How to Dropship With Alibaba, Step-by-Step, If you want to begin dropshipping on Alibaba, you’re probably wondering how to get started. To help, here’s a step-by-step guide to sourcing products safely with Alibaba Click here.
Step 1. Start Your Search for Suppliers
To start, head to Alibaba and search for the product you want to sell — you can then use the left sidebar to hone in on a suitable supplier. It’s a good idea to filter suppliers by Trade Assurance — even if you don’t use the service yourself. “Ready to Ship” and “Fast Dispatch” are also good options to check, as suppliers that fulfill these criteria are more likely to dropship products.
Step 2. Check the Minimum Order Quantity (MOQ) and Price
Once you’ve found a potential listing, check out the product page and note the minimum order quantity — also known as MOQ. In the example below, the supplier allows buyers to purchase 1 unit at a time: Sometimes the product’s MOQ is visible front-and-center, and other times, you’ll have to scan the page to find it. To speed up this process, you can hit “Control” and “F” on your keyboard to search the page’s text, then try writing “MOQ,” “minimum,” or “order.” Another key consideration is the unit price. For the listing above, we can see that the price for 1-18 units is $25 — notice how the price drops considerably as you order more products. However, this price doesn’t include shipping costs which are “To Be Negotiated.”
Step 3. Compile a List of Potential Suppliers
Most suppliers that you contact won’t work out for one reason or another. For example, they might:
- Be unable to meet your verification requirements
- Not have enough stock or capacity to take on more work
- Offer unacceptable payment terms and refuse to negotiate
So, it’s best to compile a list of potential suppliers and then reach out to many at once. This will allow you to secure a suitable supplier faster. At this stage, a promising supplier will:
- Sell the product you want
- Offer a MOQ of 1
- List reasonable prices
- Be verified and offer Trade Assurance
- Have good reviews
Once you have a list of at least 5-10 suppliers, it’s time to connect with them.
Step 4. Contact Suppliers and Ask About Dropshipping
Not every product page will clearly list the unit prices and MOQs. So, you’ll need to contact many suppliers to find out if they’re open to dropshipping products to your customers in whichever country you plan to sell in. Perhaps the easiest way to contact suppliers on Alibaba is to use the platform’s messaging service. However, some suppliers will prefer that you call, email, or use WeChat — China’s largest messaging app. It’s worth remembering that most suppliers listed on Alibaba are based in China.
So you’re likely in a different timezone! Plus, unless you speak fluent Mandarin, communication can sometimes be challenging. Many suppliers will use a tool like Google Translate to translate your messages and their replies. You can help to avoid misunderstandings by using simple words, short sentences, and checking for spelling errors. It also helps to bullet point questions to make it easy for suppliers to reply to each one individually. Here’s a template that you can use to inquire about dropshipping:
Step 5. Agree on a Payment Method
It’s worth understanding the most common payment methods used on Alibaba, so you can try to find a supplier that’s open to using your preferred method. Here’s a quick rundown of 4 common payment terms used:
1. Bank Transfer
Transfers to Chinese suppliers are usually made using Telegraphic Transfer or ‘T/T’ payments. With this payment method, the supplier will generally want to receive the full payment before starting production. A bank transfer is also a relatively slow and cumbersome way to send money, so it’s not well-suited to dropshipping. Plus, it’s very high risk — especially when dealing with unknown suppliers.
2. Alibaba Trade Assurance (ESCROW)
Escrow services are third-parties that hold a buyer’s money and only pay it to suppliers when the buyer confirms satisfactory delivery of an order. As a result, it’s a very safe way to transfer money. However, like bank transfers, it’s not the fastest way to send money. So, while secure, it’s not ideal for dropshipping.
3. Credit and Debit Card Payment
Alibaba facilitates credit and debit card payments from all major processors, including MasterCard, Visa, and American Express. However, the transaction fees involved can make this payment method costly for buyers and impact your margins.
PayPal is another payment method offered by some Alibaba suppliers. For buyers, it’s easy to use and offers relatively good buyer protection. However, suppliers will usually avoid it due to the platform’s fees, the challenges of withdrawing money, and the possibility of chargebacks by unscrupulous buyers. All in all, PayPal is the best option for new buyers.
Step 6. Shortlist Suppliers, Order Samples, and Then Select a Supplier
It’s now time to separate the wheat from the chaff and select a couple of Alibaba dropshipping suppliers that seem like a good fit. It’s worth noting that you may need to repeat the process outlined above a few times before you find suitable suppliers. When shortlisting suppliers, make sure to consider things like:
- The unit cost
- The payment terms
- How well each supplier communicates
- How long it’ll take for the supplier to fulfill orders
Once you’ve got a list of good suppliers, it’s time to order samples. Make sure to compare each supplier’s samples and test them thoroughly. Finally, select an Alibaba dropshipping supplier! If you have two or more suppliers that are a great fit, look for additional opportunities to capitalize on. For example, perhaps one of your suppliers also offers a private labeling option. In this instance, you may prefer to use this supplier because it offers an opportunity to expand and develop a unique brand in the future.Next, you’ll need to set up your online store, optimize your product pages, and drive sales.