But the social network’s advertising revenue grew 18.4% during the quarter.
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For example, Alibaba provides links to approved factory inspectors with experience in China. Factory inspectors' services range from $110 to $300 and offer an array of checks such as a visual quality check of materials and products as they are being made, a pre-shipping inspection and a sample check. Alibaba also offers free videos showing the supplier's work and business environment and details about the company's staff and products.
Such vetting can be useful, says Ivanov, who once worked with a supplier that sent her a batch of lingerie with stretched-out straps. While Ivanov received a credit toward her next order after sending the manufacturer a sample to prove its error, a bad order slows down her business, she says.
Another issue that can slow down a business relationship is language. To help buyers and suppliers correspond, Alibaba offers online chat with instant translation, and translates e-mail in eight languages.
Ivanov looks for suppliers with a good grasp of the English language.
"I don't expect perfect grammar, but I do expect it to make sense," she says.
Cultural issues can compound language issues. Chris Ryan, founder of M1 Formula, which sells an herbal supplement for men at BuyM1Now.com, recalls deciding not to work with a supplier in Pakistan, only to find the supplier wouldn't take no for an answer.
"It was like something got lost in translation," Ryan says. "I told him I was no longer interested and thanked him for his time, but he sent me 10 to 12 more e-mails."
Many societies outside the United States, particularly those in Asia, are culturally predisposed to try to please others, adds Ryan who has traveled and lived abroad. And that can be a problem if, for example, a supplier says he can produce 1,000 T-shirts a week when he only has the capacity to make 800.
"They will say 'Yes, we can do that' even if they can't," Ryan says. "They don't want to say 'no' or that they don't understand."
Buyers who have sourced from overseas say it is best to spell out exactly what they need, including such details as turnaround time and the quality they expect, such as an exact thread count in sheets. Then they ask point blank if the supplier can meet each requirement.
Ivanov says that over time she has learned to spot suppliers that probably can't meet her requirements.
For starters, she looks for a supplier web site with a clear Contact Us link and an About Us section. "If they have a web site that looks like a Las Vegas casino meets Hello Kitty, I can tell it's not going to work out," she says.
She also looks for suppliers to show they want her business. She expects a potential supplier to ship her samples and respond speedily to e-mails. While the time difference typically means she has to wait around a day for a response, if Ivanov has to wait much longer than that the manufacturer is off her list.
"Were samples sent the way I asked?" Ivanov says. "Was communication prompt and in good working English? Those are all things that help me decide about the potential partner. If things go pretty smoothly, then it's an indicator that things will go smoothly in the future."
Buyers must also pay attention to payment arrangements, says Kozlowski of Alibaba. In some instances, she says, dishonest suppliers demand payment through a non-traceable money service be sent to a person who has a different name than the person the buyer has been corresponding with.
To help fight payment fraud, Alibaba offers an escrow service through AliPay, an affiliate of the Alibaba Group, Alibaba.com's parent. The service allows buyers to pay online without exposing their credit card details. Alibaba holds the payment, only releasing funds to the supplier after the buyer has confirmed receipt of goods in satisfactory condition.
If the delivered item does not meet the buyer's requirements, or does not arrive within 30 days of the supplier confirming shipment, the buyer can contact the supplier to resolve the issue or request a refund from Alipay. If there are still problems, Alibaba will attempt to resolve the issue.
Time is money
Ivanov began making use of another Alibaba service in August 2011 when she expanded her Eve Alexander product line into loungewear and beachwear and her sales channels into more than 100 maternity boutiques, hospitals and online stores in the United States, Canada, Europe, Australia and South Africa. She also sells through her own e-commerce site at EveAlexander.com.
To find good suppliers fast, Ivanov used Alibaba's customized sourcing service: Buyers submit bids in response to her request for proposal, and Alibaba vets suppliers and delivers as many as 10 supplier quotes within two business days.
Customized sourcing saves Ivanov time over her previous process of writing separately to each potential vendor, introducing herself, explaining her needs and asking the basic questions over and over again, she says.
And, for Ivanov, saving time is nearly as important as saving money. "I have two children and I work around their schedules," Ivanov says. "I work when my kids are at school, when they are asleep, and all weekend, and when my husband is not on a business trip. I am a full-blown businesswoman who manages manufacturing, warehousing, I.T."
And she does it, like millions of other savvy entrepreneurs, using materials from around the globe from suppliers she meets online.