We’ve introduced you to Alibaba and given you our take on what’s good and bad about it. Now, we’ll address the giant panda in the room: is it safe to buy from companies that sell on Alibaba? Before you put stock in the exaggerations and tall tales that you might hear on the Internet or elsewhere about widespread scamming and counterfeiting in China, take some time to read our assessments and advice.
Is Alibaba legit?
Alibaba is one of the largest e-commerce portals in China — and perhaps the world — so it’s definitely legitimate. The suppliers who sell through it, though, are another story. While the majority of them are there to do business honestly, there have been some cases of them scamming their customers.
So, how safe is Alibaba?
Alibaba provides certain trade guarantees and secure payment methods to protect your transactions. It also has protocols to make sure suppliers are legally registered, and allows you to report a seller whom you suspect of fraud. These tools help to keep you safe on Alibaba.
With that said, the platform cannot guarantee the ability (legal or otherwise) of their suppliers to list certain authentic branded products for sale. There have also been cases where suppliers have slipped through cracks in the verification process and ended up scamming buyers in various ways.
All trading (online or otherwise) comes with a degree of risk. The risks (or at least the stakes) are assumedly higher on Alibaba, though, since you’re often forced to buy multiple units of a product at once. That means more money changing hands, and more products that have a chance to be counterfeit or otherwise defective. Buying on more consumer-focused e-commerce portals — such as eBay.com or Amazon.com — can decrease this risk, as you can often buy items one at a time.
Fortunately, there are ways to reduce the risks that come with buying in bulk, and weed out the scammers. We’ll explain more below.
Top 5 tips for avoiding Alibaba scams and fraud
1. Beware of offers that seem too good to be true, especially on certain products.
There are certain products that are especially popular bait for counterfeiters and fraudsters. These include digital media (such as DVDs, Blu-Ray discs, video games, and computer software), computer memory storage devices (such as USB flash drives and external hard drives), and items from popular Western brands (e.g. Apple, Nike, Sony, Disney, Marvel, and so on). Almost all of these will be not-as-advertised, if not outright knock-offs. Even some products supposedly from major Chinese brands may be fake, too.
If you’re unsure about a product on Alibaba, try to find an identical or reasonably similar one elsewhere online. If the one on Alibaba is in the ballpark of 50% (or more) off the price of its counterpart, it’s a sign that you might be dealing with a faker or scammer.
2. Try to deal only with Verified Gold Suppliers.
An easy way to avoid dealing with a dishonest seller is to buy only from those who have the Gold Supplier status. This means that they have a paid account on the website, and have verified that they have a registered business, so they have more to lose from being caught scamming. This isn’t a total guarantee, though, so try to find Gold Suppliers who have been on the platform for a number of years (say, a minimum of 3); they’re likely more trustworthy. You can find this information on a product’s details page, in the upper-right section labelled “Supplier Details”.
3. If you’re still not sure about a supplier, do some more research.
Under the “Supplier Details” section that we just mentioned, you can also click Contact Now or Chat Now / Leave Messages to send an email or online chat to a supplier. Ask as many questions as you need to in order to be sure that you’re dealing with someone on the level. You may also want to click Visit Minisite to see what else the supplier has for offer, or look them up using a regular search engine and see if they’re authorized to be selling everything that they list. If your intuition tells you that something is off, it may be a better idea to look elsewhere for what you want than forge ahead with a risky deal.
4. Always use secure payment methods.
Look for the “Secure Payment” box underneath an item’s ordering options on Alibaba. This will tell you that if you buy from this supplier, you get three safety guarantees. First, your payment won’t be released to the supplier until you receive your order and are satisfied with it. Second, you will get a full refund if your order is late (or never arrives) because of the supplier’s error. And third, if you receive your order and it is significantly different from how it was listed, you can keep it anyway and receive a partial refund.
It is also wise to use your credit card or PayPal account as your actual method of payment. PayPal or your credit card company may be able to step in and help you if something goes wrong, as opposed to if you pay with a money order or bank transfer.
5. Never deal with a supplier personally outside of Alibaba.
This goes somewhat hand-in-hand with our previous tip. Some sellers may try to contact you and/or ask for payment outside of the Alibaba website. Don’t respond to them, even if they claim to represent the seller that you want to deal with! They may be trying to hijack your purchase by posing as the seller, then taking your order payment and not sending you anything in return. Only deal with the official representative for the seller that you want to buy from by using the methods described in tip #3.
Also, even if a seller is (or appears to be) legitimate, they may be attempting to avoid selling fees or taxes by having you not pay through the Alibaba website. At worst, they may be trying to scam you, and at most, they aren’t using the website properly. Avoid doing business with these people.
That’s our best advice for how to stay safe when using Alibaba! Now, let’s get buying and/or selling in the next two tutorials of our Alibaba course!