How to Start an Online Business in Malaysia: A Step-by-Step Guide for 2018

Since starting EntrepreneurCampfire.com, I have received many e-mails from people who are keen to start making money online in Malaysia.

I’m not surprised. E-commerce has been growing steadily in Malaysia for the last five years. In fact, it has grown from contributing 5.9% of Malaysia’s GDP in 2015 to contributing 6.1% in 2016.

Seeing friends and other people make money online, they become interested to take part of the e-commerce pie for themselves.

The good news is that making money online is easier day by day. Malaysians are more trusting of buying things today and there are many more infrastructures of support for e-commerce today than ever before.

If you are someone who has recognized this development and want to find out how to capitalize on the burgeoning e-commerce in Malaysia, this guide was written just for you.

In this guide, I will walk you through some of the most popular online business types to help you decide on one that suits you best as well as show you how to set them up and the methods you can use to get customers to your business.

Once you have decided on the type of online business you want to be in, know how to set them up and how to get customers, I will show you how to make your business legal so you don’t run into trouble with authorities.

When you have completed all these steps, you will be ready for business.

Sounds good?

Then let’s get started!


In this Guide

Step 1: Decide what business you want to be in

Online Business #1: Sell Physical Products

Online Business #2: Sell Informational Products

Online Business #3: Monetize Your Website Using Google AdSense

Online Business #4: Make Money Using Affiliate marketing

Online Business #5: Sell Your Expertise (Writing, Web Design etc)

Step 2: Marketing Your Business

Step 3: Make your business legal

Myths of Starting an Online Business

Conclusion


Step 1: Decide what business you want to be in

In Step 1, we will first take a look at some of the most common ways people make money online in Malaysia. This will help you to discover the online business model that suits you best in terms of your budget, skills level, and interest.

Online Business #1: Sell Physical Products

Selling physical products like phones, clothes, food, and accessories is one of the most popular ways people make money online.

The concept is simple: you buy products at cost price, put them online at a higher price and ship to your customers when someone orders.

In Malaysia, the three most popular ways to do this are:

  1. Selling your products on your own e-commerce website and,
  2. Selling your products on an online marketplace like Lazada or Shopee
  3. Selling your products on social media (Facebook and Instagram)

You can make money using all three channels but the method to do so will be quite different.

In general, if you sell products on your own e-commerce website, you will need to have money prepared to set up an e-commerce website as well as marketing your brand.

If you don’t have money for that, it would be much easier to get started selling on an online marketplace like Lazada or Shopee or on social media like Instagram and Facebook.

For more established brands, you may even use all three channels to close sales. But for people who are just starting out, I recommend focusing on one channel at a time.

Having said that, let’s now take a closer look at each sales channel to help you understand them better and decide which is the best path for you to start with.

Channel #1: Sell your products on your own e-commerce website

Selling on your e-commerce website means having your own website, with your own domain and then getting people to buy from your website. This is something known as a ‘branded e-commerce store’.

Examples of branded e-commerce stores include websites like FashionValet (modest wear), FITGEAR (activewear) and StormingGravity (bags, bottles, wallets etc).

sample branded e-commerce site

The biggest benefit of setting up your own branded site is that you get to build your brand. An established brand can be something valuable in the long-term as more and more people get to know about your brand.

To get started, you need to of course set up your e-commerce website.

There are a few ways to do this.

The first and easiest way is just to hire someone to do it for you. A custom designed e-commerce website will cost you RM3,000 – RM6,000 and take a few weeks to a few months to set up.

The second way is to do it yourself.

While setting up your own e-commerce site can sound challenging, the good news is that there are a lot of e-commerce solutions available these days to make it really easy.

The first one is WooCommerce.

WooCommerce is a WordPress-based, open source e-commerce solution.

If you know how to set up a website using WordPress, you can set up your e-commerce website using WooCommerce. Here’s my guide to how you can do that:

How to Build an E-Commerce Website in 1 Day: A Step-By-Step Guide for Complete Beginners

sample site set up using Woocommerce

On the other hand, if your technical skills are limited and you don’t know how to set up a WordPress website, a much better solution for you is to use a website builder.

A website builder is a platform designed for people who have no technical skills to set up their own website. They usually feature drag-and-drop capabilities so you can change the layout of your website without touching a single line of code.

So, even if you don’t know how to code, or install things on the cPanel, it’s fine. You won’t need to do it with a website builder.

Although there are many website builders available in the market, the one I recommend is Shopify.

sample site set up using Shopify

Shopify is the most developed e-commerce platform on the market right now. With Shopify, you can set up a full-featured website easily from storefront to payment, promotions, marketing, and logistics.

This means it is even possible for a non-technical person to set up a Shopify website in under a day.

If you are interested in using Shopify for your e-commerce needs, here’s my Shopify review to help you learn more about the platform:

Shopify Malaysia Review: Pricing, Plans, Pros, Cons and How to Get Started Selling in 2018

Once you have decided on the method you want to use to set up your e-commerce website (WooCommerce or Shopify), the next thing you need to do is to make decisions on shipping and payment on your e-commerce website.

If you use either WooCommerce or Shopify, integrating shipping or payment will be straightforward.

Your job is simply to choose the best courier and payment solution for your particular business. Here are some resources you might find helpful in making those decisions:

Choosing a courier service company for your shipping:

Which Courier Service in Malaysia Should You Use for Your Online Business? [Domestic Delivery]

Choosing the best payment gateway:

iPay88 SOHO vs MOLpay Lite vs PayPal: Which Payment Gateway in Malaysia Should You Use?

Channel #2: Sell on online marketplaces

The next most popular way Malaysians sell physical products online is through online marketplaces.

Selling on online marketplaces is one of the best ways to start making money online in Malaysia if you don’t have the money to set up your own e-commerce website.

Unlike on your own e-commerce website, when you sell on an online marketplace, you don’t have to set up your own website, or even bother yourself with shipping or payment gateway decisions.

All of these have been set up by the online marketplace you sell on. All you have to do is list your products and wait for sales to come in.

If you are interested to sell on online marketplaces in Malaysia, check out my guides on how to get started selling on two of the most popular online marketplaces in Malaysia – Lazada, and Shopee:

Why You Should Sell on Lazada Malaysia and How to Get Started in 2018

Why You Should Sell on Shopee Malaysia and How to Get Started in 2018

Tip: Don’t have the capital for stock? Consider drop shipping

Dropshipping is a great way for people who do not have enough capital to keep inventory to also make money selling physical products online.

Sound like something you want to try? Find out more about drop shipping in my article below:

How to Finally Make Money Drop shipping in Malaysia (Even if You Have Failed Many Times Before)

Online Business #2: Sell Informational Products

The next popular way you can make money online in Malaysia is by selling informational products.

Informational products are things like e-books or online courses.

If you have a special skill that most people want to learn from and you can teach it through an e-book or an online course, then you should sell it.

In Malaysia, the best way to sell informational products is on your own website as there is not yet a good marketplace to do so.

If your target audience can be international, you can even sell them on Udemy.

Online Business #3: Monetize Your Website Using Google AdSense

Google AdSense is a monetization method used mainly by online publishers like Says.com, and Vulcanpost.com.

You basically make money when Google displays its ads on your site. The more people look at the ads and/or click on them, the more money you make.

In a way, Google AdSense is one of the most popular ways of earning ‘passive’ income online.

The biggest challenge of making money with Google AdSense is that you need a lot of visitor to your site. If you only have a few thousand a months, you won’t be making a substantial income.

Google AdSense is a good way for people who write a lot of articles online to make money. If you have a keen interest in writing and publishing, this could be a viable way of making money online for you.

To get started, you will first need a website since Google AdSense only works with websites.

If you don’t have one yet, the good news is that these days, it’s pretty easy and cheap to set up your website. You can check out my guide on how to set up a website cheap:

How to Create a Website for Less Than RM400 in Malaysia with InMotion Hosting [No Coding Skills Required]

When you set up your website, you will need to decide the niche you want to be in and use your entire website to cover topics relevant to that niche.

For example, you can pick the beauty niche and spend most of your time talking about makeup brushes, highlights and so on.

The next thing you need is traffic.

The sad truth is that not everything you write will bring in visitors. You will need to invest in some marketing for your site.

You can either do this by Facebook marketing or something known as Search Engine Optimisation (SEO).

SEO is something you apply to your site content that makes it easier for Google to match them with the searches people make on its platform.

The more closely you match with Google’s searcher keywords and intent, the higher you rank.

If you have never done SEO before, I recommend reading my guide on how to get started:

SEO Malaysia Guide: A Step-by-Step for Complete Beginners

By applying proper SEO strategies, you will be able to increase traffic to your site every week. By the time you reach a few thousand visitors a month, you can look to monetizing your site using Google AdSense.

But a word of warning here about Google AdSense. Not every site will be accepted so you will need to be careful about the niche you choose to be in.

Here is a quick guide on how to make money using Google AdSense to help you understand the process better:

Online Business #4: Make Money Using Affiliate marketing

Affiliate marketing is a less popular way of making money online but is slowly picking up in Malaysia.

With affiliate marketing, you make money by helping other people or brands sell their products or services.

You don’t need to create your own products or services. You take what is already made and sell on other people’s behalf, profiting whenever a sale is successfully made.

For example, if you are an affiliate marketer for a toothbrush brand, you do not need to create a toothbrush. All you have to do is find a way to get people to buy it.

For every sale you make, the toothbrush brand will give you a commission.

If you are interested to explore affiliate marketing, here are my affiliate marketing guides to help you get started:

How to Make Money Online Through Affiliate Marketing in Malaysia: Case Study + Guide

Affiliate Programs in Malaysia You Can Make Money Online From: The Comprehensive List 2018

Online Business #5: Sell Your Expertise (Writing, Web Design etc)

The last way to make money online in Malaysia is by offering your skills for a price.

If you have a specialist skill like writing, web design or graphic design to sell, you can make money selling your services online as a freelancer.

To get started as a freelancer, you can register yourself with a freelancer website like Favser (Malaysian) or Upwork (International).

There, you can create a profile for yourself and showcase your skills to potential employers.

But that is not the only way you can sell your skills online. The other method is instead of passively waiting for employers to look for you, you can do outreach to companies that you think might require your services.

In this case, you will need to know how to pitch the potential employers on your skills.

In either case, I would recommend that you set up a website as a place to showcase the work you have already done or the type of work you can do. This will give the potential employers an image of what working with you will be like and if your skills are what they are looking for.

If you plan to set up a website to showcase your skills but don’t know how to get started, do check out my guide on how to do it fast and cheap using WordPress:

How to Create a Website for Less Than RM400 in Malaysia with InMotion Hosting [No Coding Skills Required]

That’s it – those were some of the common types of online businesses in Malaysia you can make money from.

Of course, this is not a comprehensive list. There are still many ways to build an online business and make money.

If you want to further explore ideas or get more inspiration, do check out these other resources:

5 Ways to Start an Online Business in Malaysia in 2018

5 SaaS Companies in Malaysia and How They Make Money Online

15 Popular Online Businesses in Malaysia and How They Make Money Online

Once you are done, let’s move on to our next step.

Step 2: Marketing Your Business

Once you have decided on the type of online business you want to do and what you want to sell, the next thing you need to do is to market your brand.

There are many ways to do marketing for your brand, but in the internet marketing space, marketing is mainly divided into two kinds: paid and organic (‘free’).

Two of the most popular paid marketing methods in Malaysia are Facebook advertising and Google AdWords advertising.

Your next question might be: which one should I use? Facebook advertising or Google AdWords?

My answer is that it depends. For some businesses, Facebook advertising will produce better results but for some other businesses, Google AdWords will perform better.

The best way to find out is to test. Set a budget for both Facebook advertising and Google AdWords and see what gives you better results.

If you have never done any Facebook or Google AdWords advertising before, here are some guides to help you get started:

Adespresso’s Beginner’s Guide to Facebook Advertising

However, if you don’t have the budget to spend on paid marketing, the other way is using organic marketing. The most popular organic marketing method is using Search Engine Optimisation or SEO.

SEO is a process of using SEO content, rank in Google to get leads.

The only problem with using SEO is that it doesn’t work for every business type and it will take at least 6 months for you to see results of your efforts.

Other than that, SEO is not truly free. If you don’t have SEO skills, you will need to hire someone to help you to do it also.

However, if you don’t have the budget and would like to DIY, here’s a guide you can use to get started:

SEO Malaysia Guide: A Step-by-Step for Complete Beginners

Organic advertising using Facebook, on the other hand, is even harder. These days, the organic reach of Facebook has dropped below 1%. So even if you make 1 million fans on Facebook, you’ll at most reach 1,000 of them at once.

Having said that, here’s my recommendation for marketing based on your product type (you can use it as your reference, but in the end, it is best to test):

If you sell physical products or even informational products like e-books, Facebook advertising will be the cheapest, fastest and most effective way of marketing your products in the beginning stages. You can always use AdWords, but it will be slower and more expensive.

If you have some budget on the side, you can invest in SEO as a long-term marketing strategy. But never expect SEO to bring you quick results. It will take months before you see real money being made.

If you sell services like web design, writing, etc, AdWords might be a better choice for you as compared to Facebook advertising. This is because most people look for services using search, not Facebook. SEO will be a good long-term investment for your business also.

Step 3: Make your business legal

Finally, once you have planned the type of business you want to do, what you want to sell and how you want to market it, it’s time to make your business legal.

One of the most common misunderstandings people have about online businesses is that it’s not a ‘real business’ and so they don’t need to make it legal.

Unfortunately, that’s not the case.

Online businesses, just like any other business in Malaysia, need to be registered with SSM or face penalty.

So once you have decided on starting an online business, be sure to make it legal. You never want to make money and get hit by a hefty fine that will wipe out all your profits!

If you don’t have any experience with registering a business, you might find this guide from SSM helpful:

Company registration SSM

Once you have registered your company, you are ready for business 🙂

Myths of Starting an Online Business

Before we conclude, I would like to spend some time talking about the myths of online business because I think it is important for you to get into the right kind of mindset to ensure long-term success.

If you believe in any of these myths, I hope that after this, you will discard them right away as they will become your stumbling blocks:

Myth #1: You can get passive income from it

One of the features that tempt people to start an online business is because they think they can make money passively.

Unfortunately, this is not true at all.

As with any other business or income stream, you will need to spend a lot of time, at least at first, to build it.

After that, you will also need to make an active decision to systemize your business so you can truly be a hands-off owner.

Before that, you will need to keep working on it, sometimes harder than you would your day job.

Myth #2: You can make money fast

Probably thanks to get-rich-quick schemes that have been prevalent in Malaysia in the last couple of decades, people have become allured with online businesses because of the belief that money will be quick.

Unfortunately again, this is not real.

Making money online is again, challenging like any other business or income stream. It can take months or even years before you can make enough money to support yourself from it.

If you are impatient, you might as well not get started.

Conclusion

Starting an online business can appear like a complex task at first. However, if you understand the components, you will find that you can set up an online business that will generate you a few hundred or a few thousand RM a month within a month.

To get customers, be sure to invest time and money into marketing your business. Don’t expect customers to come by themselves.

When you have decided on starting your business, don’t forget to make it legal.

Finally, as with any kind of business, don’t expect to see quick results. Be ready to invest your time and money to make your online business a sustainable and successful one.

Thanks for reading this guide. If you have any questions about starting an online business, leave a comment below or send me a message via contact.

Lu Wee Tang
Lu Wee is the Founder of The Entrepreneur Campfire. The Entrepreneur Campfire (TEC) is where smart entrepreneurs in Southeast Asia gather. You can find practical articles on how to grow, market and scale your business on TEC.

4 COMMENTS

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