Case Study: Alibaba Sales Numbers vs Reality for Five Random Suppliers

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In this case study, we compared the transaction data from Alibaba’s company profiles for their suppliers to the data displayed in Jungle Scout’s Supplier Database.

We hoped to learn whether or not manufacturers that seem legitimate on Alibaba are, in fact, legit, or if they may be inflating their numbers or are actually trading companies.

Here are a few things to know about this case study:

• Subjects: The five companies selected were chosen at random, using the following keyword search terms: bamboo sticks, drinkware, headphones, yoga mats, and card games.
• Tool #1: Alibaba is a massive, international retail site that connects businesses with suppliers. The majority of these manufacturers are located in China.
• Tool #2: Jungle Scout’s Supplier Database gathers transactional importer information from US Customs and Border Protection’s Office of Trade, and then displays the data in an easy-to-understand format.

Company #1 – Xiamen Haoliyuan Bamboo Products Co., Ltd.

Products: bamboo sticks

What does Alibaba say?

According to Alibaba, Xiamen Haoliyuan Bamboo Products Co., Ltd. was established in 2015. The site also states that the supplier generates $1-$2.5 million in annual revenue, with 11.08% of that revenue generated from buyers in North America.

What does the Supplier Database say?

The Supplier Database shows Xiamen Haoliyuan has exported a total of 13 shipments to the US since 2014. Of those 13 shipments, all were sent in 2016 or later.

Verdict: Alibaba’s information is accurate.

Our database information lines up with the data on Alibaba. It’s important to note, though, that while Xiamen Haoliyuan has had over a million in sales, only a fraction of that is US export-related. And most of those shipments were smaller in quantity (never more than 1,200 units).

Company #2 – Zhejiang Daian Commodity Co., Ltd.

Products: drinkware

What does Alibaba say?

Zhejiang Daian Commodity Co., Ltd. has processed 48 transactions, totaling $860,000+ in sales. They’ve also been an Alibaba seller for more than four years. As for their minimum order quantity (MOQ), their catalog states that it is 1,000 units.

What does the Supplier Database say?

Since 2014, Zhejiang Daian has exported 290 orders for 88 different customers. What’s interesting to note is that the quantities for those shipments are almost all below the 1,000 MOQ mentioned on Alibaba. In fact, the largest shipment they’ve sent over the last two years was 1,501 units. This means their MOQs are negotiable.

Verdict – Alibaba’s information is accurate.

Zhejiang Daian Commodity Co., Ltd.’s sales numbers on Alibaba are legitimate and they export to the US a lot. That tells us they are probably familiar with Amazon’s shipping procedures. However, their MOQs on Alibaba are somewhat misleading, as it’s clear sellers can order fewer than 1000 units.

Company #3 – Minnee International Trading Company

Products: yoga mats

What does Alibaba say?

In the last six months, Minnee International Trading Company has landed 41 deals worth $10,000. And while that is a low number (averaging out to $243.00 per transaction), most of those sales came from US businesses. Minnee International is also relatively new, having been on Alibaba for just one year.

What does the Supplier Database say?

In terms of this case study, this is the first company we’ve found where there is a data discrepancy between Alibaba and the Jungle Scout Supplier Database. Unlike Alibaba, our database shows Minnee as having performed a mere three transactions in the history of the company, with all three going through in 2015.

Verdict – Alibaba’s information is NOT accurate.

Why does Minnee show one thing on Alibaba and another in the Jungle Scout database? Because they’re not actually a manufacturer. They are a trading company. Of course, they’re pretty clear about this. It’s in their title, after all!

* As a side note: In order to turn a profit, trading companies’ prices are usually higher than those of a manufacturer. So, if you use a trading company like Minnee, you can expect a higher cost of goods (COGs).

Company #4 – Bluetiger (HK) Electronics Technology Co., Ltd.

Products: headphones

What does Alibaba say?

Bluetiger (HK) Electronics Technology Co., Ltd. is another new company, active on Alibaba for only one year. And in the last six months, they’ve had 11 transactions and made $700 in sales. That’s an extremely low average of just $63 per transaction. Also, the 11 orders were shipped to many different countries, with just two going to the US.

What does the Supplier Database say?

The data in Jungle Scout’s Supplier Database is, once again, different than the data displayed in Alibaba. Our database shows Bluetiger Electronics as performing a total of four transactions, with only one customer located in the US. Furthermore, all four sales were completed in late 2016.

Verdict – Another trading company?

It’s hard to tell exactly what’s going on with Bluetiger’s data. It’s clear that the company once had the capacity to fulfill orders on its own (or, at the very least, were selling wholesale goods). However, their recent transactions aren’t recorded in the Supplier Database, which means they were probably shipped by another company. If it is a trading company, the ‘gold supplier’ and ‘trade assurance’ status on Alibaba is misleading. Having those badges makes it easy for buyers to mistake them for an actual manufacturer.

Company #5 – Jiangsu Hicreate Entertainment Co., Ltd.

Products: card games

What does Alibaba say?

Alibaba has Jiangsu Hicreate Entertainment Co., Ltd. processing 74 transactions, worth $220,000+, over the past six months. That’s $2,972 per transaction. In addition, Alibaba states that US buyers were responsible for 46 of those sales.

What does the Supplier Database say?

The Jungle Scout Supplier Database, on the other hand, shows that Jiangsu Hicreate has only shipped seven orders to the US. And, unlike the claims on Alibaba, our database shows that all seven fell within a two year timeframe, with the last shipment going out in August of 2018.

Verdict – Alibaba’s information is NOT accurate.

Frankly, this one surprised me. I’ve dealt with Jiangsu Hicreate before and I thought they were the original manufacturer of the products I purchased. But, it turns out that they’re probably a trading company. Or, since they deal with items that have many different parts (some wooden, some plastic, some paper), it’s possible that they are in the logistics game, putting all of those pieces together for other factories. Regardless, Jiangsu Hicreate isn’t the company shipping the final product.

Important takeaways.

This data opened our eyes to the following:

There are manufacturers on Alibaba that actually ship their own products.

The first two companies, Xiamen Haoliyuan Bamboo Products Co., Ltd., and Zhejiang Daian Commodity Co., Ltd., demonstrated on both Alibaba and the Jungle Scout Supplier Database that they ship their own goods to the US. And, just as important, they do so fairly frequently.

Companies that ship goods to the US often do so in small quantities.

If you’ve ever dealt with a manufacturer or trading company on Alibaba, it’s likely they’ve told you that they can’t produce small quantities of your product. In addition, they may have said that large orders take priority over smaller ones.

But judging by the majority of transactions displayed in the Supplier Database, most shipments contain fewer than 1,000 units of the product ordered. And sometimes, especially in the case of the trading companies, order amounts can be downright tiny.

Knowing this information beforehand can give you a huge advantage in negotiations!

Trading companies are usually easy to spot…

Two of the companies we looked at are clearly trading companies. They act as a middle man between the buyer and the original equipment manufacturer (OEM).

Minnee International Trading Company has “trading company” in its name, therefore, it was easy to spot. However, Bluetiger (HK) Electronics Technology Co., Ltd.’s name gives no indication that they’re a trading company, although the sales figures in our database clearly did.

…but some trading companies aren’t.

Finally, the biggest eye-opener for us in this case study was Jiangsu Hicreate Entertainment Co., Ltd.’s actual US deals.

Judging by their Alibaba data, they seem like a legitimate supplier. They have all the proper badges and plenty of transactions to back up their claims. But when we looked at the Jungle Scout Supplier Database, it was clear that they’re not the source manufacturer.

As I mentioned above, Jiangsu Hicreate might be a trading company, or they could be handling logistics for complicated products on behalf of the OEM. But even if they are a logistics operation, that still raises the question: why aren’t they shipping the goods themselves?”

Conclusion

Always do your due diligence!

Alibaba is an amazing website that has empowered millions of people to launch small and large businesses all over the globe. And while there are some great suppliers offering their services on Alibaba, it’s easy to see that there are trading companies listed on the site that are excellent at masking the fact that they’re not an OEM.

Do you share the same opinion? Share your thoughts in the comments below.

And if you haven’t already, be sure to check out the Jungle Scout Product Database so you can investigate the claims of your own suppliers.

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