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If you want to sell products on Amazon or 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 interesting.
This is mainly because Asian manufacturers are very cheap. So it is 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 your business goals. You need to know which factors you need to consider when making a selection 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.
Let's dive right in.
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 USD 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 very well. The manufacturers on Alibaba get back to you very 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 this. Make sure you only work with suppliers who offer the secure payment and trade assurance program.
Also, Alibaba offers Alipay for dealers in the wholesale program. Alipay gives buyers a 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 offer 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 title.
The origin of a private label product is a white label product.
In fact, you create a private label product when you print your logo on a white label product (non branded products).
With Dropshipping you usually build your own online shop. You can do this with Shopify, for example. Additionally, you need a Dropshipping partner.
If a customer orders something at your store, you pass this order on to your Dropshipping partner. He will then take care of shipping your products.
On AliExpress you can find many Dropshipping partners.
Dropshipping is very like Fulfillment by Amazon. Here you can find a comparison of Amazon FBA and Dropshipping.
If you want to sell private label products, you have to use Alibaba. On AliExpress, you won't find any manufacturers selling private label products.
On Alibaba, you will find many manufacturers who can produce white label products. They also print your logo on these white label products.
You can communicate with the manufacturers on Alibaba and discuss specific changes. Then you order a sample. If the quality of the sample is nice, you can order your desired quantity.
You always have an individual product branded by your brand when you do private labeling.
With AliExpress it looks different. You can't buy private label products. You have access to millions of products, but you can't make changes to them or print your own logo on them.
Many retailers on AliExpress offer a dropshipping service. For this reason, AliExpress is suitable good 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.
You can also choose to have your products shipped from the United States or China.
Alibaba is suitable for Private Labeling and AliExpress for Dropshipping.
Wholesale refers to the sale of large quantities to business customers. 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 this. 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 be 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, you can also write them a message and ask.
Depending on what your goals and budget are, AliExpress or Alibaba may be the right solution for you.
The minimum order quantity is the minimum number of products you must order to place an order.
On AliExpress and Alibaba, the minimum order quantities are very different. On AliExpress you can order one unit, while on Alibaba you have a minimum order of 50 to 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. In the production of an individual product, the manufacturer would not be profitable.
On AliExpress, the products are not customizable. You cannot make changes, so you can already 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 start selling.
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 you need to get to your products as soon as possible.
But 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 the fast delivery time won't help you, because nobody will buy your products in the long run.
As already mentioned many times, on AliExpress you buy products that are already produced. This means that no time is lost in producing the products or making adjustments.
With AliExpress you can therefore only concentrate on the delivery time, which is 5 days to 40 days.
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 a month.
If time is short, then 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.
It is best to opt for sea freight, as air freight is much more expensive.
You have to pay for it:
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.
If you use FedEx, DHL, or UPS, the cost is much lower.
The delivery costs depend on the number of ordered units. Generally, Alibaba is suitable for many units 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 lot of budget available, then you should use Alibaba, because you can order the same amount and you will pay less per unit at the end.
If you have less budget available, then you should concentrate on AliExpress, as you have a lower Minimum Order Quantity here and can place an order for a smaller total amount.
Alibaba allows you to negotiate with your manufacturer, make adjustments and build relationships. For Private Labeling Alibaba is indispensable.
You should use AliExpress if you are building a business based on a dropshipping business model.
Then there's the time aspect. On AliExpress you can get products much faster than on Alibaba. There are also merchants on AliExpress who offer free shipping. At Alibaba, you will have a hard time negotiating a free shipping with your manufacturer (especially at the beginning).