How To Buy Inventory On Alibaba

Updated: Dec 16, 2021

Alibaba Suppliers

When setting up your Amazon business, nothing is more important than selecting a good supplier. About half of the listings on Alibaba are put there by traders. These are third parties that markup the price significantly and then sell it to you. Their mark-up takes away from your profit. So how do you find the actual supplier on Alibaba? How do you know the product you're ordering is what you get? When you want a sample, how does that work? Your private label and graphics and barcodes and packaging and on and on and on? I'm here to answer that question today. Keep reading.

Finding “real” suppliers

In China, the name of the supplier’s business is essential. When you're looking at the name of a manufacturing business, it should list one of the four coastal cities. That’s where almost everything is exported from China. You should not buy products from manufacturers or "traders'' inland because your shipping cost will increase.

Business Type

The four provinces you're looking for in the first word of the business name are location. The next thing you're looking for is business type. The business type is listed in the supplier profile and Alibaba. Open the supplier profile. There are two main types of businesses on Alibaba. One of them will be a manufacturer. The other will be a "trading company." A trading company may be a small business renting an office if the street address is 123 street, room number 7. They probably don't manufacture a whole lot of products out of room number 7. take notice these details before agreeing to do business with a supplier.

A trading company buys the product from the manufacturer and sends it to you. That's their entire business plan. The only way they make money is through their mark-up when they resell items to you. You do not need their service. Your best bet is to go to the manufacturer directly by searching suppliers whose business type is "manufacture." You will also see that they have large buildings, and if you look at the pictures and product listings for that manufacturer, you will know that they have a fundamental theme in the products and processes used.

Price And Seller

Once you select a supplier for your product, it's time to negotiate the price. The price for your product should be competitive, considering that just a one-dollar discount will save you thousands on every order. That's money that goes directly into your pocket each month.

Your opening message should be complex, not "down" to business right away. Tell them that you are happy to meet them. Tell them that you can see that their product has excellent quality, but the price is higher than others. Name your target price, usually a couple of dollars lower than the average price on Alibaba, and ask them how they can come closer to your target price. Many suppliers will respond by saying that they can't lower the cost. That's Fine but make sure the cost on Alibaba is accurate and include customization. This should be done at night in the United States because, during the nighttime, it's daytime in China.

You want to get responses quickly, so it doesn't take days to have a simple conversation. Start this conversation at night so that you get immediate answers from the supplier by clicking the "Contact Supplier" or the "Chat Now" button. Once you open the conversation with the supplier, it will go relatively quickly. You will ask them to lower the price. They will say yes or no, and you will either move on to another supplier or ask them how much it costs to ship a sample to the United States.

You will tell them that you would like them to prepare a sample order for you and send you the "PI" so that you can pay. Before you pay for the sample, you should ask them to send another "PI" for the first inventory order. Make sure their price for the first order is the same as what you negotiated before you pay for the sample. Otherwise they will raise the price once you're ready to order your inventory.

You should order at least three or four different samples. Don't order from only one manufacturer because if that sample doesn't work out, you will spend months going back-and-forth ordering different samples from different suppliers. This should be a rigorous, fast, and complete process. You may want to talk to several suppliers simultaneously during the same evening. If the suppliers do not respond to you right away, they are not likely to respond to you later if you have an issue with the product. You can move on from them.

Getting The Merchandise To Amazon

Once you've selected a product, you should order 500-1,000 from your initial inventory order. Maybe this seems like a lot, but if you run out of inventory, you will lose a lot of the progress that you made in the beginning, and hijackers may step in on your listing. It's vital that once you get started, you do it to completion. Don't start and stop. Don't generate sales and search and then drop down to nothing. Not only is it detrimental to your business, but Amazon does not like it. When you make your initial inventory order, you should have your logo and graphics printed on the packaging. Most suppliers will include this service if your order is over 1000 units. Having your graphics already prepared at that time is very important.

Along with your graphics, you should have your barcode prepared as well. A separate barcode is required for different colors and different sizes. Any variation of your product will need a separate Barcode. You should provide the graphics for the packaging and the barcodes for each variation of your product when you make your inventory order. You should specify that the packaging should be done individually for sale on Amazon FBA. Most manufacturers will do this for you so that an Amazon FBA preparation warehouse or service is not necessary. You should send your inventory directly to your house. Do not send the merchandise to Amazon's warehouse. Especially not right at first. Amazon will send a truck to your home to pick up the inventory.

Ordering Inventory

When you order your inventory, you are not done paying. That is important to know. You should not calculate your profit per item based on your sales price minus Amazon fees minus the inventory cost. Consider taxes and fees while entering the country. Having things imported from China to the United States plus taxes and shipping. Your inventory will be held at the port until the "vat" or fees are paid. The vat is a tax to get the stuff into the country. To calculate the vat, you should go online and search for the product “HS code" and do your research to find out exactly what it will cost you for your particular product—considering quantity, weight, and value.

Sourcing agent

This process can be very intimidating, and you may be tempted to hire a sourcing agent. The problem with many sourcing agents is that they have a fee schedule that would require you to continue paying them to source your product. It's unusual for them to give you the source of the products manufactured. It's impossible to know how much they paid for it or where it came from, so for you to take over the sourcing of your product would require you to go through this process all over again without the sourcing agent. You might as well start that way in the first place.

At Amazon FBA Business In A Box, we will have a video call and screen share with you when we begin. You can be there when we talk to the manufacturer in the first place to order your samples, order your inventory, and create your graphics. We provide professional photography of your product and inspect your sample from right here in Asia. Dealing with that and taxes is our business. Don't try to do this alone. Higher us at today. We will help you set your business up in the next couple of days, then give you support and follow through for the next six weeks while you get your product and list it on Amazon’s website.

See us on YouTube to see how we recommend you get reviews. If you hire us to deliver the Business In A Box, we will include reviews on your product, brand registration, and coaching down the road so that you can be confident of overcoming any issues as they arrive. See you on the other side. Let's get this started!

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