Selling on Amazon can be an extremely lucrative business, but sourcing reliable and affordable products can be challenging. That‘s where Alibaba comes in. As one of the largest B2B e-commerce sites in the world, Alibaba connects sellers with manufacturers and suppliers primarily based in China.
By leveraging Alibaba to source your products, you can keep your costs low while still providing quality goods to Amazon buyers. However, there are some important factors to consider when selling on Amazon using Alibaba suppliers.
In this comprehensive guide, we‘ll walk you through everything you need to know, including:
- Researching profitable niche products on Alibaba
- Evaluating and selecting reputable suppliers
- Registering as an Amazon seller and understanding fees
- Creating effective Amazon product listings
- Shipping products from China and dealing with customs
- Ensuring product quality control and safety standards
- Pricing products profitably and competitively
- Managing customer reviews and feedback
- Staying compliant with Amazon‘s policies and US laws
Step 1: Finding Profitable Niche Products to Sell on Amazon
The first step to success is finding niche products that are likely to sell well on Amazon. Avoid picking items that are already saturated in the marketplace.
Here are some tips for finding profitable niche products on Alibaba:
- Use the Best Sellers ranking to identify popular products experiencing high demand
- Check Google Trends and Amazon listings for keyword and product search volume
- Look for niche products not widely available in western markets
- Find items that solve specific pain points or fulfill emerging needs
- Consider products with variations like color options and multi-packs
Make sure to use Amazon seller tools like Jungle Scout or Helium 10 to evaluate the marketability of a product including estimated sales volume, competition levels, and profit potential. This data can help you determine if a niche product is worth pursuing.
Step 2: Evaluating Suppliers on Alibaba
Once you’ve identified potentially profitable products, the next step is vetting Alibaba suppliers to find reliable partners.
Here are 5 factors to consider when shortlisting and selecting suppliers:
Reputation and Reviews
An experienced, highly rated supplier is crucial for receiving defect-free products in a timely manner. Prioritize sellers with at least a few years in business and look for positive reviews mentioning product quality, responsiveness and professional service. Both the supplier profile and product listings will display ratings and feedback.
Offered Products
Browse the supplier’s storefront for product catalog depth, variety, and customization capabilities. Suppliers that specialize in your niche demonstrate higher levels of expertise and manufacturing quality. Having options like logo imprinting and packaging customization also provide more ways to differentiate yourself on Amazon.
Pricing and Minimum Order Quantities
Compare pricing across a few suppliers while keeping shipping expenses in mind. Reputable sellers will list prices upfront instead of complex quote inquiries. Also pay attention to MOQ (minimum order quantity) policies, as lower minimums like 100 units reduce financial risk compared to 1,000+ unit commitments.
Certifications
Legitimate suppliers demonstrate credibility and security through recognized certifications like an Alibaba Gold Supplier badge, Import & Export license, and ISO quality system certificates. These signal the seller undergoes auditing and meets standards for capabilities, transparency and performance.
Responsiveness
A supplier should respond to inquiries and questions in 1-2 business days. Clear communication is vital for clarifying product specifications, confirming production capabilities, negotiation and resolving any sourcing issues. Prioritize working with English-speaking contacts for easier correspondence.
By evaluating suppliers across these criteria before placing any orders, you can improve the likelihood of receiving high-quality products on schedule at the lowest viable cost from reliable, ethical factories.
Step 3: Register as an Amazon Seller
To sell products sourced from Alibaba on Amazon, you need to create an Amazon Seller Central account. There are two main options – Professional and Individual accounts:
Amazon Professional Seller Account
- $39.99 monthly subscription fee
- Gain access to enhanced reporting, listing, and order management capabilities
- Ability to sell unlimited products across all categories
- Volume selling discounts on shipping and fulfillment
Amazon Individual Seller Account
- No monthly fees (pay as you go model)
- Can sell up to 40 products per month across most categories
- Basic selling tools and order tracking features
For serious sellers planning to scale their business over time, a Professional account typically delivers the most value and income potential.
Be sure to also understand the different types of selling plans (FBA, Merchant Fulfilled, etc) and related Amazon seller fees. Consider costs for referral fees, FBA pick & pack charges, storage fees, and more when determining pricing strategy and profit margins.
Step 4: Creating Effective Amazon Listings
Creating a compelling product listing is essential for driving conversion from initial interest to finalized checkout. Follow Amazon listing best practices:
Optimized Title
Include the primary keyword for your product while keeping the title concise under 200 characters. Lead with your brand name and product name for improved branding.
Informative Bullet Points
Highlight the most important product features and benefits in easy-to-read bullet points. Avoid duplicating the title and focus on how the product uniquely solves customer needs.
High-Quality Images
Showcase your product across multiple angles and contexts. Zoom in on essential details and include images displaying packaging, measuring product size, product in use, accompanying accessories, available color variants and more. Follow Amazon image guidelines.
Enhanced Brand Storytelling
Share your brand’s founding story and core differentiators in the product description to build an emotional connection with customers and establish trust in your business.
By crafting optimized listings for each product, you make it easy for shoppers to evaluate your offerings against competitors and confidently purchase from your brand.
Step 5: Shipping Products from China to Amazon
When importing products from Alibaba suppliers to sell on Amazon, arranging cost-effective shipping and properly navigating customs takes careful planning and coordination.
Calculate Total Landed Costs
Consider all expenses associated with shipping – not just freight rates. These include terminal handling charges, fuel and peak season surcharges, duties, taxes, broker fees, etc. An experienced freight forwarder can advise on the most economical option.
Choose a Carrier
Popular choices for Amazon sellers include sea freight forwarders and express carriers like FedEx, DHL and UPS. Compare transit time, tracking capabilities, pickup/delivery reach and claim resolution support across carriers.
Prepare Customs Documentation
Work closely with your supplier to receive a detailed product invoice, certificate of origin, bill of lading, packing list and any other necessary customs forms documenting your shipment. Inaccurate or missing info can delay clearance.
Arrange Clearance Brokerage
A customs broker will help classify and value your goods while paying duties/taxes on your behalf to speed up product release. Brokers also handle audits and any customs inquiries throughout the import process.
Create Amazon Shipment Plan
Log into your Amazon Seller Central account to create your first shipment plan for FBA inventory. Follow the step-by-step process including box content details, estimated arrival date and shipping label creation to send pallets to Amazon fulfillment centers.
Staying on top of these logistical considerations will prevent unnecessary storage fees and listing suppression if inventory arrives late.
Step 6: Product Quality Control and Safety
Ensuring products meet quality and safety standards protects customers and your Amazon seller account reputation. Follow these best practices for risk reduction:
Order Samples
Before large scale production, have your supplier ship some units for quality assurance checks around durability, sizing, color accuracy and functionality testing. Provide factory feedback if any tweaks are required.
Review Third Party Certificates
Ask your factory to share existing safety certificates like RoHS, CE, CPSC, etc. If critical documents are unavailable for your product category, consider hiring a pre-shipment inspection company.
Conduct Routine Audits
Perform periodic production monitoring whether in-person visits, live video walkthroughs or documentation reviews to confirm compliance with your specifications. Continuous evaluation tightens quality control across batches.
Validate Barcodes
For each product, validate that the Amazon-scannable barcode matches the manufacturered item exactly. Errors can negatively impact inventory tracking, fulfillment and metrics.
By verifying product quality with multiple checks through sourcing and sales, you prevent jeopardizing your Amazon account status. Customer safety also avoids negative publicity or legal issues.
Step 7: Pricing Products Profitably
A well-planned pricing strategy is necessary for achieving sufficient profit margins while remaining competitive. Take the following into account:
Calculate a Profit Margin Goal
Tally your cost of goods sold (COGS), Amazon fees, and desired profit to determine an appropriate retail price. Common margins range between 30% to 100%+. Find the sweet spot appealing for customers while earning significant ROI per sale.
Research Competitor Pricing
Use Amazon price tracker extensions to analyze pricing patterns from rival sellers. Consider matching prices on commoditized products or position premium prices for differentiated offerings. Discounting sparingly for promotions.
Factor in Dynamic Pricing
Leverage Amazon repricing software to automatically modulate prices based on competitors‘ rates and algorithm factors boosting discoverability. This maximizes sales volume across fluctuating market demand.
Step 8: Managing Amazon Reviews & Reputation
Customer product reviews make or break purchase decisions. Proactively managing your brand reputation on Amazon leads to higher conversions.
Follow these review generation and response best practices:
Automate Review Emails
Invite feedback from both satisfied and unsatisfied customers via automated review request emails through tools like FeedbackWhiz. Monitoring reviews becomes more efficient.
Respond Publicly to Reviews
Reply to user reviews (good or bad) showing customers you value input and are committed resolving issues transparently. Public responses also build credibility.
Investigate Negative Reviews
If you receive multiple negative reviews, thoroughly investigate by reviewing past orders and contacting reviewers. Determine if there are legitimate quality problems requiring seller or supplier action to prevent recurrence.
Report Review Violations
If you suspect fraudulent reviews from competitors or customers violating guidelines, immediately report the issues to Amazon for monitoring and removal to prevent distortion of your product’s true rating.
Proactively managing reviews protects your brand’s reputation on Amazon while increasing conversion rates – ultimately resulting in higher sales.
Step 9: Stay Compliant with Laws and Regulations
When leveraging overseas suppliers to export products for sale, numerous legal considerations arise around taxes, intellectual property (IP) rights and restricted items. Consult professionals to navigate the complex landscape of exporting/importing regulations including:
- Sales tax collection by US state
- Safety and compliance documentation (CPSC, FCC, FDA, FTC, Prop 65)
- Trademark and licensing verification
- Restricted product vetting (hazardous materials, weapons, wildlife)
Strictly adhere to Amazon selling policies, Terms of Service and stay up-to-date on prohibited seller activities to avoid suspension. Continually monitor guideline changes in Seller University training.
While intimidating to interpret at first, full compliance protects your business from detrimental legal consequences down the road.
Final Thoughts
Selling products sourced from Alibaba on Amazon offers entrepreneurial opportunity with lower barriers to entry, but still carries executional complexity.
The ultimate keys to success are:
- Selecting niche products poised for sales volume based on demand
- Building relationships and vetting manufacturing partners
- Planning end-to-end shipping/logistics efficiently
- Delivering exceptional quality and support to customers
- Adapting pricing and promotion strategies to stay competitive
- Continually enhancing processes for operational improvement
While challenges exist from financial to supply chain risk, the potential profitability of leveraging Alibaba for Amazon arbitrage makes the endeavour worthwhile for many burgeoning ecommerce brands.
Hopefully this guide has provided a comprehensive overview of critical steps and considerations when starting down the fulfillment pathway of manufacturing products overseas and selling them directly to Amazon end-users.
Let me know if you have any other questions in the comments!
