When it comes to selling online, there’s no shortage of impressive online marketplaces, I’ve explored a lot of them. However, there are a couple of giants that stand out from the rest. In this review, I will be taking a closer look at Alibaba vs AliExpress.
With the names being so similar, it’s easy to get confused and wonder how these two marketplaces are different, but they definitely aren’t one and the same.
Let’s look at how these platforms differ.
Alibaba vs AliExpress: How Do They Differ?
Both Alibaba and AliExpress form part of the Alibaba Group but the marketplaces were formed to fulfill different purposes.
Alibaba is a B2B, wholesale marketplace that caters to businesses that want to import large volumes of products that they can resell online or in stores. Buyers who want to purchase on the Alibaba platform will need to meet the supplier’s minimum order requirements.
By becoming an Alibaba seller, you will be selling to other businesses in bulk.
Alibaba sellers require capital to get started and need to have the ability to store and ship large quantities of products. It’s a much bigger commitment than selling products to individual buyers.
The fact that Alibaba requires a lot more capital naturally leaves potential sellers wondering whether it’s safe.
If you’re wondering the same thing, read my full review on Alibaba here.
AliExpress, on the other hand, caters to buyers who want to purchase individual products at affordable prices from manufacturers and resellers. In essence, AliExpress functions as a regular online store.
While there are no minimum order requirements, the product prices tend to be slightly higher than on Alibaba but lower than traditional eCommerce stores.
If you’re interested in selling on AliExpress, there are two different options.
The first option is to become a reseller who sells products directly to customers. This means you will also need to handle inventory, storage, packing, shipping, and returns. It’s a very hands-on approach to selling online.
The second option is to start dropshipping via AliExpress…
For this, you would set up your own online store on a platform such as WordPress or Shopify, which would be used to sell products that feature on AliExpress – just at a higher price.
The difference is that instead of fulfilling the order yourself, the AliExpress seller would do it for you.
The products that you choose to sell will determine which AliExpress sellers you partner with.
If you want to know more about AliExpress and whether it’s a legit platform, read my full review on it here.
If you want to consider a few alternatives to Alibaba and AliExpress, here are some of the other popular platform options for selling online.
Alibaba vs AliExpress – What It Costs to Sell Online
Let’s start by looking at what it costs to sell on each platform.
Alibaba doesn’t charge any sign-up or commission fees. They also don’t subtract any sales commissions.
To start selling on Alibaba, you would need to choose one of two membership plans. The basic plan is $2,399 per year and their premium plan is $4,199 per year.
Both plans allow you to post an unlimited number of products, receive and respond to inquiries and transact on the platform. Sellers can also take full advantage of all beta features and access in-depth data and reports.
The areas where the plans differ include the total keyword ad spend, customer support, and B2B insider access.
You can see the full range of features included with each plan here.
It does’t cost anything to open your AliExpress store and you have the freedom to close your store whenever you want to. There is, however, an annual fee for the technical maintenance of the platform. The fee is based on the types of products you choose to sell.
Sellers will need to pay a commission of between 5% and 8% for each transaction – the percentage depends on the product category.
If you’re going to be fulfilling orders yourself, you would need to take packaging and shipping costs into consideration but that’s dependent on the courier services provider you choose.
Alibaba vs AliExpress: How to Get Started
Once you decide which platform is best for you, here’s how you get started.
Creating an Account
Here are the steps to follow to create your Alibaba account:
- Visit the Alibaba seller homepage and click on the Sign In button to create your free account
- You will need to fill in several fields, including your country, how you want to use the platform and your personal details
- Next, wait for a verification email from Alibaba in your inbox
- Once you verify your email address, you will need to select the membership plan you want to sign up for
- In the final step, you will need to provide certain details to authenticate and verify your account, including your business name, registered address and website
Finding Products to Sell
Deciding what to sell on Alibaba will start with your specific preferences. If you already have manufacturing partners in place, you probably have a good idea of what you want to sell online.
With this being said, I still stand by my belief that product and market research is essential, even if you do have a manufacturing partner.
Take some time to look at which products are popular on Alibaba in your country and why. Are you able to offer similar products of a better quality or at a more attractive price point?
Another approach that you could take is to check buyer requests on Alibaba. This will give you a good idea of demand across different categories. Subscribing to Alibaba’s Trade Alert system will ensure you receive the latest buyer requests in your inbox.
Pricing Your Products
When you start pricing your products on Alibaba, there are two main considerations:
The first is how much it’s going to cost to manufacture, store and ship a specific product?
The second, what profit margin are you willing to accept?
Next, you need to know what buyers will be willing to pay for your products. You can do your own research among your ideal customers or look at what buyers are already paying for similar products.
Once you receive a quotation request from a buyer, you will need to factor in shipping costs and agree to a delivery time frame.
As an Alibaba seller, you’re going to be doing a lot of shipping using an international freight service.
It also helps to shop around for several international couriers to ensure you have a list of reliable and cost-effective options.
We use a specific service to ensure we are getting the most competitive prices.
For all international orders, you will need to decide whether you want to ship by air or sea. Air is quicker but more expensive, while sea is slower but more cost-effective. This is just one reason why discussing delivery expectations and time frames with a buyer is important.
Creating an Account
Here are the steps to follow to create your AliExpress account:
- Start on the AliExpress seller home page and create an account using your country and business details
- The next step will be to allocate your products to the right categories and subcategories. You will also need to apply for your company’s trademark qualification, which will take some time to verify and approve
- Once approved, you will need to choose how you want to pay the annual website technical fee
- Now, you can name your shop so that AliExpress can provide you with a URL that will give you direct access to your online store
- The last thing left to do is to work on the design of your store and to complete your product listings
If you would prefer to dropship instead of selling directly on AliExpress, you can read a guide on this here.
Finding Products to Sell
There are a few ways that you can decide what you want to sell on AliExpress, starting with their best sellers. In fact, you only need to go to the AliExpress home page to take a look at some of their best sellers.
The Official Ranking page also showcases their most popular products.
Another approach is to search for products using relevant keywords in specific categories or subcategories. To ensure you’re only seeing the most in-demand products, filter your search according to Orders. This will show you listings with the highest sales.
There are also a few product research tools that you can use to simplify this process even further or collect additional data.
AliInsider, AliExpress Dropshipping Center (which you can access when you login), and AliExtractor are all tools that can be used to collect data on what you should sell. These tools base their recommendations on data from AliExpress.
Pricing Your Products
If you are choosing to dropship, you will want to take the price of your product and add on your ideal profit margin. A profit margin of at least 30% is recommended if you want to continue growing your online business
If you’re choosing to sell directly on AliExpress, you will need to consider the price of the product, your profit margin, delivery fees, and sales commission.
A good place to start is to look at how other sellers are pricing similar products. Just keep in mind that while you want to be competitive, you’ll still want to be making a profit.
One of the benefits of dropshipping is that you don’t need to worry about shipping – the seller takes care of it for you.
If you will be selling directly on AliExpress, you will be taking care of packaging and shipping yourself.
The cost of packaging and shipping will depend on the size of the order as well as whether it’s local or international. It’s always best to take the time to shop around for courier prices and put together a list of affordable and reliable providers.
Prices fluctuate all the time, which is why it helps to have more than one option.
Alibaba vs AliExpress: What to Watch Out For
Before you start selling on these platforms, here are a few things to keep in mind.
Alibaba is based in China, which means there is a lot of competition, particularly in terms of pricing. Think twice about the products you want to sell and how you want to price them if you want to stand out.
Due to the high competition and annual selling fees, it’s recommended that your business has an annual turnover of at least $500,000 and that you sell at least 10 different products.
You should also take the time to understand export and customs requirements since countries have different shipping rules and regulations.
There is a lot of information to take in when you start selling on Alibaba so take your time to understand the platform first. Especially since getting started requires a sizeable amount of capital.
If you decide to start dropshipping via the AliExpress platform, take your time when selecting the resellers you want to partner with. Their reputation, communication, and product quality should all be taken into consideration. The last thing you want is to ship counterfeit goods to clients.
The same applies to the manufacturers you choose to partner with as a direct reseller. Choosing reliable manufacturers will ensure your customers are happy and that you are making a profit.
Both Alibaba and AliExpress are secure and reliable platforms. The marketplace you decide to sell on will depend on the capital, time, resources, and facilities you have available.
If you want to make some additional money as an online entrepreneur, dropshipping via AliExpress is an excellent option. Once your store is up and running and you’ve partnered with reputable sellers, you mostly only need to focus on marketing and making sure your customers are happy.
If you would prefer to start selling online on a full-time basis, becoming an Alibaba seller or selling directly on AliExpress is a better choice.
If neither of these options sound appealing to you, why not try something that’s in the middle?
In the video below i explain exactly how we started our very own online business.
Good luck!Tags: alibaba, AliExpress, dropshipping