Common Issues with Alibaba and other Foreign-Owned Suppliers
- Your Intellectual Property is As Good As Gone
Unless you are dealing with an established manufacturer, we never recommend any of our clients to share their logos with their supplier. In many cases they will make products without your permission and sell them in the “gray” market in China, India, and Vietnam, where copyright laws are very difficult to enforce.
Even if your supplier signs and “NDA” it’s only enforceable in your country. Be careful with your copyrighted designs. If your brand gets big, you don’t want counterfeiters to have a head start. In many cases the factory that produces an original branded product is also producing the counterfeit products behind that brand’s back.
2. Suppliers on Alibaba Pay for Their Ranking
When you type in a product on Alibaba, the entire first page of results are not actual manufacturers, but are usually one-man companies that have gamed the system by paying Alibaba to be displayed first. They are not manufacturers or suppliers at all, but are actually salesmen who will ask you what you want and then go try to find it for you. This is not necessarily a scam, but if you are ordering a product, wouldnt you like to talk directly with the manufacturer of that product? In many cases you are really just talking with a young man or woman in his apartment in a city far from the actual factory that produces the product. They wait for you to send them your designs, then they negotiate a price with the factory and take a cut off the top. This isn’t always a bad thing, but if this person cannot oversee the actual production of the product, then you have zero quality control and might as well fly to the factory in China at this point.
3. Alibaba will Almost Always Side with the Chinese Company in a Dispute
Alibaba does not make money from the buyer (other than some small fees if ordering through their platform). They make the majority of their revenue on the Seller side. This means that their client is the seller, not the buyer. Don’t kid yourselves, Alibaba is a Chinese company with Chinese business’ best interests in mind. They flat out do not care if you get “cheated” by a Chinese supplier. They will use excuses such as “Client did not provide specific information” and other extremely vague terms to cover themselves in a dispute.