This transcript was generated from the episode audio and may contain minor errors.
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Listeners, friends, community, what's up? Welcome to Side Hustle School. My name is Chris Guillebeau, your host. Here we are beginning the month of November, episode 1402. That would be 1,402.
I'm so glad you're here and thank you long time listeners. I often get notes from people who've been listening for years now or even from the very beginning. And I'm so grateful for you being part of this community. I'm also happy to have new folks. So welcome to new folks as well.
Now, every other Monday, we've been doing some different stuff here in 2020. Every other Monday, we look at a specific topic related to starting or growing your project. Okay, so if you'd like to check out any of the archives for this series, head over to the classroom page. That would be sidehustleschool.com/classroom. And on that page, you can scroll back and take a look or a listen to anything you might have missed or that seems particularly relevant to you.
And this is topically focused, a bit different than how we do the two stories a week, the question and answers each week. I always encourage you to use your time well. So if any of those topics seem basic to you, then just skip them. If you already have a website, you understand WordPress, for example, you might not need that particular episode. Now, we still have those stories in case today's coming each week, along with other formats, question and answers, Throwback Thursday.
I'm actually working on something new for the future. So I'll share that at some point, perhaps in the future. But today, let's look at the topic of sourcing products using Alibaba. Alibaba or Alibaba Express. I'll talk about the differences there.
And specifically, I'm talking about buying something from overseas, most likely an East or Southeast Asian factory, and reselling it in your country. Is there an easy way to get started with this? Like you've heard about this, no doubt, but how do you actually get started? What is the best process? That's what we're gonna talk about today, sourcing products using Alibaba.
All right, first things first. For anyone who has not heard of Alibaba, well, the Alibaba Group, this is the company, the conglomerate, they control the largest online marketplace in the world. And yes, that includes Amazon. This is bigger than Amazon, believe it or not. Alibaba is a directory of manufacturers and items for sale in bulk, predominantly from China.
Other countries as well, but it's a Chinese company that runs it, the Alibaba Group. So naturally, that's where they started. That's where they have a lot of listings. You can peruse the listings, you can contact vendors, you can place orders directly. You don't need to be a big business or even a business at all to purchase from these sellers.
This really is just a direct marketplace. Alibaba provides a number of protections for both buyers and sellers, kind of like eBay, although not quite like eBay, which I'll get into in a moment. And in a lot of cases, they have low minimum order quantities, so you don't have to invest a lot of money upfront. Now, there's also this thing called Alibaba Express, which can get confusing. So alibaba.com, alibabaexpress.com.
Alibaba is B2B only, business to business, even though as I said, you don't actually have to be registered as a business to make a purchase. Whereas alibaba express is B2C, or business to consumer. And that site, the second one, the express one, tends to have a lot more single item listings. So if you don't want 50 of a particular item, well, you can go to alibaba express. There's some overlap between the platforms, but generally the prices will be higher on alibaba express.
And that's because it's easier and more consumer friendly with even lower minimum order quantities. I'd recommend if you really want to get into this, if you're interested in reselling, you actually focus more on alibaba. Just be aware that there is a learning curve. Okay, so alibaba express is B2C, a little bit easier and more consumer friendly, but I think your focus should be more on alibaba itself. So lots of preamble there.
What can you actually buy from these sites? Well, when you visit alibaba, pretty much anything, that's the short version, but let's go through some detail. You'll see all sorts of categories. You're gonna see consumer electronics, home and garden, fashion and beauty, sports, apparel, and much more. You can find a lot of stuff.
Now, for example, on the homepage today, as I was recording this episode, I found all kinds of deals, including women's big booty sand wash jeans for just $13 a pair, if you're ordering 50 or more. I also saw I could get 16 tons of cashews for $6,700. 16 tons of cashews, it's a lot of nuts, $6,700. It's also a lot of dollars. So then I kept scrolling, I was like, I don't want the big booty jeans or the cashews right now, but how about some iron-on patches of Winnie the Pooh?
And you can get thousands of these patches for just 40 cents each. Or fresh ginger from Vietnam, 30 cents a kilo. And then last but not least, this is not the last item, this is just the last example I'm gonna give you for now, live sheep from Somalia. That's correct, you can get a live sheep, or I guess, what is it, a flock? I don't know, a group of sheep, a lot of sheep from Somalia for $50 each.
Now, presumably, shipping is not included. I don't quite understand how that works, but this just gives you a broad range. If you think I'm pulling out some unusual examples, well, I did like those items, they are kind of random. But the point is you can find anything. It's actually entertaining, at least it was for me, to go through and just look at the listings.
You might be thinking, well, that's all fine and well, I'm gonna have fun looking through all the listings, but what should I actually buy? If I want to resell, what do I buy to resell? And the thing is, you want to buy something that you think you can sell for more money than it will cost you to buy, ship, and store it, whatever all those costs are. And of course, your time is valuable too. So here's an important tip.
With reselling, you wanna think not only about the profit margins, but also your actual net profit. Higher priced items are usually going to be better for you. And I'll just give you a couple examples based on some of these items. You could sell iron-on patches of Winnie the Pooh, maybe for two or three dollars each. And you're like, well, that's a big profit margin.
I only paid 40 cents for them, or 30 cents or whatever it was. Well, it's a big profit margin, but it's not much actual profit. Like yes, you had a numeric percentage gain, but you're still making two bucks or whatever it is on each iron-on patch of Winnie the Pooh. Whereas if you wanted to sell women's big booty jeans, I just like saying that, sorry, for $40 each, the profit margin is only, I'll put this in quotes, only about 300%, but you're making more than $20 on each pair, so much better, right? Even though the profit margin is higher with the iron-on patches, your actual profit is going to be so much more with those jeans.
So think about that. Do your research by looking at completed auctions on eBay, as well as any local networks you might sell on, that could be Facebook Marketplace, the app known as OfferUp, Gumtree, Craigslist, something else depending on where you live. With a bit of time and effort, this kind of research you can learn a lot. So my suggestion is to choose a few things to start, most likely from the same category or industry. It's very easy to get overwhelmed.
So that's why I say just choose a couple things to get started to experiment with, and then go from there. We're gonna take a quick break to say thank you to our sponsor, bring you a message from them. I really appreciate our sponsors allowing the program to be completely free for our listeners. When we come back, what to be aware of, okay? So I said it was like eBay, and it sort of is, and it sort of isn't.
Can you negotiate in prices? What are some best practices? I'll give you a number of tips, along with your assignment for the day, right after the brief message. [Music]
All right, so what are a few things to be aware of if you choose to go down this road? Well, I said it was like eBay, and it is sort of.
It's like eBay in the sense that there's a ton of listings. You can find all kinds of stuff for sale. There is a process for communicating. There is a process for buying. There are reviews.
There are some protections and so on, but it's not quite as simple as buying something from someone who lives in the same city or even the same country. I mean, you are buying from a factory or a vendor or a middleman or somebody who is in China or some other country, mostly in Asia, some others as well. Most buyers are businesses. So even though some minimum order quantities are low, not all are. So just be aware, like it can take a long time to get the items that you purchase.
I mean, that will always be clear in the listing, like how long it will take to get it. But if you have a problem, you're gonna have some protections, but it's also gonna take time. And the cost of resolving that conflict may be higher than it would be if it's just buying something on eBay, especially if you're trying to like buy a whole bunch of stuff to resell and it doesn't show up or it shows up and there's a quality issue. As I said, you have some protection, but it's not all inclusive. Now next, are prices negotiable?
Often yes. Often yes, there is a price there, but you are free to contact the vendor, that manufacturer, that middleman and make an offer. I would just be careful with low balling because it's usually better to establish a relationship, especially if you're looking at some kind of long term thing of I'm gonna buy a whole bunch of stuff or maybe I'm gonna try to be making my own product. It's usually better to establish a relationship and ask for discounts later on, especially if you're not spending much money in the first place. So just be fair, but yes, it's true that prices can be negotiable.
Alibaba also allows you to post a request for quotations. So this is like the opposite of an auction. You know, with an auction, there's a seller who's putting up something for sale. Well, you're posting like, here's what I want, here's what I'm looking for. And with that, you can say what it is you want and you can invite suppliers to reach out to you.
So if you don't see what you're looking for, you can post it and depending on the amount you can purchase and so on, you may get multiple offers. Now lastly, here's one tip that I learned myself when I was looking online in preparation for this episode. Try to look for a supplier that has a warehouse near you. This can help you save on shipping and not deal with customs. So a lot of big manufacturers or those who are kind of all working together in some kind of partnership, they might have a warehouse in the United States or Canada or wherever it is that you live.
And this can help you, as I said, save on shipping, first of all, and then not deal with that issue of customs and importing goods, all of which there's a lot of information on the Alibaba website about. But again, it's more complex than just buying something on eBay or from somebody in your same town. So try to look for a supplier that has a warehouse near you. They will often include that information on their profile. All right, for those who are interested, your assignment for the week is to consider buying something for resale.
Go to alibaba.com or alibabaexpress.com and identify at least two items that you think you could purchase and then resell for a profit. And I really do challenge some of you to actually go out and do that. Other people are like, that's not, this isn't my focus. You know, I'm busy with something else. Totally respect that.
You can't do everything. But if you're interested in reselling, this would be a good thing to try. You can read notes for this in every classroom episode this year at sidehustleschool.com/classroom. For this one in particular, we're gonna link up a number of resource pages since I know a lot of people have questions about it and such. So we'll try to give you a few different resources as a jumping off point to learn more.
This has been episode 14.02.14.02. Thank you so much for joining me for it. I hope you will continue to listen. My name is Chris Guillebeau. This is Side Hustle School.
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From the Onward Project.
