Alibaba vs. AliExpress: Differences, Dropshipping, Costs

The world of selling goods online goes far beyond Amazon, eBay, Shopify, Etsy, and other brand names that might come to mind. Both Alibaba and AliExpress, once considered online shopping behemoths specific to the Asian market, have become global forces for ecommerce that rival Western-born competitors across most industries.

Many people may not know the difference between Alibaba vs. AliExpress, however. Both ecommerce sites offer a way for vendors to sell goods and do so by way of similar user interfaces. In truth, the two sites are pretty similar as well—except for the kinds of transactions each site focuses on. Alibaba is designed to help with product sourcing for B2B sales, and AliExpress for sales directly to consumers. Most, if not all, products on Alibaba are priced for wholesale, whereas AliExpress pricing and unit sizes are much smaller.

Of course, these are far from the only differences when comparing Alibaba vs. AliExpress. There are plenty of other considerations, such as dropshipping capabilities, costs of using the platforms, shipping time, and more.

Alibaba vs. AliExpress: Overview

Alibaba and AliExpress are part of the same Chinese ecommerce giant, Alibaba Group. 

Both sites are designed to connect merchandise manufacturers with purchasers—be they retail consumers or wholesalers.

Alibaba was the first of these two sites, focusing on wholesale opportunities and connecting Chinese producers with the global marketplace. The success of Alibaba led to AliExpress, a B2C solution that mirrored Alibaba’s marketplace but without the need for customers to buy in bulk.

Together these two platforms dominate the global ecommerce landscape and give a variety of businesses opportunities to source products—be it in bulk, through smaller orders, or even through dropshipping.

Alibaba vs. AliExpress: Differences

Alibaba and AliExpress offer significantly different services for different vendors. Alibaba offers wholesalers and B2B customers a one-stop shop for inexpensive goods. Instead of hunting around for suppliers (or customers, in the case of wholesalers), Alibaba makes it easy to list one’s wares and provide upfront pricing—including bulk discounts, shipping costs, and more. 

What Makes Alibaba Unique

Alibaba is designed to connect manufacturers and wholesalers across a variety of goods. Manufacturers from around the world list their products on Alibaba, and purchasers can create accounts that enable them to solicit quotes, work out production runs, and even gather samples before deciding to make a purchase.

For sellers, Alibaba means more than merely listing your products. Setting up an account also provides you with a host of additional tools, including a customizable page for your company, analytics tools to help track sales and engagements with your products, and support for sellers on the platform.

What Makes AliExpress Unique

AliExpress is the retail arm of the Alibaba empire. This platform shares a similar look and feel to its wholesale counterpart, but the environment is different for both sellers and buyers alike. Chiefly, all of the wholesale-related options for buying and selling are gone. Instead, sellers create individual product posts for items, typically with only a small amount of customization options for customers.

Buyers can expect to see products on AliExpress in a manner much more similar to a shopping experience on Amazon, Etsy, or Shopify. Company profile pages focus on the goods being sold, rather than how the business’s operations work. In essence, AliExpress is just like any other consumer-facing online portal. For this reason, we’re going to stick to discussing the ins and outs of AliExpress for small and medium-sized businesses as well as dropshippers.

Alibaba vs. AliExpress: Costs

Alibaba and AliExpress charge different fees for their services, given how different they are in terms of the businesses and volume of goods offered on each platform.

Costs for Selling on Alibaba

Selling on Alibaba isn’t cheap. Vendors of any size or transaction volume have to pay to be on the platform. There are currently two tiers available to sellers: basic and premium. Each comes with a different set of tools and resources to make selling on Alibaba easier. Basic costs $2,399 a year; premium accounts cost $4,199 a year. Alibaba also takes a 2% to 5% commission on each sale.

Basic seller accounts are a good fit for businesses that are either looking to test the waters on the platform or that have minimal needs from their account. Both pricing tiers allow you to create an unlimited number of product posts, interact with queries, conduct transactions on the platform, and create five sub-accounts for employees.

Premium memberships come with 200 free listings through Alibaba’s product posting service, whereas a basic account only offers 50. Basic accounts also come with email support, versus premium accounts that come with a dedicated account manager and consultations on your performance every month.

It’s also worth noting that U.S.-based businesses were once unable to sell on Alibaba, but recent changes have allowed for these sellers to join the platform and sell to domestic buyers only.[1]

Costs for Buying on Alibaba

Buyers, on the other hand, do not have to pay for membership. Alibaba makes it easy for buyers to get information on the products they need, look at competitive pricing and minimum volume requirements, and better get to know potential vendors. Listings typically include a brief description of the company in addition to product information, complete with information about product packaging, shipping options, and an option to reach out for more information from the seller before ordering. Some vendors will also include the option to buy a product sample before committing to a large order.

Perhaps the best feature of Alibaba for buyers is the ability to post requests for vendors to give you quotes based on the item (or items) you’re looking to buy. This means you don’t have to sift through hundreds of item listings and hope that the product you’re looking for happens to be available. Receiving quotes is as easy as creating an account, creating a post that lists your needs and other considerations, your method of payment, and the destination to which you will have the goods shipped. From there, vendors can submit quotes and bid on the job—all without requiring you to do the legwork of reaching out to vendors one by one.

Last but not least, most products on Alibaba tend to be inexpensive. If sourcing products internationally doesn’t pose a challenge for your business, you may be able to benefit from some of the lowest wholesale prices around by using Alibaba.

Costs for Using AliExpress

AliExpress uses a different pricing structure for sellers than Alibaba. At present, U.S.-based businesses cannot set up stores on AliExpress. Businesses with a tax presence in mainland China, France, Italy, Russia, Spain, Italy, and Turkey can open seller accounts.

Buyers on AliExpress, however, can come from just about anywhere in the world. Since AliExpress is open to retail shoppers, anyone can set up an account and begin making purchases. There are no fees for buyers—be they per-item commissions or subscription payments.

Alibaba vs. AliExpress: Dropshipping

Alibaba is a great option for wholesalers to get inventory for ecommerce or brick-and-mortar stores, but AliExpress is the clear favorite for dropshippers. Alibaba is designed to offer products in bulk: There is no real method for making one-off purchases that ship directly from the manufacturer to the end customer. Plus, buyers would need to purchase large quantities of goods, which would not be beneficial to dropshipping operations and logistics.

AliExpress, on the other hand, is an excellent marketplace for dropshippers to source goods. There is an almost endless supply of different items for sale on the platform, and many offer deep discounts on shipping. Current trade agreements between the U.S. and China include a shipping option called ePacket, which offers a deep discount on shipping costs as an effort to promote trade between the two countries. This makes it easy to pass along savings to the end customer in the event that AliExpress sellers don’t offer a free shipping option (or when that option would take too long to arrive in a reasonable amount of time).

Dropshippers who are just starting out will likely want to stick to using AliExpress to build their business, as there’s no requirement to purchase in bulk. After all, the name of the game with dropshipping is to not have any inventory to purchase and warehouse.

AliExpress excels in providing dropshipping products at inexpensive prices, and free shipping is always an alluring prospect for customers, even if this option typically takes around 30 working days from order placement for customers to receive their goods. Plus, there are several ways to integrate your roster of AliExpress products into a Shopify account, taking out much of the manual work that comes with keeping your online store up to date (and your back-end work on AliExpress humming). 

Alibaba vs. AliExpress: Pros and Cons

At this point, you might be wondering: Is Alibaba better than AliExpress? Well, it depends on your type of business and needs. Alibaba and AliExpress both have their advantages and disadvantages, depending on how you intend to use either platform. There are dramatically different business use cases for both, as well as limitations on how domestic companies can interact with different facets of each marketplace. 

Alibaba Pros and Cons

Alibaba is an excellent option for buyers that need access to wholesale goods, or who want to establish a long-term relationship with specific manufacturers abroad. Buyers don’t need to pay for accounts on Alibaba and can solicit bids from sellers to find the best value. Buyers should be careful about sacrificing quality for value, though. Every manufacturer is different in terms of their quality assurance, and going with the cheapest option may result in goods that aren’t up to snuff.

On the other hand, U.S.-based sellers will have a significantly limited business opportunity on Alibaba, since they are only able to sell to other domestic businesses. This may not make the monthly fees and commissions worth it for many sellers who might find other platforms more worthwhile. 

AliExpress Pros and Cons

AliExpress is perfect for dropshippers, as it offers such a wide variety of goods at competitive prices. Integrations with Shopify make it even easier to display inventory on a dropshipping site and take out much of the manual work that would otherwise come with maintaining a dropshipping business storefront.

However, those looking to sell their goods on AliExpress will have to look elsewhere, unless they have a business presence in one of only a handful of countries. 

The Final Word

Both Alibaba and AliExpress provide major opportunities for buyers and sellers across the world. Alibaba is the go-to hub for wholesalers looking to sell their wares, as well as businesses looking to buy in bulk. If you want to offer unique goods and find a distributor that can help make it happen, Alibaba has a host of options for white-label manufacturing in virtually any industry.

AliExpress, on the other hand, can be a great option for international sellers and dropshippers, particularly if you’re looking to start a small business in the United States. AliExpress offers affordable prices on a host of different products—many of which even come with a free shipping option. With the right business strategy and niche for goods, AliExpress can be a fantastic asset for getting a dropshipping business off the ground without spending a fortune.

Article Sources:

  1. Reuters.com. “Alibaba Welcomes U.S. Small Businesses to Sell Globally on Its Platform

Christine Aebischer

Christine Aebischer is an editor at Fundera.

Prior to Fundera, Christine was an editor at the financial planning startup LearnVest and its parent company, Northwestern Mutual. There she wrote and edited on topics such as debt, budgeting, insurance, taxes, investing, and retirement. She has written for print and online on topics ranging from personal finance to luxury real estate.

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