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How to Reduce the Minimum Order Quantity on Alibaba by 50% and MORE!
May 6, 2016 by Andrew Minalto - 14 Comments
As we all know, Alibaba.com is a B2B marketplace which invariably means high Minimum Order Quantities (MOQs). So what if your budget is strictly limited but you still want to deal with suppliers on Alibaba – what’s the best way to negotiate LOWER MOQs when dealing with large companies on Alibaba?
This is exactly what Russell asked about in his email:
Firstly I want to say thank you for this wonderful resource you’ve created. I’ve always been interested in creating an eBay business and thanks to your blog finally took action earlier this year buying and selling used items on eBay.
I’ve done pretty well from this and have built up a decent fund to buy goods in wholesale, which is what I’m really interested in. But I don’t think my starting budget is quite good enough to buy from China, judging by some of the MOQs I’ve come across in my searches on Alibaba.
Forgive me if this is a stupid question but is there any way I can bypass these minimum order quantities?? Of course I can continue flipping used goods if need be, but I am really keen to get started with a proper business now that I have some decent eBay experience.
I look forward to hearing from you.
First off, you have to understand that not all companies listed on Alibaba are equal. In general, there are two large groups of suppliers:
- Trading companies
Manufacturers – self-explanatory really – these companies manufacture the products in-house and will usually have very high minimum order quantities. And for a good reason, as manufacturers on Alibaba will very rarely hold any stock – they manufacture it for each order.
Many customers want to put their logo (OEM) on products and the packaging so it makes no sense for manufacturers to hold stock. Each batch of products is made to order and they obviously won’t “run” the factory, arrange assembly lines etc., to make just 10 products. Keep this in mind when you negotiate with true manufacturers as there will be a minimum order level that they simply won’t go beyond. Read More…
REVERSE Sourcing – From Product TO Supplier!
March 9, 2016 by Andrew Minalto - 0 Comments
One thing that I’ve covered in great detail on this blog is how to find good suppliers for the niche you want to sell in, but what if you want to find the supplier/manufacturer of a very specific product?
The idea for this blog post actually came to me from a question that was sent in by one of my EAB customers, who had found a terrific product for sale at a local market and wanted to source it to sell on eBay.
After a few minutes of searching he had found the “same” product and then purchased a sample order. But when it arrived it was nothing like the original product he’d found – the finish was significantly worse, the colouring was slightly off, and even the materials used were of a lower quality… clearly the two seemingly identical products weren’t manufactured by the same company/factory.
So the subject of today’s post is – how to find the exact supplier of a particular product that someone else is selling?
This could be an item you’ve seen on:
- In a local B&M
- At a market
Well the first thing I’d suggest is GOOGLE! But you really need to do some extensive searching, using a variety of search combinations. Here’s a good starting list for you to use:
- manufacturer + product
- manufacturer + brand name of product
- supplier + product
- supplier + brand name of product
- wholesale + product
- wholesale + brand name of product
- Alibaba + product
- Alibaba + brand name of product
- bulk + product
- bulk + brand name of product
- And so on…
Although I usually find Google’s search algorithm to be more reliable, you should also replicate your searches directly on Alibaba, Global Sources, Made-in-China etc.
If you’re lucky, you’ll come across the supplier in this first step. BUT there is one crucial step after that – confirming it is the correct supplier (which is what my EAB customer didn’t do). But more on that a bit later. Read More…
How Import Taxes Can DESTROY Your Business!
February 8, 2016 by Andrew Minalto - 22 Comments
Happy Monday everyone! I hope you enjoyed your weekend.
I apologise, as I know this is probably the last thing you want to hear on a Monday morning, but today I want to talk about taxes – specifically the import and VAT that we, as importers, need to pay on goods bought from outside the EU (i.e. from China, USA, India etc.).
And actually it’s this dislike and general avoidance of the subject that has led me to write this post… as I recently received an email from someone distraught about an order they’ve placed because of the VAT and import duty.
Initially they had expected to make a healthy profit reselling the product on eBay, but they had miscalculated the import taxes! That goes completely against one of my main rules when importing – always do all of your calculations BEFORE placing an order, so that you know exactly what it’s going to cost you and how much profit you stand to make.
So today I want to share a simple and straightforward guide to calculating import taxes. Without further ado, let’s get to it!
First of all, exactly what taxes do you have to pay on goods imported from outside the EU?
And yes, this only refers to goods bought from countries outside the EU as imports within the European Union are import duty free. Just so that it’s 100% clear, the EU countries are:
Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
But when we discuss imports, 90% of the time it’s referring to China, and that obviously means there are import taxes to be paid, which are – VAT (value added tax) and import duty.
VAT is a set amount, currently 20%, whereas import duty ranges from 0% (duty-free) to 15%, depending on the product.
The exact amount is calculated using the product’s tariff code, which is a special number assigned to specific products. And by specific products I don’t mean – doll, clothes etc. I mean really specific, i.e. pyjamas of knitted cotton for boys under 14. Read More…
Taobao Wholesale Orders vs Alibaba & 1688.com
January 15, 2016 by Andrew Minalto - 16 Comments
At the end of Part 2 in our Taobao series, which was published on Wednesday, we had finished comparing the pricing on Taobao vs our tried and trusted AliExpress, and honestly, the results were not good…
With the commission and added shipping costs, Taobao just couldn’t keep up with the low prices offered for single/small quantities. But other than samples, the vast majority of you reading this aren’t interested in single orders anyway – when I talk about importing from China I talk about bulk orders, as that’s the only way you’re going to be able to compete with other sellers ordering container loads at a time.
And that brings us to our final question about Taobao – is it worthwhile for larger orders? To get our answer we’re going to go back to the MacBook cases that we looked at it Part 2, but instead of an order of 10 pieces, we’re going to find out the price for an order of 500!
- £1300 – Cost of Products (500 x £2.60)
- £130 – Commission
- £300 – Shipping
= £1730 TOTAL = £3.46 Per Piece
So again another big drop in the cost per piece compared to ordering 10 units at a time, but that really is to be expected at such quantities and any other result would have been a huge disappointment…
Does this change my overall thoughts on Taobao in any meaningful way? Well no, not really, as I’m practically certain that I could easily beat that price for a quantity of 500 using Alibaba.
In fact, I found this after literally 30 seconds of searching:
Ignoring the shipping costs as that’s a courier vs freight for the Taobao example, the price per piece of $3.29 is equal to roughly £2.19, which is already 15% cheaper than Taobao! That’s for 100 pieces, I would obviously expect it to be even cheaper for 500 and once again this is without all the hassle of using a buying agent, paying commission, waiting longer for multiple shipping times etc. etc.! Read More…
Taobao Part 2 – Price Comparison vs AliExpress
January 13, 2016 by Andrew Minalto - 2 Comments
Hello and welcome back!
After introducing Taobao and going over exactly what it is in Part 1, as well as finding three highly regarded buying agents to use for our experiment, it’s now time to take a look at pricing!
After all, is there any point to Taobao if it can’t beat the pricing of a site like AliExpress, where everything is in English, you can simply pay using your own credit card, and no buying agent is required?
So without further ado, let’s get to it!
Really there were three different sites that I could have used as the “competitor” to Taobao in our pricing experiment – Alibaba, AliExpress, and eBay.
I decided that from the three, AliExpress is the fairest as:
a) Taobao is geared towards single quantity orders, not wholesale, so Alibaba is out!
b) Taobao is obviously based in China, which eliminates eBay. So that means the fairest comparison for us is AliExpress.
Alright, let’s get started with product no.1:
*Please note – I am not considering the viability or profitability of these products at all – they are chosen at random in order to compare pricing, and nothing more.
Syma X5SW RC Camera Drone
As you can see from the below screenshot, this item is readily available from AliExpress for $75 including shipping which gives us a price of £50 (at 1 GBP = 1.5 USD)
Searching for the product on Taobao produces a number of results, some initially appearing at a much lower price! But looking further I immediately see that these are for a cheaper model than the X5SW being offered on AliExpress: Read More…
Taobao.com – Cheapest Way to buy from China?
January 11, 2016 by Andrew Minalto - 11 Comments
Taobao – I’m sure many of you have never even heard of this company, never mind bought anything via their site, but Taobao.com is a hugely important company that could change the way you import products from China, and most importantly, what price you get!
But let me back up a little bit and explain what Taobao.com actually is.
Basically, Taobao is an online marketplace where millions of sellers list their products for sale. Although you often hear people talk about it as an Alibaba alternative, really a more accurate description is – the eBay of China (seeing as the items are sold in retail quantities).
Now I know what you’re thinking – great, but what’s this got to do with importing and how can it help me!?
Well, think about it for a second. This is the eBay of China, which means it is geared towards the domestic market, and not export/international orders, like AliExpress and Alibaba.
So this is a site designed for sellers in China, the cheapest place to buy items from pretty much every country in the world. And as these are domestic prices, in theory they should be cheaper than any other alternative!
As TaobaoFocus.com puts it:
No other online or offline business can beat the prices on Taobao.com: you can always buy items from Taobao.com at lower prices than anywhere else.
A bold claim, I know, and something that we will be investigating fully in a special 3 part series of posts. Part 1 is what you are reading now, in which I will introduce Taobao and explain what it is. Part 2 will be released on Wednesday, and in that I will pit Taobao head to head with AliExpress to test its pricing. And then we’ll wrap up the series on Friday, in Part 3, where I’ll give my final conclusions and recommendations, and also introduce another surprise site! Read More…
Alibaba GOLD Member SCAMS!
November 24, 2015 by Andrew Minalto - 20 Comments
The blog is turning in to a bit of a scam buster site now, as today we have a post all about Alibaba Gold Supplier scams, to follow on from last week’s one on Trademark applications.
Anyone who has read my very popular post “exposing the Alibaba scam” or the follow up article I did detailing the 10 most commonly attempted scams on Alibaba will know that I always recommend that you only deal with Gold Suppliers when sourcing products on Alibaba.
In fact, it’s the very first criteria I use when I’m searching for a new supplier and want to instantly filter out a large majority of the un-safe options. The reasoning behind it is incredibly simple – it costs a lot of money to become a Gold Supplier on Alibaba and most scammers are unwilling to spend that sum, when they know their account won’t last long anyway.
So does that mean only dealing with gold suppliers on Alibaba protects you completely against scams and makes you 100% safe? No, unfortunately not! You can still get scammed by gold suppliers on Alibaba and that’s exactly what I want to talk about today.
But before we get started with the meat of today’s post – I do want to quickly point something out: the absolute vast majority of gold suppliers on Alibaba are 100% legitimate companies. Of course I can’t put an exact figure on it, but I would estimate that around 1% of your dealings with these companies will be a scam. And no matter where you’re ordering from, a 99% success rate is very impressive!
So please don’t let this article scare you away from Alibaba, as that is the opposite of my intent! Instead I want you to feel more confident so that you can use Alibaba safely to source great products at great prices.
Alright, now that’s covered, let’s get back to the topic at hand.
From my experience and knowledge, there are 5 main instances when you may be scammed by a gold supplier, and we’re going to go through them one by one so that you know what to look out for: Read More…
Chinese Brand Products – Are They FAKES?
November 18, 2015 by Andrew Minalto - 0 Comments
Nearly every time I mention the words “China” & “Branded Products” together, it’s a warning about how you CANNOT buy branded products from China.
You know exactly what I’m talking about – all those websites with their too good to be true “buy one get one free” deals on all the top products and brands, such as:
Electronics – Apple, Samsung, Intel, Sony etc.
Clothing and Footwear – Nike, Adidas, Puma etc.
Designer Clothing and Accessories – Armani, Gucci, Dior, Dolce & Gabbana etc.
And many more!
Sites such as these are everywhere online, preying on newbies who don’t know any better (I still get emails every week from people who have lost a lot of money by falling for these scams).
BUT all my warnings about branded products from China have created a bit of confusion that I want to clear up today.
When I talk about buying branded products from China, I am referring to Western brands (plus some Asian electronics companies of course) – big consumer brands whose products you will find on Amazon and your local high street. Read More…
RULES on Importing Toys to the UK from China!
September 28, 2015 by Andrew Minalto - 22 Comments
Following on from last week’s post about importing children’s clothing to the UK, today I want to cover the specific rules for importing toys.
Toys is another hugely popular niche for new online sellers, and that’s not really surprising. After all, we’ve all seen the toy sensations that just fly off the shelves; pretty much everything Frozen related in the last few years is a great example!
And that’s exactly why I wanted to bring this up, before we get to the actual point of today’s post – you cannot buy licensed toys from China!
Please don’t ignore this point! Any toys, be they plush, figures, cars etc., which feature trademarked characters or names, are illegal to buy and resell!
It doesn’t matter if it’s a different design to the doll that Disney sell in their own stores! It doesn’t matter if it doesn’t have a Disney logo visible on the label! These toys are illegal – and that’s that.
Of course this goes for all trademarked characters, not just Disney. I just used them as an example as the vast majority of toys being sold illegally are something to do with Disney.
I don’t want to delve any further in to this now, as I’ve actually covered it on this blog before. You can take a look at that post here if there’s anything you’re unsure about: Wholesale Disney Character Items from China!
Okay, now that we’ve got that point out of the way, let’s get to what today’s post is all about – importing toys from China to sell in the UK.
As an importer of toys intended for children, you must comply with the 2011 Toys (Safety) Regulations, which basically introduced the European Toy Safety Directive into UK law.
The overall requirements of this directive are that toys must: Read More…
Importing Children’s Clothing from China!
September 23, 2015 by Andrew Minalto - 13 Comments
Clothing is a niche that I receive a LOT of emails about, and it’s not hard to understand why – the margins are amazing!
It’s not uncommon to achieve 80%+ margins on clothing (selling your own brand of course – you won’t make anything near that re-selling designer brands!) which is something that most other industries can only dream of.
But really that 80% margin is only part of the story and when you delve deeper there are a lot of issues with selling clothing online, particularly designer brands.
I have actually covered this topic in the past, and outlined my reasons for staying away from this supposedly very lucrative niche. You can take a look at that post here if you missed it:
But despite my personal reservations, today’s post is all about importing clothing to the UK, and specifically, children’s clothing.
I recently received an email from a blog reader who had big problems with a fairly large order of children’s clothing and shoes from China, and he ended up losing a lot of money sending the whole shipment back, as it didn’t conform to the necessary standards and regulations.
So to try and help you avoid any costly mistakes like that in the future, I want to cover exactly what you need to do when importing children’s clothing the UK from China.
Let’s get to it!
The first things I want to cover apply to all clothing and footwear in general, as there are safety regulations that you need to meet in order to sell imported clothes in the UK.
This should really be obvious to everyone – after all, clothing is a product for which the materials and quality are extremely important. These are items that are worn in contact with the skin for hours at a time so it’s not just a simple matter of the product merely not working if it’s badly made – the consequences can be much more severe. Read More…