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 In today's trying economy, more and more businesses are turning to ecommerce as a cost-effective and efficient way of sourcing their products. Alibaba.com is the world's largest B2B ecommerce company, providing an efficient, trusted platform for international buyers and suppliers to connect and exchange raw materials, goods, manufactured products and even services. Kelly Sang, US General Manager of Alibaba.com, shares with us the benefits of ecommerce and online product sourcing.
Sourcing products is the number one challenge that all ecommerce retailers face, and may even be the number one challenge for all retailers in general. As the world economy suffers shocking losses, smart product sourcing becomes even more vital to all businesses.
While product sourcing may seem challenging to a small business owner, it's really quite simple. All it means is finding products at a wholesale price that you can resell at a retail price and having a steady, reliable source of inventory so you won't disappoint your customers through lengthy back orders or lack of product variety.
Traditional methods
Traditionally, buyers have used overseas trade shows, trading agents, print catalogs and sourcing events to meet new suppliers. These methods are still popular, but with increasing restrictions on expenses and travel budgets, small and medium-sized enterprises (SMEs) are relying more on ecommerce channels such as online marketplaces to do business, both internationally and domestically.
Research shows that the discovery phase - when buyers search for sellers - is the most time-consuming and costly phase of the sourcing cycle. Online marketplaces can significantly shorten the discovery phase by providing information on products and suppliers from around the world 24 hours a day, 7 days a week, 365 days a year. Aberdeen Group pointed out in a 2006 study that while supplier sourcing generally takes a company three to four months using traditional channels, the time required can be dramatically reduced using online marketplaces. An Internet-savvy retailer once told me: "What used to take weeks or months to source, now literally takes minutes or hours through the Internet."
One ecommerce veteran has also put it, "The concept of online product sourcing might seem daunting to someone who is not used to working with computers, but when it's taken down to basics, it's actually quite simple. The learning process is relatively fast, and if the right steps are taken to ensure that you are dealing with a reliable business partner, the ordering and delivery of goods can proceed smoothly and at a fairly rapid pace."
Benefits of online product sourcing
Online B2B marketplaces are gradually stealing the limelight from traditional methods with their comparative advantages, such as efficiency and effectiveness, strong B2B focus, a large database, real-time operation and the capability to remove barriers of geographies and time zones. The breadth of products and global reach of online marketplaces is unmatched, so finding the right manufacturer - whether you are looking to source consumer electronics, fashion accessories or home appliances - has never been easier.
Tips for Finding & Working with Suppliers
With traditional barriers of time and place fast disappearing thanks to the Internet, more and more new traders are entering the import and export business. In this new, fast-paced business environment, timing is of the essence, and newcomers may need to make quick buy-or-sell decisions with companies that they have no history of doing business with. The easiest, fastest and most reliable way for newcomers to find trustworthy suppliers is through businesses already operating on established B2B platforms.
Safe and secure trading
Trust is a very important issue when it comes to doing business online, and knowing your supplier is the first step in building that trust. Besides communicating with suppliers regularly and in real time, it's important to be able to verify their identity and details to make sure that the company really exists.
For example, Alibaba.com's "TrustPass" ranking for suppliers, which is a paid membership service requiring a rigorous authentication and verification process, helps many buyers feel more secure when sourcing products on Alibaba.com. Our experience shows that more than 85% of our buyers prefer to do business with TrustPass members only. And our policy of banning violating companies permanently from the marketplace provides a safe and reputable trading environment for all users.
Develop relationships and communicate
Developing a sound business relationship with a supplier leads to greater trust, which in turn often leads to more business. Alibaba.com helps facilitate these relationships with TradeManager, a free, downloadable chat tool that allows buyers and suppliers to conference, buy and sell in real time. Since it's often difficult to coordinate contact times throughout Europe, North America and Asia, TradeManager puts users in touch whenever both parties are online - even if they are away from the office. Members can also archive trade records to keep track of their leads and inquiries.
Reliable product shipping
An important last step of product sourcing is choosing the right freight forwarder for your product, as reliable shipping can help buyers better manage their inventory. In addition to comparing shipping costs and transit times, ask questions such as: Is the freight forwarder's company big enough to handle your business? Can the freight forwarder communicate with you as a novice? Does it have any knowledge of your product? Does it have errors and omissions insurance? The answers can often be found in online marketplaces, which are living and breathing communities of online traders. For instance, Alibaba.com hosts a number of trade forums for its millions of members and industry experts to interact with one another and exchange the latest industry know-how.
Doing business online is becoming easier and more popular every day. But many business basics still hold true - know your customers (who they are demographically at least, and what they want), and know those with whom you will be doing business, because the right partners can help you succeed beyond your dreams.
Conclusion
Despite the current economic downtown, ecommerce is a sector that is growing and full of opportunities. Online product sourcing is one of these opportunities, which allows businesses to find high-quality products and suppliers with limited investments. Online marketplaces are proven, practical channels that have already opened a vast universe of opportunity for millions of buyers and suppliers all around the world - and will be a major platform for doing business in the future.
Popular Products & Categories on Alibaba.com
Alibaba.com Limited, the world's leading B2B ecommerce company, offers more than 40 industry categories and 6,000 product categories. In the US, the most popular categories are mobile phones, laptops, motorcycles, ladies' handbags and digital cameras, and the products in rising demand range from LCD monitors, recycled auto batteries and glassine paper, to PVC boots and optical inspection equipment. Currently, the top ten product categories worldwide are: mobile phones, laptop computers, motorcycles, digital cameras, second-hand cars, cigarettes, desktop computers, jackets, automobiles and dresses.
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