How are Alibaba prices so low sometimes? 

The first point to understand is that Alibaba is a sales platform run by salespeople to get—you guessed it—sales. 

So, much like grocery stores who have loss leaders like $1.50 hot dog-and-soda deals (shoutout to Costco Wholesale) or 50% off nearly expired produce, suppliers also have their set of strategies to get your attention and get you in the door. 

Here are the top 5 reasons. Be especially mindful for reason #5. 

1.) Mass-produced products pricing 

Most products, when produced in great volume, tend to have wonderful efficiencies that create lower prices. 

This can be a great thing—if you are in the market for a generic, off-the-shelf product. But if you are looking to make a customized product with an MOQ of only 500-1000 units, then the shown Alibaba pricing is likely far away from the actual pricing you will get. 

2.) Teaser pricing 

You might be seeing a “starting from” price that’s designed to get you messaging the supplier sales rep. But when you dig into the details and get further into the conversation, oftentimes pricing will increase—sometimes drastically. 

3.) Low-quality materials pricing 

As the Chinese expression “一分钱一分货“ or “you get what you pay for” goes, the price will reflect the quality of the materials and labour. 

Once you share your specs and the quality requirements increase, so too will the pricing. 

4. Tiered pricing models 

Sometimes the pricing listed is for a much higher tier—maybe for 10,000+ units. Expect pricing to be higher for lower quantities as the factory has to account for setup costs, inefficiencies in smaller production runs, and higher per-unit costs for materials.

5. Guinea pig pricing 

The supplier may not be producing your product yet but will show images and act as if they are. With their low pricing they could be trying to attract “guinea pig” clients to develop into a new product area. 

So what’s a brand to do？

Ask questions. Lots and lots of questions. 

If you are worried about your idea being stolen in the process, show them a like-product. But be sure to include specifics like material type, dimensions, weight, MOQ, and packaging requirements. Sharing an Amazon listing link of a competitor’s product is often not enough information for the supplier to be able to give you an accurate quote. 

Additionally, take time to build trust by verifying the supplier’s qualifications (such as factory audits, certifications, or product quality standards). And always, always ask for samples before placing any order! 

Good luck and happy sourcing! 

Stay Ahead of the Sourcing Curve

Become a sourcing super hero! Get the latest China sourcing news and tips—handcrafted and delivered to you by our team.

No spam, ever. Our monthly newsletter will share tips on negotiating, increasing quality, best ways to communicate with your suppliers, and many more insights and stories.

Subscribe Now to get “in the know” about what’s happening on the ground in China.