Before we get started, here are the two websites where 90-95% of our clients do their sourcing:
- alibaba.com– This is for wholesale/bulk purchases
- aliexpress.com– This is for retail / small quantity purchases
There are other online websites but let’s just discuss these two which are commonly used.
Both websites are very useful if you’re shopping around for the lowest price of that certain item you’re looking for and ultimately where to purchase it. The first step we often want to figure out if we want to sell something is to find the best source with the lowest possible price for an item. The second is, how to get those items we’ll be purchasing here in the Philippines.
Let us now go to Aliexpress to get an idea of the retail price of our sample item. Our goal here is to get the lowest possible price so in order for us to do so, we look for the lowest price a retail / single quantity is being sold for.
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Now we know that in single quantities the item is sold for $7.50, obviously, it should be lower if we’ll be buying wholesale. Normally before we go on negotiating for the wholesale price, we should always have an idea first of how much an item is sold in retail quantity, this way we would know if it is really worth buying that item in huge quantities. I mean, why oblige yourself in buying a hundred or thousands of pieces of that certain item when the price is almost similar to retail? Of course, we expect a price way lower if we purchase wholesale.
Since we already know the retail price, it’s time we move on and find a wholesale supplier of this item via Alibaba.
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Buying wholesale has its pros and cons. If you buy wholesale, it is good for you as the purchase price is way lower than buying it in small quantities ergo a higher profit for you. However, with wholesale, there’s always what we call a MOQ (minimum order quantity. See note above) which should be met so the low price can be given to you, which translates to a larger cash requirement.
Note that even though both websites are intended to serve their own purpose (Alibaba = wholesale / Aliexpress = retail), you can always ask suppliers from each website regarding prices for retail and wholesale quantity.
Searching for Suppliers via Social Media
Social media can be a good way to find suppliers. The first thing if you are starting is to build social media awareness for your business on social media networks. If you establish a great business presence on social media, suppliers may come to you instead of you seeking them out. LinkedIn is a professional site where you can build networks from. Facebook, as the biggest social network today can make your brand known and will put the business on the radar of the suppliers that you need.
Searching for suppliers online
Online is one of the best and easy ways to find suppliers like manufacturers and wholesalers. A simple query using search engines will give thousands of results for the supplies that you are looking for. They also advertise through online directories like Yelp, Yellow Pages, and True Local.
Trade Fairs
Sourcing from China is a decision that you will have to think about very meticulously, simply going there and asking around may not be the best way to spend your time. The best way to create relationships and assuring the supplies will be reliable is to go to trade fairs and get to know the suppliers face-to-face. A good business relationship with them goes a long way.
Local Wholesale Suppliers
A wholesaler is a business that buys products from manufacturers and sells them to other businesses. The wholesaler doesn’t operate a store; instead, they supply your small business with inventory that you sell to customers. Whether you run a brick-and-mortar business or an e-commerce store, wholesale distributors play an important role in connecting manufacturers and store owners.
Sourcing Agents
A sourcing agent is a person or agency that represents a buyer to source commodities. They are the ones who buy supplies that are out of reach of the buyer. They are often needed and quite important in international trade.
How to evaluate your supplier
Here are 5 important factors to consider when evaluating a supplier
- Price
A key consideration in choosing a supplier may be affordability. However, cheap suppliers don’t always represent the best value for money. If you want reliability and quality from your suppliers, you’ll have to decide how much you’re willing to pay for your supplies. It is important to strike a balance between cost, reliability, quality, and service.
- Quality
- Reliability
The quality of your supplies needs to be consistent – your customers associate poor quality with you, not your suppliers. Equally, if your supplier lets you down with late delivery or faulty supplies, you may let your customer down.
- Flexibility
Being able to place frequent, small orders lets you avoid tying up too much working capital in stock. Flexible suppliers help you respond quickly to changing customer demands and sudden emergencies. If you want to cut down the time it takes you to serve your customers, suppliers that offer you a quick delivery service will rate higher than those that compete on other factors – for example, on price alone.
How to negotiate with suppliers
- Bring value to your supplier
Be a business partner that will open your supplier to new markets. That way, you will have more leverage as your business holds the key to more demand
- Research the Actual Costs
There’s no better position to be in when negotiating a price than to know what it cost the guy on the other side of the table to make what he’s selling. By figuring out the cost to make the product, you then have a much better idea of how much wiggle room you have in regards to negotiating.
- Understand your supplier
By conducting some basic research into a potential supplier you can work out how valuable your business is to them. Your bargaining power increases in direct proportion to your potential supplier’s need for your business.
- Reference Their Customers
The best data you can get from a supplier is from their customers. Before you enter into any sort of negotiation, you should always ask the supplier to provide a list of customers you can reference for the type of product you want. Customers like to talk about products they are happy with, and more often than not, they will share their prices.
- Help Them Save Money
Treating suppliers like partners is critical to a company’s start-up’s success. As much as possible, figure out how you can work with your suppliers to make their lives better, whether saving them money from their vendors or saving them time with your order. By understanding their business model, you can make orders in an efficient manner, which should lower costs for everyone.
Quality Control
If you purchase goods from outside companies, and if you need to ensure that your products are of high quality, reliability, and safety, you need to focus on supplier quality management.
What is the Alibaba inspection service?
The Alibaba inspection service helps you ensure you will be receiving the same products you are paying for. The inspection for higher value orders is performed by two other inspection companies, mainly Bureau Veritas and the China Certification & Inspection Group not Alibaba’s team themselves. Alibaba’s team only performs their production monitoring service.
Third-party inspection services
Third-Party Inspection services refer to independent inspection services that are provided by inspection agencies. This article supplies you with information about TPI definition, and TPI companies and also provide you with third-party independent inspection procedures for the different fix, rotary, electrical and instrumental equipment. In purchasing and procurement projects the sellers and vendors are first parties. The second parties are purchasers or buyers.
Last but not the least, always remember that everything is negotiable… 🙂
Good luck and happy shopping!