Alibaba and Fulfilled by Amazon

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This year I have tried to learn as many things as I can. I became fascinated as to what barriers of entry exist in real life and which ones only exist in my mind.

Someone said the word Alibaba to me once without me knowing what it is. Then I noticed that Jack Ma was on some inspirational video medley I was watching. After looking it up I see that it is the largest global IPO ever. Interesting.

So what is Alibaba? From what I see, it’s a business to business hub connecting buyers and producers globally. When I say producers, I don’t mean resellers like Wal-Mart or even Wal-Mart’s warehouses. This is the actual people that make the product in countries like China and Vietnam. I mean you’re connecting to people in the factories. You might catch a reseller in China but the goal is finding the actual factory.  You are cutting out the middle man as a normal Joe Schmoe. Is this hard? I set off to find out.

So what’s first and what’s hardest? It’s finding out products to sell. I mean that’s an infinity question right? EVERYTHING is a product. The chair you sit in, the computer you work on, the clothes on your back. Since I have a gym on the side, I thought I’d look up gym stuff.

But even that’s hard. How do you know what product is successful?

I stumbled on a pod cast that mentioned the product Jungle Scout.

Jungle Scout is a Chrome Add on that will pull the stats of any Amazon item that your screen is currently. Using this you can tell what items are doing well and what market you might want to compete in.

That’s one step in the process. I saw that mobility bands were sold at a very high volume from the top seller. So what you do from there is look for that item on Alibaba.com.

So now you’re in the Alibaba world. What the heck is going here. They have prices that I’m told are completely negotiable. They have an MOQ (minimum order quantity) that is also completely negotiable. Now I’m dealing with people directly from China. How do I know if I’m getting ripped off? How do I know the quality?

The first step is asking for a price list and MOQ. For some of the more expensive items you won’t even get a response because it would take a lot of capital to get a shipment. For example when I asked about mobility bands and knee sleeves I got a ton of inquiries and responses. When I asked for barbells I got no response because I was trying to do a small MOQ. For barbells they can’t just ship them to you via fedex or DHL. You need to get a crate that gets put on a boat. They’ll ask you for your origin port, whatever that is.

So the first step if this is your first foray is to find the product you want, mention an MOQ, and then ask for a sample. Surprisingly the sampling process is very very quick. You can pay via paypal and they’ll send you a sample within a week or so. So that’s what I did, i get several samples for resistance bands and knee sleeves and they all looked identical to me.

The next step was to actually risk money. Ali Baba has a guarantee process where you can get your money back if the arbitrator thinks that the terms weren’t met. That sounds pretty good but what is the exact definition of terms not meeting? At this point it was a leap of faith. I was very paranoid about talking it over with these distributors. I was trying to look for warning signals that they were ripping me off but still in the end, it’s a leap of faith. I eventually spent about $2000 on Knee Sleeves and $2000 on resistance bands. My first distrubtor I picked for resistance bands looked shady and then stopped communicating with me when I put down the deposit. I actually did use the arbitrator and got my money back.

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