Do you want to open your own online retail or import company? In both circumstances, starting your studies on the internet is the best option.
But where do you begin?
I invited my friends and my partner Fredrik to write this essay for my website, as he has been assisting Western companies in importing from China since 2009. Here’s what he has to say about it!
Alibaba Group and Aliexpress.com are well-known among international importers. The Alibaba Group, located in Hangzhou, China, owns both websites. The two websites may appear similar at first glance, but they have two entirely different business models, each with their own set of strengths and disadvantages. This article will assist you in determining which one to utilize.
• A B2B (business to business) website connects Chinese manufacturers with international buyers.
• Order terms are discussed and verified via email or the created chat function because there is no built-in shopping trolley system.
• Alibaba.com receives no transaction cost or commissions. Suppliers pay a “Gold Supplier” membership fee, which is their primary source of revenue. Alibaba confirms that every Gold Supplier is a legitimate business. However, this does not imply that the products will be high quality.
• Emphasis on “made-to-order” items. In practice, this implies that Alibaba suppliers don’t offer “ready-produced” products; instead, they produce things based on the buyer’s needs. Essentially, the vendors are listing reference products.
• A transaction that connects mostly trading enterprises – primarily Chinese – with global purchasers via a B2B and B2C (business to customer) platform.
• Intended for small & mid importers who cannot afford to purchase a container of goods and focus on modest volume orders of “ready-produced” products rather than “made to order” products.
Alibaba Vs Aliexpress
Order Quantity Minimum (MOQ)
Before a provider can profit, he needs to produce a particular quantity of products. MOQ restrictions are also imposed on your supplier by raw resources and component suppliers, who must offer a fixed number of items to your provider to be profitable. The MOQ is the result of this. The supplier will not deal with you if you cannot contact them.
Most suppliers have a high minimum order quantity (MOQ). Companies must acquire a minimum from their suppliers because they don’t have products on hand. To maximize profits, they must also produce a certain number of things. Many consumer goods, such as wristwatches, have 300 pieces or more minimum order quantities. Because a MOQ requirement typically applies to a single product, if you want to buy two separate products, you must order two times the MOQ requirement. For tiny firms that don’t have a lot of sales, this is typically too much.
The majority of suppliers here have a minimum order quantity of 10 units or more. The simple fact is that AliExpress vendors may distribute a more significant amount to a vast number of tiny customers. This solves the problem of meeting a large MOQ requirement, but it will inevitably affect costs.
The cost of a product is determined by two factors: its quality requirements and the quantity purchased. When analyzing the Alibaba and Aliexpress websites, an importer’s strategy in terms of pricing is highly different.
There are no set prices, and everything is quoted to varying degrees from scratch. You send the supplier your product specifications (colors, measurements, materials, certification requirements, and so on), the delivery terms, and the quantity you want to buy, and they respond with a price. A wristwatch can range between $2 to $200, depending on the quality requirements you demand.
If you can meet the MOQ criteria of the seller, you can also benefit from lower pricing than if you order 10 to 20 items at a time from AliExpress sellers.
The vendor lists a product as well as prices for various quantities. Usually, it is not negotiable. Compared to Amazon, Aliexpress has more excellent prices Orders in more significant amounts from an Alibaba provider.
Products that are uniquely created and labeled
Even if it’s not a well-known good brand, branding rather than importing random no-name products might boost the perceived worth of the product to customers. A logo, particular colors, or a design can all be part of a brand. Some importers wish to create an entirely new product or change an existing one.
The majority of providers can create unique designs and print logos. Building the product from the ground up, on the other hand, is complex, and you’ll need to possess very well-written product specs and graphics material on hand. Material specs, components, Pantone colors, packaging design designs, product body artwork, and logo designs are all examples of this.
Aliexpress products are already made and ready for a buyer. It is impossible to return a few items to the manufacturer to change the design or have a brand printed on them. As a result, if you’re looking for custom-designed or branded products, Aliexpress isn’t the place to go.
Certification of a product
In most markets, most products, such as electronics, toys, plastics, and food, are required to meet product standards. Distinct countries (the United States, Canada) and markets (the European Union) have different product certification standards. Many importers believe that export manufacturers are certified by default, incorrect. Importing non-compliant products is unlawful and can lead to your shipment being confiscated, so take this aspect seriously. The following is a list of various product certificates:
• Toys: EN71, CE, RoHS, EMC Class A and B
• Toys: EN71, CE, RoHS, EMC Class A and B
• REACH for plastics
• FR B1 and B2 for fire retardant materials
Alibaba: Because suppliers offer “made to order” items, you can ask your supplier to manufacture products that comply with a specific license by using the components and materials that are required. Keep in mind that not all Alibaba suppliers have the necessary experience or knowledge to produce compliant products, although plenty do. The bottom line is that if you’re inflow of foreign to the EU or the US that also need to meet a standard like CE, Alibaba should be your first stop.
The products offered on Aliexpress have already been manufactured, and it’s pretty improbable that the supplier has produced things that meet Western product standards. Compliant products are more expensive, making the provider less competitive with their Russian, African, and Latin American customers (remember that these markets often have regulations). Because this group of purchasers is more significant than that of American and European buyers, it makes sense for the ordinary Aliexpress trader to disregard European and American certification norms. This is why it will be tough to find a supplier on Aliexpress if you are selling into the United States or the European Union.
Risks and Quality Issues
Importing things from China is dangerous. Unlike everywhere else, a whole sector dedicated to quality control and fraud protection has emerged in China. This business could involve anything from minor inaccuracies in the final result to intentional deception. This costs money to firms, and although they may overlook some flaws, others can drive them out of business.
Even if you want to acquire custom-made products or have certification compliance as a necessity, not all vendors can undertake your order. You’ll have to spend a lot of time interviewing your suppliers about their manufacturing skills. If you don’t know which product specs define the product’s quality, you’ll be more likely to have problems. To put it another way, the more you understand about your item, the fewer quality difficulties you’ll encounter.
Ordering from Aliexpress is simple, and you get precisely what the source promises, nothing less and nothing more. Please remember that “quality” is a subjective term, so try a sample before ordering an enormous quantity. Things deemed excellent quality in Ecuador and Russia (no offense!) may not be such in the U.s or Italy.
Unlike Alibaba, Aliexpress allows customers to provide comments right on the website. Examine your supplier’s bad buyer feedback to acquire a general idea of the kind of errors they’ve made.
Time is money, and when importing from China, this is especially true. The following is a list of the various lead times to consider when purchasing from a Chinese supplier:
1. Make the necessary preparations.
2. Time to complete the project
3. Delivery time
Finding the correct supplier, confirming samples, negotiating rates, and receiving a signed Sales Contract in your inbox can take months. On the other side, you could ask a different provider to send an electronic invoice and immediately transfer your funds, but this is hazardous. It takes to prepare an order can range from 15 days to 6 months. The longer it takes, the bigger the demand is, and the more complicated the product is.
Production is easier to estimate because it usually takes roughly 30 days from when the supplier gets payment.
The length of time it takes to send goods from China is mainly determined by transportation. Airfreight takes 5–7 days, whereas sea freight takes four weeks. If you’re finding suppliers on Alibaba, you’re probably going to order a lot of stuff; therefore, sea freight is a better deal than air freight.
You don’t have to worry about time-consuming order preparation and production time because the things you have seen on Aliexpress already are created and ready to ship. Because you’re ordering from Aliexpress, your purchase is unlikely to be large enough for sea freight to be an option. As a result, only one lead time you’ll need to consider is the time it takes for air freight to arrive. This portal’s name, Aliexpress, was not chosen at random by the Alibaba Group.
Custom Design and Branded Products
Unlimited options for custom design and branding
Custom design and branding not offered
Many suppliers can comply with US and EU certification requirements
Products are generally not compliant
Quality Issues and Risks
Require more product knowledge in order to minimize quality issues
You can get what the supplier can offer, nothing more nothing less
Planning. Due diligence and productions can take months
Add to cart pay and wait for delivery
We recommend Alibaba.com if…
You can buy just a few hundred copies of each product and wish to import custom-designed products; Alibaba.com is a good option.
• You wish to import products with your logo printed on them or custom packaging.
• The price of your products is significant to you.
• You’re bringing electronics, toys, plastics, or other goods into the EU or the US, and you’ll need to meet particular certification requirements (CE, FCC, etc.)
We recommend Aliexpress.com if…
• You buy 10–100 units per product
• Custom design, logo printing, and custom product packaging aren’t important to you
•Your products aren’t priced sensitive
• You aren’t importing goods to the EU or USA, or your products don’t need to comply with any certification standards (but these products are rare)