Went to the Canton Fair? How to follow up with suppliers AFTER the trade show so you don’t waste your trip

It’s trade show season and some of you may have went to the Canton Fair or one of the trade shows in Hong Kong. So you met up with potential suppliers for your product at the fair but now what?

Did you know that many online sellers go to trade shows and meet a supplier that they have a “good feeling” with. But after the show… things don’t work out like they should. For example one of my readers was sourcing a modified product and went to a trade show and met a supplier that he had a good feeling with. After returning home, he sent them a box of products he wanted them to reverse engineer and source. Afterwards he waited… and waited… and waited…. In fact he’s still waiting today. Don’t let this happen to you!

TAKEAWAY: Going to the trade show is only the beginning (not the END) of the process. Here’s how I follow up with suppliers AFTER the trade show and how the process is different for sourcing standard, modified, and custom products.

The audience paid hundreds of dollars to attend this event. But I’d like to share it with you in this presentation I gave at the Global Sources Summit in Hong Kong.

Also in case you missed it I covered in Part 1: How to prepare BEFORE going to a trade show and in Part 2: How to attend a trade show like a pro.

Sourcing expert Gary Huang talking about How to follow up with suppliers after a trade show. Live from the Global Sources Summit for online & Amazon sellers in Hong Kong.

How to attend a trade show like a pro: Finding the right suppliers, Asking the right questions, and Getting the right Product

We are officially in the middle of trade show season. Whether you are attending the Canton Fair or smaller regional trade shows, here is how to attend a trade show like a pro to find the right suppliers, ask the right questions, and find the right product at the right price.

If you want to cut to the chase and get my cheatsheet that summarizes “How to Attend a Trade Show Like a Pro”, please sign up for my free newsletter.

First of all you might be asking why trade shows? Aren’t they dying when you can find suppliers online? Well, do you want to own a 7-figure Amazon business? FACT: according to a 2016 survey of Amazon sellers, MULTIMILLION DOLLAR AMAZON SELLERS ARE TWICE AS LIKELY TO ATTEND TRADE SHOWS? This is according to a survey done by webretailer.com.

What does this mean? It’s not just a matter of simply showing up at the Canton Fair and finding the right supplier right away. You have to know how to ask the right questions to find the right product at the right price. In part 1 I showed you how to prepare for a trade show. Here I will review best practices AT THE SHOW and AFTER THE SHOW.

First let’s take a step back. Many of you know the 80/20 Rule or Pareto’s Principle “The law of the essential few and trivial many”.

80% of the world’s GDP is controlled by 20% of the people
80% of a company’s sales come from 20% of its products (bestsellers)
80% of your results come from 20% of your work

In terms of sourcing: 80% of suppliers out there are NOT the right fit for you. Your job is to find the right 20% and focus on those! Let’s call them the YES suppliers for the purpose of this article.

So let’s apply the 80/20 rule to trade show sourcing. By now you’ve already pre-registered for the show and reviewed the map so you know which halls to target so you will hit the ground running. If not, see part 1.

AT SHOW:

At the show your goal is this:

See as much as possible in a limited amount of time
Decide WHO are the ESSENTIAL FEW to follow up with

In other words “80/20” the suppliers and don’t waste time on the trivial many. Trade shows are huge. When I visit one, sometimes I walk 20,000 steps a day!

Trade Shows are a lot like Speed Dating Events

In fact it’s a “Meet Market” and I compare it to speed dating. Just like one of these networking events, you’re not going to talk to everyone. Use your eyes to see which suppliers may be the right fit for you first before you approach them. As I’m doing this, I keep in my head 3 buckets: “YES, NO, and MAYBE”. I ask myself “Where will I put them?”

Before we get into asking questions, first you should question yourself. I prepare a short elevator speech introducing my experience and the product category I’m in, demonstrate an ability to buy, and then a call to action where I will ask them questions. Many first time trade show goers forget about this step. In fact a proper introduction will build confidence and make suppliers more comfortable in doing business with you. This can mean revealing products not on the trade floor, lower prices, and a greater incentive to do business with you.

At the show, here are 7 questions that I ask suppliers.

Do you manufacture [XYZ product]?
If yes, then continue. If no, thank them and move on
Are you a factory or trading company?
Many Amazon sellers prefer to work with direct factories so here are some ways to tell them apart from middlemen. Most times I ask them directly and they tell me. Another way is to look at their product selection and if there is a common theme. For example silicon product manufacturers will offer silicon baking sheets, silicon gloves, and silicon measuring cups so it makes sense they focus on one type of material. On the other hand trading companies will offer everything under the sun such as iPhone cases, USB power banks, and selfie sticks. Telling them apart is both an art and a science. I will dive deeper into this topic in the future so please signup to my free newsletter to be the first to know.
Which countries do you export to?
I call this the country test. If your marketplace is the US and the factory exports to Africa or the Middle East then BEWARE. Their quality will be about the level of a 99 cent store. In other words CHEAP. They will claim they can make better quality but this is risky. In fact their whole supply chain is configured to low quality standards from cheap raw materials, to low skilled labor, to low quality control standards, to heavy handed packaging procedures, etc. I normally select suppliers who have experience with my marketplace or similar quality level marketplaces.
What other products do you manufacture?
There are two benefits to this question. First you are double checking the common theme test to verify they are a factory. Also you can discover new product opportunities this way. Million dollar Amazon sellers report that they ask suppliers for product suggestions.
What quality control system do you have?
Depending on your product you can ask about quality control systems. ISO 9001 is one of the most common.
Beware: ISO9001 certification can be purchased and its quite common practice in China. So take this with a grain of salt.
Can you private label for me?
This is important for Amazon private labellers. It’s good to check if they can do this for you in the beginning. They will normally require a minimum order or tooling fee – both of which can be negotiated.
How much is this?
To me the price is just one variable of the supplier equation and not necessarily the most important at this time. I get an estimate first and then ask for a firm quotation by email after the show.

The CIO of a major online sourcing platform recently asked me “How do you capture this information?” When talking with suppliers, I quickly take notes in my notebook which I will use when deciding whether to follow up. First I staple their business card to the page. Then I take down the name of the person I spoke with (not necessarily the same as the name on the business card) and the main points. Also I will note their booth number. I’ve forgotten to do this before and when I tried to find them again I got totally lost. This will save a lot of time.

I also take pictures of the product and the people. I learned this trick from one of my clients. It helps a lot after you return home and are trying to figure out who’s who. Also this builds the relationship or “guan xi” as it’s an appreciated gesture.

Finally I note the next steps for follow up: questions, request for quotations, and research (e.g. Jungle scout).

Common mistakes: I’m not perfect and here are some mistakes that I’ve made over the years attending trade shows.

Don’t fall in love too fast. Just like in speed dating there’s plenty of fish in the sea so don’t commit to anyone until you’ve walked the entire floor.
Don’t spend too much time with unqualified suppliers. If they’re a NO supplier, thank them and move on quickly.
Don’t spend too much time talking about pricing. Get a reference quotation first. There’s a couple reasons why. One is the salesperson does not have the authority to make a formal quotation by themselves. Normal the sales director, boss, and/or engineer needs to have a say. Also they just met you and don’t know you well enough to give you a low price.
Don’t forget to follow up. Just like you, suppliers will have met hundreds of buyers and they may have 100 things to do after returning to their factory. Take the initiate and email them.

Once you’ve seen the entire show, leave.

POST SHOW: But wait – you’re not done yet. You need to filter and follow up.

u-turn-road-sign — POST SHOW: You’re not done yet!

After the show I will have a ton of business cards, notes, and catalogs. I will separate them into 3 stacks:

YES: For Follow Up
NO: For the trash
MAYBE: Keep in case you need backup suppliers

So how do I manage all the emails after the show? I create a spreadsheet with the YES suppliers and their contact information, reference quotation, notes, and next steps. Then I follow up with an email template that I copy and paste. In the subject line I include their company name and product so I can quickly recognize who’s who.

Best practice: Never give them your primary email address! I create a separate email address for sourcing. Be prepared for a lifetime of Happy New Years, Merry Christmases, and endless supply of spam.

The follow up email will address these essential points leading up to a trial order:

Request for quotation based on your specifications. Please signup to my newsletter for a free RFQ template.
Questions about their company and product
Arrange samples if needed
Trial order

Here are some tricks of the trade that will get you ahead of your competitors at the trade show:

Get there early – There will be less people on the floor and you will get more attention from suppliers
Talk to the most senior person – I try to at least meet a sales director or manager as they have more decision making power
Take and early/late lunch to avoid the lines
Avoid the afternoon of the last day – Everyone will be closing down and not in the mood to talk business
Combine your trip with other goals – Factory visits and other trade shows
Get a VPN if visiting mainland China – Anything Google-related (Gmail, docs, maps, translate, etc), Facebook, Twitter, Instagram, New York Times, and others will be virtually inaccessible from China. More VPN info here. Make sure you get it BEFORE YOU ARRIVE. Many VPNs themselves are blocked in China.
Don’t go out and get drunk at night – Complete rookie move

Remember you’re at work and a good trade show can be priceless. With these tactics you will be on your way to finding the right suppliers and products at trade fairs so you can own that 7-figure business and swim in your money like Scrooge Mcduck!

What’s your #1 problem when attending trade shows? Comment below and let me know.

BONUS: For a cheatsheet that summarises “How to Attend a Trade Show Like a Pro”, please sign up for my free newsletter.

Instant Flip

How to find suppliers beyond Alibaba Part THREE: Online, Offline, and Thinking outside the box

So by now, you have validated your product and you’re ready to move on to larger orders. At this phase, the right suppliers can found online, offline, and what I like to call “thinking outside the box.” Let’s take a closer look.

By the way this post is part of a series called: “How to find suppliers beyond Alibaba” (part one and part two).

Online:

Alibaba

Everyone knows Alibaba is the 800 pound gorilla in the room. They have a celebrity CEO in Jack Ma who’s one of the richest men in the world. They have millions of suppliers and products listed and they have a huge campus in Hangzhou that rivals the Google campus in Silicon Valley.

But all is not perfect in the land of Alibaba. Not only do they face a problem with the overall quality of their suppliers, but also in the quality of the Alibaba users. Alibaba has gotten too popular for its own good and suppliers know this. Many users are “newbies” who don’t have any prior experience. They are getting their feet wet with Alibaba. Many better suppliers are well aware of this and have told me they purposely avoid Alibaba.

Also it’s widely known that Alibaba is filled with middlemen or sourcing “agents”. Best case scenario they may be able to get you the product you want at a slightly higher price which includes their margin. But how can you trust them? Beware scammers which I’ve written about here. And when the rubber hits the road and problems come up, who’s side they will take?

Dirty secret: How do you know your sourcing agent is not taking a kickback from the supplier? This is common practice in China. If a problem arises, many middlemen may take the side of the factory whom they may have a stronger relationship with.

Having said that it makes sense to look beyond Alibaba when sourcing product from China.

Global Sources

Global Sources has over 45 years experience in international trade. It was established in 1970 by Merle A. Hinrichs and C. Joseph Bendy. They started as a media company with a print catalog of Asian suppliers. Later they evolved and began organizing trade shows in Asia. Their online directory began in 2003.

They offer an online directory of suppliers similar to Alibaba. They are strong in mobile electronics, fashion and accessories, as well as home and gift items. These suppliers tend to have more experience with the export market.

In addition, they have an offline component which Alibaba does not have. First they organize trade shows held in the Spring and Fall mainly in Hong Kong. These trade fairs are an excellent opportunity to meet suppliers to build relationships and touch and feel their products which I will discuss in further detail later.

What’s the difference between Alibaba and Global Sources? Overall I feel the quality of suppliers on Global Sources is higher than those on Alibaba. They also tend to have more experience in the export market which is a good thing for you because they’re more likely to understand your needs. Also you tend to find less suspicious factories than on Alibaba. In fact, many big-box stores use Global Sources as part of their sourcing strategy.

But on the other, these suppliers expect more also. Normally they will ask about your company background and your purchase volumes. It’s only fair that they want to see if you are a right fit for them. So sourcing from Global Sources may take more initial work to build trust and get thorough replies from suppliers.

The fact that many suppliers listed in Global Sources’ online directory also exhibit at their offline fairs adds to their credibility. More specifically given they are willing to invest time and money into buying booth spaces and exhibiting at the fairs, they have more skin in the game than a purely online middleman who can disappear overnight.

This is not to say there are no trading companies on Global Sources. In fact there are middlemen and trading companies on Global Sources, but they tend to identify themselves this way so it feels more transparent than on Alibaba.

This leads to another difference. Global Sources’ international roots creates a better user experience for buyers in my opinion. Global Sources was founded by an American and has a broader pan-Asia focus. On the other hand, I find that Alibaba’s business culture and focus is more China-centric. Moreover the user experience not as friendly and intuitive.

In summary:

Global Sources Pros

Arguably higher quality suppliers than Alibaba and less hidden middlemen
Strong in mobile electronics, fashion accessories, and home and gift items
Offline trade shows are an excellent way to meet face to face with suppliers to build trust, get immediate feedback, negotiate better pricing, and terms. Also you may find items which are not publicly available.
Private offline matchmaking events for established buyers

Cons

Smaller selection of suppliers than Alibaba
Requires more work to get quotations – must prove yourself to pickier suppliers

Made in China, and others

After Alibaba and Global Sources there is a big drop-off in quality and selection. When applying the 80/20 role, don’t bother with these other online platforms when most of these suppliers can be found on Alibaba and Global Sources.

Offline:

Trade Shows

In China “guan xi” still rules despite the age of the internet, smartphones, and social media. Chinese culture is deeply rooted in relationships. Friendly relations and referrals will give one an advantage. Applying this to sourcing, many times simply showing up in person will earn “brownie points” in the relationship. This is especially true as they learn more about you the person, your country, your business and how you can help open up new markets for them. This can motivate them to come closer to your target price and offer flexibility in payment terms, packaging, product modifications, and more. This is why it’s so important to meet face to face and trade shows are a great way to meet many suppliers quickly.

Best Practice: In China businesses are very hierarchical. In fact it is a dictatorship where the owner will make all the major decisions. If they like you and are convinced that you can bring large sales or open up a lucrative new market then they will find a way to get things done. This is why when meeting in person you should always meet the most senior person. They normally are the oldest but with two exceptions. First, the oldest may be an engineer and not a decision maker so he should not be your target to schmooze. Second nowadays many 1st generation owners are passing their business to their children. In China there is a term called 富二代”Fu Er Dai” which means “2nd generation wealthy.” So a brash millennial dressed in designer clothes can in fact be the one who calls the shots and get your order through if you can prove yourself.

Trade shows are also a great opportunity to find new products. Many suppliers will not reveal all of their products especially the new products online to protect themselves from their competition. However if you meet with suppliers face-to-face and can prove yourself to be a trustworthy buyer then they are willing to open up the kimono.

For example I have found that suppliers with innovative new products explicitly will NOT show them at their booth to the general public and their competitors. So they will rent a hotel room close to the fair as a private showroom. Do you think they are foolish enough to show their cutting edge items at the fair and risk being copied by their competitors next door? In China, there is an expression: “Quick to copy, quick to market“. This is why often times the best products are behind closed doors. You will not find them online unless you have built a strong relationship with the supplier. This definitely will separate you from your competitors.

There are numerous types of trade shows and I will focus on three: General trade shows with a broad selection of products, Industry specific fairs that target a specific industry (for example electronics), and Regional marketplaces which highlight suppliers nearby. Which one is best for you? It depends on your needs.

General trade shows

General trade shows include the famous Canton Fair and Global Sources Home and Gift Show. These are good if you don’t have a specific product or category in mind and are open to new product ideas. Also this is a good way to identify new trends.

The disadvantages include being unfocused and risk of wasting time wandering around. The Canton fair is HUGE and you can easily spend several days if not a week walking around the place. Moreover there is a broad range of quality, prices, middlemen (agents), and even scammers there so buyer beware.

Best Practice: The Canton Fair runs in three phases. It pays to do your homework to find out which phase has the products that you want. You don’t want to be looking for electronics only to visit during the food portion of the fair.

Industry specific fairs

For a more targeted approach, there are numerous industry-specific trade fairs including HKTDC, Global Sources, MAGIC for fashion, CES for electronics, Intersolar for solar, Automechanika for automobiles and parts, and the list goes on. This can be a quick way to meet many relevant suppliers. Also by meeting face to face with suppliers you can gauge new trends, products, and pricing all in one visit.

Note however that these fairs typically meet once or twice a year so you must plan ahead. In tremors of costs, it may not be cheap when you consider hotel, airfare, ground transportation, visa, entertainment, etc depending specific locations.

Regional trade shows

Two of the most famous regional trade shows are the Yiwu marketplace and Shenzhen electronics market (Hua Qiang Bei). They are a good way to get a quick feel for products that are made locally. Another good thing about these marketplaces is that they are open to the public. This means you can walk around and touch and feel the products. It’s a great way to identify products you may have overlooked online. Moreover you can buy as little or as much as you’d like. Keep in mind however that most of these vendors are middlemen.

Best practice: Plan ahead

Most these fairs offer online registration so book ahead to save time. The lines at the registration desk can get long so if you pre-register you can move to the front of the line to get your badge immediately to get a head start on your day.

Also it’s a good idea to review the show directory before you arrive. The fairgrounds are HUGE and it’s easy to get lost so I always jot down the booth numbers of the suppliers I want to visit and then use that as a guide to plan my attack. Here are some links to get you started.

Global Sources – Their trade shows focus on Electronics, Home and Gift, Fashion related products. Mainly based in Hong Kong but also have events in Taiwan, Korea, Japan, South Africa, and the US.Â

HKTDC – Hong Kong Trade Development Council offers many industry specific trade shows based in Hong Kong.

Canton Fair – The granddaddy of the them all. Among the sourcing community the consensus is that Canton Fair is “dying”. Though overall fair attendance is declining it may still be useful for some. This is held in South China twice a year in the spring and fall.

Another way to find relevant trade shows is to ask your suppliers where they are going. This is a great way not only to meet them in person while saving a trip to the factory but also to find additional suppliers. As the saying goes “Don’t put all your eggs in one basket”. If one supplier falls through you need a plan B and attending trade fairs and getting their contact information is a great way to do this.

Factory Visits

Factory visits are among the best ways to vet a supplier by taking a peek behind the kimono. Taking a trip to the factory allows you to see their facilities, workers, equipment, and production line, as well as sit down with management and sell them about your business. But of course this takes more time and money. It’s beyond the scope of this article but you’re interested in learning more, please comment below or contact me for more information.

Thinking outside the box:

Referrals

Just like doing business anywhere, referrals can be a powerful tool when finding suppliers. Through friends, business acquaintances, or online platforms and social media you may be able to find hidden gems. One of the ways is to ask suppliers you are working with Also because of the “guan xi” effect there is “face” involved which creates a greater incentive to make it work and not screw around. In other words the stronger the family tie or friendship, the more social capital at stake to make it happen.

On the other hand, the referral may not be based on objective criteria or measurable benchmarks so you still have to do you homework. Also beware hidden markups because everyone needs to be taken care of.

Matchmaking events

As your purchase volumes grow, consider using matchmaking services that online sourcing platforms and offline trade shows may offer.

For more established buyers, Global Sources offers a private offline matchmaking events where they will organize meetings with suppliers that are matched according to your buying requests. This is a great way to save time and meet many suppliers quickly. In fact Global Sources will be doing most of the pre-work setting up the meetings. While you have still have to do you due diligence after meeting them, I found this saves me time in quickly meeting many targeted suppliers.

On the other hand, do you trust their ability to find the right supplier for you? Moreover their scope is limited to their one platform. And finally, this service may not be available to everyone.

Sourcing agents and trading companies

Depending on your needs and budget, it may make sense to outsource this work to professionals. This will save you time and headaches so you can focus on your strengths to grow your business.

Generally speaking sourcing agents and trading companies have advantages in that they can find better suppliers through their networks, pick up on red flags faster, can optimize logistics to save you time and money, and may be able to negotiate better pricing and terms with factories.

On the other hand, there are good ones and bad ones so you have to find the right one for you. And this service will result in additional costs.

In summary, sourcing is not a one trick pony. Alibaba may not have the best suppliers for your needs so it makes sense to plan a three-pronged attack: online, offline, and thinking outside the box. Depending on your needs you should do an “80/20” to find the right formula on which channels to focus on for your sourcing. Hope this was helpful. Please signup for my newsletter for a “deeper dive” into these topics. Good luck!

How to find suppliers beyond Alibaba? PART TWO: Online Sourcing for Small Volume Orders

This post is a part of a series on “How to find suppliers beyond Alibaba”. (Part 1)

Before we dive into online sourcing, first you need to identify what type of supplier you’re looking for. It’s like in dating – a gold digger (big supplier) isn’t gonna waste her time going out with a bootstrapped entrepreneur (testing the waters as a small volume buyer), get it? You have to find a supplier that is right for your needs so we will be discussing Aliexpress and DHgate for small volume orders.

Before we do that, you need to identify your needs first: what kind of product you’re looking for, how much do you need to start off and in the future if your business explodes, your budget, and your timeline. If a supplier makes the right product but has a minimum order quantity of 1,000pcs and you only need 5pcs, then obviously this is not going to work.

Best practice: I know it doesn’t sound sexy and you want to go straight in, but doing a little work upfront will save you a lot of time and headaches in the future. First put together a request for quotation (RFQ) and then select the right platforms to connect to the suppliers in your ballpark. If you have questions about RFQs, please leave them in the comments below.

Small volume orders

You might be thinking: why are these suppliers offering such low quantities? It could be several reasons. The factory could have leftover inventory from a previous order they want to liquidate. Or they could have an order cancellation because of product quality problems or defects. Another possibility is they could be middlemen.

In any case if you’d like to start small to test the waters then try Aliexpress or DHgate. Minimum order quantities (MOQs) can be as low as 1 piece. In this case middlemen can actually work in your favor because they can offer lower MOQs than ordering from direct manufacturers. Some suppliers offer free shipping as well so it’s relatively easy.

On the hand expect to pay a higher price, normally at least 30% more than ordering direct from a factory. Prepare for a long wait because free shipping is normally by China Post and may take upwards of 30 days. Also beware quality problems because there is a risk they are defective items.

Best practice: Instead of asking for a sample (not worth the cost for such a small order), ask for a photo of the actual product and packaging before placing an order so you can “see” if there are any problems. Also ask if these products have any defects. They may or may not tell you but it doesn’t hurt to ask! If there are defects then try to negotiate a discount.

Aliexpress

Think of this as an eBay with sellers from China shipping to buyers around the world. They sell individual items and small wholesale lots. This is good if you want to test the waters with a small order or to sell locally (e.g. Craigslist, swap meet, bricks and mortar store, etc). I know some people who buy off Aliexpress to use for themselves as well.

Aliexpress if fine if you volume is small and if you’re just starting out. I don’t recommend it if you want to build a scalable business because you likely are not dealing with the direct manufacturer but with a middle man who will not reveal the factory to you. This means you won’t get the best price. Another major disadvantage is that you are not building a relationship with the supplier. This relationship is critical if you want to build a sustainable business.

Just as in dating as you get to know each other better you grow together to find out their strengths, weaknesses, likes and dislikes to find out if you’re compatible. Similarly as you grow your business with the supplier you want to decide if you will invest in a long term relationship where you be able to negotiate lower pricing, better payment terms, smoother communication, etc. In good scenarios you will continue dating. In bad situations, such as poor quality products, missed deliveries, miscommunication, etc you can drop them.

Pros:

Find same products offered on Alibaba
Lower MOQs
Escrow service for added protection (but you will pay a few % more)

Cons:

Higher prices (at least 25% more)
Dealing with middlemen – higher prices, hidden factory, risk of disappearing overnight
Difficult to establish long term relationship with direct manufacturer
Beware defective and counterfeit products

DHgate

DHgate is another online directory of suppliers that target small volume buyers. The main advantage again is lower MOQs – as low as 1pc. Users report that there are a larger variety of products on DHgate it can be a good resource to complement Aliexpress or for certain niche items. They also offer an escrow service to protect you but this will cost you a few extra % points on top of the quotation. Or it will already be embedded in the quotation. This is common practice in China.

Pros

Larger variety of products
Lower MOQs (as low as 1pc)
Escrow service – DHgate buyer protection plus

Cons

Higher prices (at least 25% more)
Dealing with middlemen – higher prices, hidden factory, risk of disappearing overnight
Difficult to establish long term relationship with direct manufacturer
Beware defective and counterfeit products

There are a few more minor players who I will not get into because I believe you can find 80% of the Chinese small volume sellers using just these two platforms mentioned above. 80/20 rule!

In the next article we will cover platforms for medium to large volume buyers. Please signup to my newsletter to receive free updates.

Meanwhile have you’ve used Aliexpress or DHgate before? Please share your success or horror stories below.

Please signup for my newsletter for a “deeper dive” into these topics. Good luck!

How to find suppliers beyond Alibaba? Part One: “Yellow Pages”

Think of Alibaba as the “Yellow Pages”

When you think of sourcing from China what’s the first thing that comes to mind? Hopping on a plane and flying to Guangzhou to find a factory? No, you go on Alibaba! But can you really find the right supplier for you on Alibaba without getting scammed? Or getting the wrong product? Or deliveries getting delayed? Or getting shipped a container full of dirt? You’ve heard the horror stories.

If you learn nothing else from this article, here’s the takeaway – Alibaba is an online directory just like the “yellow pages“. In other words, it’s a listing of suppliers and you shouldn’t trust Alibaba to vet them for you. Just like the yellow pages a supplier can pay for a bigger and nicer-looking ad. This is exactly what “gold suppliers” are. Alibaba does verify supplier information to a certain extent, but don’t naively believe that the “gold supplier” badge means they are a good supplier. Many of them are in fact trading companies and middlemen and things can go wrong.

In my experience working with Chinese suppliers, I don’t trust anyone unless they prove themselves to me. I’m not saying all suppliers are evil. But they need to earn your trust through their actions. Many suppliers with good intentions may have poor communication skills, misaligned quality expectations, dysfunctional teams, and other problems. Having said that, there are the bad apples and I will share with you the common “dirty tricks” they play and what to look out for. Think “guilty until proven innocent.”

On the other hand, if you are a multinational corporation like a Walmart, Target, or Carrefour you will have an entire supply chain department and sourcing team to vet suppliers and do the proper due diligence. They may use Alibaba as part of their sourcing strategy but it definitely will not be the only method.

I’d like to show you ways to find suppliers beyond Alibaba to help grow your business. Here’s why:
1) Quality – Alibaba has a broad range of suppliers but there are a lot of middlemen, trading companies, and bad apples. So you really have to sift through the mess to find the good ones.

2) Many quality suppliers are NOT on Alibaba – Do you honestly think that all Chinese suppliers are on Alibaba? FALSE. In fact, I have worked with numerous reliable suppliers who purposely choose NOT to be on Alibaba. If you rely only on Alibaba then you will never find them.

You may be thinking why aren’t they on Alibaba – isn’t this the #1 marketplace? True but the same low quality standard that you associate with suppliers on Alibaba, they associate with you the BUYER! In fact it’s become so common and easy to use that there there are tons of looky-loos who “spray and pray”. They blindly post requests for quotations (RFQs) to dozens if not hundreds of suppliers at once with no serious intention to buy. They are just shopping around. If you are the supplier, would you want to waste your time on them? Of course not. So many quality suppliers who want to deal with serious buyers do not bother with Alibaba. There are other reasons as well such as language barriers, lack of resources, and different priorities but you get the picture. Good luck trying to find Apple’s contract manufacturer Foxconn on Alibaba. Do you really believe XYZ trading company is selling real iPhone LCD screens? Get real!

Do you really believe XYZ trading company is selling authentic Iphone LCD screens? — Do you really believe XYZ trading company is selling real iPhone LCD screens? Get real!

3) Diversification – Your competitors are sourcing from Alibaba. If you are sourcing from the same supplier how will you differentiate yourself? Price? I don’t know about you but anytime there is a price war I find it’s a race to bottom and there’s no money to be made. The smart ones will find unique suppliers which deliver differentiated products at competitive prices. So I will show you ways to find suppliers beyond Alibaba to differentiate your products from your competitors.

Now tell me why you are considering sourcing beyond Alibaba? Welcome your comments below.

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