out to steal their money.
Despite their best efforts, it's up to the buyer and seller to be cautious when dealing with each other. Alibaba may come in to help you in case of fraud, but it's always better to be safe than sorry.
Buyers must always research on the manufacturers and traders they're dealing with on Alibaba. Look at the feedback from previous consumers and the number of orders they've fulfilled well. This will enable you to determine whether or not to move forward with them.
When ordering in bulk, e.g., if you're a company, order a few samples first and then test them out to see if they're good enough. This is a safe way of determining if the seller is trustworthy and provides quality materials.
Always use the payment methods put in place by Alibaba. These include platforms Credit Card, Escrow, QIWI, and PayPal. Alibaba does not officially support PayPal, but agreements can be made directly with the manufacturer to use PayPal. These methods have been put in place to ensure safe and legitimate transactions. It also makes it easy for Alibaba to give you back your money in case of fraud.
How to Find Legitimate Suppliers on Alibaba
Alibaba may have the most significant number of traders and manufacturers compared to other platforms. These include the best traders with quality material, people with horrible products, and people with no products at all. All of these people are traders on Alibaba despite the presence of scammers. Here are some tips on how to sift through and get the best supplier:
1. Look for Verified Sellers
This is the best way to determine whether or not a supplier can be trusted. This is because to get verified, and a seller must fulfill a variety of requirements that show that they are quality sellers. Verification is also proof that a business is legally registered.
To confirm the business' registration, the seller's goods are inspected by Alibaba employees who are employed specifically for that purpose. Independent third parties and audit companies also check the services and products a seller provides.
Verification on Alibaba is put into different levels that show exactly what stage of verification a seller has reached. The verifiers check on things such as certification, products being sold, and whether they match pictures and videos being displayed, business licenses, and contact information.
The highest level of verification is gold, which means that a seller has been inspected on all possible aspects and is trustworthy.
2. Ask for a Few Samples First
If you're looking for a permanent supplier, then asking for samples beforehand is the right way of gauging quality. It's especially important when making custom orders. A lot of manufacturers are quick to accept orders even when they're not fully capable of fulfilling the request in terms of quality.
Asking for samples is also the right way of getting legitimate people. Traders who know that they're not good enough for the job often shy away when asked for samples. You can also ask numerous suppliers for the same samples to compare quality and decide on whose is best.
3. Check Reviews
You should never shop online without first looking at product and seller reviews. A seller with less than a 4.5-star rating shouldn't be trusted. Next, check what customers are saying about the seller and their products. When checking reviews, always look for the bad ones.
A lot of manufacturers usually get people to write fake reviews for them to mislead people. It's rare for a satisfied customer to come back and praise a product. The dissatisfied people are the ones who always come back to warn other people.
Bad reviews will tell you more about the product than what the seller is willing to tell. Some of them even go as far as giving real pictures of what the product actually looks like. It doesn't matter how many reviews there are; read all of them.
4. Ask Questions
Get to know your supplier on a deeper level. After all, this is someone you're going to be doing business with. Ask them about the business, what else they sell, the number of employees, their physical location, and even photos of their company. By the time you settle on a trader, you should know all there is to know about them.
Also, check how they respond to your questions. People trying to scam you will always try to evade questions, or they won't answer at all. Questions wear out people who are not genuine.
5. Don't Be a Cheapskate
Who doesn't love a good deal? I know I do. Think twice when a deal sounds too good. Cons on Alibaba don't reap millions from people at a go. They often get bits of cash from numerous people through shoddy sales.
You've probably logged on to Alibaba and seen something like an iPhone 11 Pro at 100 US dollars. This is more than 1000 US dollars less than the usual price. This seller is trying to rip you off. No one in their right mind would sell an expensive item at a throwaway price.
Making Payments on Alibaba
Alibaba has gone above and beyond to ensure the safest payment methods possible. If you ever come across a seller trying to look for more straightforward payment methods, then he or she is trying to scam you. The payment methods put in place by Alibaba make it easy for Alibaba to track transactions and even provide refunds where applicable.
This is guaranteed through the Trade Assurance policy that states if the products you ordered are in poor condition or if not shipped at all, you get a full refund. Some legitimate traders, however, don't support Trade Assurance making it hard to work with them.
In this case, always try as hard as possible to find another trader who does, to avoid any risks.
Here are some of the payment methods on Alibaba ranked from the most secure the least secure:
1. Escrow
All transactions through the bank are carried out and processed through AliPay. The best thing about this platform is that it always puts buyer satisfaction above anything else. When you use Escrow to make a payment, AliPay holds the funds until the products you ordered are shipped and delivered and in the right condition.
Once you confirm that you have gotten the right thing and it's what you expected, AliPay then releases the funds to the seller. This is the reason why products paid for using cash are delivered much quicker compared to non-bank transactions.
If you dispute the product, then Alibaba will investigate the matter, and you'll get a refund if the trader is at fault. This is, by all means, the safest method of payment.
2. Letter of Credit
A lot of Alibaba users shy away from this method because of its complexity. It is, however, the safest method for both the buyer and the seller. When making purchases that involve large amounts of money, i.e., Over $15000, then a Letter of Credit is the best way to go.
Your bank will issue a letter to show that ‘the funds are coming and so the transaction should still go on. Other methods are slower, as numerous verification steps have to be followed. This is especially true when using direct credit/debit card payments. It's the fastest way to keep a transaction moving.
3. PayPal
Although it's not an official method supported by Alibaba, it is still a safe payment method. Alibaba doesn't cover losses as a result of transactions via PayPal, but PayPal may cover your losses.
Whenever money is sent via PayPal using the ‘Goods and Services' option, the Buyer safety program is automatically activated. If you don't get your goods or if they're in bad condition, you are eligible to receive a refund from PayPal. This method works almost like AliPay.
4. Upfront Bank Transfer
This is one of the methods you should steer clear of unless you completely trust the seller. It is never a safe option when starting with a manufacturer. This method works by sending direct wire money to the seller up front before receiving the product. Usually, 100% of the product cost has to be paid upfront for the transaction to continue.
If a trader asks to use this from the get to, then chances are you're being scammed. Once the seller gets the money, there's no way you'll retrieve it again. Only use this when you've worked with a seller for a long time, and you must be the one to initiate this payment method.
5. Western Union
This is the most insecure method of payment on Alibaba and any other online platform in the world. Once you send seller money via western union, they'll quickly go and withdraw it, and that's the end.
Most genuine sellers will be willing to compromise on the payment method to ensure even the least form of buyer protection. Unless they're family, never use Western Union. At least try PayPal because you still may never know if a distant family member is out to scam you.
How to Approach Alibaba Manufacturers and Suppliers
This is the next step after determining that a seller can be entertained. The step that determines whether to engage in business with a particular seller. How do you interact with a trader to make everything as smooth and as genuine as possible?
Here are some of the things you can do to allow legitimate transactions on Alibaba:
1. Ask About Samples
Always ask for samples when you're looking for a bulk manufacturer and never compromise on quality. Many sellers allow for conference calls where you can describe exactly what you want and even show them drawings of the items. Once they send samples and you analyze them, you can then make a decision.
Some sellers are usually willing to send more samples in case their initial work isn't pleasing. If they're not ready to do this, then move on to the next seller. Samples are rarely free, and so prices for samples should be negotiated. A sample is usually charged as the price of a unit of the product.
2. Ask About the Manufacturing Time
This is something that a lot of people always forget to ask. How long will it take for the product to be made and get to you? Ask for exact dates when you should expect to receive your items and make no compromise on it.
You're looking for a seller who is not too slow but also not unrealistically fast. Know how long the product takes before it's well made. Sellers who promise to do it exceptionally quickly are potentially fraudsters looking for quick money.
3. Ask and Negotiate Pricing
After receiving quality samples, ask how much a unit costs to produce. Prices on Alibaba are reasonable, ranging from $3-$6 per item. You can quickly negotiate with suppliers, especially when working with them on a long-term basis.
4. Ask on Minimum Order Quantities
This is the minimum amount of items one can order from a seller. However, most sellers are flexible and can reduce the MOQ for you to a reasonable quantity.
How to Buy from Alibaba as an Individual
Alibaba sellers usually only deal with people looking to buy things in bulk. It's mostly a wholesale platform. Despite this, there are still ways to purchase products singly by doing the following:
- Ask for samples only. Sellers only send single samples, and this is the best way to get individual items
- Find people who buy the products in bulk and buy from them. AliExpress is a great alternative where you can find the same Alibaba product in retail.
- A few suppliers have a MOQ of 1, which makes it possible to buy single products or items.
FAQs
1. What Is the Difference Between Alibaba and AliExpress?
Alibaba is an online platform where companies sell items in bulk to other companies and businesses. AliExpress is an online retail store developed by Alibaba for the everyday buyer to get items in retail. Companies on Alibaba sell their items on AliExpress at retail prices, but not all AliExpress sellers are on Alibaba.
2. Is it Safe to Buy Things on Alibaba?
Yes, it's safe. Alibaba places a priority on the buyer through its payment methods and verification processes. However, just like any other form of online shopping, scammers are always trying to reap from people. Always be careful when dealing with strangers on the internet.
3. How Should I Pay on Alibaba?
The safest method of payment is through Escrow and PayPal. This allows for your money to be held for you until you have received the product in good condition. To ensure buyer security, check for a Gold supplier who offers Trade Assurance. Never rely on Western Union for payment under any circumstances.
4. Should I Invest in Alibaba?
Alibaba is a big company with a lot of value in the stock market. Its value is expected to increase in the coming years as it expands its users all over the world. E-commerce businesses are always a sure way of multiplying investment value. However, always do your research before investing in anything. Only invest in something whose potential you see.
Final Word
Alibaba is a fantastic platform for buyers and manufacturers to interact. The products are relatively cheaper, and a lot of its manufacturers can be trusted. It's also a unique platform. According to Trust Pilot, Alibaba has received 5-star ratings from over 9000 reviews. Close to 90% of users also described it as being an ‘excellent' platform. It's, therefore, worth all your coins.
Always get to know who you interact with, whether you're a buyer or a seller. Transactions on Alibaba are either a hit or a miss. Always treat an Alibaba seller as a scammer until you have done your research on them. Look at all the reviews, ask questions, and only trust Verified manufacturers and sellers. Like any other online shopping platform you need to exercise caution when transacting and making deals with sellers to avoid being scammed.