Are Alibaba’s cheap prices legit? 6 reasons they’re not

What is Alibaba?

Alibaba is one of the world’s largest online e-commerce businesses. It offers various services like businesses to businesses (B2B), consumers to consumers (C2C), and businesses to consumers (B2C) thanks to his several sites related to retail, wholesale, and dropshipping business, such as Taobao, Alibaba, Aliexpress and 1688.

Business owners can visit Alibaba.com to purchase products in bulk. The website gives you the chance to discuss with the manufacturer directly. You can even customize products if needed.

Is Alibaba safe?

Alibaba is very legitimate and safe and enjoys a solid reputation. The majority of the platform's transactions are secure because of its tight laws and restrictions. The platform has also put in place measures to cushion its users if they do run into people who are just out to steal their money.

Alibaba, however, is merely an online marketplace that links suppliers and customers.

Customers on Alibaba should constantly conduct due diligence on the manufacturers and traders they are working with. Take a look at what prior customers have to say and how many orders they've successfully completed. You can then decide whether to continue working with them or not after learning this.

When making a bulk order, order a few samples first and then try them out to determine if they're satisfactory, for instance, if you're a business. This is a secure method of figuring out whether the merchant is dependable and offers high-quality items.

How to find great suppliers on Alibaba?

When using Alibaba, you browse suppliers. Instead of screening for products, you should do so for suppliers. Use Trade Assurance, Gold, and Assessed suppliers to filter out potential suppliers.

Trade Assurance

Trade Assurance, a free service provided by Alibaba, will protect you if the things you ordered do not arrive as scheduled or if they do not meet your expectations for quality or specs. Alibaba will issue a full refund if this occurs.

Gold suppliers

Suppliers with premium memberships must pay a hefty membership fee to be granted gold status. Usually, scammers target free Alibaba accounts. The membership fee does not ensure they are trustworthy, but gold providers are less likely to be shady operators that vanish after taking your money. Look for the number that indicates how long the supplier has held the Gold designation on the product page or supplier profile.

Verified suppliers

Your greatest option might actually be verified suppliers. They are gold vendors who are from China, Hong Kong, or Taiwan and who have undergone an examination by an independent inspection firm. On the supplier's Alibaba page, you can see if they have been confirmed along with a list of the things they have been approved for.

Why are Alibaba products so cheap?

Products sold on Alibaba are usually cheaper for many reasons, here are the 4 main ones :

Cost of labor

The products' ostensibly "affordable" price has a lot to do with the fact that they are manufactured in China. Chinese producers use what some could refer to as "cheap labor," which lowers the cost of production.

Cost of electricity

The price of electricity in China is VERY low when compared to other global manufacturing hubs. It might be $400% less expensive than what it would be in the US. Naturally, this results in lower production costs and, consequently, lower product costs.

Selling in bulk

Unlike when you sell individual things when you offer products in bulk, you are certain to sell more of them and for higher prices. For this reason, wholesale prices are lower everywhere in the world, benefiting both the consumer and the supplier.

Less consumer targeting

The businesses that sell the products to customers are more concerned than the producers. For instance, Apple must allocate funds for advertising, public relations, customer service, marketing, etc. The total cost of the product that you purchase is impacted by all of those expenses. While manufacturers on Alibaba must engage in some marketing, they don't compete as fiercely for customers, thus their costs will be lower in that respect.

Why you shouldn’t trust Alibaba’s prices

There are several reasons why we say that the prices on Alibaba are not as low as we imagine and that you have to take into account other parameters.

- Reason n°1:  you have to take into consideration the exchange rate, which directly impacts the price of the order.

- Reason n°2: Suppliers post very low prices to gain visibility, but in reality, the price is much higher.

- Reason n°3: the cost of production and raw material can drastically increase the prices, but those posted on Alibaba are not updated

- Reason n°4: you have to add the shipping costs, which are important.

• Reason n°5: to entice you to place the order, some suppliers may provide you with a highly attractive quote. They will increase the price as soon as you try to send the deposit after all the details for the packaging, samples, etc. have been confirmed.

- Reason n°6: The low prices you see on Alibaba are for a bulk order.