Thinking of buying products in bulk from Alibaba to expand your local business? Then, you must be wondering, is it safe to buy from Alibaba? This robust e-commerce platform is legit and connects consumers and businesses originating from worldwide.
However, some risks still exist. But, taking necessary precautions can help you ensure a secure trading experience. Let’s dig deeper into our comprehensive guide on is Alibaba safe.
Alibaba currently holds the record of being the world’s largest mobile commerce company on online media. It’s no shocker that it managed to garner around 8.3 trillion Chinese Yuan in the recent fiscal year that ended in March 2022.
The base of this world-famous multinational company was put in 1999 in Hangzhou by Jack Ma and Co. And since then, there is no stopping its success. Even Forbes recognizes the potential of Alibaba. Therefore, it was named the 31st largest public sector company in the world in 2020.
Additionally, Alibaba boasts the honor of holding the 9th highest global brand valuation globally. All these awards are completely justified pertaining to the fact that Alibaba connects businesses, manufacturers, retailers, and sourcing agents on a universal level.
Understanding the Business Model of Alibaba
Alibaba’s business model is completely different from that being utilized by top marketplaces like Amazon and eBay. Besides the typical seller-to-consumer service, it offers an efficient form of facilitating trade between businesses of different levels.
For example, manufacturers can list their products on the platform in bulk at highly economical (read: wholesale) rates. And from there, multiple small-sized startups can purchase them and resell them in the local market by keeping a solid profit to themselves.
If you think that’s it, then wait; there is more to this extensive global enterprise. Alibaba also allows registered sellers to trade via multiple e-commerce online portals. Taobao is an example in this case.
Similarly, Tmall is also sponsored by Alibaba and offers a great opportunity for middle-class Chinese residents to purchase branded products.
Besides these, there are multiple more subsidiaries comprising Alibaba’s business model from which the platform earns its revenue. These include Aliexpress, 1688, Lazada, Cainiao Network, Ant Financial, Alimama, Alibaba Cloud, etc.
Simply put, Alibaba’s business model is multi-sided, with two major parties that depend on each other, i.e., buyers and sellers. And there are several combinations of these based on which this platform operates. Some examples are:
Conditions Applied to Become a Seller at Alibaba
No matter in which part of the world you reside, you have equal chances of becoming a seller at Alibaba to scale up your business sales. However, there is a specific criterion for every state which you must meet to be eligible for this.
Here are the key requirements for selling your products from the USA on this famous marketplace.
– Certificate of Business Registration:
In order to expand your business through Alibaba, you need to be a US-registered business entity. This can be a corporation, limited liability company (LLC), sole proprietorship, or partnership.
Alibaba will ask you to submit a business certificate or incorporation documents as proof of this claim.
– Wholesale Quantities:
Alibaba’s business model is more inclined towards wholesale trading. Therefore, you, as a seller/manufacturer, must be able to provide products in large quantities.
Suppliers set minimum order quantities that you have to fulfill to qualify for becoming a registered seller on this platform. If you are running an individual and small-scale business, Alibaba won’t accept your application.
– Access to Computer or Mobile:
This criterion is pretty basic, but since Alibaba connects with sellers online, it’s a must-have requirement. You need access to a computer or mobile device with a solid network to create and manage your seller account.
This is crucial for handling tasks like listing products, communicating with buyers, tracking shipments, etc.
Types of Sellers on Alibaba
A brief breakdown of the types of sellers that Alibaba facilitate is given as follows:
– Free Suppliers:
The best part about Alibaba is that it does not ask for any initial investment to list your products on the marketplace. But there’s definitely a catch i.e., it allows displaying only 50 products with the unverified status.
– Gold Suppliers:
Without verification, you might not be able to win the trust of buyers. Moreover, it also does not allow unlimited selling. For these benefits, you need to subscribe to Alibaba’s gold membership which costs around $1,399 per year.
Is Alibaba Safe and Legit?
If you are wondering if Alibaba is safe to buy from, the clear-cut answer is yes. The platform bears a range of policies and rules which help ensure secure transactions.
Moreover, all your personal data is also secure from unauthorized access, thanks to the implementation of AES-256 (industry-standard) encryption.
How to Select Reliable Suppliers on Alibaba for Avoiding Scams and Fraud
No matter how safe this platform is, the chances for scams are still there. It’s more probable if you get caught in the trap of a fraud supplier. Therefore, exercising caution is a must to trade securely here.
With that said, let’s have a look at some tips that can help you stay protected from unreliable sellers on Alibaba.
1. Go For Gold Supplier
Following this, you can ensure purchasing from an authentic seller. It’s because gold suppliers undergo a tough verification process to ensure their legitimacy.
They are even bound by Alibaba to not make any changes to the agreed-upon specifications and prices after an order’s placement. Moreover, the likelihood of receiving high-quality products from these sellers is maximum.
2. Opt For Verified Suppliers
Sellers do not get a verification mark just like that. Instead, they have to pay a certain fee. And a third party even authenticates their business practices through an on-site visit. So, all in all, a verification mark is a huge indication of a supplier’s reputation.
– Check the Response Rate
This is another factor inspecting which can help you get your hands on trustable sellers. You can compare the response rate of different suppliers and choose the one with the highest figures (generally 70% or more).
This indicates the seller’s diligence in addressing the concerns and inquiries of customers. And it eventually signifies their commitment to serving the best.
– Evaluate the Company’s Background
Conduct a background check on the agency or company you think can potentially fulfill your buying requirements. Now there are two ways to do so.
Firstly, you can perform an on-site check by looking at the company’s profile available on Alibaba. In addition to this, you can even visit the supplier’s official website to ensure their credibility.
In this step, you need to verify the company’s documentation, like licenses and certificates. The more legal requirements they fulfill, the lesser chances for scams.
– Go For Trade Assurance Suppliers
We highly recommend you choose sellers having a trade assurance tag on Alibaba. It’s because the relevant policy states that the platform’s support system will be responsible in case of any mishap.
It would be their responsibility to involve and get your money back. Similarly, there are assessed suppliers, too, because they are easy to trust. These sellers offer authentic assessment documents and verified videos of the products to win consumer trust.
– Avoid Free Suppliers
All the sellers using a free Alibaba account may not be scams but mostly fall in this category. So it’s a better idea to avoid this altogether.
Similarly, it’s also important to consider the account’s duration on the platform, even when opting for Gold Suppliers. The longer the profile’s age, the more reputable its services will be.
According to a general rule, you should only choose sellers with a history of serving consumers for almost two years in the marketplace.
– Consider Payment Methods
This tip does not always work but might help if you consider all the above factors we have enlisted. So, it’s a common practice for scammers to offer limited payment means. Amongst all, bank transfers or Western Union are the most prominent ones.
It’s because these methods are relatively unsecured, and even trackers fail to keep tabs on them. Therefore, you must go for sellers offering safer payment options like credit or debit cards, PayPal, etc.
– Check Reviews
Lastly, do not forget to check reviews and ratings left by buyers on the seller’s profile. If a supplier boasts a large number of positive reviews, they can be trusted.
On the contrary, if different buyers have highlighted issues, it’s time to step back. It could be about anything, including non-delivery of products, poor quality, or unresponsive communication.
To conclude this guide on is Alibaba safe to buy; we would give a verdict in favor of the platform. Facilitating both sellers and buyers for years, it has gained a reputable stance.
However, there might be some bad fish in the sea in the form of fraudulent suppliers. But worry not, it’s easier to avoid following the tips outlined in this article.