Alibaba vs. Aliexpress for Resellers and Dropshippers (2023 Comparison Guide)
If you’re new to the world of discount merchandise from China but looking to take advantage of the insane prices, you may have heard of both Alibaba and Aliexpress as two options to achieve that goal. They are both popular online marketplaces, but which one is better for reselling? In this post, we’ll compare Alibaba vs. Aliexpress and explain which is better under certain conditions for both resellers and dropshippers.
What is Alibaba?
Founded in 1999 by Jack Ma, Alibaba started as an online marketplace for business-to-business (B2B) trading of goods. Alibaba allows manufacturers to market just about anything to potential business customers worldwide, from screwdrivers to sheds. Alibaba has since become one of the most popular e-commerce sites in the world, with over 100 million products for sale.
What is AliExpress?
Operating under a similar name, Aliexpress is the retail version of Alibaba. Started in 2010, Aliexpress became the option for buyers looking to take advantage of highly aggressive pricing from retailers in China, but without the need to also buy 10,000 of something at a time. Pricing isn’t as great as Alibaba, but that’s to be expected given the order volumes required on the B2B platform.
Alibaba vs. Aliexpress: Which is Better for Resellers?
Between the two, Alibaba is the go-to platform for resellers looking for products. Manufacturers on the platform generally offer their goods with minimum order quantities (often in the hundreds of units, though for smaller items, the minimum order can be upwards of 10,000 units). For resellers, this means that instead of placing dozens or hundreds of orders to fulfill inventory needs, only one order may be required for some time.
These higher minimum order requirements also mean better pricing. Whereas an item may go for $5 when purchased on Aliexpress from a manufacturer, that item may sell for $0.50 each when ordering 100 units.
Alibaba vs. Aliexpress: Which is Better for Dropshippers?
For drop shippers, the opposite is true, and AliExpress is the better option. Like Alibaba, Aliexpress offers many items across every category you can imagine for heavily discounted prices. The difference is that these items are sold as single units and thus can be great sources for dropshipping products to your customers.
Your business can use discounted pricing from Asian manufacturers and suppliers. That savings can be passed on to your customer, or your business can benefit from higher margins without keeping inventory.
Things You Should Know About Alibaba Before Signing Up
Because Alibaba is geared toward B2B transactions, there are a few things to remember before jumping in and placing orders.
Most manufacturers have minimum order quantities. This means you’ll be required to purchase hundreds or thousands of items.
Not all Asian manufacturers take the same types of payments. You may find yourself using non-standard payment methods to pay for your order. The most reputable suppliers on Alibaba will take PayPal, however.
Alibaba is not responsible for any payment disputes arising from transactions, so thoroughly research each supplier before purchasing. Alibaba provides various certifications for manufacturers, allowing them to be vetted for their on-time order fulfillment, customer satisfaction, and more.
Shipping can be expensive and complex when dealing with international suppliers. Be sure to factor this into your pricing when reselling the items. The most economical shipping option is by boat, which can take up to 30 days or more. Air shipping is often very expensive and may be discouraged unless you have the profit margin to spare or need the product quickly.
Once you have your products from your supplier(s), you’ll need someplace to put them. We compiled a list of our favorite third-party logistics (3PL) providers to help you quickly manage your inventory and ship orders to customers.
Things You Should Know About Aliexpress Before Signing Up
Orders may take a significant amount of time to be delivered. One of the ways these orders can remain so inexpensive is because the most economical shipping option is often used. For most orders, this means orders are put through the mail system, originating in China or the manufacturing country, and delivered through the destination country’s mail carrier. You might find that orders can take 3-4 weeks or more to be delivered.
The quality of items may not be great. There’s a reason these items are less expensive than what you’d likely find at a retail store. While the cost to make something in an Asian country is likely lower overall, further cost-cutting measures often occur, which can translate into lower item quality. Keep that in mind when pricing your items for sale on your dropshipping site.
Returns can be a hassle. Don’t expect to easily return defective or unwanted goods to the original seller on Aliexpress. It can cost almost as much, if not more, to return the item. Consider having the item returned to you, and either dispose of it or try to resell it through other means, like eBay.
Tips for finding products on Alibaba
Check reviews and ratings of suppliers to ensure they are reliable. With the volume of suppliers on the site, there’s no reason not to be picky about who you work with.
Use the search filters to narrow down your product selection. Look for suppliers that have Trade Assurance, are a “Verified Supplier,” and have any required certifications if those are applicable.
Ask for samples to test out the quality of the products before making a purchase. Any supplier worth working with will offer a free or discounted sample product. You’ll likely have to pay for shipping.
Request a competitive price by requesting quotations from multiple suppliers. The posted price is never the final price. There is always room to negotiate, especially if you’re looking for larger items. Conversely, don’t expect much negotiation room for small order quantities, either.
Think about the long-term goals and build a relationship. If you have an opportunity to bring your manufacturing partner on board with your long-term plans, you may find yourself with a partner that’s willing to be more flexible both in terms of manufacturing requirements and what they can make and the pricing they can offer. It’s in both parties’ best interests to ensure success, so look for an opportunity to create a long-term relationship.
Always confirm delivery times and shipping costs before placing your order. Alibaba can help confirm the delivery and timing since it’s often posted on the site, but always confirm with the supplier. The last thing you need is to expect a six-week delivery time only to find out it is six months.
Alibaba and AliExpress both offer great opportunities for resellers and drop shippers. Depending on your needs, one might be better suited than the other. If you’re looking to buy in bulk and have access to manufacturers worldwide, then Alibaba is the way to go.
On the other hand, if you’re starting with small quantities and don’t need access to manufacturers directly, AliExpress is a great choice. Whichever platform you choose, make sure to do your research and be aware of any potential risks that may arise. Good luck!
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