(This post originally appeared on Inc.)
Is it time to sell products on Alibaba? I think it is.
Just this week, the Chinese ecommerce giant and Amazon-rival announced that it will be opening up its platform and providing tools specifically for U.S. small merchants. The potential is enormous and it’s not just about China. Alibaba has customers worldwide and according to Reuters, U.S. merchants will be able to sell not only to Alibaba’s core China audience but also to customers in India, Brazil and Canada, as well as other U.S. businesses.
“You get to compete and act like a multinational company in a way you’ve never had the tools or technology to be able to do so,” John Caplan, head of North America B2B at Alibaba Group, told Reuters.
For starters, it’s a new, and potentially enormous channel to develop – and you need to expand your channels if you want to grow. The smartest business owners I encounter are all about diversifying and reaching new markets. My best clients, whether or not they’re a brick and mortar store, are developing other channels for their products – both on and offline. For those into ecommerce, many are realizing that Amazon isn’t the only game in town. They can sell on eBay or Etsy or use applications like Shopify, BigCommerce or Magento to sell from their own websites. Now, there’s Alibaba and its millions- no billions – of potential customers. My recommendation – assuming you have the resources to manage it – is to exploit as many as these channels as possible.
Alibaba taps you into an enormous market. As great as Amazon and eBay are, Alibaba pretty much owns China. It’s where most of their merchants and consumers are. There are currently 720 million users on the platform, and another 150 million users across the company’s 189 other markets, It’s an enormous number of potential buyers for your products and because the company knows the Chinese market so well, I expect to see many future tools and services to help its American sellers over the next few years for facilitating shipment, customs and other bureaucratic challenges.
One final thing to note is cost. Alibaba’s Caplan believes that small business owners looking to sell to Chinese customers will be enticed by Alibaba’s fee structure and business model. He says that the company charges a membership fee of around “a few thousand dollars” as opposed to taking a cut of each sale and also offers advertising options for its merchants. Whether this turns out into real savings remains to be seen. But at the very least, the costs to do business there should be somewhat similar to Amazon.
“Getting new customers is hard, and when you have an online store, you don’t automatically have customers,” Caplan told Business Insider. “There has been, up until now, no global platform you can join where you could actually get customers all over the planet, and we’re trying to combine the best of those two capabilities for US small businesses.”