If you're not sure what Alibaba is, exactly, then you might be surprised to learn that it's the largest on-line B2B marketplace on the planet. The site essentially acts as a facilitator, putting buyers in touch with sellers, which includes both manufacturers and middlemen. Sellers complete company profiles and put their wares up for sale, and buyers come to shop. In that regard, it is, in at least some respects, not unlike eBay for businesses, except that there are no auctions. As a buyer, you can, of course, submit an alternate proposal if you do not like the listed prices or options and go from there.

As a platform, there are a number of things that Alibaba gets right, and a number that it gets wrong. Businesses everywhere can learn from both. Here are some of the lessons learned from a study of Alibaba:

Seamless Scaling Is Essential

One thing Alibaba does really well is volume. There are thousands of suppliers of nearly any product you can imagine, made in companies all over the world, though the site seems heavily dominated by Asian companies, which makes a fair amount of sense, given its geographical headquarters and purpose. You can't get to be a company of Alibaba's heft without paying close attention to scalability. If you don't get that right, the entire platform crashes and burns.

They've kept their design simple, clean, and effective. You won't find a lot of flash here, but there doesn't need to be. The platform doesn't need to be beautiful, it just needs to work. Function over form, every time, and Alibaba seems to understand this.

Good Suite Of Evaluation Tools

One of the most troublesome aspects of doing business with a company you've never heard of before is the fact that they're an unknown quantity. You have no way of knowing what the quality of their products is. No way of knowing how responsive they are. They are, for all intents and purposes, a black box. Fortunately, Alibaba addresses this in three ways. First, there's a place for customer feedback, and customers can rate their experience across three dimensions: “Product as Agreed,” “Communication,” and “Shipping Time.” These three dimensions are then aggregated into a final “score” rated 1-5 stars, so again, not unlike the eBay rating system, and comments can be left. It's a good system, in that it gives you feedback from other actual customers, and at least some means of evaluating them.

The second tool is the rather extensive Seller's' Profile, which has a lot of information about the company, who they are, where they are, how long in business, contact info, and the like. Obviously the more completely filled out a company's profile is, the more likely they are to be legit, and you can do some fact checking based on the information you find here.

Finally, there's a “Quick Response” metric, which tells you how many customer issues have been responded to quickly (versus slowly, or not at all). Another good yardstick to give you clues as to the competency of the company you are considering dealing with.

No Real Customer Protections

Alibaba is very much a “buyer beware” site. The company isn't liable for shoddy products or broken deals made on its platform, and rightly so. However, at least some effort could be made by the company to weed out the scam artists using their platform on the front end. As it stands, you can become a “Gold Seller” simply by paying the fee. Nice profit center for Alibaba, but it can, and has, led to bad blood between buyers and sellers, which gives Alibaba itself a bad name.

The internet is rife with customer complaints about all the ripoffs and scam artists on Alibaba (ref: http://www.startupbros.com/how-to-avoid-scams-middle-men-and-fraud-on-alibaba/ and http://www.sitejabber.com/reviews/www.alibaba.com for just a taste), so clearly, this is an area where they could do much better. In this respect, I would definitely pay more attention to what eBay is doing and emulate those behaviors, rather than relying on the Alibaba playbook.

In any case, there can be no denying that Alibaba is a huge success, and that didn't happen by accident. There's a lot to learn from the company, both good and bad.