Supplier Marketplaces

Gary Huang, 80/20 Sourcing

Most importers find their suppliers on online marketplace searches. For Chinese suppliers, Alibaba is the biggest marketplace, but Global Sources and 1688.com are also very large. This chapter assesses these three marketplaces, and also covers the first two steps in the supplier process, namely Search For Suppliers on Alibaba and Request Quotes.

Search For Suppliers On Alibaba

Alibaba is rather like the yellow pages, a listing and grouping of businesses. You want to find trustworthy suppliers who can manufacture your product at the quality, at the right price, and deliver it on time. Here’s a great way to do this:

  1. Enter search terms. Start by entering the same search term your customers use, and then consider synonyms and other phrases. Remember, too, that English is a second language for most Chinese suppliers so you may need to think creatively to find the right keywords.
  2. Sift search results. Skip past the first results. Like Google, these are sponsored ads. You can filter down to “gold suppliers” if you have too many results.

Expert Tip

Don’t put faith in filtering by gold supplier alone. It is an advertising badge suppliers buy from Alibaba, and, contrary to popular belief, doesn’t mean that they have been pre-approved or even that they are a trustworthy supplier. Not that that makes them a scam artist either.

A better way to filter suppliers is to is find established suppliers (filter for gold suppliers with more than two years standing).

  1. Search visually. Scan through images in the search results to find products similar to what you’re looking for.
  2. Apply the “common thread” test. If you want to work with factories rather than trading companies, check their catalog of products. If there’s a common thread running through them, for example, they are selling products in a certain material like silicone, then that usually means they are a factory. But, if they selling everything under the sun, they are probably a trading company.

Request Quotes

  1. Create a request for quotation (RFQ) letter. The Further Reading section at the end of this chapter includes a link for a free RFQ template.
  2. Structure the letter for success. The following is a great way to structure your RFQ letter.
    • Start with a short company introduction telling them about your business, where it’s located, how long you have been doing business and anything else that would make you look more professional.
    • Then, include product details such as measurements, material, specifications, pictures, packaging, and any modifications you’d like to make.
    • Provide volume estimates in your RFQ letter, so that the supplier understands that you have a purchasing plan. You should provide an attractive annual purchase volume, and the initial trial order should be for at least 500 units. Otherwise, if they think you are just trying to work out the cheapest price and the smallest order, they may skip past your email.
    • Ask for their price quotation.
  3. Track responses. Use a spreadsheet so you can see the price spread, who is responding quickly and who’s slow. You can also use this sheet to make sure that you quickly follow up.

Don’t Just Look On Alibaba

Many suppliers search on Global Sources instead. There are fewer suppliers on this marketplace, but they tend to be better in terms of quality, company reputation, and service.
Another large supplier marketplace is 1688. This Alibaba-owned platform is targeted towards the domestic Chinese market. Here’s why you will probably find it difficult to find suppliers:

  • The platform is entirely in Chinese.
  • The suppliers there are catering to the domestic China market, which may mean lower quality standards.
  • Most suppliers probably don’t have an export license, and therefore can’t legally export to the US. You can get around this, at a cost, if you use a trading company as an intermediary. Trading companies also list on 1688.

Summary

  • Alibaba and Global Sources online marketplaces are great sources of suppliers and products.
  • Follow the steps outlined in this chapter to use Alibaba to shortlist quality suppliers for your product.
  • Be specific in your requests to look more professional and improve the response rate.

    Further Reading

  1. Sourcing Bonus Pack (At the right, there is a link to download a RFQ template)
  2. How To Find Suppliers Beyond Alibaba? Part 1: “Yellow Pages”
  3. How To Find Suppliers Beyond Alibaba? Part 2: Online Sourcing For Small Volume Orders
  4. How To Find Suppliers Beyond Alibaba? Part 3: Online, Offline, And Thinking Outside The Box

80/20 Sourcing helps importers scale and systemize their online businesses, saving time and money when sourcing products from China. It offers video courses, masterminds, coaching, and free content, and has been featured in NPR, Bloomberg, Global Sources Summit, Webretailer.com, and Jungle Scout’s Million Dollar Case Study.

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