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Shares of the humongous online retail portal Alibaba surged 38% during their trading debut on Sept. 19th, breaking all records for a first-day IPO performance. But what many Americans don’t realize is that the company, which is based in China, may offer a unique opportunity for small businesses in the USA to fatten their profit margins.As Meghan Robinson, CEO of Sunovis Financial, explains, “Many small American businesses have already located low-cost suppliers through the Alibaba network. In fact, in its mission statement Alibaba says that it exists to make it easier to do business anywhere. So while this kind of online giant based in China can potentially pose a threat to American businesses, especially direct competitors like Amazon and eBay, it also represents an opportunity to those who are savvy enough to know how to take advantage of it.”
The Washington Post reported that 80% of online sales pass through the Alibaba site, and the company rang up nearly $250 billion in sales in 2013. That is more than Amazon.com and eBay combined. Alibaba is also growing at breakneck speed while its competitors like eBay are having more and more trouble finding ways to continue their expansion. Not only that, but Alibaba has significantly larger profit margins than does Amazon. All of those factors make it a tempting investment, and many Americans are snatching up shares of the newly-traded company.
But as Robinson points out, Alibaba’s real value may lie in what it offers to American business owners. Since Alibaba has such far-reaching native access to China’s low-cost manufacturers and producers of consumer goods that are popular here in the USA, it could dramatically widen their margins. Perhaps the biggest obstacle that has faced American businesses wanting to partner with companies in China is that it can take a lot of time, money, and experience to succeed at making inroads in China. The politics are tricky, and there is tremendous risk. But American companies may find that the dollars they spend have much more buying power through creatively tapping into the Alibaba network of discount suppliers.
“Another possibility is that Alibaba may eventually become agile and flexible enough to allow local American small businesses to sell their products over Alibaba” Robinson adds. “Since the platform has billions of customers, that could really be a paradigm-shifting development that makes a local ‘mom and pop’ store on Main Street in America suddenly a multinational business with billions of buyers.”
Contact Info:
Name: Meghan Robinson
Email: Send Email
Organization: Sunovis Financial
Address: Overland Park, KS
Phone: 1 855 243-7191
Website: http://www.sunovisfinancial.com
Release ID: 64034
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