Alibaba vs. AliExpress: What's Better For Your Business?

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If you want to sell products on Amazon or through your own online store, you need a supplier. Alibaba and AliExpress are platforms to find a manufacturer that can produce your products. Both platforms are part of the Alibaba Group Holding Limited.

Alibaba and AliExpress work based on the same concept: They mainly work with Asian manufacturers. However, there are some differences between Alibaba and AliExpress.

In this guide, you'll find out whether Alibaba or AliExpress is better for your business. You will also learn what is important when choosing a supplier.

Here's what we'll cover in the guide:

  • What is Alibaba?
  • What is AliExpress?

We're going to compare Alibaba and AliExpress in terms of:

  • Dropshipping and Private Labeling
  • Wholesaling
  • Minimum Order Quantity
  • Delivery Time
  • Delivery Costs

Also, check out the best Alibaba alternatives for 2020.

What is Alibaba?

Alibaba is the world's largest B2B marketplace founded in 1999 by Jack Ma. The Alibaba Group (which includes AliExpress) currently has more than 66.000 employees and makes over 509 billion USD in revenue per year (2020).

As mentioned above, Alibaba is a B2B marketplace, where you can search for manufacturers for your quality products. You can see this from the fact that you can find a Minimum Order Quantity for most products on Alibaba:

Alibaba drinking bottle

In most cases, 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, contact information, and so on. You can also contact manufacturers directly and negotiate with them. In my experience, this works pretty well.

If you are looking for suppliers on Alibaba, you should look for those who have a Gold Supplier Membership. Manufacturers who have this membership have been verified by a special agency for their quality and legality.

On Alibaba, you can use several payment methods. 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.

Manufacturers have to participate in this program. However, not every manufacturer does so. Make sure to only work with suppliers who provide the secure payment and trade assurance program.

Also, Alibaba offers Alipay for suppliers 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. You can learn more about Alipay here.

What is AliExpress?

AliExpress works in a different way than Alibaba because it's not a B2B marketplace. It's more a B2C marketplace like Amazon. You can search for products on the marketplace and buy them.

Just like Alibaba, Aliexpress also offers buyer protection. If you don't get your products, you'll get a full refund. Some sellers even offer a 60-day money-back guarantee.

AliExpress Money back

However, one thing distinguishes AliExpress from Amazon. While Amazon is only a B2C marketplace, AliExpress is a small mix of B2C and B2B. For example, if you order 100 units of a product, some suppliers will give you a discount on your bulk order.

Alibaba vs. AliExpress #1: Dropshipping and Private Labeling

Private Labeling and dropshipping are two different business models. Here are two brief explanations:

Private Labeling

Private label products are produced for a specific reseller and then sold under the reseller's own brand name. Private Labeling has two significant benefits:

  • You can coordinate certain product changes with your supplier.
  • You can build your own brand.

If you want to learn more about Private Labeling, check out this post on how to sell private label products on Amazon.

Dropshipping

If you want to start a dropshipping business, you need an online store and a dropshipping partner. If a customer orders something, you pass this order on to your partner. Your partner then takes care of packaging and shipping.

On AliExpress, you can find lots of dropshipping partners.

Alibaba vs. AliExpress: Which platform for which business model?

If you want to sell private label products, use Alibaba to search for a supplier. That's because you can discuss specific product changes with suppliers on Alibaba. Furthermore, you're able to discuss a better price and place bulk orders.

You won't find manufacturers producing private label products on AliExpress. You have access to millions of products, but you can't discuss product changes or print your own logo on the products.

But, many retailers on AliExpress offer a dropshipping service. So if you want to build a dropshipping business, check out AliExpress.

Takeaway

Use Alibaba if you want to go for Private Labeling. Use AliExpress if you want to build a dropshipping business.

Alibaba vs. AliExpress #2: Wholesaling

Wholesaling means buying products from different manufactures and reselling them to other commercial buyers or so-called bulk buyers. Whether Alibaba or AliExpress is better suited for wholesaling depends on your company's needs and goals.

If you are looking for small quantities like 100 to 200 units, AliExpress is better for your business. If you want to order large quantities, like 500 or 1000 units, Alibaba is the right choice.

In most cases, the prices on AliExpress are higher than on Alibaba. That's because you have to place larger orders on Alibaba.

Let's take a look at the price of a drinking bottle on AliExpress:

AliExpress prices

On AliExpress, the price varies between $2.33 and $9.

Now, let's take a look at drinking bottles on Alibaba:

Alibaba prices

The prices are much lower.

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.

Also, make sure to find the lowest price of a product. In most cases, the real manufacturer offers the lowest price and several resellers sell the products for a higher price. You need to always buy products from the real manufacturer. To be on the safe side, contact the responsible person, and ask if the seller is the real manufacturer.

Takeaway

Depending on your goals and budget, AliExpress or Alibaba may be the right solution for you.

Alibaba vs. AliExpress #3: Minimum Order Quantity

The Minimum Order Quantity (MOQ) is the minimum number of products you have to order.

On AliExpress and Alibaba, 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.

That's because, on Alibaba, most products are customizable. You can discuss specific details with your manufacturer, print your logo on the product, or change the color of it. To work profitably, the manufacturer needs to produce much more units. If the manufacturer would only produce one product, it wouldn't be profitable.

On AliExpress, the products are not customizable. Thus, it's possible to order one unit.

Takeaway

If you want to order small quantities and have a small budget, AliExpress is more worth it. If you want to place bulk orders, Alibaba is better.

Alibaba vs. AliExpress #4: Delivery Time

Each of us knows how important it is to have enough units available to sell them online. If you don't have any products available, your potential customers will shop somewhere else and spend their money on your competitors.

So fast delivery times are important. 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, a fast delivery time won't help you.

AliExpress

As already mentioned, on AliExpress you can buy products that are already produced. The delivery time is about 5 days to 40 days. In most cases, it's about 5 days.

Alibaba

The total processing time includes the time to find a product, negotiation time, time for additional administrative tasks, and the delivery time. This can take 20 days to 6 months. The more complex your customization needs, the more time the whole process will take. Production time can take up to 30 days.

Shipping time depends on whether you want your products to be shipped by sea or air freight. Sea freight can take up to one month.

If you don't need any specific product changes, the total processing time is significantly shorter.

Takeaway

If time is short, choose AliExpress.

Alibaba vs. AliExpress #5: Delivery Costs

You have to pay delivery costs when ordering products. On AliExpress and Alibaba, delivery costs are very different.

AliExpress

On AliExpress you can even order products free of charge. You can also filter products by Free Shipping.

AliExpress Shipping Costs

You have the choice between different shipping service providers, delivery times, etc...

AliExpress Shipping

The delivery costs between $1 and $3 for each product. Keep in mind that the more products you order, the more you will have to pay. For example, for 100 units, the shipping costs are $71.

Alibaba

Alibaba works in a different way. 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.

It's always cheaper to go for sea freight, as air freight is much more expensive.

Here's what you have to pay:

  • Load
  • Docking ship
  • Documentation
  • Sea freight from China to the US
  • Unload and transport to your destination/warehouse

All this with taxes, high season delays, and other transaction fees. You will probably have to pay $2,000, if not much more, especially if you order a lot.

Takeaway

Alibaba is better for bulk orders and AliExpress is better for small to medium quantities.

Alibaba vs. AliExpress: Conclusion

There are two things to keep in mind when choosing between Alibaba and AliExpress: Your goals and your budget.

If you have a big budget, you should use Alibaba, because you can order higher quantities and pay less per unit. If you have a lower budget, use AliExpress, as you can order fewer products.

Alibaba is indispensable for Private Labeling. Alibaba allows you to negotiate with the manufacturer, make product changes, and build relationships. On the other hand, you should use AliExpress if you want to build a dropshipping business.

With AliExpress you get products much faster than with Alibaba. There are also suppliers on AliExpress who provide free shipping. On Alibaba, you will have a hard time negotiating free shipping with your supplier.

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