“Alibaba is a SCAM” – you’ll find this written everywhere online! The truth is, yes, it is possible that you may get scammed on Alibaba.com IF you don’t know what you’re doing. However, with the information you learn in this blog post, the chances of you getting scammed on Alibaba will be very slim.
Is Alibaba Legit?
Just to be clear: Alibaba itself is not a scam. In fact, it’s one of the largest companies in the world, with a market value of tens of billions of dollars. Alibaba.com is simply a platform where buyers and sellers meet. Yes, there are some scammers on Alibaba, just like any other online platform, but that doesn’t mean Alibaba itself is a scam. By that logic, you can say that eBay, Amazon and Gumtree are scams because you can find MANY unscrupulous businesses on those websites, too.
That’s why I find it hard to answer when people email me asking for an Alibaba review, because that depends entirely on the seller. If you’re asking purely for my review of Alibaba as a website, then the answer is I love it! Yes, it is reliable! It’s made sourcing from China, and many other countries, incredibly easy and opened up opportunities for people who previously would never have been able to start their own private label business. So if you’re wondering if Alibaba is legit and safe to use, then my answer is a resounding yes. But of course, that is true IF you know what you’re doing.
And that’s what today’s blog post is all about. I’m going to show you how to spot scams on Alibaba and how to find trustworthy and reliable Alibaba suppliers, using the 15-step system which I’ve used to find suppliers for my own 7-figure Amazon FBA business.
The Myth of the Alibaba Scam
And for me the biggest problem that this “Alibaba scam” myth creates is that it makes people who are new to importing too afraid to even start their research process. They have that one line repeating in their minds “Alibaba is a scam, Alibaba is a scam, Alibaba is a scam….” and that’s why, with today’s blog post, I want to clear the air once and for all. I will give you a step-by-step filtering system that you can use to spot Alibaba fraudsters and avoid 99% of scams on Alibaba and unlock the potential of one of the world’s biggest online marketplaces.
I Got Scammed on Alibaba! – I Hear This in Every Other Email
You won’t believe the amount of emails I used to get that started with this horror sentence! Thankfully it’s getting less and less now, both because Alibaba are much better at spotting and removing scams, and more importantly because people know what to look out for and how to avoid Alibaba scams.
But still even today, every third email I receive from my blog readers is about Alibaba scams! It is that serious, yes. I already debunked the myth that Alibaba itself is a scam in my Alibaba Scams EXPOSED article but today I want to talk specifically about the most common Alibaba scammer tricks and schemes you can run into when searching for a supplier on Alibaba.com.
Remember, these don’t apply solely to Alibaba but to all popular B2B platforms that involve a large number of wholesale suppliers from China. But as Alibaba is the most popular platform, I will use examples from there. So let’s get started!
The number 1 most common Alibaba scam
Alibaba Scam #1 – Sending FAKE branded goods!
This is without a doubt the most popular scam taking place on Alibaba! The saddest thing is that most people who get fake goods from a Chinese supplier don’t even realise it until eBay takes down their listing a while later.
How does this scam work?
Basically the supplier will sell you “branded goods” which are actually just copies of real products. This usually involves products like:
This can basically be ANY product with a well known Western brand name/logo/registered trademark on it.
How to avoid this scam?
SIMPLE – DO NOT BUY ANY BRANDED GOODS from Alibaba suppliers! Or ANY Chinese supplier for that matter!
What is a branded product? It’s a product with a well known name on it, like:
Apple
Nike
Sony
Dsquared
Gucci
This also includes ANY kind of band, movie character or kids’ character like:
Batman
Spiderman
Frozen
Hulk
One Direction
U2
All these are also classed as branded goods in the sense that to manufacture such goods, you have to buy a LICENCE from the Intellectual Property (IP) holder and pay royalty fees. Chinese manufacturers selling such products on Alibaba HAVEN’T paid licensing fees and simply use any popular images they can find and put them on these products. These are not genuine, licensed items and you can get into serious trouble selling them online.
While it’s true that most products these days are manufactured in China, it DOESN’T mean that Chinese factories sell them directly to everyone via Alibaba and similar platforms. Far from it! Brand owners monitor the entire manufacturing process very strictly and they do not allow any of their products to be sold outside their own distribution channels.
Genuine branded goods in China are actually more expensive than they are here in the Western world due to the high taxes the Chinese government has put in place (to support local business). So contrary to popular belief, an iPhone actually costs a lot more in China than in the UK or US.
Just to clarify, by China I mean Mainland China and I am not referring to Hong Kong based suppliers here. Yes, in HK you can get genuine branded goods BUT you still have to be extremely careful as there are also many types of Alibaba scams associated with HK based suppliers, which we’ll cover later on in this post.
So if you’re looking for ANY KIND of branded goods, Alibaba is NOT the place to go! You want to look for US, UK or EU based official distributors/wholesalers for such goods, NOT China. If you order such items from Alibaba suppliers in China, it’s a SCAM.
The only exception to this rule is IF the brand itself is a Chinese brand. There are some groups of products where Chinese brands actually lead the market, for example electronic cigarettes. In niches like these, yes, you can get genuine CHINESE BRAND products from Alibaba.
But even then be very careful as guess what? YES! Chinese scammers do also copy even the Chinese brands!! So you always want to get in touch with the brand owner first and ask whether the company you’re dealing with is an authorised re-seller of their goods.
Second most common Alibaba scam
Alibaba Scam #2 – Selling BRANDED goods but delivering nothing!
How does this scam work?
This is a very similar scam operation to the first one we covered but with one major difference; in this case once you send your money to the supplier, you never hear from them again. Yep, that’s right – you receive NOTHING in return for your money.
How to avoid this scam?
By following the same, simple rule – DO NOT buy branded goods from suppliers listed on Alibaba.com or from any supplier based in Mainland China!
Scammers are very smart and are always on the lookout for the newest hot product coming out, so they can build an entire website ‘selling’ that product. Even when the iPhone 12 was not yet released, there were already dozens of Chinese wholesale iPhone 12 websites up and running selling it for $300-$400. Or even better – buy 5 and get one free, plus free shipping! What an amazing deal to miss out on!
On Alibaba itself it is very easy – just stick with the rule of NOT buying branded goods and you have protected yourself from the 2 most common Alibaba scams in China. But what if you have found a website selling branded products? Here are a few simple rules to follow:
1. If it looks too good to be true, it is. iPhones for $300, MacBooks for $600 – these are typical scammer prices. They’re UNREAL! They want people to believe that they have found a superb deal while in reality it’s a very cheap scam.
2. Check the domain name in the WHO IS database. If registration shows China, you know for sure it’s a scammer’s operation.
3. Check payment methods – if credit card or PayPal is not an option AND only Western Union or Money Gram is accepted, it’s a scam.
4. Check shipping methods – if they say shipping is via EMS, it’s a scam! (As EMS is a Chinese courier company).
5. Product variety – very often scammers sell a huge number of unrelated items, all on one website. With experience you can easily spot such scammers by taking a quick look at the product categories offered. If you see products like these selling on one website with too good to be true prices, it’s a 100% definite SCAM:
iPhones
Pioneer DJ Decks
Designer Handbags
Yeezy Shoes
MacBooks
Usually genuine wholesalers selling designer handbags won’t also deal with iPhones, so this is a clear sign that you have found a scam.
To sum it up – branded goods and China just don’t go together. Just stay away from Alibaba and Chinese suppliers altogether if you’re looking for branded goods as you have an extremely high chance of getting scammed and receiving fake goods (or none at all).
Third most common Alibaba scam
Alibaba Scam #3- Unverified Alibaba profile for a UK or US company!
How does this scam work?
Chinese scammers open a FREE Alibaba profile using the details of a legitimate UK/US/EU based company. They pretend to be that legit company to sell branded goods (any goods for that matter, even unbranded) and basically just take your money and never send you anything. These free accounts are NOT verified so there’s no guarantee that you’re dealing with the company whose name is on that particular profile.
How to avoid this scam?
NEVER deal with FREE/unverified suppliers on Alibaba! Simple!
I have said this many times before, you only want to deal with Gold Suppliers on Alibaba and the more established they are, the better. I personally try to stick with 3rd year + Gold suppliers and if you manage to find a 7th or 8th year supplier then the chances of you being scammed are incredibly small, provided you follow the other rules of course.
This isn’t as common but another trick scammers try is to clone the website of a genuine company, but change the contact details and try to scam people this way. The easiest way to spot these scammers is by doing a Google search for that company’s name as usually the genuine website will show up first and not the scam page.
Secondly, they will usually use Gmail or another free email service. Thirdly, when it comes to paying for goods, they will only accept payment via bank transfer to some weird bank account or the same old Western Union or Money Gram only.
Fourth most common Alibaba scam
Alibaba Scam #4 – Sending money to the boss’ bank account
How does this scam work?
When it’s time to make payment for your order, your supplier informs you that there’s a problem with their bank account and asks you to send money to the boss’ account, which is of course a personal account. You may get lucky and receive your order but in most cases they will simply scam you and send nothing.
How to avoid this scam?
This scam can happen even with legit suppliers sometimes when they try to avoid taxes by funnelling money to personal bank accounts. Either way, you DON’T WANT TO DO THIS so simply never send money to a personal account!
And even if there was a slight chance they are still legitimate, if any supplier offered this to me I would instantly stop communicating with them as the likelihood of it being an Alibaba ripoff attempt is just too high.
Fifth most common Alibaba scam
Alibaba Scam #5 – Asking for additional payment for customs clearance
How does this scam work?
A few days after you have paid for your order, your supplier will contact you and ask for additional payment to cover customs fees. If you don’t agree to pay, they say that they can’t get the goods out of China. Quite often they may also provide you with fake courier tracking numbers that have fake information about your goods being held in customs.
How to avoid this scam?
There are no such customs fees to pay when exporting goods from China so if you receive an email like this from your supplier, you have already been scammed and can say goodbye to the money you have already paid. Just accept the loss and move on. DO NOT pay anything extra as it won’t make any difference.
Very often these scammers go even further – once you pay that first additional payment, a few days later they will come up with another excuse that requires yet more money from you. They know that you’ve been played twice by them and they’ll try to milk you for everything they can!
As I said, as sad as it is, if you get emails like these, you have already been scammed and there’s nothing you can do about it apart from accept the loss and move on, and just try to learn from what happened.
Sixth most common Alibaba scam
Alibaba Scam #6 – Asking for payment via cryptocurrencies
How does this scam work?
This scam is becoming more and more popular recently, coinciding with the rise of Bitcoin and other crytpocurrencies into the mainstream. It’s very simple, suppliers will ask you to send payment via crypto to their wallet.
How to avoid this scam?
DO NOT under any circumstances pay your suppliers through ANY cryptocurrency. There’s no way to retrieve your money once it’s sent like this. And in fact you can’t even find out who you sent it to (after all that’s one of the selling points of crytpcurrencies) so it really is an Alibaba scammers dream come true.
Seventh most common Alibaba scam
Alibaba Scam #7 – Refusing to send samples
How does this scam work?
When you contact a supplier to ask for sample availability and they say that they don’t do samples and only deal with bulk orders.
How to avoid this scam?
While this may not be a 100% sure sign it’s a scam, I would personally stay away from any such company that doesn’t offer samples.
Getting a sample is the first thing you want to do when you have found a new supplier – just to test the quality of the product and in general verify that this supplier is the real deal and can provide you with products you’re interested in. If they don’t provide samples, something dodgy is going on and it’s really not worth taking any extra risk in situations like these!
With most legit suppliers, they will happily send you a sample of their product if you cover the shipping fee. If the product is very cheap, they often won’t even charge for the product. If the product is more expensive, they may charge a premium price on the sample + shipping, which is understandable as they don’t want retail customers to simply purchase ONE item from them at the wholesale price.
Either way, a genuine supplier will have no problem sending samples over to you and if they don’t want to, for whatever reason, look for another supplier!
Eighth most common Alibaba scam
Alibaba Scam #8 – Only accepting payment via Western Union!
How does this scam work?
When you receive the Proforma Invoice, it says Western Union under payment terms, with information on who to send money to. This is a CLEAR sign that something dodgy is going on!
How to avoid this scam?
Do not send money via Western Union to a Chinese supplier!!! Period.
When you send money via Western Union, you send money to an individual, NOT a company, so you don’t really know where your money is going to end up. It could even be that a sales person working in a legit company is trying to scam you or simply that the supplier is a scam altogether.
Either way, the only payment methods you should be using when dealing with Alibaba suppliers are:
PayPal (ideal)
Alibaba Escrow
Bank transfer (wire transfer) to a company bank account (not a personal one).
The only exception to this rule is when you pay for samples. For samples, if the company looks totally legit to you and you’re not dealing with high risk items, you can use WU, yes, as it’s cheaper and quicker than bank transfer.
Ninth most common Alibaba scam
Alibaba Scam #9 – Selling FAKE memory products!
How does this scam work?
A supplier sells storage products (SSDs, USB sticks and similar) for great prices but when you receive them, you find the capacity is actually much smaller than advertised. For example, you buy 64GB USB drives and receive 8GB ones instead.
How to avoid this scam?
You have to be extremely careful when buying memory products from China as this scam is very, very popular. Everyone knows that the more GBs you get in the product, the higher the price is. But not everyone checks the REAL size of these products! Often, with this scam, the first people realise what has happened is when they get negative feedback from their customers on eBay!
To minimise the risk of getting scammed in this way, here are a few rules to follow:
1) Deal only with established, 5 year + Gold Suppliers. 2) Order samples and check the memory size for each product. 3) Make your first order as small as possible, check the size for all products and only if everything is fine, increase your orders gradually.
As for testing the actual capacity/memory size – it’s not enough that you put the card/USB in your computer and see that it shows 64GB. Scammers are smarter than that – they modify the electronic chips within the product so that it shows the inflated/fake memory size when it’s plugged into your computer!
What you need to do is use specialised software to check the actual memory size OR simply attempt to transfer the maximum capacity to see if it fits or not. So for example if you have 64GB USB sticks, transfer a 63GB file to it – and yes, this would take a LOT of time so if you’re serious about buying and reselling such products, I strongly suggest you invest in some decent diagnostics software.
Lastly – the same NO BRANDED GOODS rule still applies here! Don’t buy SanDisk, Sony and similar branded memory products from China, they will all be fakes! You can only buy unbranded memory products or your own brand memory products from China.
Tenth most common Alibaba scam
Alibaba Scam #10 – Invoice made to a personal bank account
How does this scam work?
Very similar to the boss’ bank account scam – on the proforma invoice you’ll find that the bank account you need to send money to is a personal one and not the company’s account.
How to avoid this scam?
NEVER send money to a personal bank account!
If wire transfer is the only payment method available, make sure that it’s the company’s bank account ONLY and ensure that the company’s details matches what you see on their Alibaba profile.
Sometimes it can be different though – when a manufacturer uses a sister company, registered as a Trading Company, to deal with all export orders. In such cases, you should still be able to verify this information on their Alibaba profile or company website.
Conclusions & Summary about Top 10 Alibaba Scams
Well there you go – The 10 Most Popular Alibaba Scams! There are of course many more, smaller scams going on, but if you learn these 10 and stick with the rules published in this guide, you’ll reduce your chances of getting scammed to an absolute minimum.
A lot of people ask me where they can find a confirmed Alibaba scammer list online, but unfortunately there is no such resource. Think about it – scammers don’t use the same name or website for long – they scam as many people as possible and then move on, so creating a scammer list like this won’t be of any help and it won’t save you from being ripped off by shady Alibaba suppliers.
Here are some final, general guidelines to follow when dealing with suppliers on Alibaba:
1) Do your homework. Follow my Alibaba SCAMS Exposed guide to filter out only the BEST suppliers. Cross check your supplier with all 10 scams listed in this post. Communicate with them, ask as many questions as you need to, order samples first and only when you’re 100% sure that this is the real deal and a genuine company; place your first real order.
2) If it looks too good to be true, it IS! I wish more people would follow this simple rule. Too often people get distracted by these impossibly low prices and the thought of the amazing profit they’ll make clouds their judgement… and the result is they’re easy pickings for the scammers out there.
As a general rule of thumb – you WON’T see miracle low prices on Alibaba unless you’re working with massive buying power (like ordering 10,000 units of the same product). In most cases you’re looking at an ROI of 20%-50% when re-selling these imported items. Sure, there are always exceptions but IF the price offered to you is ten times lower than what that item is selling for on eBay, then that’s a clear sign that something dodgy is going on.
3) If you don’t know what you’re doing, just don’t do it, seriously. I know that we all want to be successful and we all want to make good profits BUT some people forget that it takes some time and education to make the right decisions in business. If you’re totally new to this, don’t rush things by placing orders in your first few days. Take your time and gain some experience, even if it’s just via communication with your suppliers.
4) Any business comes with some sort of risk and importing is not an exception. You can follow all the guides in the world and still get scammed. That’s the sad reality and it’s something you have to accept when doing business of any kind. So please don’t use money that you can’t afford to lose (I’m talking about loans, credit cards etc. here).
5) Make informed decisions. Do not let your emotions rule any decision! I know how tempting it may be sometimes to just go ahead with the order, even if some things don’t quite add up. Don’t do it! Stick with my guides and do not make exceptions on your own! It’s better to let a potentially good deal go, than to be sorry later on when you get scammed.
Alright, that’s it for today! I really hope this post will be valuable for many people starting an importing business. And I really hope it means I won’t get any more emails starting with “I got scammed on Alibaba!”.
As always if you have any questions or want to share your personal experience when dealing with Alibaba suppliers, please leave your thoughts in the comment box below this post.
As if COVID-19 hadn’t caused enough shipping problems for Amazon FBA sellers importing from China, we now have to deal with the Brexit disaster and even some snowstorms to top it all off!
Any Amazon FBA seller who imports from China knows that 2020 saw some HUGE increases in Amazon freight rates, with costs increasing by up to ten times. Typically, shipping a 40ft container would’ve cost between $1,500-$2,000, but we’re now seeing ocean freight rates of $10,000-$15,000 for the same 40ft container.
And that’s not all, my fellow Amazon FBAers! Consider you pay import VAT on the total amount of the goods you’re importing, including shipping, so the government adds insult to injury with your higher VAT bill, too.
This has had a significant effect on margins and profitability, and for many Amazon FBA sellers has meant having to increase their prices. The only saving grace is that this shipping nightmare affects everyone importing from China: not just you, but your competitors, too.
What’s causing this increase in cost to ship to Amazon FBA?
These increases were initially caused by carriers reducing capacity in the early stages of the COVID-19 pandemic last year by introducing “blank sailings,” which basically means a cancelled sailing. This can be the entire sailing or the removal of certain ports on the route.
The outcome is that a lot of importers had their goods stranded and they had to find another free vessel with space so they could ship their products. With this happening on a large scale, coupled with increasing ecommerce and Amazon FBA sales, demand for shipping containers skyrocketed globally. There simply weren’t enough empty containers in China to meet this demand.
And as we all know, increased demand and decreased supply only means one thing – higher prices!
The issue worsened and worsened, reaching its worst point in Q4 last year when there were severe congestion problems at some of the major port hubs in Asia, which then spread to Europe and the UK, in particular Felixstowe port, which all saw severe delays.
I saw firsthand the effect this had on businesses here with some Amazon Sharks members having their products stuck both at port and then again at Amazon FBA fulfilment centres as the delays caused a huge bottleneck. Despite all this, they managed to hit their biggest Q4 sales ever, so just imagine what it would’ve been without the shipping problems!
Now I know what some of you may be thinking – “if there’s such high demand, why not just produce more shipping containers?” Simple right?
Well sadly, no – it doesn’t work like that. For various reasons, COVID-19, of course being no.1, container production in 2020 was actually down compared to 2019 (H1 2020 container production was 40% less than H1 2019). This decrease in production coupled with the sudden increase in demand has led to a significant drop in global container availability.
And this is really the problem at the moment – there’s simply not enough containers, along with congestion and delays caused by COVID-19, which is causing a number of further issues, including:
Delays in the return of containers to China.
Lower productivity at ports and terminals.
Take Felixstowe port, for example, which was hit particularly badly in the busy Christmas season last year. As a result, they’re currently moving 22-23 containers per hour, down from the usual 28-30.
That might not seem like a huge difference, but these bottlenecks add up and cause more delays, exacerbating the problem further and further. And with the big 3rd wave of COVID-19, it’s really not a surprise – there were 250 staff off from COVID-19 at Felixstowe at one point, though this is now down to 130.
I’ve seen a few people online suggesting this, and in theory, it makes sense. After all, nearly all factories are closed for most of February, so there’s no production and no new shipments, which will allow the backlog to be cleared…
Won’t Chinese New Year clear the backlog and get everything back to normal for your Amazon FBA business?
Unfortunately not. While there will be a drop in shipping volumes for a short while, March will see another significant increase as all the delayed orders are shipped out. Sorry to be the bearer of bad news, but if anything, I expect the problems to worsen after Chinese New Year.
What about shipping using other methods? Or ordering from suppliers in another country?
I’ve had a lot of people messaging me asking these questions, and the short answer is it won’t really help.
While, yes, the problem is being caused by sea freight, this has spread and affected both air freight and even rail shipping from China. And it makes sense because those who can switch to air freight have done so, thereby increasing demand and affecting pricing and services.
I would still suggest speaking to your freight forwarder about this option because it could be the case that while sea freight costs for you have doubled, air freight is only 50% higher… so it might still be worthwhile switching.
Then in terms of ordering from other countries, by now this is a global issue with nearly all ports and hubs being affected, so that’s not really an option to save on shipping.
So that’s it? Are we stuck paying $15,000 for a 40ft container?
No, and thankfully I can finally give some good news.
Speaking to Andy Ball, the Director of Trade for Asia for Woodland Global and he told me that the general feeling moving into 2021 is that “carriers operating ocean freight services have learned some harsh lessons since the outbreak of COVID 19, and in the main, the best lesson they have learned is that it’s no longer a race to the bottom in terms of rates. They are managing their utilisation much better and are limiting the amount of business they want to take on of lower rated contracts thus forcing the considerable surplus freight to move on higher rated spot contracts, meaning they don’t necessarily have to have their vessels full to make profit.
The general feeling is that rates will come down at some point this year as the current levels simply cannot be sustained but they will not return to the levels that have previously been enjoyed with the general consensus being that 40ft/HC rates settling around USD 5000-6000 mark but again there is no timeframe as to when this will happen and it’s only a feeling being shared amongst forwarders.”
So there you have it. If nothing further goes wrong, rates should start to settle, and while we won’t enjoy the same prices as before, we also won’t have to pay the current exorbitant fees.
What should Amazon FBA sellers do?
I’ve spoken in-depth to a number of Amazon Sharks members to try and help them navigate through this and my answer is really that it depends on your individual business, and there’s no one blanket suggestion that will apply to everyone.
This is the plan of action I would suggest:
Speak to your supplier/freight forwarder about alternate shipping options and see what they say. Compare air freight and sea freight quotes and see what makes sense for your business. You will always pay more for air freight, but it does offer a number of benefits to Amazon FBA sellers, such as much faster shipping times (especially important now when sales are up) and decreased storage costs as you don’t have to hold as much stock, either yourself or with Amazon.
Reassess your margins and pricing.
Again, this is very specific to each individual business as it depends on how much your Amazon seller shipping costs have increased, your margins before and after, your competitors and whether they’ve increased their pricing etc.
But you have to make sure you know all these numbers! Please don’t be one of those sellers who blindly charge the same amount while their costs have increased, not even knowing their margins and net profit. Work it all out, and then make the best decision for your business.
One final piece of advice is that now, more than ever, it’s so important that you work with a good freight forwarder. And my suggestion is Woodland Global.
I’ve recommended them countless times on this blog and to my Amazon Sharks members, and I’ll continue to do so as their service is always fantastic. They’re sending out a lot of emails keeping us all up to date, and you can also check their page here for more info: https://www.woodlandgroup.com/news/news/global-shipping-update/
Last but not least, for today’s post, I do want to point out that it’s not all doom and gloom!
Yes, COVID-19 has meant much higher shipping costs, but it’s also meant much higher demand for e-commerce and Amazon FBA goods! Many of my students hit new sales records in November without spending a penny on PPC. That resulted in big jumps in NET PROFIT in one month, so the opportunities for Amazon FBA sellers really are bigger than ever.
Oh boy, I wish I didn’t have to make this post… EVER! But it’s so sad watching people getting scammed on Alibaba on a daily basis that I have no choice but to sound like an old record and repeat stuff I have already covered in my previous Alibaba Scam posts.
You would think that in 2020 people would be a little wiser to these things, right? You would think that all the “cleaning” Alibaba has done over the years, the Trade Assurance platform, the safe payment methods and everything else would completely eliminate scams, right?
Unfortunately, that’s not the case. I do believe that there have been some improvements over the years, BUT I’m still getting emails from people EVERY WEEK who are looking for help because they have been scammed by someone on Alibaba.
Sourcing products from China is a risky game, let’s admit it. Essentially, you’re sending money to a supplier in another country who you have never met, so there’s always a possibility that something could go wrong. I have discussed Alibaba Scams on my blog in the past, but if you ask me, scams are NOT the biggest issue you face when sourcing goods for your Amazon FBA business.
In fact, if you’re sourcing unbranded, everyday goods and you do proper research and use safe payment methods, the chances of you getting scammed on Alibaba are very low.
Believe it or not, over the last five years, I haven’t received a single email from someone who has sourced goods using my guidelines claiming they were scammed by a supplier on Alibaba. And by a “scam”, I mean a scenario where money was sent and the goods were never received.
However, I do get emails every week from people who failed to follow my guidelines and, as a result, have been scammed on Alibaba.
It sucks, but it’s always 100% their fault. They try to source branded goods, electronics and phones for unbelievably low prices from very shady suppliers, and then they are surprised when it turns out to be a scam. This is something I have warned people about over and over again. You CAN’T source branded goods from Alibaba, so just don’t do it!
I have put a lot of time and effort into this blog, and over the last ten years, I have constantly reminded everyone that Alibaba is NOT the place to go if you’re looking for branded goods. I have explained in detail how Alibaba scams work and what the top ten most popular scams are, and my number one rule always comes down to:
Stay away from branded goods! If you do, the chances of you getting scammed on Alibaba is reduced by 99%!
Scammers like to “work” with branded goods because there is a high demand for them from uneducated people! These people continuously fall for crazy deals like “buy three PS4 consoles and get three free!” and other similar nonsense. That’s why scammers mostly stick with branded goods—it’s the easiest and most lucrative niche for them to be in!
Now, when I talk about branded goods and Alibaba, I’m always talking specifically about Western brands, such as:
When you first start importing goods from China, you will face many new terms that you haven’t heard of before, like various shipping terms (DDP, FOB, etc.), payment methods, contract rules, etc. One of the questions I am often asked is about shipping marks—what are they and what information should we put in them? Let’s find out!
Basically, shipping marks are the details your supplier will put on the outer cartons/boxes that your goods are packed in. With bigger orders, this information can be printed on the boxes, while with smaller orders, suppliers usually use labels. In many cases, suppliers won’t even ask you about these shipping marks, but sometimes they will. If that happens, you will need to provide information to them.
Legally, you’re not obligated to put any information on these boxes. The supplier can send them to you completely blank, without any shipping marks. But that approach may not be the best, especially if your order is small and sent as an LCL shipment (less than container load).
Imagine that there are orders from twenty, thirty or more suppliers all in one container. Someone is responsible for unloading and sorting those goods at the port. Make their life easier and minimise the chances of your goods getting mixed up or lost by at least putting some basic information on your boxes.
I have previously discussed factory inspections in China on my blog, but today I want to specifically delve into the pre-shipment inspection, which is the inspection you do when your goods are finished and ready for dispatch. Do you really have to spend all that money on a FULL inspection, or you can get away with a PARTIAL inspection? Let’s find out!
1) Alibaba’s service team, which costs $48. This is not really a pre-shipment inspection service as all they check is carton quantity (whether or not it is correct), one item for visual defects and one carton for packaging and shipping marks. I don’t recommend you use this at all, as it won’t tell you anything about the quality of the goods in your order.
If you’re an eBay or Amazon seller who has just recently started importing from China, you know there are LOTS of things to learn! You need to know everything from how to filter out scams on sites like Alibaba to the best ways to order product samples, as well as all kinds of specific, previously unknown business terms and abbreviations.
And it’s not like you can just ignore these new terms and abbreviations. Having your price or shipping terms wrong can turn your first order into a massive disaster! You can easily incur unexpected charges that you never accounted for, which can totally ruin your projected margins and chances of being profitable on eBay or Amazon.
CNF, CIF, DDP, FOB, Ex-Works—what do they all mean? And, most importantly, which of these shipping methods is the most cost-effective? Which one is the best for your situation?
DDP: Delivered Duty Paid! It sounds like a dream come true for so many Amazon sellers importing products from China! Isn’t it great that you can pay a slightly higher price for the product and get it delivered to you with all taxes already paid for? Perfect! Or… is it?
I’m afraid that when it comes to offers like these, we always come back to the age-old truth that if it looks too good to be true, it probably is. And DDP is no exception.
If you’re importing goods from China using Alibaba.com to sell on Amazon, eBay or anywhere else, you should read this article very carefully, because the chances are you’re currently breaching the law and could be facing severe problems due to tax evasion.
Sounds terrifying? I agree. So, let’s clear the air once and for all and learn about DDP Incoterms and how you CAN and CAN’T use it in your importing business.
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