Choose the wrong one, and you could end up with botched inventory, time, and money down the drain—or worse—an empty box of nothing that reminds you of one terrible truth: You got scammed.
Today, I’m going to give you a step-by-step guide to find legitimate suppliers to build your product to sell on Amazon and/or eBay and filter your options down to choose your #1 supplier.
Before we go any further, let me clarify one thing: If you sell products arbitrage, then instead check out this post for my top tips on how to source products to sell arbitrage.
What I will walk you through today is how to source suppliers to build products for private label businesses.
Private label means creating your own brand and branded products. This typically involves ordering inventory in large batches that you then sell on Amazon, eBay, or other ecommerce platforms for profit. And you can find the best suppliers to build those products on Alibaba.com.
1. Filter by Suppliers on Alibaba.com.
Alibaba, founded in 1999, is the largest business-to-business (B2B) sourcing site on the internet. Alibaba is also the fifth largest internet company worldwide. There, you can find thousands of products that can be created to your exact specifications, along with hundreds of suppliers willing to make it happen.
When you first visit Alibaba, the search bar is, by default, set to search by product type. This will help you find a specific product. However, when you instead filter by suppliers, you can find specific products along with suppliers who can actually make those products.
To do so, in the dropdown to the left of the search bar, change Products to Suppliers.
Then you can search by the product type you want to build.
2. Filter Suppliers by Your Core Keyword.
Keywords are words or phrases shoppers search on Amazon.com to find what they want to buy. Keywords are also how you will find suppliers to build your product on Alibaba.
Your product’s core keyword is the word or phrase that quintessentially describes your product—in as few words as possible—without extra bells and whistles.
For example, let’s say we wanted to build our own quilted car hammock for dogs. The core keyword for our product would be “car pet hammock”: It perfectly describes our product without extra embellishments.
So we would type “car pet hammock” into the search bar on Alibaba and click the search icon.
You should then see a list of suppliers who can build your product as well as the different versions of that product those suppliers make.
While Alibaba is fairly secure overall and tends to feature legitimate suppliers, there are certain precautions you should take to ensure you still don’t fall victim to a scam.
3. Filter by “Verified” Suppliers.
Verified suppliers have been vetted by a third party inspection service trusted by Alibaba. Verified suppliers have had to provide proof of their business license, their production machinery, and much more. They’ve also submitted to an on-site inspection and signed hundreds of legal documents to prove that they’re legit.
That’s more work than most scammers would even consider; it’s safe to assume verified suppliers won’t scam you.
To take advantage, check the Verified box at the top of your search results.
Now you are only seeing suppliers who can make your product and have been proved to be legitimate. The other security measure we can add is Trade Assurance.
4. Filter by “Trade Assurance”.
Suppliers who offer Trade Assurance agree to specific payment terms that protect buyers, but still remain fair to legitimate suppliers.
When you place an order through Alibaba’s Trade Assurance program, you can pay using a 30/70 deal: You pay 30% of your total order cost upfront. You then pay the remaining 70% once the product has been manufactured to your exact specifications.
You can also stipulate that your inventory be inspected by a third party service to ensure it meets those standards before you pay the remaining 70%.
As an additional measure, when you pay with Trade Assurance your final, 70% payment is put into an escrow account. In other words, your final payment is untouchable until the supplier has actually manufactured your products.
To add this feature, check the Trade Assurance box at the top of your search results.
Of all the ways I will show you to filter suppliers on Alibaba, Verified and Trade Assurance are arguably the most important. You might not always be able to find suppliers who meet all our suggested criteria. But aim to find suppliers that fit these two.
However, most of the verified suppliers who offer trade assurance exist in Hong Kong, Taiwan, and mainland China. If you’re determined to source outside of these regions, you may not be able to apply these filters.
At this point, you probably still have dozens, if not hundreds, of suppliers to filter through. Keep prospective suppliers organized with our free supplier researcher spreadsheet.
Once you’ve gotten your copy of the spreadsheet, record the names of each Alibaba supplier that:
- Can make your product
- Is verified
- Offers trade assurance
As we go through the rest of Just One Dime’s supplier research criteria, use the spreadsheet to track which suppliers meet what metrics. Add any additional notes you may need to make the most informed decision about potential suppliers.
The sheet will allow you to easily, and objectively compare suppliers and ultimately, choose the right one for your business.
Download your copy at JOD.com/srss.
5. Filter by Supplier Online Performance Index (SOPI) Score.
SOPI stands for Supplier Online Performance Index. Essentially, it measures how well a supplier performs across these metrics:
- Presentation Quality
- Product Popularity
- Transaction Volume
- Service Quality
Scores range from a terrible, singular grayed out gem all the way to a fantastic, five bright orange gems.
Essentially, the higher the SOPI, the better that supplier is likely to perform. Aim to find suppliers with at least four gems, three at the absolute minimum.
SOPI scores can be found in the center of each listing in search results next to Supplier Index. We can see, for example, that the company Guangzhou Doglemi Pet Product Ltd. has an SOPI score of three orange gems, so they’re likely a solid pick.
This is but merely one example. You should start by looking at a pool of at least a couple dozen suppliers and whittle down your list as we continue to apply new filters.
The next factor we should consider on our quest for the perfect car pet hammock is supplier age.
6. Filter by Business Age.
Suppliers who have been in the game for at least three years are ideal. More experienced suppliers tend to be more familiar with English business terms (a majority of Alibaba’s suppliers are in China so a supplier who understands English well is invaluable), shipping and customs regulations, and more.
You can find a supplier’s age on their listing in search results when you search by Suppliers rather than Products (see what we did there?). Each listing includes a number followed by YRS to the left of each supplier’s name.
For example, we can see that Guangzhou Doglemi Pet Product Ltd., has been on Alibaba for 11 years.
Now that we know we’re looking at legit, seasoned suppliers, it’s time to assess business types.
7. Filter by Business Type.
Your supplier’s business type informs a lot of details about your prospective order such as:
- Turnaround time
- Ability to bundle multiple products
Depending on what type of product you wish to build, or how quickly you want it built, you should opt for either a manufacturer or a trading company.
Manufacturers are companies that deal in the physical production of products. In most cases, you will pay less per unit, and receive your products faster when you source from a manufacturer. And if you want to create a differentiated product, manufacturers are the stronger option.
Differentiated products have a unique attribute that makes them…well, different, from the competition. Oftentimes when you source a product that you will differentiate, you will make special requests of your supplier and the end result will differ from what that supplier currently sells on Alibaba.
Trading companies are companies that source products from manufacturers. Trading companies act as middlemen between buyers and suppliers.
When you order from a trading company, most of the time they will then source that product from a manufacturer. In doing this, trading companies may charge you more than if you’d worked with a manufacturer directly. Trading companies often have longer lead times for the same reason.
That said, trading companies are ideal if you will build a product with multiple components and/or sell a collection of bundled items together in one unit.
Some suppliers may actually be both a manufacturer and a trading company, which is also a perfectly viable option.
To find a supplier’s business type:
Click on the supplier’s name on their listing.
You’re now on that supplier’s minisite…
Scroll down to the blue box that says Verified in the top right corner. This is usually under their Company Overview. In the top left of that blue box, you will see the supplier’s company type.
Here we can see that Guangzhou Doglemi Pet Product Ltd. is both a manufacturer and a trading company, so they are a solid pick to build our car pet hammock.
8. Filter Suppliers by Their Main Products.
As you search for the perfect supplier to build your product, aim to find a supplier who specializes in the type of product you want to build.
From a supplier’s listing in search results, you can see what types of products they typically produce. To the right of Main Products, the second line in product information shows what type of products each Alibaba supplier specializes in.
For example, the Shijiazhuang Aofeite Medical Device Co., Ltd. supplier appeared in our search results for “car pet hammock”. However, we can see that this supplier actually specializes in lumbar support belts and knee braces, which is not exactly pet-friendly stuff. Additionally, their name includes the term “Medical Device”, which indicates that they don’t specialize in the pet products.
This supplier is most likely not the best option to build our car pet hammock.
However, we can see that Guangzhou Doglemi Pet Product Ltd. does in fact specialize in pet products:
In fact, this supplier explicitly specializes in pet clothes, collars, leashes, harnesses, carriers, snuffle mats, and toys. This makes them a solid pick to build our pet hammock.
A supplier who specializes in the right product category is great; however you should also consider where each potential supplier is located.
9. Filter Suppliers by Location.
We’ve put a lot of checks in place. Most suppliers who make it to this point will be located in China. China is a production powerhouse that is hard to beat.
In fact, as you scroll through the remaining listings in search results, you’ll probably notice that most listings indicate that the supplier is located in China.
Each supplier’s location is listed towards the middle of their listing in search results:
However, choosing from Chinese suppliers is not enough.
Much like the state of Nebraska is synonymous with corn, most Chinese provinces are associated with their own manufacturing specialties. Aim to find a supplier who is located in the ideal province for your product type.
For example, the Hebei (Huh-bei) province is rich in steel, iron, and coal, which makes it a great province to find Automobile Supplies and Accessories.
We’ve created a free guide to help you navigate the different Chinese provinces and their respective manufacturing specialties. Download it at JOD.com/factory.
Many suppliers include their province in their company name. For example, the Heibei Aofu Wiremesh Manufacture Co., Ltd. is located in the Heibei province.
If a supplier does not list their province in their name, there is an easy way to find out where they’re located. From the supplier’s minisite, scroll down to the blue Verified box. Country/Region is at the top right.
For example, Guangzhou Doglemi Pet Product Ltd. is located in the Guangdong province, which specializes in pet products, among other things.
You can source from suppliers located in less than ideal provinces, however the products tend to be of inferior quality and higher priced than they would be from a supplier in the ideal province for that product type.
Once you have a list of 10 to 20 suppliers who fit, more or less, the above criteria, it’s time to contact each one.
10. Filter Suppliers by RFQ Deadlines.
Sending potential suppliers a request for quotation (RFQ) is an easy way to filter out suppliers who are either not worth your time or who are not hungry for your business.
An RFQ is a request sent to suppliers asking for a quote on how much it will cost them to make different numbers of your potential product, including any differentiation you might add. Below is an example of a buyer-completed RFQ:
The pricing you get on an RFQ may be different, or higher, than what’s posted on the product listing page on Alibaba depending on how much modification your product requires.
For example, if we were to order 300 car pet hammocks from Guangzhou Doglemi Pet Product Ltd. without changes, it would likely cost us $7.50 per unit plus shipping.
However, if we wanted to add our brand name and logo, and change the interior fabric to make it softer and cozier for our customers’ dogs, the price per unit would almost definitely increase.
To send a supplier an RFQ, you will contact them through Alibaba’s messaging platform. To do so, click the Contact Supplier button in the bottom center of the supplier’s listing in search results.
Send the supplier a message in simple, plain English explaining what product you want along with any potential modifications you need. Attach a blank RFQ form to the order.
Always include a deadline to receive the completed RFQ in your message. We recommend you set the deadline for three business days after you send the initial message. However, if you are requesting a lot of differentiation, you might consider giving each supplier more time to respond.
Remove any suppliers who do not meet your stated deadline from consideration.
11. Filter Suppliers by RFQ Completion.
From the suppliers who return your RFQ within the allotted amount of time, you should eliminate some based on how completely they filled out that RFQ.
Move forward with any supplier who fills out the majority of the RFQ.
If a supplier fills out ⅔ or less of the RFQ, consider their reasoning for not including more information and eliminate as you see fit. You should consider if suppliers who did not fill out the entire RFQ asked for clarification on anything before returning the unfinished document.
Eliminate any suppliers who do not fill out at least ½ of the RFQ.
Then, take a look at the actual quotes you got from the suppliers you are still considering.
12. Filter Suppliers by Quote Price.
As you’re filtering suppliers on Alibaba to find the right one to build your product, price is not the only thing you should consider. However, you should know your own monetary limits.
Keep your cost limits in mind and, before you pull the trigger on requesting samples, eliminate any supplier who quotes you a price well above what you can realistically afford to spend on products.
The product research you conducted in advance should already show you the maximum price you can spend per unit in order to meet your goal profit margin.
13. Filter Suppliers by RFQ Negotiation.
If you find that a quality supplier is charging you a bit more per unit than you can afford, negotiate within price tiers.
For example, if a supplier quotes you 300 car pet hammock units for $7.50 but 500+ units for $7.18, you can ask them to apply the lower cost if you order 300 units. If they say no, you can still negotiate within the $7.18 - $7.50 range.
In every aspect of your supplier communications—except with product samples—prices are negotiable. In fact, most suppliers expect you to negotiate and might consider you a non-serious client if you don’t.
Once you’ve negotiated RFQ pricing, officially request samples from the suppliers who can produce products within an affordable price range.
14. Filter Suppliers by Sample Lead Time.
This is where you can finally, for once and for all, fully understand if some of the suppliers on your list are secretly trading companies.
When you request samples from your remaining potential suppliers, pay attention to how long it will take them to ship the samples to you.
Most manufacturers will already have samples readily available. If not, they are capable of producing samples fairly quickly.
Typically it should take no longer than two days for the supplier to prepare and ship the samples to you. After that, expect about two to three weeks for the samples to arrive if they’re coming from China.
If a supplier quotes you longer than two or three days to acquire the product before they ship it to you, that supplier is likely a trading company. Trading companies have to source products, including samples, from manufacturers—which cuts into their sample lead time. Avoid any supplier who appears to be a trading company that has not been upfront about it.
15. Filter Suppliers When You Request Samples.
Oftentimes, suppliers will offer to send you samples for free. In that case, you would only pay for international shipping via air express (door-to-door cargo carriage).
In other instances, a supplier might include more samples than requested.
Now, I’m not saying you should eliminate suppliers who don’t send samples for free and/or include extras without added costs. However, if a supplier sends you an extremely high quote for samples, they are most likely a trading company that hasn’t yet owned up to that fact. Those suppliers could also be manufacturers that just don’t take you seriously as a potential client.
Either way, eliminate any suppliers who overquote the cost for samples.
Once you have samples from legitimate suppliers, you will filter them down even more by the quality of product they provide.
After this filter, you should have five or fewer suppliers that you are considering.
16. Filter Suppliers by the Samples They Send.
Product samples are the best way to test a supplier’s product quality. And they’re a supplier’s best chance to impress you with their product and gain you as a client.
Once your samples arrive, test them as much as you can. Use the products the way they’re intended. “Accidentally” misuse them in ways that your potential customers might. If a product breaks while performing its basic function, that’s a no-no.
For example, if, when testing samples of our prospective car pet hammock, our dog were to tear a hole through the product just by walking on it, that product is not going to work. We might also “accidentally” install it into the car incorrectly to see how well the product withstands pet traffic when not properly set up.
Test each sample for the following:
- Feel and quality
- Ease of use
Rank the products that are still contenders based on those attributes.
Eliminate any suppliers whose samples do not withstand standard wear.
17. Filter Suppliers When You Request Differentiation.
As I mentioned, when you request differentiation on the product you order from a supplier, the cost of that product will inevitably change. And by “change,” I mean increase.
That said, keep in mind that until you sign a contract and/or fill out an order form, you can still negotiate pricing.
If a supplier says no to a lower cost with differentiation, try to negotiate on total order cost.
For example, if a supplier quotes you $2,250 for 300 units ($7.50 per unit), you might counter with $2,100. If they accept, you would end up only paying $7.00 per unit.
Once you’ve hit the true lowest price a supplier can produce your potential products for, you have to decide if you can actually afford that price.
Keep in mind, however, that differentiating your product often allows you to charge more for it than your competitors charge for their products. Consider if the supplier’s differentiated product price will allow you to sell that product for a higher price tag and if that supplier’s price leaves enough margin for your business to succeed.
18. Filter Out Suppliers Who You Don’t Want to Do Business With Long Term.
By this time, you’ve probably spoken and negotiated with dozens of suppliers. You should have a solid understanding of who you would be comfortable working with long term. If you can find a great, quality supplier, they can become an invaluable business partner.
However, if there are certain suppliers that don’t make you feel as if you’d want to keep working with them long term, it’s probably time to cut the cord.
19. Choose Your Final Supplier.
You should have, hopefully, two to three suppliers who you could feel comfortable working with and, more importantly, paying to build your product.
To choose the final one, the supplier who will make your product dreams come to life, compare all the pros and cons for each supplier based on price, communication, transparency, etc. that you recorded in your free supplier research spreadsheet that you got from JOD.com/srss.
Keep in mind that, while price is important, it is not the only factor to consider. You should be looking at potential suppliers as potential business partners. If a supplier offers you an unbeatable price, but they’re not a strong communicator, that supplier might not be right for you.
And also remember that of all the criteria we’ve laid out today, you might not be able to find multiple suppliers who check every box. Even if that’s the case, your goal should be to find the best fit for your business.
Once you have chosen your final supplier, let them know you intend to order from them. Then, pay your initial payment and move forward with building your product and business!
What I’ve just given you is an extremely quick, high-level overview of the supplier-filtering and finding process. But there are lots of details and “how-tos” that we simply cannot fit into one article. To get the full scoop on how to talk to suppliers, how to test samples, and even how to move forward with launching your first product and Amazon store, visit JOD.com/freedom.
What type of product do you want to source for your ecommerce store? Let me know in the comments.