One of the biggest questions people are asking today when it comes to finding a supplier to launch a product for e-commerce, for Shopify, for Amazon, for eBay is: Can I trust the supplier if it's on Alibaba? And even more importantly: Can I trust them if they're Gold Suppliers on Alibaba?
In this article we’ll answer these essential questions.
Just a few years ago, any supplier could become an unverified member on Alibaba just by filling out a form and it was really easy for fraudulent so-called suppliers to start preying on unwary Alibaba shoppers. Yet fortunately because unverified suppliers did not have much exposure, they were buried on the pages so if you went to search for a product you'd have to scroll way down to find them and so little harm was done.
Later on along came “Verified Suppliers”. To become a verified supplier, all you had to do was to get a business license and that was it, there was no fee for becoming it, so a lot of fraudulent suppliers or so-called suppliers would go out, get their business license and sign up. A lot of trusting unwary Alibaba shoppers would leverage them and their “services” to get what they needed. This created a major problem and made Alibaba develop a bad reputation, that's why a lot of people at that time posted online: “I can't believe Alibaba. I just got scammed by this Chinese...”
So in 2015, Alibaba went through and cleaned house, they fired a ton of their leadership, revamped the entire system and did two things to stop these scams: 1. Alibaba discontinued offering any more free verified memberships. 2. Alibaba set up what’s called the Gold Star Supplier Status so that the supplier cannot talk to an agent until after they have paid the fees for becoming a gold star supplier because before that one could actually call Alibaba on the phone and tell them “Can I pay you on your site, you just give me the status?” So for someone to become a gold star supplier, they have to pay a hefty fee, two thousand dollars or more. Since most scammers look for shortcuts, they're not interested in paying a big fee. So what this policy does is to filter out the people who are not really set on big business now that if the goal is to build a business correctly a foundation should be laid, it requires an upfront investment so the real businessman is willing to pay what it takes in order to scale. Therefore, this has filtered out the majority of those scammers.
However, does all of this mean that you can trust everyone on Alibaba? Of course not!
There are still some people on Alibaba who are going to try to scam you. Here we want to give you a step-by-step process so you can find a supplier that will provide a differentiated product that can benefit you.
When someone becomes a gold star supplier, there are different levels of fees they can pay to get greater storage like photo storage space for the products as well as ranking so when a customer searches for their product it ranks up and comes up quickly. The supplier can pay the Basic one which is 1,399 dollars or the Standard one which is 2,999 dollars or 3,999 dollars for the premium Gold Star level.
Among the gold suppliers there are three different levels, as you can see below, each level consecutively becomes more strict and difficult to apply:
1.Authenticated and Verified supplier
A&V Checked suppliers are Gold Suppliers who have passed authentication and verification inspection by Alibaba as well as a third-party verification company. All legal business licenses and contact persons are verified for those who have been A&V Checked.
Authentication
It means that the supplier submitted three documents to Alibaba that verify they're a legally registered company:
1)A government-issued document that verifies that this company is legal with the tax department in China.
2)A company telephone bill no other than three months which includes the company's number under their name.
3)If the person applied is not the actual owner or the director level of the company, they have to submit an authorization letter from the company.
Verification
This is where Alibaba really goes to the next level. They check to see if the contact information on that form is accurate, they actually call them up and talk to them to verify this is the real person, it's not some robot, this isn't a fake number.
Now with the three previously mentioned documents and that final check it's really hard to fake it, one would have to spend a lot of energy and time to fake it but that's not the last thing. The A&V process takes a few weeks. Again, scammers are not into waiting, they're always looking for shortcuts so this is another filter that decreases the chance that they're a scammer.
2.Onsite check
Onsite Check is a verification process for China Gold Suppliers. The supplier’s company’s premises are checked by staff of Alibaba to ensure onsite operations exist there. The suppliers’ legal status and other related information are then confirmed by a third-party verification agency.
This is required verification for all gold status suppliers in China mainland, Hong Kong and Taiwan. So if there is supplier in the US, Russia, India or any other country, they do not need to have this level, they can just go with the authentication and verification. But in order to give people an increased level of security, a Chinese supplier actually have to get the on-site check level, the A&V is not enough for them to become a gold star supplier. So theoretically saying, in most cases, the Chinese suppliers on Alibaba are more trustworthy than those of other countries.
3.Assessed supplier
This step means fully independent and impartial third-party verification of the suppliers. Alibaba commissions several agencies based on their international reputation and proven credibility to test the claims made by suppliers.
For buyers, this means that instinct and trust are based only on concrete evidence. Assessed Supplier includes Assessment Reports, Verified Videos and Verified Main Products.
This is the highest standard verification you can receive in Alibaba and it’s very strict.
The assessment includes company overview, it covers their legal status, company address, human resources, production capacity, production processes and machinery, trade capacity, quality assurance, certification, supplier management, etc. So if a supplier has this status the chances of them being a cheat or a liar or scam are not impossible, anyone can do something stupid but the chances of it are really really low.
So, after doing all these vetting work, you can go to the options for payment of a supplier to see if they offer Trade Assurance that works like an escrow where part of the payment like the first 30% goes into a holding place and it stays there until you click the button to release the payment to the supplier. You will have all the leverage in the world and Alibaba will back you now, that increases the chances that you will not be scammed.
We hope that this article has been helpful to you and you can feel more oriented now when searching for your ideal suppliers. If you still feel worried about making transactions directly on Alibaba on your own, feel free to contact us, we are a professional purchasing agent and freight forwarder located in China that can help you solve all the problems you have about importing from China. GUANGZHOU CHINA-LATIN, your eyes and your partner in China!