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If you want to sell products on Amazon or through your own online shop, you need a supplier. Alibaba and AliExpress are platforms to find a company that produces your products.
Both platforms are part of the Alibaba Group Holding Limited. Alibaba and AliExpress work based on the same business principle: They work with Asian manufacturers.
Of course, you can also work with a manufacturer from another country. But for most of us, Asian manufacturers are very interesting.
This is mainly because Asian manufacturers are very cheap. Thus it's probable that you'll always find the cheapest suppliers on Alibaba or AliExpress.
But there are some differences between Alibaba and AliExpress. And if you don't know which platform is the best for your business, you can quickly lose a lot of money.
You need to know which of the two platforms is right for your business and suits your business goals. You also need to know which things to consider when making a decision because you don't want to lose any money.
In this detailed guide, you'll find out if Alibaba or AliExpress is better for your business. You will also learn what to consider when choosing your supplier.
These are the contents of this guide:
Here, you can also learn more about the top Alibaba alternatives for 2020.
Alibaba is the world's largest B2B marketplace founded in 1999 by Jack Ma. The Alibaba Group (to which AliExpress belongs) currently has 66.421 employees and makes $40 billion a year.
As mentioned above, Alibaba, unlike Amazon, is a B2B marketplace where you can search for manufacturers.
You can see this from the fact that you can find a Minimum Order Quantity for most products.
This Minimum Order Quantity varies between 100 and 500. It depends on the supplier and the product. Some manufacturers even have a Minimum Order Quantity of over 500 units.
Alibaba works as a directory of different manufacturers. You can get information like available product variations, costs, certificates, and also contacts.
You can also contact manufacturers on Alibaba and negotiate with them. In my experience, this works pretty well. If you contact them, they get back to you extremely quickly.
If you are looking for suppliers on Alibaba, you should look for those who have Gold Supplier Membership.
Manufacturers who have this membership have been verified by a special agency for their quality and legality.
On Alibaba, there are several ways to pay. Alibaba offers a secure payment and trade assurance program. This program can be used by buyers to get a refund if products do not meet the agreed quality criteria.
However, manufacturers must participate in this program and not every manufacturer does so. Make sure you only work with suppliers who provide the secure payment and trade assurance program.
Also, Alibaba offers Alipay for dealers in the wholesale program. Alipay gives buyers special protection by acting as a trustee in the buying process and ensuring that the manufacturer does not receive any money before the customer receives his goods.
Learn more about Alipay here.
AliExpress differs from Alibaba in the sense that it is not a B2B marketplace. It's more like Amazon a B2C marketplace.
Accordingly, AliExpress also works like Amazon. You can search for products and buy them easily.
Just like Alibaba, Aliexpress also offers buyer protection. If you don't get your products, you get a full refund.
If you get your products damaged or if they are not in the agreed condition, you will get a partial refund.
Some retailers even offer a 60-day money-back guarantee.
But one thing distinguishes AliExpress from Amazon. While Amazon is only a B2C marketplace, AliExpress is a small mix of B2B and B2C.
For example, if you order 100 units of a product, some suppliers will give you a discount on your bulk order. Of course, not all suppliers do this.
For your online business, you can buy products on Alibaba and AliExpress. At the end of this article, you should know which platform to use for your business.
Dropshipping and Private Labeling are two different business models described below:
Private labeling is an English term used to describe selling products with its own Label.
Private label products are produced for a specific reseller and then sold under the reseller's own brand name.
This brand name can correspond to the name of the respective company, but it can also have a completely different name.
A white-label product is the starting point for a Private label product.
In fact, you create a private label product when you print your logo and design on a white label product (non branded product).
With Dropshipping, you usually build your own online shop. You can do this with Shopify, for example. Additionally, you need a partner for dropshipping.
If a customer orders something at your store, you pass this order on to your partner. Your partner then takes care of packaging and shipping.
On AliExpress, you can find lots of partners for dropshipping.
If you want to sell private label products, you have to use Alibaba. On AliExpress, you won't find any manufacturers producing private label products.
On Alibaba, you will find a lot of manufacturers who produce white label products and print your logo on them.
You can talk with the manufacturers and discuss specific changes. When you ordered a sample and the quality suits your needs, you can order your desired quantity.
With AliExpress it looks different. You can't buy white label products. And you can't buy private label products.
You have access to millions of products, but you can't make changes or print your own logo on them.
Many retailers on AliExpress offer a dropshipping service. For this reason, AliExpress is great for dropshipping.
Once a customer orders a product from your online store, you can order it on AliExpress. Then, the retailer fulfills your order and ships the product to your customer.
Alibaba is suitable for Private Labeling and AliExpress for dropshipping.
If we talk about wholesaling on Alibaba or AliExpress, we mean ordering large quantities on one of these platforms.
Now the question arises whether Alibaba or AliExpress is more suitable for wholesaling. It depends on what you are looking for and what goals your company has.
If you are looking for small quantities like 100 to 200 units, then AliExpress is more suitable.
If you want to buy large quantities, for example, 500 or 1000 units, then Alibaba is the right choice.
The prices on AliExpress are mostly more expensive than the prices on Alibaba. That's why you have a larger minimum order quantity on Alibaba.
Let's look at the price of a drinking bottle on AliExpress:
On AliExpress, the price varies from approximately $2.33 to $9.
Now we're looking for drinking bottles on Alibaba.
So always pay attention to what your goals are and what budget you have. Depending on these criteria, you have to choose between Alibaba or AliExpress.
For example, if you want to add your own logo to your products, AliExpress will not be eligible because you cannot buy Private label products there.
Always make sure to find the lowest price of an item when searching for products. Most often, the real manufacturer offers the lowest price and the same product is sold by several resellers at a higher price.
To make sure that you are actually buying from the real manufacturer, message them and ask for it.
Depending on your goal and budget, AliExpress or Alibaba may be the right solution for you.
The minimum order quantity is the minimum number of products you have to order.
On AliExpress and Alibaba, the minimum order quantities are very different. On AliExpress you can order one unit, while on Alibaba you see minimum order quantities of 50/500 or more.
Above all, there is a reason for this:
On Alibaba, most products are customizable, meaning you can discuss specific details with your manufacturer, print your logo or change the color of the product.
For the manufacturer to be able to work profitably, he requires a minimum order quantity.
With the production of one single product, the manufacturer would not be profitable.
On AliExpress, the products are not customizable. Thus, it's possible to order one unit.
If you want small quantities and have a small budget, AliExpress is more worth it.
Each of us knows how important it is to have the desired number of products available to sell them online.
As long as you don't have any products available, your potential customers will shop somewhere else and spend their money on your competitors.
That's why fast delivery time matters.
But you should also make sure that your products not only reach you quickly but that they also meet the right quality standards.
If the quality of your products doesn't meet the requirements, then fast delivery won't help you, since nobody will buy your products in the long run.
As already mentioned, on AliExpress you buy products that are already produced. This means that no time is lost producing the products or making adjustments.
With AliExpress, the delivery time is about 5 days to 40 days. In most cases, it will be 5 days, which is quite good.
If you do not have any specific change requests, then the delivery time is significantly shorter. Otherwise, the total processing time includes the time to find the desired product, the negotiation time, the time for additional administrative tasks, and the delivery time. This period can last from 20 days to 6 months.
The more complex your customization needs, the more time the whole process will take. Production can take up to 30 days.
Shipping depends on whether you have your products shipped by sea or air. Sea freight can last up to one month.
If time is short, choose AliExpress.
Of course, as everywhere, you will have to pay delivery costs when ordering products. On AliExpress and Alibaba, delivery costs are very different.
Basically, on AliExpress you pay much less for delivery than on Alibaba.
Let's take a look at this in detail.
On AliExpress you can even order products free of charge. To do this, you must specify Free Shipping in the filter above.
You have the choice between different shipping service providers, delivery times, etc...
The delivery costs are between $1 and $3 for each product. Keep in mind that the more products you order, the more you will probably pay. For 100 units, the shipping cost is $71.
Alibaba works differently. It depends on what you agree with your supplier. For example, your supplier can be so generous and send you the sample for free. That's very rare, though.
You will rarely find such suppliers unless you are sure to place a bulk order worth tens of thousands of dollars.
Yet it's best to opt for sea freight, as air freight is much more expensive.
Here's what you have to pay:
All this with taxes, high season delays, and other transaction fees. Probably you'll have to pay between $2.000, if not much more, especially if you order a lot.
The delivery costs depend on the number of ordered units. Generally, Alibaba is suitable for bulk orders and AliExpress for small to medium quantities.
There are two criteria when choosing Alibaba or AliExpress: your goals and your budget.
If you have a high budget, you should use Alibaba, because you can order the same amount and you will pay less per unit.
If you have a low budget, you should focus on AliExpress, as you have a lower minimum order quantity and can place a smaller order.
Alibaba allows you to negotiate with the manufacturer, make adjustments and build relationships. For Private Labeling Alibaba is indispensable.
You should use AliExpress if you are building a business based on dropshipping.
Then there is also time. With AliExpress you get products much faster than with Alibaba. There are also suppliers at AliExpress who provide free shipping. At Alibaba, you will have a hard time negotiating free shipping with your manufacturer (especially at the beginning).