If you have even a basic understanding of e-commerce, it is likely that you are familiar with Alibaba. This Chinese company stands as one of the world’s largest e-commerce platforms, linking millions of buyers and sellers from across the globe. Offering an extensive array of products, Alibaba caters to almost every conceivable product category, making it a prominent player in the global e-commerce landscape.
If you are in the midst of establishing an online business or aiming to expand, Alibaba presents itself as a prime destination for sourcing products. Alibaba has a 779 million active consumers across its various online shopping platforms as of December 2020. It offers an immense potential customer base for businesses looking to tap into the global market.
This vast reach and consumer base make Alibaba an attractive option for entrepreneurs seeking to procure products for their online ventures. So, let us discuss in this post on how to order from Alibaba briefly.
How to negotiate with Alibaba suppliers
After initiating contact with an Alibaba supplier and receiving a price quotation, aim for the best price per unit and negotiate a reasonable Minimum Order Quantity (MOQ) for the desired product.
To negotiate prices with China suppliers, assess the market value by approaching multiple suppliers simultaneously for price comparisons. Discrepancies in pricing indicate whether a higher cost is justified by superior quality or if it is unwarranted. This approach ensures informed decision-making based on market conditions and product quality.
Also, while evaluating prices, you must consider factors such as:
1. Shipping costs
Lower-priced suppliers may offer less favourable shipping terms like EXW (Ex Works) instead of FOB (Free on Board). Despite lower product prices, these shipping terms could significantly increase overall costs, making them comparable to or even more expensive than competitors’ offerings.
2. Item quality
Lower prices can often signal lower quality. Detailed product specifications and images are invaluable in assessing quality when purchasing items. They provide essential information, including materials used, aiding buyers in making informed decisions and ensuring they acquire products that meet their quality standards.
3. MOQs/order minimums
Beware of apparent bargains where lower unit prices come with the requirement of purchasing large quantities. This tactic may inflate the total cost and should be carefully considered when evaluating price, ensuring that the bulk purchase requirement aligns with your business needs and budget.
After receiving multiple offers of similar quality, request suppliers to match the lowest price offer. Negotiation scope with Chinese suppliers is limited, yet discounts up to 10% are feasible with a genuine counter-offer grounded in competitors’ prices and prevailing market conditions.
Negotiating Minimum Order Quantities (MOQs) is facilitated by proposing pre-payment for smaller quantities, which appeals to suppliers. Offer a purchase order (PO) for a reduced quantity, expressing willingness to increase orders if the initial transaction proves successful, leveraging flexibility in securing favourable MOQ terms.
Tell them to invoice you when you do this and make an immediate payment offer. Few suppliers will never refuse prompt payment. Therefore, you can get around MOQs with this strategy.
It will always be useful to take help of any reliable Chinese sourcing agency like Maple Sourcing, who has experience and understands Chinese market.
