Assuming that you have identified a trending product in AliExpress and your keyword research indicates there is a big enough demand and that keywords are affordable, it is time to find vendors for your online store. While AliExpress is consumer-facing, Alibaba is where you will find the manufacturers and vendors of those products.
Find the Best Ranking Vendors
It is important to note that many Chinese vendors sell the same product. When selecting a vendor there are several considerations to consider, other than just the cost per item.
As you can see from the snip below from the Alibaba website, two companies produce the same hammock. One sells the product for less than the other but more than just price per item should go into your selection decision. One thing you will want to compare since you are not a large retailer, is the minimum order size proposed by the vendor. In our example, they both have a minimum order size of 50 but they can often be quite different.
Another thing to consider when trying to find vendors is the vendor’s star rating. In our hammock example above, one vendor has a 4.9-star rating while the other has only a 4.6.
Also, consider the number of reviews that went into the star rating. As you can see, the higher star rating came from just 12 reviews when the lower rating came from 48 reviews. It is always harder to maintain a 5-star rating with many reviews because more buyers will rate a vendor when there is a problem than when the experience is good or meets expectations.
If you roll-over the star rating, you will see that it consists of three dimensions: Supplier Service, On-Time Delivery, and Product Quality.
If you click on the vendor’s star rating, you can see even more details from the supplier.
For each of the three dimensions that make up the star rating, you can see how many reviewers rated the supplier. In our example, you can see that the 4.6 ratings that made up the Supplier Service, 42 reviewers, or 88% gave the supplier a 5-star rating.
To the left of the vendor’s star rating is a percentage that represents the percentage of customers that received a response within 24 hours or less from the supplier. This is important given the large time difference between the US and China. Never select a supplier that has a response rating of less than 90%.
Next, you will want to click on each vendor.
Concerning the response rate, you will see that one is based on a smaller total number of orders, 340k vs 440k, but spanned 205 transactions.
Another thing to note as you compare suppliers is the lead time. As you can see, the most expensive product also had a much longer lead time.
If you want to private label the item, which involves placing your logo or brand on the item, one vendor required a minimum order of 100 items while the more expensive one required 500 items to private label the order.
If you scroll down the page, there is a wealth of additional information about the company and its product that are worth reviewing. While the remaining information varies from vendor to vendor, there is often lots of valid information to help you make a good decision such as FAQs, customer feedback, export distribution, etc.
NOTE: If the product requires a certification to sell in the US such as Food and Drug Administration (FDA) or Underwriters Laboratories (UL), be sure to read the product information to make sure it has the proper certifications so you can sell the product in the US.
Communicating with the Vendor
When you find a vendor, you will want to contact them with a list of questions that are not answered in either their detailed product pages or on their company page. You will want to negotiate price, minimum order sizes, and terms. However, it is important to note that Chinese culture is quite different from the US.
Companies in China want a long-term relationship with you, so trust is essential. To create that deeper relationship and trust, it is important to share some personal information. Sharing personal information such as pictures of you and your family and where you live, will often encourage your Chinese counterpart to do the same, thereby deepening the relationship.
In Chinese culture, confrontation is avoided. If you ask for a concession on price or minimum order size, for example, they will often accommodate your request. However, be aware that they may be forced to change other things, often without consulting you. For example, if you ask them for a better price, they will often give you one, but it may come at the expense of product quality.
Never be rude or raise your voice as this is considered losing face in Chinese culture. Saving face is very important in Chinese culture. Pressing an issue or going out of your way to prove a point will cause the other party to lose face. Once lost, it will permanently affect the relationship.
Before you commit to an order, you will want to order a sample to verify the quality of the product. Also, see if they have videos of their product in action that you can use in your marketing.
It is always a good idea to have multiple vendors from whom you can buy products, just in case.
Shipping Product from China to the US
When shipping products from China to the US, you can use Express Shipments, Air Freight, or Ocean Freight
Express Shipping
FedEx, UPS, and DHL are popular choices for express shipments from China to the US. Most courier companies provide air express shipping options. US customs will only apply if the value of the goods exceeds $800, but clearing customs is a lot more straightforward than with air freight or ocean freight.
Air Freight
The larger the shipment, the more complex the shipping process will be. In many cases, shipments are delivered to a facility where your order is consolidated with other shipments. This process is repeated in reverse at the other end. The US customs process is also a lot more complicated with air freight than for express shipping.
International law, national law, and individual carrier regulations all play their part in defining and restricting what goods are considered dangerous for air transport. More products are restricted for air freight than ocean freight. Some common products that are prohibited from air freight include:
Products that contain a gas such as spray cans
Flammable products such as perfume or batteries
Toxic or corrosive items such as products that contain acid
Products that contain magnetic substances such as speakers
Oxidizers and biochemical products such as pool chemicals or pesticides
ePacket Express is a subsidized shipping option in China that uses unused space on passenger airplanes and can usually ship products from China to the US in about 7 days. However, as I write this, Covid-19 has restricted passenger travel from China making this option less reliable.
Ocean Freight
Ocean freight means containers. Between 2021 and 2022 the cost to ship a container from China to the west coast of the US has nearly tripled. The Freightos Index is a great resource that provids the median cost of shipping a standard rectangular metal container from China to the West Coast.
If you don’t have enough material to fill a full 20’ or 40’ container (Full Container Load or FCL), you can ship a Less-than-Container Load (LCL). With LCL, several shipments are consolidated and packed into one container. LCL means more work for the forwarder, including the physical work of consolidating various shipments into one container on the Chinese end, and de-consolidating of the shipments at the US end. As a result, LCL typically adds an extra week to shipments.
Furthermore, it is more difficult to keep track of a shipment that is one of many orders in a container than it is to keep track of a full container. With LCL, there is also extra paperwork involved and a greater risk of delay or loss of shipment.
How will you find vendors for your online store and validate them as your best options?
Special thanks to Michael Beck for his review of this post. Michael is a SCORE colleague and a maven when it comes to selling online products. Michael is the CEO of BeckTan and Groupe Beck, two businesses that provide consulting services for entrepreneurs with online stores. He is a serial entrepreneur with a wealth of business experience having built more than a dozen successful businesses.
