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Mon Apr 16 2012 12:23:34

What Are Your Experiences with Global Sourcing or Alibaba.com?

By: Julia Wilkinson

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Have you ever sourced for products globally, using any worldwide sourcing service, Alibaba.com, or another of the Alibaba Group's marketplaces?

In the recent article from EcommerceBytes Update, "From Alpacas to Custom Bras: Product Sourcing with Alibaba," I spoke with Alibaba's Director of Global Marketing, Linda F. Kozlowski, about the differences between their various marketplaces, what sellers can do with each, and how the company has tightened controls to combat fraud, which she said is now down to 0.2%. (New figures from Alibaba: their fraud rate is now down to 0.03%).

In fact, it seems to me that when online sellers hear the word "China," they have an automatic reaction of worrying about fraud. But do you think this matches up with the reality, and why or why not? I was also surprised to learn that in terms of Alibaba.com's international marketplace, comprised of some 240 countries, China suppliers are only 6% of that. (New figures have been provided by Alibaba: the percentage of Chinese gold suppliers on Alibaba.com international marketplace is 15%). This is not to be confused with Alibaba's other services and marketplaces, some of which, such as Taobao.com, are China-based and oriented.

I also spoke with one of their successful users of their "Customized Sourcing" services, Jane Ivanov, who has created a business that met a need in the marketplace for comfortable and also pretty pregnancy and nursing lingerie and clothing, Eve Alexander.

However, I did not have the sense I would have liked about who all is using these types of services successfully, lessons they have learned that they would pass on to others, and how these sellers would advise not to get burned. Some of the advice in the article addresses, from the standpoint of Alibaba, those issues of how to be careful and safe when buying supplies or inventory from another country, sometimes on the other side of the world from where you live. But I'd like to get more online sellers' points of view. So I'd love to open this blog post's comments up to hear as many experiences as possible, so sellers can learn from each other.

In the case of Jane Ivanov, I asked her what advice she would give other sellers starting out, especially those looking to invent or create a new product, like she did with Alibaba's Customized Sourcing program.



Above: Jane Ivanov, founder of EveAlexander.com.

Ivanov's company is based in Indianapolis and their sales are "in the low seven figures," she says.  Their manufacturing takes place in China, LA, and "some in Columbia," she said, and she happens to live in Moscow and in between all those other places.

"Ironically enough, in my business, the actual design part is actually pretty easy; it's easy to draw something pretty and say this is what I'd like it to look like," she said, and that "the hard part comes in, in finding a person or a company out there that will make it look like what you had envisioned and the quality will be what you're expecting it to be, and it will have the features you're expecting it to have."

She also strongly recommends having a business plan, and not being afraid to approach people for advice, whether in similar industries or in completely opposite industries, if you admire them and think they may have something to teach you.

***

Alibaba also just launched a survey to help buyers find out what their is score in terms of safe trading. You could win one of 10 iPads by entering the drawing here entering the drawing here.

What advice would you give others? Have you tried global sourcing, and if so how did it work out for you, or not? What would you tell the newbie looking to order supplies or have something manufactured in another country?

[Note: Blog post was edited for clarity on 4/17/12.]




Comments (23) | Permalink

Readers Comments

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: lococanucko This user has validated their user name.

Mon Apr 16 17:59:57 2012

I buy on a regular basis from China in significant volume and travel to Hong Kong once a year.

In China:

1) Quality is NOT a priority from our experience, and is generally the exception rather than the rule

2) Be skeptical of any promises until you have that relationship established.

For example: We were sourcing 720P 30 frames per second spy camera... about 80% of suppliers either blatantly lied or misrepresented "unknowingly" a newer buyer would have taken advantage of until it was too late. Even though windows was showing 30FPS per second unless you had a serious vision impairment it was obviously 20PFS at max ! Fortunately we were at a tradeshow and insisted all 15+ suppliers to "prove" this to us. This alone was worth the cost of our trip.

3) Be VERY careful before wiring funds since you really have no recourse once funds are wired. If possible try to pay using credit card or paypal so you have some kind of recourse.

4) Get a sample, then order small quantity (even if you have to pay a premium for it) then gradually increase purchases until that trust and consistency is established.

5) I could write a book on my experiences... good luck !  

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: pace306 This user has validated their user name.

Mon Apr 16 18:14:35 2012

Alibaba ..

Im not sure what this women is talking about .... 99% of all the branded items on Alibaba are fake.

Like eBay they get a cut of the action so they dont care.

How do I know? I experienced it first hand and am out 3k because of it.

Beware that most of the sellers on Alibaba ONLY accept Western Union which is RIFE with fraud. They will not tell you the true recipients of the funds, will let people make up any name at all and collect the funds with out proper ID (ie drivers lic or eqiv).

I am in the headphone business. In this category - ALL the merchants sell fake goods.

I stay away after being burned. WU did nothing, Alibaba did nothing, the only thing they are good for is cheap freebees at the CES show when they show up with a booth full of attractive women in orange outfits.

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: Susan Averello This user has validated their user name.
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Mon Apr 16 20:20:29 2012

I have seen the same thing from many artists, even going so far when grabbing pics and descriptions to not even bother removing the original artists watermark  or store name.
How trustworthy can that company be?

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: WhoKnewIt This user has validated their user name.

Mon Apr 16 23:52:13 2012

I've purchased through Alibaba before and was told the shipping would be one price and when the items arrived, COD, the shipping charge was over $75 MORE than I was quoted...had I known I would of never bought the items but since I needed them immediately I ended up having to pay it.  It's not a place I'd purchase through again...

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: Alibaba Representative This user has validated their user name.
Web Site

Mon Apr 16 23:53:03 2012

To pace306:

As an open and neutral e-commerce platform, Alibaba.com is dedicated to maintaining a safe and trustworthy marketplace for buyers and suppliers worldwide to do business online.

We noticed several inaccuracies in your post that we would like to clarify. Alibaba.com does not “get a cut of the action” as we are not a transaction-based platform. Also, most of our suppliers focus on providing OEM products and raw materials so we do not encourage anyone to buy “branded items.” You can reference our product listing policies at http://www.alibaba.com/help/safety_security/policies_rules/product_lis
ting/003.html#a31


To address potential fraud, we have developed firm policies and strict enforcement measures to help ensure customers get what they bargained for. We also encourage all our customers to use escrow payment service in which you can find more information at http://www.alibaba.com/help/safety_security/products/escrow.html

It is important to note, also, that the best way to reduce fraud when trading online is for users to always remember to conduct proper due-diligence before entering into any transaction as they would for offline business activities. Our Safety and Security Center (http://www.alibaba.com/help/safety_security.html) offers tips to both buyers and sellers on safe online trading. If anyone has a specific complaint about an incident of suspected fraud, he or she contact us at cs-us@service.alibaba.com so we can assist in mediating the case. Feel free to contact us if you have been defrauded.

Finally, our Alibaba.com family take great pride in their work and attend these conferences to meet small and medium sized business owners who can benefit from global trade. We are very disappointed about your remark on our staff at the CES show. It is regrettably highly inappropriate and unacceptable.

Regards,
Alibaba Representative

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: Alibaba Representative This user has validated their user name.
Web Site

Mon Apr 16 23:54:37 2012

To Susan Averello,

Alibaba.com takes intellectual property rights very seriously, as do the vast majority of our 25.5 million registered buyers and sellers worldwide. Unfortunately, a small portion of these users does not. For these cases, Alibaba.com has strict IPR policies and enforcement measures in place to deal with violators. Our AliProtect system is an enhanced online reporting system that makes it easier for users to report alleged IPR infringement including photo theft. To report alleged photo theft, please visit AliProtect http://legal.alibaba.com/index_en_US.html

We hope you’ll understand that Alibaba.com is an open e-commerce marketplace that matches buyers and sellers globally, and our goal is to help small businesses source products from around the world to grow their businesses. Image protection is an ongoing challenge for many people around the world who conduct business online, not just on Alibaba.com. We are committed to putting our every effort into eradicating cases of alleged photo theft on our platform. For additional tips on protecting your images online, please also check out an article on Alizila here: http://alizila.com/details/index.php/blog/2011-12/199/  

Regards,
Alibaba Representative

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: susiewang This user has validated their user name.
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Tue Apr 17 00:24:17 2012

hi!  we've used alibaba extensively.  we source everything on alibaba - from slippers, custom packaging, boxes, bags, etc..  and we've had very good luck and very good experience.  ofcourse it's like anything - there's always bad people but that is why they now have that escrow service.  we've never had a bad experience and have been very pleased with being able to find vendors so easily.  prior to alibaba, it took so much time to research vendors and it always felt like they had the upper hand but now that i can get quotes from 10+ vendors at once, i feel more confident that we're getting the best prices and best products.  good luck!  alibaba has been great for us and hope all of you enjoy it!  

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: susiewang This user has validated their user name.
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Tue Apr 17 00:29:11 2012

hi, we've been using alibaba for a few years and have had really great experience with alibaba!  we source everything on there from slippers, custom packaging, exotic organic ingredients, recycled bags, etc...  without alibaba, sourcing overseas would take so much time and would be a nightmare!  ofcourse there's always bad people out there but that's why they have the escrow service!  but personally, we've sourced a ton on alibaba and have had only good luck, great products .. it's been a very easy, successful experience for our company.  what i also do is ask for a reference from the factories.  when i started making slippers, i asked them for a reference and felt more confident when i found out that the slipper company made flip flops for the top brands and that the top American brands spoke highly of them.  i hope all of you enjoy alibaba as much as we do!

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: DonC This user has validated their user name.
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Tue Apr 17 01:04:10 2012

I have purchased a few items from Alibaba. Mostly small quantities of fairly inexpensive items. Each time my purchases arrived as expected.

My advice:

Be very careful to assure that you understand exactly what you are purchasing. The descriptions leave a lot to your imagination. If in doubt ask.

Watch shipping charges. The cost of shipping your purchase may eat up all your profits.

Make sure that the market isn't already flooded with the item you plan to sell. Someone may have already imported a shipping container of the item in question and will under price you.

Only use a credit card. Never use wire transfers.

Regarding off shore manufacturing in general:

Be prepared for plenty of communication problems.

Be prepared for your production run to bear little or no resemblance to the beautiful sample they sent.

Be prepared for your vendor to ship your order whenever they feel like it. ETA's are a joke.

Never pay everything out front. Some vendors immediately loose interest in producing your goods when they have your money.

Consider only doing business with an offshore manufacturer if they have a distributor in your country to handle customs and domestic freight.  


What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: Joe Tai This user has validated their user name.

Tue Apr 17 02:24:23 2012

I am a product developer. I used Alibaba to source the materials that I need.  I got fairly quick responses from sellers, which is very convenient. As far as I know, alibaba provides escrow services to provide safer transactions. well.. users concern about the safty of transactions should consider to use it. It's like buying insurance when you mail important mails vis USPS. There are indeed bad sellers, but bias should not be taken against those honest sellers.

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

This user has validated their user name. by: TheCheapSkirt

Tue Apr 17 02:50:06 2012

I suspect some of these favorable comments are shills.

I tried to use Alibaba once to find a company who would make a particular garment for me. I was told my posting on their site was denied because I couldn't request the garments I wanted to be made the way I wanted. So I gave up.

Too bad, really. I just got tired of trying to explain something to people who didn't understand what I was looking for. And I feel I'm rather articulate in English--in fact every person in the US & Canada I've discussed these garments with had no problem at all understanding what I was talking about.  

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

This user has validated their user name. by: Ric

Tue Apr 17 04:03:48 2012

I used Alibaba exactly twice to source computer parts, both transactions went without a hitch, probably because I made payments with PayPal where I felt I had some level of protection.

When the PayPal/Alibaba relationship fell apart over PayPal's greedy insistence on significant fee increases, I stopped using Alibaba - not out of support for PayPal but rather due to an abundance of caution regarding Alibaba's Escrow Payment system.

Shipping costs for bulk goods from China are significant and prevented us from making several deals with Alibaba sellers. In several instances the low price per unit was offset by the extreme high shipping costs Alibaba sellers were charging.

I have since found a US wholesaler who I can order goods through. They already do business with the same factory that makes the cables I sell. Now, I place my order through the US company, they add my order in with their orders to fill containers faster.

When the container arrives at their warehouse, they pull my order out and ship it to me via UPS. Shipping costs are about 60% less than prices I got from Alibaba sellers with this arrangement. The only trade off is there are times when it will take 90 days to receive orders so managing inventory of these items is a little more critical.

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

This user has validated their user name. by: Ed Gadfly

Tue Apr 17 06:32:31 2012

How can you trust a company that is introduced to you though eBay?

eBay is not a trustworthy company.

Alibaba there are too many stories about shoddy and counterfeit products from your suppliers. Your ''escrow service'' is yet another slice from my pie.

On top of all that - Alibaba Representative can't even give you their name.

No Alibaba, I don't trust you and I would not do business with anyone associated with your company.    

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

This user has validated their user name. by: Rexford

Tue Apr 17 07:57:01 2012

Fake! Fake! Fake!   I ordered sunglasses and instead of sending what I actually ordered I got an assortment of items.  The sunglasses were fake and due to that fact they were unsaleable.   I also ordered some porcelain containers which were also obvious fakes.  Never again.

This is why I do not understand why Donahoe is so hell bent on dealing with the Chinese.   Yes, I know that China is a big market, but all one has to do is look at the supposedly high-end designer items sold by  Chinese sellers on eBay and you will quickly know that they are fakes.  And eBay does nothing about it.  

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: pace306 This user has validated their user name.

Tue Apr 17 08:04:31 2012

to Alibaba Representative

I did my due diligence - you didnt. You let anyone on the platform - much as eBay does. Ive been in the electronics business since 1984 and have worked for MOST major electronics retailers on the east coast of the US.

After leaving the majors to start my own company I did use Alibaba and I did get ripped off. The company used a US front but was an overseas scam operation. Thats due diligence YOU didnt do.

I got local law enforcement involved and while I didnt get funds back - was sort of satisfied that someone (though not enough and not the right people) ended up doing time for fraud.

99.9% of all branded items are fake. Ask Skullcandy, Denon, Alpine etc. They too have experience with the sellers on Alibaba.

Im not going into it farther - lets just say I learned an expensive lesson.

As for my comment about the attractive women at your CES booth - it was a compliment - it and the orange bags they hand out are the only good thing that Ive experienced comming from Alibaba.

I dont need ''raw materials'' im not building anything ... Im SELLING.

thanks! :)

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: 1189 This user has validated their user name.

Tue Apr 17 10:29:32 2012

In my research into Alibaba i see that they are distributors of fakes. Fakes of any sort. Now that eBay and PayPal are helping them (India) to export large quantities into the US and which will end up on eBay I find it to be a detriment to the small US business that started eBay in the 1st place.  

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

This user has validated their user name. by: Tula

Tue Apr 17 11:21:53 2012

I used AliExpress - their platform geared toward smaller orders - without any difficulty. This was while they were still using Paypal for payments. The items arrived well-packaged and as described on the site. One was from China, the other, from Hong Kong. The only odd thing was that the packing slip/invoice/customs form on both orders (from different manufacturers) showed the value as half what I actually paid. I've heard that it's quite common for people to request such things due to customs duties in some countries, but they apparently did it by default.  All in all, I was quite happy with my purchase.

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: comet This user has validated their user name.

Tue Apr 17 13:37:51 2012

Is it me----

I tried to FIND some items via AliBaba.  I really REALLY tried.  And I asked questions.

I got back the most difficult to read and figure out "response" a few WEEKS later.  Never did figure out if the seller even HAD what I NEEDED.  

But daily I get emails--Find trade opportunities with AliBaba!!!!!!

Now I am pretty sure that English is a hard language to learn.  And anyones Chinese would be better than mine.  BUT that is why there are talented people who DO learn both.  And translation programs that are improving all the time---saw one last even from Portuguese to Eng and I really wouldn't have known it had not started out in English.  

Sooooo---aside from the payment issue---admittedly a scary part---if you can't figure out WHAT you are even looking at from the terrible pictures;  extreme LACK of description;  NO measurements; NO communications; no common terms of address in naming the items---well I could go on.  

I think I might have even eventually FOUND what I was looking for.  And yet---I cannot manage to get the info I need.  Can't get clear pictures.  Can't get costs.  Can't get answers to email.

And I did NOT get "sent" to AliBaba via ebay either.  

Nor can I afford to go to Shen Zhian or Changzhou to FIND my own items!  I thought that was what AliBaba was FOR????

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: semper fi This user has validated their user name.

Tue Apr 17 16:20:57 2012

I have been ripped off for hundreds of dollars by supposed ''verified'' vendors on Alibaba and have found honest ones also. Alibaba is CHINESE owned so be very careful as they will do nothing for you when you contact them regarding the fraudulent sellers.

As one person commented about establishing relationships with Chinese factories, that is all in the past. I can tell you dozens of horror stories regarding fellow business owners getting screwed big time for Millions of Dollars by factory owners they have been doing business with for the last ten years. Factories are disappearing on a daily basis in China.  

What Are Your Experiences with Global Sourcing or Alibaba.com?   What Are Your Experiences with Global Sourcing or Alibaba.com?

by: rickostick This user has validated their user name.
Web Site

Tue Apr 17 20:44:58 2012

I've used Alibaba to source ingredients and packaging from all over the world. I've also sourced cables, and various equipment needed in my business.

The way I use it is I try to catch the factories online when it is their day time and I chat with them.  I tell them the rough idea of what I am looking for and then take in pricing from a few different factories or farms.  
If it is a ingredient, I request a sample and I pay for the shipping of the sample for my review.  It's small costs of doing business.
If it's something custom, I then will usually pay a small fee up front to have them create a sample, but prior to doing this, I find out what the factory has previously done.  I usually take in samples of their previous work before contracting them to do the new work.

If you are extremely worried about fraud or the factory not being whom they are, there are steps (that are either free or cost a little amount) you can take to lessen the risk.
They are:
- ask them for references from other companies they work with and call them
- look up their address on google earth and verify that it is actually a factory building or farm
- you can hire Alibaba's service to physically send someone to the factory for a nominal fee

Remember that sometimes starting small requires you to convince the factories and farms to supply you as they prefer to work with larger customers.  You have to be the one to take the initiative and regularly followup with the factories or farms. I typically check in daily on certain partners, even to just say hi and ask how our order is going.  Build your relationship as you go, and Alibaba gives you a great start to find the right partners and a platform to build this relationship.  

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