If you’re looking to source supplies for your business for super low prices, take a look at Alibaba. It’s a leading online global marketplace based in China, serving millions of buyers in over 190 countries worldwide¹.
In this guide, we’ll give you the lowdown on Alibaba, including what you can buy using the platform and how to place an order. We’ll also cover ways to pay, including how to get around eye-watering currency conversion fees.
For example, open a free Wise Business account and you can pay for Alibaba goods in the seller’s own currency.
You’ll benefit from low, transparent fees and the real, mid-market exchange rate on every payment you send. This could make shopping at Alibaba even cheaper, sweetening the already fantastic deals available.
But first, let’s put Alibaba under the microscope and see how it all works.
Alibaba is a business-to-business (B2B) platform connecting buyers and sellers all over the world. It’s a wholesale marketplace where items are bought in bulk. Minimum order amounts are usually very high, but this also means that prices per unit are temptingly low.
The sellers on the platform are mainly Chinese manufacturers and factories, selling to business buyers in a number of countries worldwide.
Unlike standard eCommerce sites, Alibaba isn’t a place where you can click and buy instantly at an advertised price. Instead, you’ll often be required to contact the seller of the goods you’re interested in and negotiate a price. This can take time and patience, and your negotiating skills will need to be on point if you want to get the very best deal.
Once the deal is agreed, the order can be placed and shipping arranged.
Alibaba offers many benefits for businesses, including the ease of finding a wide variety of goods (more on this next) on its user-friendly platform. You can also customise items with your own branding, and choose from a number of payment methods.
Some people mix Alibaba up with another similar-sounding site, AliExpress. This is understandable, as they’re both owned by the Alibaba Group and are retail platforms based in China.
But where Alibaba is a wholesale marketplace focusing on B2B customers, AliExpress is a standard retail platform for customers to buy individual items – just like Amazon or similar sites.
One of the reasons Alibaba is such a popular choice with businesses worldwide is that it has an enormous range of different products. It offers one-stop sourcing, where you can find anything and everything you’re looking for.
There are over 40 major product categories³ on Alibaba, including⁴:
- Apparel and fashion
- Consumer electronics
- Watches, eyewear and jewellery
- Beauty and personal care
- Packaging and printing
- Home and garden
- Sports and entertainment
- Health and medical
- Gifts and crafts
- Electrical equipment
- Tools and hardware
- Minerals, chemicals and raw materials.
Thinking of having a browse on Alibaba for your business supplies? There are a few things you should know first.
Keep an eye on the payment currency, as it can sometimes work out cheaper on Alibaba if you pay in US dollars (USD)⁵. We’ll look at ways to pay in different currencies and swerve high currency conversion fees in the next section.
Another important thing to remember is that shipping costs aren’t usually included in purchases from Alibaba, unless agreed with the seller. You’ll need to organise shipping yourself (or negotiate with your seller) along with any applicable import taxes, customs charges or other essential paperwork.
If you plan to use Alibaba regularly, make sure you protect yourself when using the platform. Alibaba offers Buyer Protection policies, but you should also do a few basics like checking out a seller’s verification badge and previous customer reviews⁶ – just to make sure they’re legit.
So, you’ve signed up for an Alibaba, searched the site and found exactly the products you want. After some back and forth with the seller, you’ll have hopefully agreed a price that everyone’s happy with. Fantastic – now you’re ready to pay for your order.
Alibaba accepts a few different payment methods. These include⁷:
- Credit or debit card
- Online bank payment
- Telegraphic transfer.
Which payment method you choose depends on what you feel comfortable with, and what you’ve agreed with the seller.
For example, you may not feel 100% happy sending over the full amount by bank transfer in advance – especially if it’s a very large order and a seller you’ve not used before. The seller may agree instead to accept an Escrow payment⁸. This is where the buyer pays a deposit and the full payment is only released to the seller on satisfactory receipt of the order.
Now, let’s talk currency conversions. If you do want or need to pay an Alibaba supplier in a currency other than your local one, remember that you can use services such as Wise which specialise in low-cost international money transfers.
This means you don’t need to worry about high currency conversion costs wiping out the bulk-buy savings you’ve made by shopping at Alibaba.
And that’s all the essentials you need to know to start ordering business supplies on Alibaba. There’s an art to haggling and negotiating the best deals with suppliers, so it may take you some time to get used to it. But the bulk buy savings could be well worth it.
Just remember to shop carefully, checking reviews and making sure you’re happy with the terms of the deal before arranging payment. Good luck!
- About Alibaba
- Alibaba vs Aliexpress
- About Alibaba
- Alibaba vs Aliexpress
- How to sell on Alibaba
- How to pay suppliers on Alibaba
Sources checked on 30-September 2020.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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