Get some insights how to sort, filter and find suppliers in the most efficient way.
Watch the video for all details or read the article below to understand the process.
Today you want to source for an action camera, similar to the GoPro cameras.
You can start by going to the main page of Alibaba.com and input “action camera” in the search option.
Ok, so you found 106,946 products. At this point you want to filter your results for the most relevant suppliers. You will definitely want the suppliers to be:
This is a paid membership from Alibaba for the supplier. They get featured and can put up a lot more items in their catalogue (among other functions).
The onsite operation of the factory has been checked by Alibaba and a third party confirmed its legal existence.
This is a third-party assessment usually done through a testing company to verify various parts of the company. This includes machinery, staff, engineers, workers, certification, and much more.
After you have filtered for this you are down to 8,258 products:
Now you filter down to the relevant manufacturing province. Why? Because each province in China is specific for different product categories.
If you find a few suppliers (compared to hundreds in other provinces) on Alibaba in a certain region it is almost 100% certain they are a trading company. They either buy this certain product from somewhere else to round up their product catalogue (95% in all cases) or they are really manufacturing it.
But even if they are manufacturing it in their region they are likely less attractive in terms of prices, less experienced in manufacturing this product and their raw material suppliers are also somewhere far away. Ultimately making them less competitive.
There are several reasons why you will find suppliers for a specific product settled within a province.
- The infrastructure for this product is good. Meaning there are a lot of suppliers in the area supplying components for the suppliers end-product
- The workers in this area are skilled in producing this specific product. Making it easier to manufacture the end-product. Most likely, this also improves the overall quality.
- The province has favourable tax rates for the factory on certain products.
Now lets look at this again. Even though you didn’t know the province and where the product is mainly manufactured you can get some insights on this very easily:
Guangdong province has a total of 7,766 suppliers for this product. The other provinces have only a few. So you filter by this province.
Now, you are looking to buy small quantities, lets say 10 pieces to start. You can filter the supplier by MOQ now:
Now lets look at the specific suppliers. You scroll down and by hovering over the Gold supplier symbol you will see quick facts. You are basically looking for a factory that has experience in your market. This specific supplier has experience in North America, Western & Eastern Europe.
You will want a supplier who has experience in these markets because he is probably aware of specific country requirements & regulations.
This helps because he may already have applied for certificates for this product that you need when importing.
Now look at the product page. What does the page tell you?
You will find the following:
- Supplier has 5 year “GOLD” membership, which is a good sign. If he had scammed someone before Alibaba would have deleted his account and not renewed it for 5 years.
- Price is within a reasonable range
- Your desired MOQ can be met (10 pieces)
- Payment terms are acceptable. I would go for PayPal at this amount.
- The company is rather young but that doesn’t matter. These type of camera’s got really popular around 2012 so a company that has been in that field prior to that has actually a lot of experience.
Insider tip:The trick here is to think outside the box.
Don’t only look at a supplier and try to find some issue or problem. Think about the product too. Ask yourself questions such as “does his product portfolio make sense”? Is it in line with his other products? Or as for example the last point above, “when did these things get popular”?.
Now when you scroll down there are several more good indicators. For example good product photos. You will want a supplier that can send you high-resolution photos for your packaging or private label.
You will see available certifications. In this case what matters are RoHS, CE & FCC.
- RoHs certification is necessary for most European countries & the Americas. It prohibits certain hazardous material within the product.
- CE is a certification for Europe to meet general standards. Its good if a supplier has this
- FCC is a required certification on electrical products & also a standard for the US.
You could already feel comfortable with this supplier, but you should check further on him in person by email.
Next, click on the “contact details” where you will find several things that help you to evaluate the supplier further.
Look at the company profile and what you can find there.
Also look at the website outside Alibaba. If you cannot find his website outside Alibaba then google his company name and try to find it that way.
When you look at the website, pay attention on what products they manufacture. If the seller advertises cameras on Alibaba and his main products outside Alibaba are pillows then you will know they are only trading the cameras and you should look for a new supplier at this stage.
But, this supplier has mainly cameras in their assortment. Looks good so far.
What you notice is that their address is different than the one on Alibaba. At this stage it is probably their Hong Kong office that they use to invoice their customers. Many factories in China have a company in Hong Kong for tax and banking reasons. No need to be worried at this stage.
Going back to Alibaba, you will want to contact the supplier with your request now. You need to sign in to Alibaba to send a message.
Basically you want to ask for a price, MOQ, delivery time and to which customers he is selling this item too. Obviously you also need to do routine checks on factory standards, product certifications and supplier profiles. If you would order from this factory later you should also look into having an inspection by a third-party.
Here is what the inquiry could look like:
My name is ….. and I am the ….(Manager/President/Buyer etc.) of …. Limited/Inc.
We are a (fill in your company’s business, e.g., Importer/Buying Office/Whole seller/Online shop) and are operating in (fill in your country).
You can also check out our website: www. …..
I am writing you today to inquire about a product I saw on your website/catalogue/exhibition.
Here is a link to the product I am looking for:
Could you please give me the following information:
- Unit price based on 10 Pieces
- Minimum Order Quantity
- Available certification (CE, RoHS, FCC, GS, etc.)
- Production lead time
- Available colors
- Payment terms
You can fill in the details in the attached quotation format or send me your quotation in the first step. After that I will evaluate your offer and get back to you as soon as possible.
If you have any questions please don’t hesitate to contact me.
Thanks and best regards,
You should now repeat this step and send an inquiry to at least 3 more companies on Alibaba.
If he didn’t follow up on all your questions make sure to email him back and ask again.
For example if you need to know about certifications and they didn’t reply to that, ask them.
Sometimes suppliers put all available certifications on Alibaba but they don’t tell you that they charge extra for them. A RoHS, CE or FCC certification can cost from 200USD up.
Ask to see copies of certificates.
- Do the certificates match up with the article number that the supplier gave you? — > If not, ask about it
- Is the certificate expired? — > If yes, ask if he would renew once order is placed.
- Who issued the certificate? — > If it is a local Chinese company google them and see what you can find about their service.
If they don’t have certificates yet, ask them if they could apply for them once you place an order.
Make sure you tell them that you will not release any payments if the certificates are not available upon shipment. If you book an inspection company, make sure to instruct your inspection company to check on this.
Once you received the suppliers feedback it is time to follow up with him on samples.
Other tips for Alibaba:
There is a rather new service called AliSource Pro. You can basically send quotation requests to thousands of suppliers.
Here is what it looks like:
You can input all product details and submit. Within a few hours you should have a couple of offers.
The downside to this is that there is not much filtering. Random suppliers will send you offers and some of them don’t even match your inquiry. I suggest filling in as many details as possible and then going trough the whole process of filtering & scanning a supplier as described above.
Google the supplier
If you cannot find much about the supplier on Alibaba, Google the suppliers name and see what you can find. Perhaps even try “supplier name forums”.
That way you maybe find something (positive or negative) in forums about the supplier.
These are the basics of sourcing on Alibaba, of course there is more to that. In the upcoming ImportDojo Masterclass I have a 2 hours screencast on how the complete process looks like.
We will have a special limited offer to join the course early next week.