Dropshipping is a great way to start an online business. It’s a low-risk way to get your feet wet and learn the ropes of e-commerce without having to spend a fortune on inventory. But how do you get started?
This guide will walk you through the process of setting up your first dropship store using Shopify and Alibaba.
How To Dropship On Shopify With Alibaba
Where to get products from in a dropshipping business is a tricky question. A good supplier can make you a fortune, whereas a bad one can burn a hole in your pocket.
Alibaba is one of the most popular dropshipping suppliers in the world. But is it a good option to get your products from?
In this article, we will decipher the above question. Along with that, we will also tell you how to find your winning product and how to import products from Alibaba to your Shopify store.
So let’s get started!
I. What Is Alibaba?
Jack Ma founded Alibaba in 1999. The platform gained popularity in no time and became the world’s largest B2B eCommerce marketplace.
It’s also the most popular destination for online shopping in the world’s fastest-growing ecommerce market.
The Alibaba group operates four main sites. All of them are Chinese online marketplaces:
- Taobao
- Tmall
- AliExpress
- Alibaba.com
They have an enormous user base and host millions of merchants and businesses. It currently claims 80% of online sales in China and holds an international market cap of $291.05 billion – more than that of eBay & Amazon combined. The company, which started with 18 people, now has over 22,000 employees.
Alibaba is a B2B online marketplace that helps connect exporters in China (or some other country) trade with companies in over 190 countries worldwide. The structure allows ecommerce stores worldwide to find manufacturers around the world and get products manufactured, packed, and shipped all across the globe.
Now, most people consider Alibaba & AliExpress as the same marketplace. But, this isn’t the case! Let’s see how.
Alibaba vs. AliExpress – What’s the Difference?
Alibaba & AliExpress are sisters from the same parent company – Alibaba group. However, both offer unique buying and selling experiences. Each has different features for different types of buyers and sellers.
AliExpress dropshipping is a cross-border B2C or retail marketplace that deals with individual customers like Amazon and eBay. It comes along with no order bracket and fixed prices – No negotiations! The platform provides faster delivery than Alibaba dropshipping. It also offers various services to enhance user experience, such as:
- Automatic translation to 18 languages
- Conversion to currencies from 51 countries
- Support for 38 local payment channels for secure payment and transaction
- Custom storefronts for sellers
- Buyer protection
- AliExpress University offers learning resources for new sellers
On the other hand, Alibaba is a B2B marketplace, which means the potential buyers are other dropshipping businesses. Businesses primarily use it to source products in bulk from manufacturers, wholesalers, or traders. And that’s why it has a minimum order cap preventing its most essential feature – Minimum Order Quantity!
Minimum Order Quantity (MOQ) is the fewest number of units a manufacturer or supplier is willing to sell to customers.
Since Alibaba is a B2B marketplace, the minimum order cap allows it to receive bulk orders from other businesses at wholesale prices, rather than attracting individual customers who are more likely to order a single unit.
Alibaba also provides services such as:
- International logistics
- On-boarding support
- Alibaba trade assurance – free order protection
- Product inspection and monitoring
Now that you know what Alibaba actually deals in. Let’s dive in to understand how you can build a profitable business with Alibaba dropshipping in 2022.
how to dropship from alibaba to amazon
One of the most common questions asked by new Amazon sellers is “where can I buy products to sell on Amazon?” While there are a few different answers to this question, an experienced seller’s answer will most likely be “on Alibaba.”
Alibaba is a great place for sellers of all experience levels to source millions of different products that you can private-label and brand. Many businesses rely on getting profitable products from Alibaba to Amazon FBA.
If you are unfamiliar with Alibaba and how it works, it can be overwhelming. In this guide, we’re going to go over everything you need to know about Alibaba, so you can successfully source quality products for your private label Amazon FBA business.
Here’s what you will learn:
- What is Alibaba and is it safe?
- How to find suppliers and order products on Alibaba
- The risks of sourcing from Alibaba
- How to sell Alibaba-sourced products on Amazon
What is Alibaba?
Alibaba is a global business-to-business ecommerce platform that connects sellers and brands with manufacturers and suppliers for millions of products. If you want to create custom products for your brand, this is where you go.
Unlike traditional ecommerce websites like Amazon, where consumers make one-off purchases, Alibaba is a platform where businesses purchase products in bulk to resell online or in a brick-and-mortar store.
Alibaba connects you with different suppliers around the world so you can find quality products at extremely low prices — even if you don’t have a big brand! Whether you are the CEO of a large corporation or are running an Amazon business on your own, you can sign up and source products from Alibaba.
Why do Amazon sellers use Alibaba?
Many Amazon sellers use Alibaba to source products because of the simplicity of its user-friendly site and, well, the low prices. Most manufacturers that you come across on the platform will be based in China, where they can produce quality goods at a much more affordable price than, say, in the United States or Canada.
Any seller can go to Alibaba right now and search for the type of product they’re interested in selling and come across thousands of potential suppliers. Finding a manufacturer for your product has never been easier.
What types of products is Alibaba good for?
Use Alibaba if you are looking to create your own private label product that is unique to your brand. If you have your own custom logo and/or design specs for a product, Alibaba is a great venue to find suppliers that can make your ideas become a reality.
DO NOT use Alibaba to purchase branded products. While there are many reputable suppliers on Alibaba, there are some who try to sell counterfeit products of big brands such as Disney or Nike. Some products could look tempting to sell, but you should refrain from pursuing this option. Selling counterfeit goods on Amazon is strictly prohibited; you’ll become permanently banned from selling on the platform if you ignore their anti-counterfeiting policy.
Is Alibaba safe?
In short — yes! For the most part, Alibaba is very safe for sellers to use. But there are things you need to be aware of when using Alibaba such as counterfeits, payment scams, and suppliers who send high-quality samples but low-quality bulk orders. When ordering products from a supplier, it is likely that it will be a large order, so you want to be sure that the company you’re doing business with is legit.
Just like Amazon, Alibaba consists of sellers that will try to earn your business. This is why it is very important that you contact multiple suppliers and order samples to evaluate before placing a larger order.
Alibaba offers a secure payment portal for all transactions so you are assured that your payment or credit card information is safe. They also offer an order protection service called Trade Assurance which will get you your money back if the product quality is different from what you and your supplier discussed, as well as if your order was not shipped on time.
As long as you make payments through Alibaba’s payment system, your money will be safe and secure.
How to decide what to sell on Amazon
Before you can find suppliers on Alibaba, you need to figure out what you want to sell on Amazon! If you are a beginner seller, you typically want to focus on products that have high demand and low competition. This will give you the best chance of competing with already established brands in your niche.
Product research is a very important step in your Amazon seller journey, so make sure you take the time to properly analyze the products you’d like to sell. Having said that, don’t get stuck with “analysis paralysis.” Many aspiring sellers get caught up in so much information that they end up overwhelmed with what to sell and can’t make a decision. If you have a couple of ideas you think would work well, just pick one and get started!
When analyzing products to sell on Amazon, you need to consider three things: profitability, demand, and competition.
Profitability: To ensure that the product you’re selling is profitable, you need to be able to source it for much less than you would sell it for. The 3X rule is a good strategy for new sellers to determine the profitability of a product: 1/3 of your sale goes towards product costs, 1/3 goes towards Amazon fees, and 1/3 is your profit, which goes to you.
Example: If you purchase an item for $10, you should be able to sell it for $30. $10 pays for Amazon fees, and your expected profit should also be $10.
Demand: Are customers actively searching for and purchasing this product on Amazon? When you’re able to determine the demand for your niche, you can feel confident about investing in a particular product. Without proper demand, you may end up with a product that no one wants to purchase.
Competition: The demand may be there, but what is the competition like? You need to find the right balance of demand and competition when selling products on Amazon. If there is too much competition, it will be more difficult to gain the rank needed to be in front of customers. If the competition is low with decent demand, you may have found yourself a winner!
Ok, so how do you actually find a good product to sell? The best way to conduct product research for Amazon is to use powerful tools backed by accurate data.
Jungle Scout offers a few different tools you can use to find and analyze products to sell on Amazon: