What is Alibaba?

Looking to bulk-buy products at super-low prices? Look into Alibaba. The platform is one of the world’s largest business-to-business (B2B) wholesale marketplaces – a haven for Aussie entrepreneurs seeking affordable foreign-made products.

In this post, we’re covering all things Alibaba, including safety considerations, tips for Aussie businesses, and how to slash foreign exchange fees.

Table of contents
What is Alibaba? Is Alibaba safe and legit? Products to buy Things to consider How does Alibaba shipping to Australia work? Alibaba payment methods Wise Business: A smarter way to pay international suppliers FAQs

What is Alibaba?

Founded in China in 1999, Alibaba has grown from a small, China-only marketplace to a global B2B behemoth. Around 1.31 billion active annual consumers¹ trade on the Alibaba ecosystem, making it a global e-commerce leader.

With a 2025 worldwide revenue of A$215.20² billion and 200 million products³ from 200,000 suppliers³, Alibaba has become a one-stop shop for Aussies sourcing low-cost products from abroad.

The vast majority of Alibaba suppliers are based in China. Others come from elsewhere in Asia – Pakistan, Turkey, Vietnam, India – where manufacturing costs remain low.

Few Australian businesses sell products on the platform. Aussie sellers are typically limited to niche industries or handmade boutiques.

How does Alibaba work?

Alibaba helps manufacturers and wholesalers sell products in bulk to businesses around the world, including Australia. The brand doesn’t hold any warehouses or stock – it’s a tech company acting as a middleman.

Minimum order requirements (MOQs) and lengthy shipping times discourage everyday consumers from purchasing single products on the platform.

The buyer process looks something like this:

1. Creating an account
2. Finding the right item
3. Evaluating supplier trustworthiness
4. Sending a Request for Quote (RFQ)
5. Communicating any special requirements (colours, sizing, or branding)
6. Negotiating the rate, if necessary, including discounts for repeat orders
7. Agreeing on shipping and payment terms
8. Making payment

Many suppliers will send a sample so you can assess quality before committing to a big order.

What is Alibaba used for?

Given Australia’s high manufacturing costs, locally-made products often aren’t financially viable. Aussie businesses primarily use Alibaba to bulk-buy cheap Chinese products and resell them in Australia with a tidy markup.

Both online stores and major brick-and-mortar retailers source goods from Alibaba, often negotiating discounts for large or repeat orders. Low overheads, economies of scale, and modest manufacturing costs allow Alibaba suppliers to offer competitive rates.

Most suppliers tend to provide customisations. A fashion retailer, for example, could have their brand imprinted onto a pair of sandals for a tiny cost per item when ordering in bulk. Larger orders also open more doors for complex customisations, with suppliers potentially adjusting sizes, colours, or materials to align with Australian tastes.

But you don’t have to be a bigwig to jump on the Alibaba bandwagon. Many sellers happily trade with smaller players, including dropshippers and budding e-commerce entrepreneurs.

What’s the difference between Alibaba and AliExpress?

While Alibaba has cornered the B2B wholesale market, its sister platform, AliExpress, exclusively does business-to-consumer (B2C) sales. Much like Amazon or eBay, everyday consumers can get single-unit orders delivered directly to their door.

Alibaba and AliExpress form part of the Alibaba Group, a ginormous Chinese tech and finance conglomerate covering everything from cloud computing to QR payments. Leading Alibaba Group entities include:

• Alibaba: Global B2B marketplace
• AliExpress: Global B2C marketplace
• Taobao: Chinese online shopping platform
• Tmall: Premium Chinese online shopping platform
• Ant Group: Digital payment services like AliPay
• Alibaba Cloud: Cloud computing services
• Alibaba Pictures: Chinese movie studio
• Cainiao: End-to-end supply chain and logistics services

Is Alibaba safe and legit?

Alibaba has been trading since the late 90s and is a well-established company listed on the New York Stock Exchange. The platform has a solid reputation as a legitimate marketplace specialising in low-cost Chinese products for B2B sales.

But Alibaba’s hard-earned rep doesn’t extend to all its independent suppliers. Horror stories abound of terrible products and snail-paced shipping, making it crucial to vet every supplier before signing a deal.

How to safely purchase products from Alibaba

Here’s how to do your due diligence when dealing with Alibaba suppliers.

Verified Suppliers

Alibaba has a Verification Program,⁴ where sellers can obtain a “Verified Supplier” badge after undergoing an extensive third-party audit. Independent consultants evaluate production capability, quality control, inventory management, product certifications, and after-sales support. Audits may include on-site inspections, licensing checks, and documentation reviews.

Look for the “Verified Supplier” icon on the seller’s Alibaba page, or filter the search results to show only verified vendors.

Unverified suppliers aren’t necessarily dodgy. But they do entail more risk.

Trade Assurance

Alibaba also offers a free Trade Assurance service that holds payment in escrow until the product is delivered.

If the order doesn’t meet quality or shipping minimum standards, buyers can raise a dispute with the supplier, who has 2 days to respond. Should the dispute remain unsolved, Alibaba will mediate and provide a refund if it rules in the buyer’s favour.

Not all sellers sign up for Trade Assurance. Again, look for the “Trade Assurance” icon on the seller’s profile, or filter your search to exclusively include the program.

Company Profiles

All sellers have a Company Profile – a client-facing webpage within the Alibaba ecosystem. Gloss over the marketing jargon and skip straight to the customer feedback. Recent reviews provide insight into real customer experiences. Look for complaints regarding product quality, shipping timeframes, and customer support.

If applicable, review the fine print, including patents, trademarks, testing reports, and certifications.

Products that businesses can buy on Alibaba?

Virtually every conceivable product is for sale somewhere on Alibaba, including the kitchen sink.

Use filters to sift through its 200+ million products. The main Alibaba categories include:

• Apparel and fashion
• Consumer electronics
• Machinery
• Watches, eyewear, and jewellery
• Beauty and personal care
• Packaging and printing
• Home and garden
• Sports and entertainment
• Health and medical
• Gifts and crafts
• Electrical equipment
• Tools and hardware
• Minerals, chemicals, and raw materials.

Things to consider when buying products on Alibaba

Consider the following before cutting a deal on Alibaba.

• Safety: Look for positive reviews from Verified Suppliers using the Trade Assurance program.
• Sample orders: Insist on a sample before committing to a bulk order.
• MOQ: Does the minimum order quantity align with your business needs?
• Shipping timeframes: Many Alibaba orders take months to arrive.
• Hidden costs: Shipping often isn’t included; you might also have to pay taxes, tariffs, or import fees.
• Currency: Some suppliers offer better deals if you pay in USD or another currency (but a favorable FOREX rate is essential).
• Language barriers: Many suppliers don’t speak fluent English and rely on translation apps to communicate.
• Intellectual property: Importing some products could breach Australian IP laws.
• FOREX: Foreign exchange fees can eat into your profit margins.
• GST: Commercial imports may be subject to GST.
• Biosecurity: Organic products must comply with Australia’s strict biosecurity laws.
• Compliance: Electronics must meet Australian standards, including safety testing and labelling.

How does Alibaba shipping to Australia work?

Three shipping methods are available for getting Alibaba products to Australia.

1. Air freight: A fast but pricy solution suitable for small or urgent orders like samples (3-7 days)
2. Sea freight: Slow, though economical option for bulky, non-urgent orders (20-40 days).
3. Express: Speedy door-to-door deliveries through private couriers like DHL or FedEx. (3-5 days).⁵

Actual delivery timeframes can differ considerably. Shipping costs depend on weight, dimensions, method, supplier, and destination.⁵ Confirm these details with the seller, as well as any additional costs, such as taxes or duties.

Most good suppliers provide tracking numbers.

Alibaba payment methods

Alibaba offers a range of payment methods, each with distinct fees, processing timeframes, and conditions.

Method	Processing time	Fees
Visa/Mastercard	24-48 hours6	2.95% to 3.5%; FOREX fees apply6
Bank Wire Transfer (TT)	3-7 business days6	Charges vary; FOREX fees apply
PayPal	1-2 hours6	2.99%,7 plus FOREX fee
Digital wallets, including Google Pay, Apple Pay, AliPay	Instant or within minutes/hour	Low but variable charges; FOREX fees apply

The Trade Assurance program accepts all payment methods⁸ and enhances security by holding funds in escrow.

Credit cards are convenient, and PayPal offers solid buyer protections. However, both have fees and may add extra FOREX charges.

Bank transfers can work out cheaper for big orders, but have fewer buyer protections, making them less attractive for first-time orders. Significant FOREX charges may also apply.

Wise Business: A smarter way to pay international suppliers

Regardless of the payment method, you’re going to get stung with nasty FOREX fees when converting Aussie dollars into Chinese Yuan, or another foreign currency. But there is a simple, cost-effective workaround.

With Wise Business, you can pay Alibaba suppliers by card or bank transfer using the mid-market exchange rate. That means no hefty hidden FOREX fees and better profit margins on your newly acquired merchandise.

Wise Business helps streamline overseas business payments without foreign transaction fees, saving up to 3x compared to other providers.

• Free to register — Send money to 140+ currencies with no hidden exchange rate markups
• Make up to 1,000 transfers at once with the Wise batch payments feature
• Fast, low-cost payouts to customers, freelancers, employees, investors, and suppliers globally
• Automate invoice payments, recurring transfers, and international payroll
• Fast and fully secure payments through Wise, even for large amounts

Tired of hidden fees and complex processes when making overseas payments?

Start sending with a Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

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FAQs

1. Is Alibaba and AliExpress the same?

No. Alibaba focuses on bulk B2B sales for companies, while AliExpress is a B2C marketplace for individual consumers.

2. Does Alibaba hold any inventory, or do products ship directly from the factory?

Alibaba doesn’t hold any inventory. Its independent sellers ship products directly to customers.

3. Is Alibaba a direct supplier or a marketplace for third-party sellers?

Alibaba is a marketplace for third-party sellers.

4. Why do shipping costs on Alibaba sometimes exceed the cost of the products themselves?

High shipping costs on Alibaba may be due to long distances, freight type (air vs. sea), product dimensions and volume, fuel surcharges, buyer location, low product value-to-weight ratios, or import taxes.

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Sources:

1. Alibaba Group Fiscal Year 2022
2. Companies Market Cap Revenue for Alibaba
3. Reads Alibaba Tips to Source on Alibaba
4. Reads Alibaba Guide to Verified Suppliers
5. Seller Alibaba Alibaba Australia Online Shopping
6. Alibaba Helpdesk How do I Pay for Trade Assurance?
7. Alibaba Helpdesk How do I Pay Through PayPal?