In my previous article on Alibaba Insights, I explained how to filter suppliers on Alibaba.com, based on various criteria. In this article, I’ll explain what comes next.
Picture that you’ve identified 10 candidates, and it’s time to contact them. Your objectives are now as follows:
Remember, most manufacturers here on Alibaba.com only upload reference products. The products you see listed are generally not ‘off shelf’ products, that can be shipped the next day.
Instead, the product listings shall be considered as a demonstration of what the supplier can manufacture.
This dynamic has implications, as you cannot assume that the supplier has product specifications for every single listing.
When you contact a supplier, you must do one of the following:
All suppliers have a Minimum Order Quantity requirement. An MOQ of 500 pcs means that the supplier only accepts orders of 500 pcs or more.
Many suppliers here on Alibaba.com do specify the MOQ directly on their product listing. This number is, in many cases, negotiable.
But, there’s more to the MOQ.
In fact, there’s more than one MOQ to keep track of. When you initiate a conversation with a supplier, you should ask them to specify the following MOQs:
There is a big difference between ordering 500 pcs of one product, in one color, and buying 500 pcs of various items.
Most suppliers in Asia are by now accustomed to a 30/70 payment process. You pay 30% before production starts, and 70% once the goods are completed.
You should confirm these terms with your supplier at an early stage.
Some suppliers refuse anything but 100% upfront, and you want to make sure you don’t spend too much time on them.
As I mentioned, most product listings are not off-shelf goods. While suppliers often have product samples, you should not take this for granted.
In most cases, they have to manufacture product samples, a process that often takes a month or longer.
Ask these questions when discussing product samples with a supplier:
Last, but not least, we get to the unit price. And I kept it here, at the bottom, for a reason.
The price is important, but only if you’ve identified the product specifications, for which the price is based.
And, a price is only relevant, if it comes from a supplier with an MOQ that you can match, and payment terms that you accept.
Fredrik Grönkvist is a Swedish Entrepreneur and co-founder of Chinaimportal.com, a website that provides free guides, videos and webinars on importing OEM and private label products from Asia.