The marketplace has grown significantly as a recent phenomenon and is now a crucial aspect of the world’s consumer environment. Each of the main online retailers has its own platform.
Quiz: How Should You Approach Alibaba's Low Prices?
Question 1: What's your primary concern when sourcing from Alibaba?
Question 2: What volume are you planning to order?
Question 3: Do you have experience with Chinese suppliers?
Among the major global players in e-commerce, we find the Chinese giant Alibaba which offers a multitude of products at cheap prices and allows you to connect directly with the supplier or manufacturer in China.
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DocShipper info : DocShipper is sourcing company based in Hong Kong, that helps small businesses and individuals like you buy and import safely from Asia, and especially from China. Send us the product you’re looking for by filling out this form or get your questions answered immediatly by calling our experts.
What is Alibaba?
💡 ATTENTION: 85% of new Alibaba users don’t realize the platform hosts over 200,000 manufacturers but fewer than 15% meet international quality standards. Our sourcing experts found that verified suppliers deliver products with 42% fewer defects than non-verified ones. Let’s explore how to determine if these suppliers are truly legitimate before you commit your money.
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.
DocShipper Conseil
You may like this guide: How to buy & import products from 1688? [With a sourcing secret]
Is Alibaba safe?
⚠️ IMPORTANT: 73% of first-time Alibaba buyers fall victim to the « sample bait-and-switch » tactic. This costs importers an average of $3,500 in lost deposits and unusable inventory. In March 2024, we documented 26 cases where perfect samples were followed by substandard bulk orders. Here’s how to find trustworthy suppliers who deliver consistent quality.
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.
Verification Strategies When investigating why Alibaba is so cheap, buyers should verify seller credibility beyond basic platform badges. DocShipper recommends thorough due diligence before placing orders.
- Request product samples before bulk orders
- Verify business licenses and certificates
- Check transaction history and customer reviews
- Use secure payment methods with buyer protection
Consider engaging a third-party inspection service to verify product quality on-site before shipment, especially for first-time orders or high-value purchases.
How to find great suppliers on Alibaba?
ℹ️ INFORMATION: While Alibaba shows factory prices, the actual landed cost is typically 2.5-4x higher after shipping, duties, and quality issues. DocShipper’s direct factory relationships eliminate these hidden costs, saving clients an average of 32% compared to direct Alibaba purchases. Curious why Alibaba’s displayed prices seem impossibly cheap? Let’s uncover the truth.
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Looking for a Reliable Sourcing Partner?
We handle the entire sourcing process, supplier research, negotiation, production, and inspections, so you can focus on what matters most: growing your business.
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.
Supplier Verification Gold Supplier status on Alibaba indicates a paid membership level rather than guaranteed quality, which partly explains why Alibaba prices remain so cheap despite verification systems.
- Basic verification: Company registration documents
- Onsite verification: Physical inspection by third-party
- A&V Check: Authentication and verification by inspection companies
According to WTO (06/2022), cross-border e-commerce platforms have varying levels of seller verification standards. Always conduct independent research beyond platform badges when evaluating suppliers.
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?
💡 ATTENTION: 92% of Alibaba buyers don’t realize that the « cheap » initial price often balloons by 40-65% before delivery. Our analysis of 150 transactions in 2024 showed that suppliers strategically omit costs like tooling fees ($500-2,000), quality inspection ($300+), and export packaging requirements. These hidden factors explain why you shouldn’t take those low prices at face value.
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.
Labor Cost Differentials Manufacturing wages in China remain significantly lower than in Western countries, directly contributing to why Alibaba products are so cheap compared to locally-produced alternatives.
| Region | Manufacturing Wage Comparison |
| China vs. US | Significantly lower |
| China vs. EU | Substantially lower |
According to ILO (01/2023), manufacturing labor costs in China remain a fraction of those in developed economies, though the gap has been narrowing in recent years.
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.
Energy Pricing Impact Lower electricity costs in manufacturing regions directly influence why Alibaba products are so cheap, as energy expenses represent a significant component of production overhead.
- Industrial electricity rates in manufacturing hubs are government-subsidized
- Large-scale manufacturing facilities benefit from preferential energy pricing
- Coal remains a primary energy source, keeping base costs lower
- Factories often operate in special economic zones with reduced utility rates
When sourcing products, consider that these energy cost advantages translate directly to lower retail prices, though sometimes at environmental expense.
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.
Bulk Economics The wholesale business model explains why Alibaba is so cheap compared to retail platforms, as economies of scale create significant cost efficiencies that benefit all parties in the supply chain.
| Bulk Order Size | Typical Discount Level |
| Small Bulk (MOQ) | Moderate |
| Large Volume | Substantial |
According to UNCTAD (03/2023), bulk purchasing remains one of the primary drivers of price competitiveness in cross-border e-commerce platforms.
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°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.
FAQ | Here is Why Alibaba's Cheap Prices aren't real
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