A comprehensive guide for Canadian businesses to choose between Alibaba and Amazon

If you own an ecommerce business, you might know that Alibaba and Amazon business are two of the most powerful platforms in the space. In Canada, sellers are signing up for both of these options because of their established reputation and capabilities.

Deciding between them is a process that involves looking at your budget, goals, and the type of product you’re offering.

As your business starts to grow and expand across borders, we’ll show you how Wise can help you seamlessly sell to customers in the US, Mexico, and anywhere else in the world.

A closer look at selling on Amazon in Canada

Amazon.ca has an enormous marketplace where you can buy anything from dog toys to a robot vacuum and have them delivered, in as little as 24 hours.¹ Canadian sellers can sign up and access Amazon’s diverse international customer base, plus a range of business tools.

Amazon is convenient, has competitive pricing, and an extensive catalogue of products. Although the site does showcase niche products, their most popular categories include home and kitchen items, clothing, health and beauty products, electronics, and books (including e-books).

Sellers get access to two main fulfillment options: Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM). Going the FBA route means Amazon takes care of the entire fulfillment process . That means they’ll deal with storage, packing, shipping, returns, as well as customer service.²

If you’re more experienced and prefer to keep control of the fulfillment process in-house, the FBM route could be more cost-effective.

The interesting perk of Amazon is that they have a real focus on international sales. Although you’ll initially sign up for Amazon Canada, the platform lets you tap into other markets through the North America Unified Account.³

A closer look at selling on Alibaba in Canada

The biggest difference between Alibaba and Amazon is that Alibaba is a business-to-business (B2B) marketplace. It’s also one of the world’s largest ecommerce platforms, and their model focuses on connecting product manufacturers and wholesalers.⁴

If you’re a Canadian business selling to retailers and resellers seeking bulk parts or products, Alibaba is ideal. Popular categories include consumer electronics, industrial machinery, apparel, and home and garden.

Alibaba offers three shipping options: air freight, sea freight, and courier service. Courier services suit small packages and localized deliveries; sea freight is affordable for large, heavy shipments; and air freight is quickest. Shipping costs depend on the seller’s method, minimum order, and price per piece.

Alibaba excels in global trade with a vast supplier and buyer network. Their trade assurance programs and tools help manage international transactions and reduce risks.

Key factors to consider when selling on Amazon or Alibaba

Between Alibaba and Amazon, which would you have the most success with? These factors will help you make an effective decision:

• Fees/Pricing: Amazon offers a more robust suite of services as such, making their selling, and fulfillment fees higher. Amazon.ca also has an ‘Amazon Handmade’ community for handcrafted goods that takes a 15% referral fee per sale.⁶ However, while Alibaba’s general costs are lower, there are things like custom fees to consider when shipping internationally.
• Audience/Product Fit: Both platforms have entirely different business models. Amazon focuses primarily on consumer goods and selling to a global network of commercial customers, while Alibaba is a B2B platform that focuses on the global selling and buying of products in bulk.
• Competition/Discoverability: Although Amazon has a competitive landscape, it has features in place to help sellers put their products on the map. Selling on Alibaba also comes with plenty of competition, but sellers typically end up establishing long-term relationships with buyers with their business model.
• Fulfillment/Shipping: Alibaba doesn’t have their own fulfillment option like the Amazon FBA, which means you’ll need more experience and resources to manage all your logistics and customer dealings. Meanwhile, Amazon’s FBA is ideal for boosting delivery speed and for those who are just starting out.
• International Sales Potential: Amazon and Alibaba offer strong international sales potential, making them popular among B2C and B2B sellers. Using Wise can enhance this potential by providing better value in cross-currency transactions. With a multi-currency account, you can pay suppliers in their local currency, avoid hidden conversion fees, and make international batch payments.
• Seller Support and Policies: Alibaba takes a hands-off approach, leaving logistics and trade regulations to the seller. Amazon provides extensive resources and support for sellers. Wise can assist with refunds and reimbursements in local currency on both platforms, avoiding hefty fees.

Which platform is better for your business?

Choose Amazon if:

• **You want a broad reach : **Amazon offers a highly interconnected network of customers. With the North America Unified Account, you can get an easy start to business expansion within the continent.
• **You want to offload your order fulfillment and shipping processes: **Fulfillment by Amazon is an extremely useful feature, especially if you don’t want to deal with the hassle of storage, packing, and shipping.
• **You want to later expand into international markets: **Your products could be easily sold all around the world, given that Amazon International Shipping is available in over 100 countries.⁷

Choose Alibaba if:

• **You want to perform bulk B2B purchasing: **Alibaba is one of the most renowned platforms for bulk and wholesale purchasing.
• **You want direct connections with wholesale buyers: ** Their platform gives manufacturers and sellers direct access to relevant buyers.
• **You want to use a platform with global reach: ** Alibaba makes cross-border trade easy, bringing the familiar B2C interface to the B2B market.

Alibaba and Amazon both present the perfect opportunity for international sales, but they stand as entirely different platforms. Doing your own due diligence to research each platform's pros and cons and whether they align with your business goals will set you up for long-term success.

If one of your big goals as an ecommerce entity is to expand globally, Wise Business can act as the ideal financial partner. Wise offers you a multi-currency business account, low-cost cross-border payments, and other useful tools for international sellers, such as integrations with Sage Business Cloud for bookkeeping and accounting.

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