Alibaba is a popular online directory of global manufacturers and suppliers. It’s a fantastic resource for facilitating contact between buyers and sellers; but unfortunately, many buyers are under the false impression that Alibaba takes responsibility for the legitimacy of the suppliers that it lists.

In fact, Alibaba is just a meeting place and no more. None of the suppliers are guaranteed safe. While you can find plenty of genuine manufacturers and suppliers there, there is nothing to stop scammers from joining up – and plenty do!

Much of the confusion lies with Gold and Trustpass memberships. Although Trustpass members are described as being ‘verified and authenticated by a reputable third-party credit reporting agency’, you don’t need to dig down very far to find that this doesn’t offer any real security to buyers. Company information in the Trustpass profile is verified, but by a third party Chinese company – and Alibaba doesn’t claim this information is either accurate or complete. All Gold and Trustpass membership really tells you is that the supplier was willing to pay a bit more for a better membership package.

Alibaba warns:

With both Gold Supplier and TrustPass Memberships, Alibaba.com endeavors to provide transparency on the identity and legitimacy of your trading partner. However, it is still important to conduct your own due diligence before making a transaction with any supplier. Alibaba.com cannot guarantee the quality of products or services provided by any supplier using its online trade platform.

Despite this, we believe Alibaba can be a great place to make direct contact with manufacturers and suppliers from all over the world – but you have to be prepared to carry out some thorough background research of your own first:

• Visit the Alibaba forums and search for feedback about the supplier
• Check the supplier’s contact details and give them a call
• Spend a while asking lots of questions and chatting before placing an order
• Ask for a sample at first, and then place only a small initial order. If they turn out to be fraudulent, you won’t have lost too much.

And the golden rule: Never spend more than you can afford to lose on an order with an untested Alibaba supplier. If you’re down to your last $200, Alibaba isn’t the place for you.  Instead, start with a local, guaranteed trustworthy supplier until you reach a more stable position.