We all know that Alibaba is the biggest business-to-business (B2B) market, and that it is best for large orders. So why do so many people worry about scams on Alibaba?
We can say for sure that Alibaba itself is not a scam. So, how do Alibaba scams catch drop shippers? What kinds of scams should you look out for on Alibaba? And more importantly, how can you make sure you don’t get ripped off?
In this ultimate FAQ guide, we’ll tell you how to spot Alibaba scams and answer all your questions so you can avoid them.
So, what do we need to do?
Is Alibaba a Scam Website?
No! Alibaba is one of the oldest and biggest B2B marketplaces. It has sellers and buyers from all over the world. So, the platform is not a scam in and of itself.
Is Alibaba a fake website?
Each item on Alibaba, though, comes from a different supplier. Whether a supplier sells good products or not is a different story.
How to Avoid Alibaba Scams?
When you join Alibaba, you have to be aware that some sellers are manufacturers while others are trading companies. People always say that ordering from manufacturers is a good idea because their prices are lower, but that doesn’t mean they can’t scam you.
Here are some of the best ways to avoid scams on Alibaba, no matter what kind of supplier it is:
Don’t Buy Branded Products Selling for Abnormally Low Prices
Even if it looks real, cheap branded products on Alibaba are almost always copies unless they come from a verified profile of the brand itself.
If you order cheap “branded” products, you will get something that is very different from what you expected. Also, it can make it hard for you to get through customs because fake goods could be taken away.
Don’t Order in Bulk Without a Sample First
Most of the products on Alibaba will have a minimum order quantity (MOQ), since bulk orders and transactions are what Alibaba is mostly used for.
Don’t place a large order without seeing a sample first.
If you want to order a lot of something, you should always order a sample first. Dropshippers often make the mistake of spending a lot of money on a bulk order without even knowing what they ordered.
Always Read Product and Seller Reviews
One great way to avoid getting ripped off on Alibaba is to always read the feedback of other buyers first.
You can read reviews of both products and sellers on Alibaba. This can help you figure out if a seller is a good one or not.
Don’t Get Convinced to Talk Outside of Alibaba
Scammers on Alibaba will often ask you to talk to them through a different channel instead of through Alibaba.
Do not do this! So, Alibaba can’t prove that you talked, bought something, or agreed to something, so they can’t help you if you’re being scammed.
Don’t Assume All ‘Gold Supplier’ Sellers Are Legit
Did you know that the Gold Supplier badge can be bought by sellers? The companies have to go through an audit to get the certification, but that isn’t enough to make sure they are safe.
Anyone can buy this membership and pass the audit at first, but then they can lower the quality of their products. So, don’t believe sellers just because they have a badge that says “Gold Supplier.”
Use a Dropshipping Agent in China
If you’re a dropshipper and you’ve reached the point where you need to buy a lot of products because your orders are steady, you might want to think about working with a dropshipping agent in China.
Having a dropshipping agent or product sourcing agent in China will help your dropshipping business in a lot of ways:
When needed, your agent can do a factory audit. They can store your bulk order in their local warehouses. The dropshipping agent can check the quality of each order.
They can help you find the best ways to ship;
They can find products not only on Alibaba, but also on local sites like Taobao and 1688.com.
Your dropshipping agent can help you private label or white label a product;
Since they live in China, dropshipping agents can even buy straight from a Chinese company or manufacturer;
Always Google and Do Your Research
Have you found a seller with good reviews who has a great product? Great! But don’t place an order just yet.
Remember to always Google the seller, their email, or any other contact information to see if any red flags come up in the search results.
Always Ask to Talk on the Phone
No matter how silly this may sound, every legitimate business has a phone number.
If someone won’t talk to you on the phone or even through Skype, that’s a big red flag. A real company would be happy to talk to you on the phone or even use video chat to show you around.
If your seller avoids talking about this subject every time you bring it up or keeps giving you reasons why they can’t talk right now, you should look for a more reliable seller.
What Are the Most Common Alibaba Scams?
Even though Alibaba is totally legit, sellers and suppliers there can try to scam you. After a lot of research, here are the most common ways that sellers on Alibaba can trick you:
Replicas Marketed as Brands
One of the most common ways to cheat people on Alibaba is to sell fake brand-name products.
Common cons on Alibaba
Even though most dropshippers who have been in business for a while know better than to order a branded product from Alibaba, this could fool new dropshippers. So, it’s important to bring up.
Asking You to Send Funds to Personal Accounts
Consider it a red flag if a seller on Alibaba asks you to send money to their personal account or their boss’s account instead of their business account. Many sellers seem nice and consistent in how they talk to you until it’s time to pay.
Then, all of a sudden, something will go wrong with the company account, and they’ll ask you to send it to a different one. If this is a personal account and not a business account, it’s probably another Alibaba scam.
Same thing if you are asked to send money to a private Western Union account, especially outside of China.
Just think about it: why would a private person in Poland, Russia, or any other country besides China send money to a Chinese company?
High-Quality Sample, Low-Quality Bulk Order
Third, many suppliers on Alibaba will send you a high-quality sample, but when you order in bulk, they will send you something completely different.
Trade assurance can help with this problem, but only if you gave the seller the right and exact details about the product. If not, Alibaba won’t be able to help you.
Make sure you give exact details about the product, such as the material, color code (don’t just say “red”), model, size, and any other relevant details.
Fake Product/Origin Certificates
Let’s say you’re dropshipping things like toys or makeup. In that case, you need to know that different countries’ rules say that these products have to come with a certificate.
When a Chinese seller sells one of these products with fake certificates, this is another common way to cheat people on Alibaba.
Products that don’t have the right paperwork will often get stuck in customs clearance.
And if you do get your product, you will be taking a big risk if you sell it without any certificates.
No Company Documents
Alibaba is a market for business-to-business sales, so the sellers there are always businesses. All businesses need to have a registered address, location, phone number, and usually a professional website, Skype account, etc.
Also, a real company would have no problem sending you documents that show they are registered or other proof that they exist.
If a seller won’t give you these company papers, that should always be a huge red flag.
Unverified/Free Profile of a Legit Company in USA or UK
A free Alibaba account can be made by anyone. Often, a scammer will create a seller profile with the details of a real company in the US or UK, without the company’s knowledge.
Then, they start selling things that look like what the real companies sell.
But just because they have pictures doesn’t mean they have the real thing. So, you’ll put in an order, pay for it, and never hear from them again.
Remember that most of the companies that sell on Alibaba are Chinese!
Lower Storage/Power of Tech Devices
And finally, if you order a lot of tech devices or gadgets from China, this is the last big way a Chinese supplier can trick you.
A USB with 32GB only comes with 18GB; a blender with 1000W power only comes with 700W power.
Since you can’t see storage or power on a photo, this is a common way for Alibaba sellers to try to scam you, so be careful.
If I Use PayPal to Pay for an Alibaba Scam Product, Will I Get My Money Back?
If you paid for your item through Trade Assurance on Alibaba, then Alibaba can help you with this dispute.
Paypal protects your purchases
PayPal is one of the safest ways to buy on Alibaba because it has a feature called “Purchase Protection,” which is usually enough. Make sure to learn more about this feature.
No matter what you do, make sure you only send money to business accounts and not to private people.
Are All Cheap Alibaba Products a Scam?
No, not always! Suppliers on Alibaba sell in large quantities with a high minimum order quantity (MOQ), which means that these products are usually cheaper than if you bought just one elsewhere.
But if a price seems too high for that kind of product or if something looks too good to be true, it usually is! In this case, go with your gut!
For example, if you know for sure that a certain smartphone sells on other sites for $900 and an Alibaba seller is selling it for $40, it’s probably a scam.
Which Payment Methods Are the Safest to Avoid Alibaba Scams?
We’ll start right away with the safest ways to pay on Alibaba. First, we have to remind you of the most important rule: only pay to business accounts, never to personal ones.
So, now that that’s out of the way, the safest and most legal ways to pay for Alibaba orders are through PayPal, Alibaba Escrow, or a Bank (Wire) Transfer to a company account.
Can a Dropshipping Agent Help Me Avoid Alibaba Scams?
Yes! Dropshipping agents in China are there so they can do a factory audit if needed or at least check the quality of your products that have already been shipped.
A dropshipping agent can help you find products on Alibaba, in local directories like 1688 or Taobao, or even at trade shows or from Chinese companies.
A good dropshipping agent will have a worldwide fulfillment center and warehouses in China and the United States.
Victim of an Alibaba Scam: What to Do Next?
If you fall for an Alibaba scam, you should start collecting evidence so you can build a case. Even if the seller has Trade Assurance, it doesn’t mean anything unless you can show that you’re right and they’re wrong.
For example, trade assurance can protect you from problems with shipping and the quality of the product. But how will you show that the product isn’t “high quality”?
It will be hard to prove and win on things like these (everyone has a different opinion on high quality). Because of this, when you place an order, it’s important to give all the necessary and exact product specs.
Imagine getting T-shirts that are a different shade of blue than what you had in mind. If you want to start a fight, how will you show which blue you were talking about? Well, there is no other way unless you gave the seller the exact color code for that blue.
Most dropshippers go to Alibaba when they need to private label a product because many of the sellers there are the actual manufacturers.
For a factory to private label a product for you, you’ll have to order a lot of them, since an entire production line will only work on your product (whether it’s a custom-sewn logo or a custom-designed bottle).
Because this is a large transaction, dropshippers rarely agree with a Chinese company directly without a dropshipping agent in the middle.
If you’re not a dropshipping expert with a lot of experience, it’s more than risky to place a bulk order for private labeling without knowing the factory or production line.
When dropshippers have steady sales and can afford bulk orders, they usually hire a dropshipping agent in China to handle their logistics.
Why Is Alibaba Allowing Scammer Sellers on Their Website?
There are both verified and unverified profiles on Alibaba, just like on most other platforms or marketplaces.
Even the fact that your seller has a free, unverified profile should be a red flag. Unverified profiles mean that those sellers didn’t send in their official company documents, so Alibaba still doesn’t know if they’re real or not.
If the status is “unverified,” it means that if you decide to do business with that seller, Alibaba can’t protect or guarantee you (which is not the case for verified sellers).
In general, Alibaba is legit on its own, and if you do your research before buying a product, you’re not likely to fall for an Alibaba scam.
With this guide, we wanted to show you the most common Alibaba scams and what you can do to stay away from them. Now that you know what to expect, it will be a lot easier to sort through the Alibaba suppliers and find the right ones.
Have you ever been a victim of a scam on Alibaba? Let’s exchange our experiences below.