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What is Alibaba.com and should your business use it

January 20, 2015

In 2014, Chinese e-commerce company Alibaba.com started making headlines in the west as many news agencies called it a major company to watch and the BBC's business section reported that it was now valued at over $100 billion. Despite this incredible growth, many USA companies did not know about alibaba.com and how it would benefit them as a resource for finding overseas suppliers.

So, what is alibaba.com and what does it do?

Alibaba was founded in 1999 by Jack Ma, and although it is new to Americans, it is well-established in China. According to the company's "about us" page, their mission is to, "make it easier to do business anywhere" and they do this by providing a helpful connection between buyers and suppliers. The website currently operates in over 190 countries and in 40 different categories. It is designed to help businesses of all kinds find complimentary suppliers in any part of the world. To help with this, there is even a community forum and mobile support.

What are the advantages to using alibaba.com?

The number one benefit of using alibaba.com is you have instant access to a countless number of global suppliers who sell just about any product known to man, and you can normally find low wholesale pricing. This can mean big profits by buying your supplies at rock bottom prices and selling at premium retail prices.

Another nice thing about alibaba.com is they do a good job of organizing products and categories so you can find what you want fast. For example, clicking "coffee" in the food category leads to a list of options that can be compared and there are filters on the side to narrow down the options even further. Additionally, this list has a familiarity to it as it looks similar to eBay, meaning American businesses will feel at home very quickly. This layout, use of community features, and their messaging system gives Alibaba a friendly look and feel.

What are the potential disadvantages to working with alibaba.com?

The company's reputation is not good and there are a lot of complaints filed against alibaba. This is reflected in the appalling F rating given to alibaba.com from the BBB. The report on the BBB website states that this rating is due to a failure to respond to 114 complaints, with the company having received 154 complaints in the last three years alone. The vast majority of these complaints are regarding problems with a product or service, but there are also billing, advertising and delivery complaints too.

Should you take the risk and join this emerging Chinese company?

Because of the huge potential profits, it is easy to see why so many companies want to buy from overseas suppliers on Alibaba, particularly when its future seems so bright as a gigantic global business. However, because of all the complaints against alibaba.com, you need to be very careful when starting out. It is recommended that you start small with your purchases and only expand to larger purchases after you have built trusting relationships with suppliers.

 

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