054: Sourcing Tips on Alibaba with Marissa Sayers

Have you ever considered ordering something from a global sourcing site like Alibaba? Have you wanted to but felt nervous or overwhelmed? Well, today we're breaking down the steps to get started. Come listen. Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch, and grow your subscription box. Now here's your host, Sarah Williams. Hey everybody, welcome back to the podcast. I'm excited today because I'm talking with Marissa Sayers from Sayers Imports, and we're talking about sourcing today. And I know it's one of those things that's on your mind all the time, especially as you get launched and you're starting to grow. Finding products is a constant battle in our industry, and it's something that we need to be on top of all the time. And so whether you've ever sourced overseas or not, I want you to listen to this episode, take some notes, because Marissa's here and she's going to drop a lot of knowledge to help us get started with sourcing globally or kind of give you some tips and tricks on if you're already doing it and how you can do it a little bit better. So Marissa, welcome to the podcast. Say hi to everybody.

Hi guys, thanks for having me. I'm so excited.

I'm so excited to— Marissa and I actually just got back from going to market, so we got to spend some time together looking at all the things, figuring out what we want to make this year, figuring out what we want to put in our boxes. But today we're going to talk about Alibaba, and Alibaba is a website that you can source a lot of things overseas. Marissa, when you explain what Alibaba is, what is that?

The easiest way to kind of explain it is that it is a business-to-business website. To connect, you know, buyers and sellers. So mostly it is China-based, although you can find some other countries like Japan or India, but usually it is sourcing for China, and it's a way for them to be able to be matched with you, and so you can get the products that you need, you know, at an imported cost.

It's, it's like the best place to go when you want to start sourcing from China, right? Because, yeah, like You could get on a plane and you could go to China and you could figure it all out. You could go to— what is that, the Canton Fair that's out there? That's like the huge thing. That is so overwhelming. This is a way that normal people, small businesses like you and me, we can start learning how the sourcing process works with China. Now there's a couple websites and I've sourced from both, but there's Alibaba.com and there's AliExpress. What's the difference between the two?

So Alibaba, like I said, is business to business. That is their mindset. Usually they have some sort of minimum or MOQ you'll see on the websites. Now that minimum could be very low. It could be 25 pieces or 50 pieces, but the whole entire website is designed with a business owner buying in mind versus AliExpress is actually designed for more of a consumer. So you're going to see a difference in prices. You're going to see that very rarely have I ever seen a minimum on AliExpress. And the prices are higher to reflect that because they are— that whole entire website is with consumers in mind. Most businesses, factories, manufacturers operate on both, and their intent is to— a business buys samples on AliExpress, and then once they see the quality, they then try and find the factory and buy in bulk. But we're going to talk about how I recommend just skipping that part.

Okay, and I, I love recommending both as well, because for me, I would send someone over to AliExpress if they have low numbers, like if they have, you know, maybe less than 100, maybe around 50 subscribers or something like that. Because you're still going to get a good deal as far as pricing, but you don't have to meet that MOQ. And when we say MOQ, we're talking about minimum order quantity. Anytime you buy in bulk, there's going to be an MOQ, and that means you have to buy at least that number for you to be able to buy from them. So because there's not that on AliExpress, you can buy lower quantities. And so I really love that to kind of get started if you're not at the 100 100 mark or above yet. So, um, all right, so if I decide, okay, Marissa and Sarah, I'm going to start looking at Alibaba, do I need to have any sort of credentials? Do I need to— is there something that I need to prove who I am, or is there something I need to do before I can start ordering on Alibaba?

You actually don't. So you don't need to prove, you know, you don't need your business license, you don't need an EIN or anything like that. Don't be surprised, the factories will actually do their own research on you before they choose to work with you. It's a two-way street, you know, you are vetting them, they are also vetting you. So as soon as you contact them, they are looking at your social media, they are looking at your website, and they are trying to decide if you are worth it to work with at the same time you are trying to make that decision for yourself.

Okay, that's cool to know. Now, So I'm going to Alibaba.com. I'm setting up my profile, my account, so that I can start looking. I'm just putting something in. So I've got stuff on my desk. So I just— I always talk about stuff on my desk, but I'm going to look for custom pins. Okay, so I type in the word custom pins and hundreds of listings come up and suddenly I'm overwhelmed. What should I do to really narrow down this search, or what should I look for to help me sort through these hundreds of listings?

Okay, so there's a few things that you can do, especially as newbies. I recommend doing this. The first is, after you click search, there's a little button on the top right that says refine, and you can click on that, and one of the two options will be trade insurance, or if they're verified. You can select trade insurance. And right off the bat, what that means is anyone you purchase from, your purchase is going to be insured. So you're— that company offers that service. It's obviously a paid service. It will be reflected in your price. But there are a lot of factories that don't offer that. And so right off the bat, you will be eliminating any company or factory who does not offer the service of insuring their products overseas. So that's the first thing.

So what does exactly does that mean? So if something happens to my shipment, say it goes missing in the ocean somewhere, does that mean it's covered for me?

Yes.

What happens if I get the product and it's not at all like the way they described it or the pictures or the sample that they sent me? Is that covered?

Yes.

Okay.

Yeah.

So that, that helps us sleep at night because a lot of times we're sending thousands of dollars overseas, someone we don't know, we've never met, maybe we've never bought from them before. For. And that can be stressful. That can be really unnerving for people. So having that trade assurance is like your little piece of your comfort zone that, you know, if something goes left with this transaction, that you have coverage. And, and I love that. Okay. What's the other thing we're looking for?

So the next thing is verified. It's going to be in blue writing. It's going to be bolder as you're scrolling through the listings. You could also click that checkbox if you want when you go to refine, if you only want to buy from people that are verified. This is basically an extra step that a factory or manufacturer has done through Alibaba to kind of show that, you know, they're in it to win it, they're in it for the long run. It's also something that they pay for to basically say, hey, you know, I'm, I'm verified on here, I'm legit. Now I will say, just because a factory or manufacturer is not verified does not mean that they're legit or not. But especially for newbies starting out, that's another thing that you can look for, you know, for peace of mind.

It's kind of like that blue checkmark, like on Instagram or Facebook of like a celebrity or someone that has a lot of followers. Like, we know this is you, we have verified that. So that's another, another bit of peace of mind for that. I like that. Okay, so I've refined my search. I'm now looking for verified people. I'm now looking for trade assurance people. So now my hundreds of listings maybe are maybe 100. What do I look for next?

So next, I want you to click on listings that you're interested in. And I want you to scroll down until you get to the section where the company information is, it will have their company name, it will have how many employees, how many square feet they have, how many transactions, and the higher that those numbers are, is a reflection of the stability and the size of that company. So when I click on a listing and I see that they have done $4,000 in transactions, I'm going to back out of that because I'm looking for a factory or manufacturer that has done multiple transactions and, you know, is proving that on Alibaba. If they have 50 square feet of space, then that tells me that they are not a true factory manufacturer. They are a middleman who is reselling product. Red flag. Red flag. If I see that they have one employee, again, that's a middleman. That's not an actual factory or manufacturer. So the higher that those numbers are, the more comfortable I feel with the next step, you know, of, of reaching out and that they're legitimate, a larger company that I want to work with.

So when you say middleman, you're talking about someone that is just a representative that will go to a factory and find that particular item in the listing, but they don't actually manufacture it and actually have no control over it, right?

Correct. They are selling the product at a markup for another factory manufacturer, and Alibaba is filled with, I mean, thousands and thousands of them. So that's one thing that you want to kind of— if you want to get the lowest price possible and the most customization and the most negotiating power, you're going to want to skip over those middlemen and find a true factory or manufacturer.

Okay, great. I love that. So now I've got all that filtered out. Maybe I found— and you know, I like to find 2 or 3 that I want to contact, right? I want to— I really want to get some samples from 2 or 3 people before I narrow down who I'm actually going to buy for. So maybe I narrow my 100 listings down to like 5, and I start contacting those 5. I don't want to directly buy from a ClickLink, right? I want to contact them. Tell me what you do when you contact them.

Yeah, you absolutely want to contact. So I narrow down my listing just like you said. So I mean, sometimes I narrow it down. Sometimes it's like 12 factories, which I know some people might be like, oh my gosh. But what I do is I write one message. And then I just copy and paste that one message to all of the different people that I'm interested in. And then part of the way I decide if I want to actually go through with getting a sample is how they respond to me. So I'm looking for things like, how long did it take? Did they answer all of my questions? Are they— how is the language barrier? Because that's a real thing. The deeper that you get into true factory or true manufacturer, the language barrier increases.

The more—

the easier it is to communicate, usually that's a sign of a middleman. And so that is also something I take into consideration. How difficult were they? Meaning, were they pleasant to talk to? I mean, this person that you are messaging is going to be your salesperson for the lifetime of you working with that particular company. They don't change around salespeople. So if I feel like someone's not interested in working with me, or they're coming off harsh, or they're not being very pleasant, I don't want to work with them. Because like I said, that is your contact for the factory. And so those are things that I'm looking for with that first message that I'm sending them, which is the message I send them to decide if I want to get samples from their factory.

It's kind of like a job interview. Like you're, you know, when I think about when I hire people, right? Like I interact with them and if their responses or their resume or whatever that is, like that's immediate no. Like the way they responded to— Exactly. Like you said, not answering all your questions. That means in the future, they may not answer all your questions if they don't do it right up front. And just being able to have a conversation, them being open to working with you, um, I think that's really, really important. So now you've messaged 10 or 12 people, and I, I would almost bet that half of the people don't message you back, right?

Absolutely correct. Yeah.

And so you're narrowed down to like 5 or 6. And so what happens next? In this process for you?

So I, once I've narrowed it down, then I will ask more questions. So those 5 or 6 that have responded, because Sarah's absolutely right, half of them are not even going to respond. And then I will start asking more particular questions to just vet them further. So some examples are, I will ask for pictures of that product in different lights, because if they're middleman or if they're a company that doesn't even have the product with them, they're not going to be able to do that. They're not going to be able to take a picture in daylight. They're not going to be able to take a picture in fluorescent light. I want to make sure that what they have put a picture of on their listing accurately represents what I'm going to be receiving. And that's another way that I can sort out red flags. If the picture on their listing is showing purple and when I ask for pictures of it, it's showing pink, then that tells me, okay, they're either editing their photos or they're putting filters on. And That's not saying I'm not going to work with them, but that is something that I'm writing down and making sure, okay, I always ask for daylight pictures from this company because they like to put a filter on their photos. It's not a negative, it's just a fact.

They like to make it look good and we're all for good imagery, but sometimes these are stock photos that are seen over and over and over again and lots of different factories use the same stock photo there. I like to ask for in real life photos. Like, that's the thing. Like, I want a photo in real life. I want a video in real life. So they'll take it, they'll talk to me on the video, or they'll show me on the video. So I want to know in— I want an in real life photo. And that means on your messy desk, wherever you're working. I don't want a pretty stock photo. I want an in real life photo because sometimes things that are portrayed in the photo are not actually what they look like.

Absolutely. And then the next, and probably, I mean, I shouldn't say next, this is all just one paragraph that I'm sending them, but something that I ask is, does their company offer DDP services? This is the only service that I recommend as a buyer using unless you are working with an importing company and you are paying them for their services.

Okay, let's talk about that.

Okay.

Because when I started sourcing from Alibaba, this was the most confusing thing for me, and it was really hard for me to figure out. So when you talking DDP, you're talking about shipping types. So tell me the different acronyms that, that are going to be there. It's FBA.

There's FBA, there's, there's so many. Okay. The only one you want is DDP.

DDP.

Period. DDP. There's FBA, there's a DDE, I believe. There is—

there's something with an X.

There's EX. There's an EXW, there's, I think, 10 different options, but as— for shipping. But as a small business or a large business importing without paying for services of an import agency, the only one you are going to use is DDP.

Okay, DDP. I want this shipped DDP, and you make sure that you ask them if that's possible before you even start to buy something. And what does shipping DDP mean?

So DDP, first of all, let me tell you, your price is going to jump, and I'll explain that in a second. And so when you are sourcing on Alibaba, I literally ignore all of the pricing that you see because when you order DDP, it's going to be a whole different price tier. And the reason for that is, is the seller is assuming complete and total responsibility. They— so here's some of the fees that go into importing, just some of them. Import duty, uh, let's see, import duty, taxes, custom clearance, insurance, freight charges, terminal handling, export duties, loading charges, and there's another 5 or 6 on there. And DDP means that the seller is covering all of those. Now that is going to be put in your cost, obviously, but you don't have to deal with paying for custom taxes and import duties and clearance at customs and unloading freight at the port and then getting freight from the port onto a truck to your house. You don't have to worry about any of that with DDP services.

If you ship any other way, you are going to be hit with all kinds of unexpected costs.

Yep.

And you do not want to, one, have to deal with that, especially in the world's climate right now, of having to find someone to go pick it up for you at the port. But you also want to make sure that you're building those expenses, the shipping expenses, the customs, the taxes, the all the things into the cost of your item, because that affects the profitability of your subscription box. So make sure that you are asking for DDP. And you have to understand that when something's $1.70 on the website and you want DDP, it's going to more than double that price. So just like Marissa said, just ignore those prices and just have a conversation with somebody to understand what it will cost you. Because that $1.70 price, number one, that could be for 1,000 pieces. First of all, that could be like an FBA or an EX shipping, which is not covering any of your, any of the legs along the way of it getting from their factory to your front door. So just go into that with an open mind and start the conversations. And that's why it's So important to have conversations with multiple people, because if Marissa is having conversation with 12 people and then 6 people don't even respond to her, and then out of those 6 people, 2 of them are not willing to ship DDP, it's going to narrow down her search. And you don't want to get through all of this and then you got nobody to choose from after you, after you did all this because you only talked to 3 people. Start the conversations with more people so that when you figure all of this out and you're ready to place your order, you have more than one to choose from.

Absolutely. And with negotiating, they're going to be using EX pricing. So they're going to tell you, you know, it's $1.70 EX is going to be what they're going to tell you. And you're going to say, I need DDP pricing. And you may have to say that more than one time to whoever you're talking to because they don't want to give you that price because they think you're not going to order because like Sarah said, the price like more than doubles. And so you just have to explain, no, I only use DDP services. I understand it's more, but they're going to be hesitant to give that to you because they want to just give you whatever price sounds lowest. So just— that's why in my very first message, you know, I say I'm only interested in DDP shipping. I'm only interested in DDP services. Is this something that your company offers? And I make it very clear that is the only way I'm going to ship. And so that way, that will eliminate later on when they are trying to say, oh no, EXW is better, EX pricing is better, it's much lower. You know, you can handle, you can handle customs, you can handle declaration. I don't want to handle that. Like Sarah said, I don't, I don't want to ship 1,000 of something or 100 of something and have no idea how much it's actually going to cost. Yeah, or how to get it off the ship or any of that. So It's stressful.

And DDP means that it's literally going to be handled from their door to your door.

Yes.

So you don't have to deal with anything in between, like nothing. It's amazing.

Very, very rarely have— this is for when I'm sourcing much larger quantities, so this is for more experienced business owners who are listening— will I need to get them some sort of information for customs. But what that is, is just they give you the website, like the tariff website, and all you do is type in what you're getting. So if you're buying you know, PU leather purse or whatever, and that's all they want you to just verify that they have the right tariff code. But that is, that's only happened twice out of all of my sourcing. But if that comes up, don't panic. It's just verifying that the information they have is correct, which so far, 2 for 2, they've been correct.

Awesome. Okay, so now I've got, I've gone through the process and You're listening, probably thinking, okay, this is going to take some time. Like, I'm going to have to, I'm going to have to do this. So I can't panic buy from Alibaba. Like, no, raise your hand if you're listening out there and you've had to panic buy stuff. I have to panic buy stuff all the time. It's a real thing and it's okay, but you cannot panic buy from Alibaba. You have to plan and buy from them out, you know, far out. So let's talk about that timeline, Marissa, because, you know, our 2000 I always go back to 2019. 2019 sourcing from Alibaba looks very different than what our 2022 sourcing is. So how much time do I need from the point of I'm on the website just searching for something to when I actually need it?

So just in shipping time alone, it's going to widely vary from factory to factory. That's another question that I recommend putting in your initial paragraph is asking them what is their current production time, their current packing time, and their current shipping time. Because those are all going to be 3 different times. If they don't have something in stock, you know, it could take 5 days to produce, it could take, it could take 14 days. Packing time could be 2 days, it could be 2 weeks. And then shipping time, each factory or manufacturer has different shipping times based off of their company size. Based off of how much pull they have with, you know, the freight and the containers, which they call cabinets, by the way, and how many they can get on a ship, all of that stuff. So that's something you're really going to need to ask. But I would say at the bare minimum, you want to be planning for 2 months out, especially if you don't have any experience with the company. Now, once—

I would tell you longer, especially if you don't have experience. Now, somebody like Marissa, she can source in 60 days. But if this is your first time to source, I'm going to tell you, give yourself 90 days, give yourself 120 days, just so you're not completely stressed out. And, and one other thing that I would tell you is that when you're very first doing this, why don't you pick something that's a small item that doesn't cost a lot? I want you to like dip your toe into something, something like I said, like a custom pen set, or, you know, any kind of those little office supplies if you need something for your box, or hair, you know, scrunchies, or something like that that's, you know, that's inexpensive so that you're not like buying a really main item of your box that cost— is going to cost you a lot of money to work through this process. Start with something small, get your feet wet, understand the process, and then work up to those bigger things that you're going to need for your boxes.

Yeah, um, once you have ordered from a company before, then you usually have more pull of when your stuff can be shipped out. So the more you order from one company, then the, the faster your stuff will turn around, just because that's how most factories do business. Another thing is keep in mind, like Sarah was saying, you're starting small and then working up to those larger things. Most, almost all factories and manufacturers will allow you to do a split. So it may be 50/50 at the beginning, and then later on it might be 30/70, but that's Split is the amount that you pay immediately upon placing your order, and then the rest you pay when it's ready to ship. So that doesn't really save you much if you're buying in-stock items, but for those of you who are looking to get custom things made, that is helpful because it might be 30 days to have something custom made, and you're only having to pay $30 upfront, and then you pay that 70% remaining as soon as it's ready to be shipped out.

Yeah, I love that. That's some good tips there. Let's just chat about samples real quick. The thing when I started sourcing, Marissa, that was sticker shock to me was how much samples cost. Yeah, and I think when you're first sourcing, that's something that if you don't know that up front, you're like, what, are they trying to rip me off? Yeah, samples cost quite a bit of money. Can you talk through why that is?

So they are shipping those samples express or air shipping, or different words that they will use interchangeably, and so you're paying for the freight. Which is drastically more expensive, especially in 2022. And, um, so they're charging a lot as well. As just the same way you are vetting them, like I said, they are vetting you. That is another way that they are trying to see if you're actually serious about it. So if you have all these long conversations and you tell them that you need 76 of something, and then you say, okay, I want a sample, chances are You know, they're going to tell you $50 or $100 for shipping and for the sample. And it's— I like to think of it as it's a step for them to see if you're actually serious in purchasing. Now, something that you can do is you can negotiate a free sample and just pay freight, which is going to be $40 or $50 minimum, usually. Another thing, if they won't budge off that, is asking them Okay, will the price of my sample then be taken off of my order? And so far, every company I've ever worked with— sometimes it takes some negotiation, but they agree to that. So if they're charging $100 to get a sample of a pen set, then if I order that pen set from that factory, then they're going to take off $60. They won't take off the freight, but they'll take off the $60 it costs for the sample. Another reason why a sample can be so expensive is because if you're asking for something custom, then they're having to make that mold, they're having to make that pen that color that you want, they're having to, you know, make a mold of that keychain, whatever it is. And so you are paying for the setup fee of your order, basically. And then that's why they're willing to remove it, because they've already made that mold for that keychain. You now have accepted you want 75 of them, so they are much more willing to then eat that cost of that mold because you're going to purchase the products that you said you were interested in.

Okay, that's all good stuff, Marissa. So don't be afraid of the sample cost and know that it's not them trying to scam you. It's legit shipping. It's legit if they have to stop and make something for you. That stops their production on someone else's order. So it's a legit cost. And if you want to get a sample, which I highly recommend for everyone, especially if this is the first time you've worked with this particular factory, is to get a sample, you're going to have to build that time again into your timeline for them to make and ship you a sample, for you to receive it, review it, and then place your order. So make sure you're building enough time. I guess that's my biggest advice for you, is that build enough time in so you're not stressed out about this process. And once you can kind of get ahead 90 days or 120 days, it's going to get easier to keep staying ahead and not get behind and not panic buy or have to panic buy like we've had to do. Um, probably a lot of you listening have had to panic buy over the last year, but that's really a good piece of advice for you is just to get out as far as you can to make the process easier and smoother. And then one thing that, you know, I really love about Marissa— so Marissa handles all of my sourcing from Alibaba, but she stays on top of it. And that was one thing that I was never good at And that's why I hired Marissa to help me, was that there's a lot of communication that has to be done. There's a lot of follow-up that has to be done. And you have to stay on top of this. So once you make that contact, once you buy your sample, once— there's constant communication that you need to have. You can have it right in the Alibaba website. So there's messages in there. You can go to your account. I like to do things inside Alibaba because it's all in one place. If there's ever an issue, they can pull our conversations. My payment has gone through them, you know, all of that stuff. I like it all in the website. So if there's ever an issue, there's records and documentation of that. Now, as you get more comfortable— and Marissa probably talks to them outside of Alibaba because she's professional— but there's a lot of communication. So you can't just place your order and hope it shows up on time. You have to follow it. You have to ask questions. You have to make sure that you're following up with them, and they have to understand that you're on a deadline. Like, it's not just when it shows up, we're going to sell it. It has to show up on this timeline because it's for your boxes. And so that's an important piece right there. And I've talked a little bit about Marissa. She does this for me, but she also does this for other businesses. And if you want to contact Marissa, if you want to hire someone to help you source a particular item or ongoing items regularly, you can find her at Sarah's sayersimports.com. And Marissa, will you tell them a little bit about, about that?

Yeah, so when you get there, you're going to see like a questionnaire, and so just fill it out. It will have, you know, your name, uh, what type of items you're looking for, and then most importantly is who referred you. So please make sure you put Sarah's Podcast or some sort of, you know, why we'll recognize that this is where you came from, because Sarah's, Sarah's people do get priority. I'm just gonna, I'm just gonna say that.

I love that. I love that we get VIP treatment. So if you're a Launch Your Box or a Scale Your Box member, or if you're not a member and you're just listening to the podcast, put that on there. So Marissa knows that you came from my audience because she, she'll understand your business needs and she'll be able to make you a priority in her business too.

Yeah.

Marissa, thank you so much for just dropping all of this sourcing knowledge bombs. I think it's important. And It will hopefully give people like the next step, like, okay, I'm ready to take this step and dip my toe in this. And you can totally do this yourself. You can do it. Just follow the outline that Marissa gave you here. And I recommend definitely start with something small. Once you have a good experience with it, you're going to feel more confident, you're going to feel more brave to then take the next step. And once you can really get your sourcing, you know, legs down, you're going to be able to source all the things that you need. I know that for me, sourcing has been a lot easier as the more that I do it. So in the beginning, it was a challenge, you know, it's new and you get nervous. But the more you do it, the more comfortable you get, the smarter you get, the more knowledge you have. And then that reflects in your conversations with these factories as well. So don't be scared. Just do it. Marissa, what advice would you give them if they want to get started?

Um, Just get started. Like Sarah said, the more you do it, the more experience you'll have. Don't— also have, have some pride, I guess. Like, you are a business owner. I recommend really showing up confident and don't try and beat around the bush of what your needs are. Tell them what you need, the exact sizes, what you're looking for, and let them know that you're a business owner and you're looking to make some connections and build relationships of companies that you can use on a regular basis. And kind of let them know like what a package you are to work with and that you are going to bring value to their company. You know, it's a two-way street. It's not them just doing a service for you. You are doing a service for them by growing their business as well. So I think that's something that people think of sourcing as, you know, something that's very overwhelming or scary or that the seller is the one doing all the favors for them. Because they're getting it at a lower price. And I just want to remind you guys to have that confidence and own that you are a business and you're growing and you're going to be exploding soon. And you need these relationships because, you know, the sky's the limit.

And it's that, it's that point when you recognize your buying power. You need products every month. You need X number of products every single month. You have buying power. So let's stand tall and own it, right?

Yep.

Marissa, where can they find you?

Marissa Mae Sayers on all social media platforms and then Sayers Imports. And just one more time, please make sure you let me know you're from Sarah's because I can only take on a limited number of clients and I want to make sure that you guys can get the help you need.

Awesome. Thank you so much, Marissa.

You're welcome.

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