The global B2B sourcing platform Alibaba basically has two categories of sellers: Free and Gold. Free sellers usually pay no fees and undergo no checks before they’re permitted to use the platform, so no-one in their right mind would source from them.

Gold suppliers pay a comparatively substantial annual membership fee, and undergo a verification process that Alibaba calls ‘Onsite Check’. This creates a way of trustworthiness, but how reliable is that the system in practice?

 

Alibaba Gold Supplier

Alibaba Gold Supplier may be a large source of income for Alibaba. Suppliers wishing to be granted the icon on their profiles must pay an annual fee to Alibaba, within the region of 10,000 USD. That’s really all that the Gold Supplier status shows: that the supplier is paying money to Alibaba so as to possess a logo placed on their profile. If that reduces the legitimacy of Gold status in your eyes, then you likely have a healthy level of skepticism.

Having said that, this technique does a minimum of eliminate all of rock bottom effort fraudsters and scammers. due to Alibaba Gold Supplier, there’s a basic selection pressure on suppliers to stump up some capital before anyone will take them seriously.

Alibaba has a very strict policy towards all gold supplier to maintain healthy relationship with buyers. most of the new sellers are blacklisted within first year of alibaba status even if 2 to 3 buyer complaints are not settled by the seller.

 

Onsite Check

It would be wrong to say that absolutely no checking or verification goes on in the least for Alibaba Gold Supplier status. Gold status includes a service called ‘Onsite Check’, which involves someone getting to the supplier’s production location and checking that it actually exists. that’s the complete extent of Onsite Check and Alibaba is upfront about this:

Despite onsite supplier check, we’ve encounter clients who mistakenly believed that how Onsite Check would guarantee high standard of the deal and trust, goods or company. In fact, Onsite Check merely shows that a minimum of something vaguely resembling a production site does exist at the situation the supplier claims it does. It says nothing about how that supplier conducts it operations or how it interacts with clients.

As well as checking that the supplier’s location exists, Alibaba also outsources confirmation of business registration record information for every Alibaba Gold Supplier, and this information is displayed on their profile. However, little or no information is disclosed about who administered the verification, using what methodology and when.

 

Other Verifications

In addition to Onsite Check you’ll see the subsequent verification services on Alibaba’s platform:

A&V Check

A&V Check may be a verification administered on Alibaba Gold Suppliers located outside of China , Hong Kong or Taiwan. Alibaba claims that it’s administered by a third-party but there’s often no evidence presented on who the third party is.

 

Supplier Assessment

This optional service is out there to China-based Alibaba Gold Supplier customers and includes a verification by a well known company like TÜV Rheinland or Bureau Veritas. Alibaba Gold Suppliers who have chosen to buy this feature have downloadable assessment reports available on their Alibaba profile page.

 

The 2011 Alibaba Fraud Scandal

In February 2011, two senior executives at Alibaba Group resigned after the revelation of large-scale fraud surrounding the Alibaba Gold Supplier scheme. It came to light that around 100 members of Alibaba’s 5000-strong sales team where taking kickbacks in exchange for allowing fraudulent suppliers to skip the already meagre verification process. thanks to this, large numbers of very low-quality or outright fraudulent suppliers were ready to get the Alibaba Gold Supplier badge on their profiles.

That saga is now over (Alibaba blacklisted many suppliers), but it remains up to buyers to think about how much trust they need to put within the Alibaba Gold Supplier system within the future. Ultimately, the simplest policy is usually to possess the important information independently verified by a 3rd party with no interest within the outcome of the verification. this manner you’ll make sure that you’re seeing reliable information that you simply can make an informed decision with. Once a supplier has passed these basic checks, subsequent step is to rearrange audits and independent visits. This process is up to the customer and shouldn’t be left to organizations like Alibaba who have a robust interest within the outcome.

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