Alibaba, AliExpress and DHgate: what you are actually comparing
These are not three versions of the same thing. One is a wholesale marketplace where the seller may be a factory or a trader; the others are retail-shaped marketplaces where the price already contains a delivery arrangement. A low unit price with heavy freight and a bundled price with cheap delivery often land within pennies of each other, so compare landed cost per sellable unit.
Cheap unit price and heavy freight often land in the same place. Compare landed cost per sellable unit, and treat an offer to split parcels as a warning.
The comparison people make is not the comparison that matters
The usual discovery is that a wholesale listing quotes a quarter of the retail-marketplace price, and then the sea freight quote arrives and the difference largely disappears. That is not a trick, and it is not evidence that one platform is dishonest. It is what happens when you compare a price that excludes delivery with a price that includes it.
The retail-shaped marketplaces are built around parcels: the price you see has a delivery arrangement folded into it, optimised for small quantities moving by air or post. A wholesale listing is built around a factory gate: it excludes freight, duty and tax, because at wholesale quantities those depend on how you ship and who imports.
So the only number worth comparing is the landed cost of one unit you can actually sell, which is goods plus freight plus duty plus import tax plus whatever you lose to damage and rejects. Our landed price guide sets out the arithmetic, and the duty calculator does the UK part of it. Until you have that figure for both routes, you are comparing two different things and concluding something about neither.
| Wholesale marketplace | Retail-shaped marketplace | |
|---|---|---|
| Quantity it assumes | A production run | A parcel |
| Who the seller may be | A factory or a trading company, not always distinguishable | Usually a reseller holding stock |
| What the price includes | Goods at the factory gate | Goods with a delivery arrangement folded in |
| Where the cost hides | Freight, duty, import tax, tooling, minimums | The margin of whoever consolidated it before you |
| What you can change | Specification, packaging, materials, tolerances | Almost nothing |
Cheap delivery on small parcels is usually someone taking a risk on your behalf
A recurring experience is that a retail-marketplace seller ships several small parcels instead of one consignment, and very little tax appears to be due. It feels like a service. It is worth understanding what it actually is before you build a business on it.
Splitting a single commercial order into several parcels so that each one falls under a relief threshold is not a shipping optimisation; it is a way of presenting one importation as several. The liability for an incorrect import declaration sits with the importer, which is you, not with the seller who suggested it, and it does not expire when the parcels arrive. A supplier who volunteers this as a benefit is telling you how they handle risk, which is useful information about them.
The same applies to an offer to declare goods below their value, or as samples or gifts when they are neither. It is generally presented as normal practice and as something everybody does. Our guide on hidden costs covers what actually turns up on a landed cost, and UK duty and VAT covers how the charges are calculated when they are calculated correctly.
There is a commercial argument too, quite apart from the legal one. A business whose margin only works while the tax is not paid does not have a margin; it has a delay.
What you are giving up at the cheap end
Buying through a retail-shaped marketplace is genuinely the right answer for testing whether anyone wants your product. It is fast, the quantities are small, and you are not committing to a factory relationship before you know the product sells.
What you cannot do there is change anything. The specification, the packaging, the materials, the tolerances and the labelling are whatever the reseller happens to hold, and the same listing may be fulfilled from different factories in different months without anyone telling you. That is survivable while you are testing and fatal once you are building a brand, because consistency is the thing customers notice.
You also cannot usually find out who made it, which matters more than it sounds. Compliance duties in the destination market fall on the business placing goods on it, and answering for a product means knowing where it came from. The factory versus trading company guide covers how to tell who you are dealing with, and using Alibaba safely covers the wholesale side.
A sensible order to do things in
Test demand with small quantities wherever they are easiest to get, including the retail marketplaces, and treat that spend as research rather than as stock. Once something sells, work out the landed cost per sellable unit at the volume you would actually order, and only then compare routes.
If the answer is that wholesale wins at volume, the next question is not price but who the seller is, because a low quote from a trading company that cannot control the factory is a different risk from the same quote from the factory. If the answer is that it does not win, that is a real answer: some low-value, low-volume products genuinely do not repay importing directly.
The point at which direct sourcing starts to pay is usually not the unit price. It is the first time you need something changed, and the reseller cannot change it.
Frequently asked questions
Why is the wholesale price so much lower but the total the same?
Because you are comparing a price that excludes delivery with one that includes it. A wholesale listing is priced at the factory gate and excludes freight, duty and import tax; a retail-shaped marketplace price has a parcel delivery arrangement folded in. Compare the landed cost of one sellable unit at the quantity you would actually buy.
A supplier offered to split my order into several parcels to reduce tax. Is that fine?
Treat it as a warning rather than a service. Splitting one commercial order so each parcel falls under a threshold presents one importation as several, and the liability for an incorrect declaration sits with the importer, which is you, not the seller who suggested it. It also tells you how that supplier handles risk generally.
When should I move from a retail marketplace to buying direct?
Usually not at a unit price, but the first time you need something changed and the reseller cannot change it: the specification, the packaging, the materials or the labelling. Before that, small quantities from wherever they are easiest to get are research spending, and treating them as such keeps the decision honest.
Can I find out which factory made a marketplace product?
Often not, and that matters more than it sounds, because compliance duties in the destination market fall on the business placing the goods on it and answering for a product means knowing its origin. The same listing can also be fulfilled from different factories in different months without anyone telling you, which is fatal to consistency once you are building a brand.