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The Alibaba Gold Supplier program is often misunderstood as a ‘seal of approval’ while it’s more comparable to a verified business directory. What makes the Gold Supplier program unique is the information you can access about each supplier – information that can in turn be used to source qualified suppliers in China, Vietnam, India, and many other countries.
In this guide, I explain what Alibaba Gold Suppliers are – and what they are not. I also explain how you can use the information made available in the TrustPass profile to your advantage.
That said, the traffic on Alibaba.com goes almost exclusively to Gold Suppliers. In short, being part of the program is a basic necessity for suppliers in China, who want to be found by prospective buyers.
Who can become a Gold Supplier?
Only registered companies can be listed as Gold Suppliers on Alibaba.com. This adds a layer of safety as you know you’re at least dealing with a registered business entity.
This onboarding video gives you some insights into the specific requirements from Alibaba:
Can only Chinese companies become Gold Suppliers?
No, the Alibaba Gold Supplier program is available for companies in Vietnam, India, United States, and many other countries.
That said, the majority of suppliers on Alibaba, Gold Suppliers included, are Chinese companies.
Can I assume that all Gold Suppliers are safe and reliable?
There’s quite a bit of confusion among small business owners regarding the meaning, and importance, of a Gold Supplier Membership. Let me explain:
a. Alibaba Gold Supplier is a membership program for suppliers, advertising on Alibaba.com. It’s not mandatory, but a Gold Supplier gets more exposure than a Free Member (x20 times according to Alibaba Group). It’s also an important revenue stream for Alibaba.com.
b. Alibaba.com ensures that every Gold Supplier is a registered company, unlike Free Members who are not verified. As such, Alibaba.com provides extensive information about Gold Suppliers, that can be used during the supplier vetting process. Such information is not provided for Free Members.
c. The Alibaba Gold Supplier Badge is not related to the suppliers’ manufacturing capabilities, product quality, or product compliance in any way.
In short, Gold Suppliers gives you access to data that you would otherwise not be able to find. This data can be used when vetting and selecting suppliers. But, you must still follow a strict product development and quality assurance process when you move forward with one or more suppliers.
Are Gold Suppliers compliant with US and EU safety standards?
There is no link between a supplier’s Gold Supplier status and their ability (or lack thereof) to manufacture products in compliance with US, EU, or other safety standards.
Do Gold Suppliers produce good quality products?
“Good quality” is highly subjective and the Gold Supplier status is not based on the supplier’s product quality. It’s always up to you as a buyer to clearly define “product quality” in technical terms and then follow a strict quality assurance program.
Why should I care about Gold Suppliers?
Unlike Free Members, all Gold Suppliers are verified by Alibaba.com. In short, Alibaba.com checks the supplier’s business license and guarantees that all listed companies are registered businesses.
Alibaba shares extensive information about each listed Gold Supplier, that can be used to vet suppliers. In fact, the Alibaba Gold Supplier database is by far the largest verified databank for suppliers in China and other countries in Asia.
Business license number
This information can be used when vetting suppliers.
How can I use the information provided by Alibaba.com to select a supplier?
For example, you can use the Registered Capital, to determine if the supplier is a manufacturer or trading company.
The Year of Registration will tell you if the supplier is a new company, registered just a few months ago, or a veteran that’s been around for decades.
You should not expect to make a final supplier selection exclusively based on the Gold Supplier information. That being said, the information can be used to filter a large number of candidates down to a more manageable number.
In recent years, Alibaba suppliers also have had the option to upload factory audit reports, product certificates, and other documents that can be used to make an even more precise supplier selection. Globalsources.com has also implemented similar functionality.
Accessing Additional Company Data on Tianyancha
Alibaba provides the business license number for each Gold Supplier. This number can be used to access more company information, including that of the main shareholders, on other websites such as Tianyancha.com.
Tianyancha.com is only available in Chinese. That said, Google translate is accurate enough to help you grasp the big picture.
What’s the difference between Trade Assurance and Gold Supplier?
Alibaba Trade Assurance is a payment solution, while the Gold Supplier program is more comparable to the yellow pages for manufacturers.
Company Information Overview
Below follows an overview of the Gold Supplier information provided by Alibaba, and how you can use it to make a supplier selection and manage your risks later on in the process.
The information provided in the TrustPass profile is verified by Alibaba.com.
Date of Issue
This is when the supplier’s business license was issued. However, it shouldn’t be confused with the year of establishment for a new business license can be issued for a variety of reasons, such as if the supplier changes address, business scope, or legal representative.
Date of Expiry
This is when the current business license expires. Not a very important piece of information for most importers since renewal is a simple process.
This is a strong indication of the size of the company. A large registered capital (more than RMB 10,000,000) indicates a fairly large manufacturer, while RMB 30,000 is a strong sign that it’s a smaller operation.
A very small supplier can be a risky choice since they have very limited resources. In a situation where something would go down south during production, they might not even afford to repair or remake a defective batch of products.
It’s more important than it might seem. Payment frauds are fairly common and it’s critical that you only transfer your money to a bank account whose beneficiary name is matching the supplier name on Alibaba.com.
Country / Territory
The Country where the company is legally registered.
Some companies register at a certain address but operate from another. There are various reasons for this. You should always stay away from suppliers who subcontract orders to other suppliers.
It might not sound like a big deal, but these subcontractors can often be low-end factories.
The longer a company has been established, the more likely it is to be a decent supplier. Bad suppliers don’t last very long and scammers need to register new companies on a frequent basis.
This is the person that should sign the Pro Forma Invoice and the Sales Agreement. A document that’s signed by a sales manager or any other employee is not valid.
Limited Liability Companies tend to be more stable than Sole Proprietorships. That’s all you need to know about the Legal Form of a supplier.
The Government entity that issued the supplier’s business license. This should be in the same city as the supplier’s registered address.
The information on the trade capacity page is provided by the suppliers themselves. Hence, it may not be accurate, but can still be used to vet prospective suppliers.
A supplier with a high export percentage is always preferable in comparison to a supplier who only focuses on the domestic market. However, European and American suppliers need to be careful here since not every supplier is targeting these markets.
A famous brand as a customer is always a good sign since these companies apply a very strict supplier selection process. Yet, It’s quite rare that Alibaba Gold Suppliers even publish their Main Customers, mainly out of fear from competition.
Total Annual Sales Volume
An indication of the supplier’s size and scale of business
Suppliers who mainly focus on exports are more likely to deliver products of a higher quality. They are also more likely to be aware of certain product certification standards in Europe and America.
Accepted Delivery Terms
All suppliers accept EXW and FOB. Some suppliers also offer freight booking according to CIF, DDU, or DAP terms through their local freight forwarders.
Accepted Payment Currency
USD is the only relevant currency for American, and also, European importers. Many suppliers are reluctant to receive EUR since it’s been fairly unstable in the last few years.
Co-founder of Asiaimportal (HK) Limited and based in Hong Kong. He has been quoted in and contributed to Bloomberg, SCMP, Alibaba Insights, Globalsources.com, China Chief Executive, Quartz Magazine and more.
Hey there, I’m Fredrik!
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