How to Find the Right Supplier

Date posted: January 12, 2018

supplier

By Rieva Lesonsky

As a retailer, whether online or brick-and-mortar, one of your biggest challenges is to find the right supplier, one that is an affordable source of quality goods. Or, if you’re an inventor, where do you go to find a potential manufacturer for your product?

At CES, I talked to Sunny Chhabra, the Marketing Manager at Alibaba.com, to get the answers. Chhabra believes, “The core of Alibaba is small business.”

Rieva Lesonsky: What’s the first thing entrepreneurs and small business owners should do when they’re hunting for a supplier or manufacturer?

Sunny Chhabra: Typically, people start out searching for a product. But instead, they should first research the market. Where in the world is this product being manufactured? Where is it being sold? The more informed a buyer is, the richer an experience they’ll have when they’re ready to do business.

They should also know about the state of their industry, the buying and sales trends. There’s information about that at Alibaba.com’s Insights and other resources.

Lesonsky: Once they do that and come to Alibaba.com to start their search, what do they do? My guess is there are hundreds, sometimes thousands of suppliers to choose from.

Chhabra: Yes, there are. And there are two primary ways to find suppliers. If you want to search for one, it’s best to filter your search. For instance, if they are looking for Bluetooth headphones, do they want to sell all types, or only specific ones, such as in-ear or over-the-head? Are they looking for headphones in certain colors only?

Once they filter on product style, they can filter on what market or region of the world they’d prefer to do business with and by minimum order size.

Buyers can further filter on the type of supplier they want to do business with. There are:

  • Assessed Suppliers. Their businesses have been inspected by 3rd parties, who have filed reports about them, which buyers can look at.
  • Gold Supplier. All gold suppliers have been assessed. They are at a premium level. If they’re located on mainland China, gold suppliers have been visited by an Alibaba.com employee to check them out. Gold suppliers can showcase their products.
  • Trade Assurance. These suppliers have to be gold suppliers as well. On mainland China, 70% of the gold suppliers are at the Trade Assurance level. This means Alibaba.com offers the buyer order protection—for free. When you work with Trade Assurance suppliers, Alibaba.com will step in if the supplier doesn’t ship on time or if the products aren’t built to the standards noted in the purchase order. Our goal is to roll the Trade Assurance program out to other countries. It’s a great way to create trust between the buyer and supplier.

You can do an entire search in 15 minutes. No matter which type of supplier you’re working with you should read their profiles, see how many years they’ve been in business, how many employees they have, if they have patents and certifications. And check out their full line of products.

Lesonsky: What’s the other way?

Chhabra: Buyers can post an RFQ—Request For Quote—which simplifies the search process. You just fill out the RFQ and within 24 hours suppliers will reach out to you with their bids. This also works well for inventors, who are creating ideas for products that don’t exist. You can upload videos and drawings so the manufacturer can see exactly what you want.

Once you get the RFQs, you should research the companies. Read their business profiles. Look at their response rates, and how many transactions they’ve had. What’s the average price they charge?

Lesonsky: And then?

Chhabra: Most buyers identify their top three choices. Once you do that, order samples. Check out the response time, the quality of the samples and how well the communication process goes.

Then select a supplier—go to the supplier page, and if you’re using Trade Assurance, it all gets initiated through Alibaba.com.

Lesonsky: How do you communicate with the suppliers.

Chhabra: However you prefer to. Phone, though negotiating time zone differences can be tricky. There’s email or you can use the Alibaba.com IM tool, Trade Manager. If you don’t want to work with Trade Assurance, you can work with the supplier/manufacturer directly offline.

Then you hit “start order” and you’re set.

Lesonsky: What if you need more help?

Chhabra: Alibaba.com also offers inspection services. You can find a 3rd party inspector on Alibaba.com who will conduct factory audits, container checks, and make sure everything is being shipped and labeled properly. We can also help with logistics.

Lesonsky: Sounds like Alibaba.com is basically a back office, offering infrastructure support.

Chhabra: Alibaba used to be a platform that connected businesses. We still do that, but we’re more than that. We can educate buyers, help them make the right decisions in global trade. Today, we’re an end-to-end solutions provider.

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