Buying products from Alibaba and selling them on Amazon for a profit is an easy thing to do, when you know how.
In this post, I'm going to share with you how to buy from Alibaba and what 3 specific things to look for in order to ensure the items you're selling on Amazon have a chance to be profitable.
I'm also going to show you my process so you always know what things to buy from Alibaba.
Here's the buying process, in a nutshell:
To buy products in Alibaba you will need to sign up for an account on alibaba.com. You will also need bank or card details in order to make purchases. Accounts are free and give you unlimited access to all the suppliers and manufacturers in the Alibaba marketplace.
Now, there's a little more to it, of course, and that's what I'm going to cover next, as well as my process for finding the best products you can sell on Amazon, without using any fancy software and without spending a dime. Thank me later :)
But first let me add that, as simple as it may sound, buying from Alibaba and selling on Amazon is one of the most valuable skills you can possess.
It's not really about the marketplaces. Buying items from one place and selling them at a profit elsewhere is the backbone of commerce. It's the old buy low, sell high equation. It's what merchants all over the world have been doing for hundreds of years. It's exactly what happens when you go to the supermarket and buy any item.
The skill itself transcends the marketplaces. If Alibaba and Amazon cease to exist one day, you still get to keep and apply the skill. You can apply it to any platform, and any market.
I don't mean to sound dramatic here, but it really is the crux of commerce - it's how the world's economies work. Everything from a loaf of bread to a Porsche rely on this equation: buy (products, parts, items) cheap and sell them at a higher price.
When it comes to buying and selling using these specific marketplaces - Alibaba as the source and Amazon as the destination, knowing how to do this well can open many doors for you beyond buying and selling for yourself.
For example, you can sell services to other Amazon sellers, like I did. You can consult. You can help people get started on Amazon and even charge to source the products yourself.
That's worth thinking about.
OK, let's continue by diving quickly into the basics, then we'll get to the magic 3 things to look for when purchasing items to resell.
When I first considered selling on Amazon, my first question was:
Alibaba is the key, of course. Alibaba is a vast marketplace (much like Amazon) where Chinese manufacturers and suppliers sign up and list their products. For a seller, this is an extremely valuable resource, because it means you don't have to find individual Chinese sellers online (good luck with that) since they are all on Alibaba.
Purchasing products from Alibaba couldn’t be simpler.
Here's how that works:
The image below shows a Google search for Alibaba and the top 2 results:
The image below shows a product search in Alibaba:
The image below shows a the Contact Supplier button on a product page in Alibaba:
It's worth mentioning that when you search for products on Alibaba, almost everything you look at will seem like it's filled with potential. In theory, that's probably true, but in reality you have competition and pricing points to deal with, so keep that thought in mind to keep your mind from wandering.
If a competitor can buy in larger amounts than you can right now, they'll likely get a cheaper deal per product, which means they can undercut you in Amazon. That said, you can always sell at a higher price by presenting your product as a premium product. I talk about this often in my Amazon guides.
Another thing to keep in mind is that most FBA sellers who lack the right FBA education will jump into Alibaba and see potential everywhere, whereas you'll have an edge because you'll be applying the criteria I'm going to share with you in a moment.
If you're purchasing a product for the first time, I recommend that you click the Contact Supplier button rather than the Start Order button. Reach out to the seller and start a conversation.
This simple process enables you to get a feel for what it may be like to do business with the company you're contacting.
But there's more...
I always start by ordering a sample and I recommend that you do the same.
[clickToTweet tweet="Sometimes you can't truly appreciate what you've bought online until you're holding it in your hands." quote="Sometimes you can't truly appreciate what you've bought online until you're holding it in your hands." theme="style3"]
When I was getting started, I was eager to jump in and start selling my product on Amazon, but when the samples I ordered started to arrive I was shocked to see how different they can look and feel once you get your hands on them.
I realised then that I needed to take as long as it took to find the right product. This means ordering sample after sample until you find one that you're truly happy with. That said, you may get lucky and find the perfect product quickly.
For me, this sample ordering exercise turned into a $300 spending spree. I purchased countless samples from various sellers. Many turned out to be pretty good and I actually had to think hard when it came to deciding which one to go for.
This is a good problem to have...
Having more than one good product from various suppliers gives you multiple choices, and that's always a good thing. Once you choose one, simply put the other products to one side, make a note about each supplier and file it away in case you ever need to switch suppliers.
Now, let me address some questions that come up around this topic, then we'll dive into the criteria:
Yes it's perfectly legal. You're buying a product from a manufacturer or supplier who sells to retailers, and that includes private label sellers. These manufacturers also supply large companies and brick and mortar stores and usually don't sell direct to the public.
Now let’s look at the 3 things to keep in mind when buying products from Alibaba.
Finding a good product to sell on Amazon before you source it from Alibaba is crucial when it comes to stacking the odds of succeeding in your favour. And that boils down to knowing what you're looking for.
While points 2 and 3 can and will probably change over time, point 1 has to be true every single time.
I sat my best buddy at my screen in front of Alibaba and watched him go wild like a kid in a sweet shop. I asked him to choose a few products that he thought would sell well, and I noticed something that gave me a great insight into brand new sellers and the way they approach product research:
He looked for products that he liked.
I've given this a lot of thought, and I believe it's the natural thing to do. We all want to sell products that we love. But this a huge mistake that can cost you dearly.
The reality is that the market doesn't care about what we love. It cares only about what the market loves. For example, I'm not particularly excited about toilet paper, but that is a product that is always in high demand.
My buddy went home and called me later that night to tell me he'd spent all evening browsing products on Alibaba. He wanted to get into drop shipping, and he felt like he'd discovered Aladin's cave.
Unfortunately, my buddy had broken the first rule, which is the ensure there is demand for a product. And that means doing product research.
By the way, I explained to my buddy the error of his ways, but I had a hard time convincing him. That brings to mind a rule I try not to break: never fall in love with your products. This is easier said than done, and many will argue that it's good to love your products. I think it is too, but unconditional love can cause you to spend serious money on a dead-end product and make it extremely difficult to pull the plug on a product when it's time to let it go.
Now, as I mentioned, when it comes to points 2 and 3, things will probably change over time.
For example, point 2 is: can you source the product cheap enough? This is important because your product margin depends on how much you pay for the products in the first place.
But that doesn't mean that a small profit is bad if the product has real potential.
Here's what I mean:
When I placed my first order in Alibaba, it was for 100 units. I paid the price the manufacturer wanted per unit, which didn't leave me with a lot of profit. The manufacturer had no reason to lower his price, because I was a first time buyer who may never return, and because I was only placing a relatively small order.
By the time I placed my fourth order, I was on much better terms with my supplier. We had started to build our relationship via email, and I was placing bigger orders - and promising to order more as soon as I was able to. These bigger orders enabled me to benefit from the manufacturer's tiered discounts.
Many suppliers use tiered discounts to encourage bigger orders and reward buyers who spend more. An example of a tiered price structure may be:
Ok, so far we've covered how to buy items from Alibaba and the all-important criteria that I stick to when searching for products. Those are 2 key things out of 3 to make product sourcing work for you.
But without the final piece in place, this whole thing becomes a hit and miss game. If you don't know what to actually buy, then you're likely to spend (or waste) time on Alibaba searching for products in the hope that one will jump out at you, like my buddy.
So let me share with you my entire process for finding the best products to sell on Amazon. The key here is to identify the products that are going to work for you, before you head on over to Alibaba. Otherwise, it's like going into a supermarket without a clear idea of what you want.
The good news is that the hordes of untrained FBA sellers out there are probably doing just that: diving into Alibaba and searching aimelssly.
So let's fix that:
Arguably the hardest thing to do for most FBA sellers is to pick a great product to sell on Amazon. I remember when I first became interested in creating my own FBA business, the forums I visited were littered with questions from students agonizing over their choice of product, and many were simply stuck, unable to get past that first hurdle.
I myself spent a fair amount of time trying to decide of what products to sell, and I also browsed Alibaba endlessly, so I understand the problem first hand.
Nonetheless, I thought about this whole choosing a product thing carefully, and eventually developed my own method of product research. I'm not saying it's unique - I'm sure many people also had the same idea. But the thing is, this method doesn't require any keyword research software, or any special tool, other than an Internet browser of your choice.
The method is simple, but powerful: search Amazon for the best products to sell in Amazon.
Amazon tell you what products are selling right now, so there's no need to guess. Amazon is showing you what the demand is.
In the video below, I'm going to show you step by step how to do your product research using this method. Don't dismiss it - unless you want to invest in fancy keyword tools that search Amazon for the same information (yeah, ironic).
Here's the process:
Ok, at this point I've covered the following:
I will add some more resources for you at the bottom of this post to more Amazon step by step guides that will help you. But just to complete this guide, let me cover briefly the final part.
Once you have your product, it's time to list it in the Amazon marketplace.
If you don't already have an account, follow the steps below:
You can read the step by step process here: how to sell on Amazon.
And here are Amazon's Instructions for signing up as a Seller: click here for Amazon's instruction page
And that pretty much covers what you need to get started. Now you know how to buy from Alibaba and sell on Amazon and how to find the best products to sell.
Knowing how to source products from China and sell them on Amazon at a profit is an invaluable skill which is transferable to any marketplace. You can always buy low and sell high wherever.
When purchasing items from Alibaba, there are certain things worth knowing, like the 3 point criteria I follow to ensure my products have the best chance of success.
The final piece of the puzzle is knowing what to actually buy from Alibaba in the first place. You need to ensure there is a demand for your product in the marketplace of your choice.
I hope you enjoyed this post. Here are more resources for you: