The Pros and Cons of Using Alibaba
In this blog, we’ll continue to answer the question, “Is Alibaba a good place to find factories, source components, and communicate with factories?”
In the previous blog, I talked about the pitfalls of using Alibaba which were:
First, many companies listed on Alibaba are not actually factories, and second, the pricing on Alibaba is all but meaningless. Below are two further reasons to be cautious when sourcing through Alibaba.
Reason 3: If factories don’t have licenses to export directly from their factory to overseas customers, a lot of them won’t be listed on Alibaba.
Oftentimes, when you’re putting together your own product, you’ll be utilizing a lot of these unlicensed factories to manufacture and bring together componentry within China for final assembly at an ‘assembly’ factory. This assembly factory will likely then be the one that exports to your country or other overseas destination. It is these skilled and experienced unlicensed factories that you will miss out on if you solely source through Alibaba.
Knowing that these factories exist but may not be showing up on Alibaba will give you the right mindset when using the platform because it will help you understand that it is only a starting point if you don’t have networks in China.
Reason 4: Alibaba is clunky and can hinder communication.
Alibaba is not easy to use, andit actually hinders communication with factories. So, the quicker you can get off Alibaba and onto platforms that Chinese factories prefer to use (for example, WeChat) the better.
Alibaba will often have incentives in place to encourage you to stay on its platform, and the largest incentive is usually focused on safety. This is typically centered around placing orders. Alibaba provides a dispute process if orders are not delivered as agreed. But this only works if you have conducted your communication and orders through the Alibaba platform. Such protection is useful and will help protect your orders.
However, if you’re intending to set up your product manufacturing in China, especially for the long term, you should be establishing robust manufacturing steps and processes to safeguard yourself anyway. If you’re looking to just buy something off the shelf, a one-off order, then stay on the platform – it gives you the ability to dispute if something goes wrong. But, if you’re looking to make your own product, if it’s complex, and you want to set up manufacturing properly from scratch, and where you’re going to be sourcing different components from different factories, then Alibaba is not going to be of any use and you will want to establish clear processes and protections specific to you and your chosen manufacturers. As soon as you can take these discussions off Alibaba, the better and easier it is, and the quicker that process will be for you.
So, we’ve walked through some of the pitfalls of relying on Alibaba:
- Many companies on Alibaba are middle-men, not factories
- Pricing is basically meaningless on Alibaba
- Many key factories won’t be listed on Alibaba, especially if they don’t export
- Alibaba can hinder communication with manufacturers
Where does this leave you? In short, we’d say if you’re looking to buy a one-off, off-the-shelf product with little to no adjustments, then Alibaba could be a great option. For everything else, we’d suggest a more robust, bespoke and long-term solution. This is where a team like China Connect can help. We have on-the-ground knowledge, experience and people to take your product from plans to shipped to your door.