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As your small business grows, it is likely that you will want to buy supplies in bulk to save money. As I’ve written about in a previous post, you have to understand the process of how a product gets to you. The cheapest way to get a product is buying directly from the manufacturer. But how does a home based or small store get in touch with a manufacturer? One way is to use a marketplace to connect. That’s where Alibaba, AliExpress, and DHgate can help you.
What are Alibaba, AliExpress, and DHgate?
These are online marketplaces where buyers and manufacturers can connect. When you are buying through Alibaba, AliExpress, and DHgate you are not buying from the marketplace; instead you are buying from a seller that advertises in the marketplace. (Think of these marketplaces like Etsy. Etsy only connects buyers and sellers, you don’t buy or sell products to Etsy.)
What’s the difference between Alibaba, AliExpress, and DHgate?
Alibaba and DHgate are both marketplaces that connect manufacturers and large wholesale sellers to buyers. In most cases, you’ll need to buy in large quantities. AliExpress (a division of Alibaba) connects manufacturers who sell in smaller quantities to sellers.
Tips for Ordering through Alibaba, AliExpress, and DHgate
- Plan ahead. Many of the manufacturers in these marketplaces are overseas. After you place an order, the manufacturer will likely need to make the product and then ship it overseas to you.
- Watch for scammers. There are many “middlemen” on these sites. These people buy cheap from the manufacturer then sell at a higher price to you. After you ask a few questions, it’s pretty easy to sort through the scammers.
- Ask questions. Be sure to inquire about production time, MOQ (minimum order quantity), delivery method and time, potential customs issues, payment arrangements, quality control, and more. Be mindful of time zone differences and that English may not be the first language of the person answering your inquiries.
- Request samples. Most manufacturers will provide discounted or free samples. Since actual products can vary from the pictures provided online, always ask for samples.
- Negotiate. When dealing with manufacturers, there is usually room for price negotiation.
- Pay through a method that offers protection. If the seller is wanting a wire transfer – run! If they don’t deliver the goods, you’ll have no way to get your money back. Instead, use Paypal or an escrow arrangement.
- Read feedback. The marketplaces provide feedback much like Etsy or Ebay. Read through the feedback before purchasing.
- Use common sense. There’s always manufacturers in these marketplaces that are selling knockoffs. Beware that knockoff products are subject to seizure at the US borders. If it seems to good to be true – it likely is!
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