Chinese e-commerce giant Alibaba is touting for business from Australian SMEs.
The company listed on the New York Stock Exchange last year and signed a deal with Australia Post allowing Aussie businesses to access Alibaba’s Tmall.com shopping platform, which is China’s largest online third-party platform for brands and retailers.
But Michael Mang, head of international business development and marketing at Alibaba, was at the ecommerce Conference & Expo in Melbourne today spruiking Alibaba to source suppliers.
Mang says businesses can use Alibaba as their “eyes and ears” to make sure businesses really exist and to investigate businesses fully before ordering.
These are his tips for Australian SMEs:
1. Look for three things
“For sourcing there are three key things to look at: price, specification and the supplier profile,” Mang says.
He says Alibaba’s search mechanisms can be used to detail exact specifications to narrow results quickly.
2. Contact a minimum of two suppliers
Once you identify a product you are interested in on Alibaba you can send an enquiry to a supplier.
Mang recommends contacting at least two suppliers for each inquiry.
“Then if one has a problem you still have backup,” he says.
3. Consider trading companies and manufacturers
Mang says Australian businesses should consider using both trading companies and manufacturers as suppliers depending on their needs.
“Sometimes it is hard for manufacturers to deal with small companies,” he says. “If you are ordering smaller quantities like 10, 50, 100 some manufacturers are not flexible enough. At this stage, trading companies come into the picture.”
He says although trading companies have a reputation for being more expensive than manufacturers, businesses should compare the prices using Alibaba.
4. You don’t have to send dozens of emails to get a quote
Rather than engaging in long email conversations with potential suppliers, Mang says there is a quicker way to ask for quotes using AlisourcePro.
“The more sophisticated and precise your request is, the more sophisticated and precise response you will get, which will save you both time,” he says.
5. Don’t pay 100% upfront
Mang says businesses should avoid paying the full cost of products upfront.
“Never pay upfront unless you are buying one piece or ordering samples,” he says.
He recommends negotiating a range like 30% upfront, 70% upon receipt of goods.
6. Check the trade assurance
Alibaba has a trade assurance mechanism which deals with problems such as delay or issues with quality.
Mang says that if a business raises a complaint Alibaba completes an investigation, which can result in a refund.
“Different amounts are available depending on the supplier’s record,” he says.
Mang recommends always checking the trade assurance amounts of suppliers.