Trying to find a supplier for a product idea or source from another country can be a bit scary if you have never done it before.
Alibaba.com is a marketplace that connects entrepreneurs and small businesses with factories that produce a variety of products.
So you’re probably wondering, can you negotiate with Alibaba?
Yes, you can negotiate on Alibaba but you will be negotiating with the manufacturers not with Alibaba directly. Alibaba is simply the middle man between businesses and manufacturers that are mostly based in China.
Read on below to get more information on the best way to negotiate with Alibaba
5 steps to negotiate with Alibaba
1. Reach out to 5-10 companies through Alibaba.com
One of the most important things to do when trying to negotiate through Alibaba is to reach out to 5-10 companies that are in your niche.
You will realize pretty quickly that not every supplier is the same and things like responsiveness, and consistency in communication messaging are important when you are trying to find the best possible supplier.
By reaching out to several upfront, you will be able to weed out the ones that don’t respond and compare the communication styles between all of the suppliers.
Typically you will be able to figure out quickly which suppliers you want to eliminate from your list.
Make sure you are speaking with the factory, not a trading company
You will quickly notice that there are a ton of trade companies on Alibaba that communicate like they are factory representatives.
These are instead third-party companies that try and work with many factories and mark up the prices to you and offer as a broker or agent in the middle.
While these types of companies can sometimes make sense if it is a slight increase, most factories in China that are legit have good English-speaking representatives that you can communicate with directly.
There is no point in working with a middleman when you can negotiate directly with the factories on the Alibaba platform. So be sure to look out for “trading company” or other agent descriptions.
2. Evaluate things like response time and communication
You want to make sure the supplier you work with is a fast communicator and very responsive. Like any professional relationship, you want to make sure that you are working with someone that is responsible and able to get back to you as soon as possible.
You will notice very early on the differences between a responsive supplier and one that is unresponsive.
Early on, this can be a great way to gauge if the company you are working with is going to be a good long-term partner.
3. Narrow down your list to the final 3
Once you have communicated back and forth with your supplier list, try to narrow the list down to 3-4 that seem like they may be a good fit.
It may be easy to feel like you have one supplier that stands out, but there are still many variables in terms of product quality, shipping times, etc that you still need to evaluate.
4. Get samples from your final list
With your final list, get samples of the product you are wanting to have produced so you can compare the quality across the different manufacturers.
Samples are a great way to get your eyes on a product and allows you to inspect it in person before you place a large order.
Evaluate samples from your suppliers under consideration
Once you get the samples, carefully inspect them to look for any defects or quality issues. Samples typically will be good quality as the suppliers are hoping to win your business.
5. Place a small quantity order
Once you have decided which sample is the best quality, you can proceed to choose a supplier you want to place your first order with.
While it may be tempting to go all in and place a large order I would recommend starting with the smallest possible order quantity for the first couple of orders.
There have been issues with ”Quality Fade” where the product you get in your samples is much better quality than the ones that show up at your door in the past. This is why you have to be very careful not to place too big of order right out of the gate.
Once you have placed a few small orders, you can have some peace of mind in placing a larger order where you have more money on the line.
6. Don’t underestimate Quality
It may be easy to choose a manufacturer that offers the lowest pricing but there may be some quality issues if the price is the only thing you are looking at.
You will probably always be able to find a supplier on Alibaba that will make the item for less than someone else, but with that comes a big risk of running into quality issues if you are always trying to negotiate down.
7. Check the Internet for Reviews
One last step before moving forward with a big order from Alibaba is to look up the company online to see if you see any concerning reviews from other companies.
If you see multiple complaints about the company on internet forums it may be a major red flag that you should find another supplier to work with.
Supplier blacklist is a good website that keeps a list of suppliers that have documented poor quality and performance issues so you want to check there also.
8. Build a relationship with the supplier
Once you have narrowed it down to find a supplier that has great communication skills and also has good quality it is best to stick with them as the best way to negotiate rates is to build a personal relationship with the supplier over time. Suppliers on Alibaba value trust and loyalty and as your relationship grows you should be able to negotiate with them for lower rates. Make sure you take care of payments on time to establish goodwill with them.
How negotiable is Alibaba?
Alibaba the platform connects you with independent suppliers and manufacturers that pay Alibaba a fee to sell on their platform.
Alibaba is not the one you will be negotiating with, as it will be the suppliers that produce the products that you will be able to message and negotiate with.
The best way to negotiate on Alibaba is to reach out to several suppliers that produce the same product and evaluate which one offers the best combination of quality and pricing.
The best way to negotiate on Alibaba is to work with a supplier and build a relationship with them over time and negotiate lower rates as time goes on.
Can you negotiate Alibaba shipping?
Alibaba negotiates with third-party logistics companies for shipping, so you are not able to negotiate with Alibaba directly for shipping discounts.
The best way to negotiate shipping rates through Alibaba is to ask if the suppliers have a relationship with a shipping and logistics company and compare the quotes from the supplier to what Alibaba shipping is offering you.
I recommend using a company like Flexport, which can handle all end-to-end logistics and is based in the US so they will have expertise in getting your items cleared through US customs and to your final destination.
Can you negotiate with Chinese suppliers?
Yes, you can negotiate, but you will likely not be able to get the best possible rates until you have established a consistent order history with them and shown them that you will be a long term business partner with.
How do I deal with Alibaba suppliers?
The best way to deal with Alibaba suppliers is to be friendly and responsive and have an idea of what prices typically go for in the product category you are interested in.
Evaluate other suppliers and compare things like their website, photos, reviews to make sure you do your due diligence.
Can you Negotiate with Alibaba Conclusion
Negotiating with Alibaba is possible through the suppliers but it will take some time to get the best possible rate. Keep in mind that suppliers value relationships greatly and that the more time you work with them the higher the likelihood is that you will get the best possible rate.
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