Alibaba.com’s group-buying solution for small businesses has a new name and some back-end upgrades as the international B2B website continues to fine tune the service.
Unveiled earlier this year asBargain Buyand now renamed Group Sourcing, the service is designed to give small buyers, who usually don’t have a lot of negotiating leverage when dealing with overseas suppliers, access to better prices when ordering small quantities of selected products.
Most of the suppliers using Alibaba.com are factories and trading companies that sell only in bulk and tend to deal with large, experienced importers, explained Mark Wu, product marketing manager for Alibaba.com. “The high MOQ (Minimum Order Quantity) and the high bar for foreign trade knowledge made Alibaba.com more like a B2B playground only for the big ‘B’ and not the small ‘b,’ ” Wu said. “That’s the main reason why we need Group Sourcing, to help level the playing field for small businesses.”
The service is straightforward: Alibaba.com invites its China-based Gold Suppliers—manufacturers and distributors who pay membership fees to sell on the platform—to offer discounted products and overstocked merchandise in small quantities for weeklong promotions. Currently there are on average about 800 products available each day in 16 categories including apparel, consumer electronics, home furnishings and industrial chemicals.
To streamline the service, Alibaba.com recently implemented an online system so Gold Suppliers could participate in Group Sourcing more easily. Products offered are vetted by Alibaba.com, a process that also was recently made more efficient.
Some of the types of companies that could benefit from the service include eBay sellers, small offline shops, and entrepreneurs without a lot of importing experience, Wu said. Group Sourcing simplifies the international buying process by providing door-to-door delivery and the option of paying by escrow.
Alibaba.com offers another service, AliExpress, that allows small businesses to buy as few as one item from participating suppliers, however products on offer are mainly consumer goods and prices tend to be higher.
Improvements to Group Sourcing are continuing. Alibaba.com is developing a freight-consolidation mechanism to help lower transportation costs for shipments that are smaller than a container load. The website is also working to add a stronger group-buy element to the service so that larger groups of buyers are able to get further price reductions during promotions.
