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How to sell on Amazon from Alibaba

Discover how you can buy wholesale products on Alibaba and resell them on Amazon for profit.

Key takeaways

Selling on Amazon from Alibaba is legal, provided sellers adhere to regional laws
Alibaba suppliers can ship products to Amazon warehouses or a private warehouse
Compare Amazon and Alibaba product prices to ensure profitable margins
You must set up a product listing before you can ship goods directly from China to Amazon FBA warehouses.

Introduction

With 200,000 suppliers offering over 200 million products, Alibaba is one of the largest B2B marketplaces in China. You can find manufacturers and wholesalers on the platform offering products at bulk pricing.

Online sellers can source products from Alibaba at wholesale prices and resell them on Amazon at retail prices.

International shipping, availability of private-labelled products, and buyer protection are reasons sellers prefer Alibaba.

Is it legal to resell products from Alibaba to Amazon?

Yes. Selling on Amazon from Alibaba is entirely legal, provided sellers adhere to the regional laws and regulations. Alibaba suppliers can ship products to Amazon warehouses or directly dropship products to consumers.

Pros and cons of buying from Alibaba

Pros

Competitive pricing advantage: You can buy products from Alibaba at low prices and sell them on Amazon at higher prices
Buyer protection: When you place an order, Alibaba holds the funds in escrow until you confirm you have received products in good condition
Reliable and trusted suppliers: Alibaba has its own vetting and verification system, making it easy to connect with reliable suppliers
Direct shipping: Many Alibaba suppliers can arrange direct shipping from Alibaba to Amazon FBA warehouses

Cons

Quality discrepancies: The quality of products on Alibaba can depend a lot on the type of sellers you partner with
Low profit margins: Profit margins for Amazon sellers in certain categories can be razor thin since they must keep their prices low to compete on the platform and attract customers
Challenges with customs: Without the right shipping or dropshipping partner, customs processes can become challenging, leading to delays.

Steps to sell on Amazon from Alibaba

1. Choose products to source

Your research should start with Amazon instead of Alibaba. After all, you need a winning product that can quickly sell on Amazon. Use tools like JungleScout and Helium 10 to find profitable keywords and low-volume categories.

Some of the factors you should consider include:

Current competition
Number of reviews on product listings
Search volume
No trademark or patents
Shipping costs
Average product pricing

You need a healthy profit margin to sustain your online business. Compare the average product pricing on Amazon and Alibaba to ensure you can make a reasonable profit. When calculating profit margins, you should also factor in the currency conversion costs, shipping costs, Amazon listing costs, storage costs, and marketing costs.

2. Find and contact suppliers

Here are some ways to find reliable suppliers on Alibaba:

Research supplier reviews, references, and track record
Use filters to find verified suppliers (These suppliers undergo a thorough inspection and audit by third-party institutions so you can be assured of their quality and reliability)
Look into the supplier’s production capacity and lead times to plan inventory
Inquire about shipping costs and whether the supplier can directly ship goods to Amazon warehouses
Ask about MOQs. Suppliers on Alibaba offer bulk pricing but they also require a high MOQ.

Pro tip: While pricing is important, it should not be the only factor you consider. Ask for product samples to check for quality before finalising a supplier.

3. Pay the supplier

Place an order on Alibaba using any payment method, such as credit card, bank transfer, or Alipay. You can also opt for Alibaba’s Trade Assurance program, which offers extra protection and guarantees a refund if the supplier fails to meet the agreed terms.

4. Decide how to ship and fulfil your order

You need to consider two types of shipping: Getting goods from the factory in China to the warehouses and fulfilling the order by shipping products to the consumers.

Most suppliers on Alibaba are familiar with international shipping and can easily get your products to Amazon FBA warehouses or your storage location.

There are two ways to fulfil Amazon orders:

Fulfilment by Amazon (FBA): Your products get shipped from the supplier’s factory to Amazon FBA warehouses. Amazon is then responsible for storing the products and fulfilling orders. Separate fees are charged for FBA and storage
Fulfilment by Merchant (FBM): You manage the fulfilment of the orders on your own after receiving the goods from the supplier

5. Create a listing on Amazon and start taking orders

Register on Amazon as a seller and create your first product listing. You need to set up a product listing before you can ship goods directly from China to Amazon FBA warehouses.

There are two ways to list products on Amazon: Finding existing listings if the products are already sold or creating new listings.

For products already on Amazon, you can add a new offer by matching or scanning the product barcode.
For new products not yet listed on Amazon, sellers can create a new product listing by uploading product images and filling in the details.

Collect payments from Amazon with WorldFirst

Collecting payments on Amazon can quickly become complicated if you plan to sell globally across different regions. That’s because Amazon requires local bank addresses of the country where you want to list and sell your products.

For instance, if you have an e-commerce business in Australia and you plan to sell on Amazon US, you will need a US-based bank account.

WorldFirst is a participating Amazon Payment Service Provider (PSP) that allows sellers to open multiple local currency accounts without any local addresses.

With a World Account, you can open local receiving accounts in 15+ currencies and collect funds from 100+ international marketplaces and payment gateways–including Amazon.

Use the collected funds to pay suppliers or repatriate them back to your bank account at competitive exchange rates.

→ Take a look at how to link Amazon seller account to WorldFirst

Open a World Account for free

Open 10+ local currency accounts with local account details
Direct CNH payments to 1688.com
Pay suppliers, partners and staff in 40+ currencies and 130+ destinations
Collect secure payments from 100+ marketplaces and payment gateways, including Amazon, AliExpress, Paypal and Shopify
Lock in currency conversion rates for up to 24 months

Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.

Written by Rick Hill, Head of Sales ANZ at WorldFirst

Rick Hill has worked in payments and financial services for the past nine years. He began his career at a large institutional bank and has since worked across startups and scaleups. Over the past four years, his experience with e-commerce retailers has led him to believe that WorldFirst will be crucial in helping brands expand globally by demystifying the complexities of entering new markets.