If you are like most Malaysians, you have thought about making money online.
But what do you need to do to start making money online?
The first thing that comes to mind might be to create your own e-commerce website.
E-commerce websites are where you can show your customers all the products you are selling. And if they find something they want, they can buy it from you online.
Though there are many benefits of creating your own e-commerce website, they can be expensive to build and maintain.
If you don’t have the skills or budget to create your own e-commerce website, the next option you can consider is online marketplaces.
Online marketplaces are hassle-free, ready-made platforms where all you have to do is list your products. The online marketplace will take care of everything else.
With these two options, which should you go for?
In this post, I will explain the pros and cons of each option. By the end of this post, you should be able to decide which option you should go for.
Are you ready?
Before we go into the details, let’s look at the main differences between creating your own e-commerce website and selling on online marketplaces:
Create own e-commerce website
Sell on Online marketplace (e.g. Lazada, 11Street, Shopee x)
|Set up cost||
RM3,500 – 15,000
No website setup cost
RM200 / mth
No operating costs
RM500 – 2,500 / month
Yes, a percentage of your sales. The actual percentage depends on the product category.
|Payment gateway fees||
Yes, you can collect emails from your buyers and visitors.
No, online marketplace keeps all emails.
You can create a brand for yourself
Your brand is almost invisible on an online marketplace.
Everyone assumes they are buying from the marketplace, not you.
|Website Design Flexibility||
You can design your site based on the branding you want to convey.
One size fits all design.
Summary: While you have more control when using your own website, it can be expensive to set up. If you are willing to give up some of the costs.
I wrote this post to help you decide if you should create your own e-commerce website or start by selling on online marketplaces in Malaysia.
Online Marketplaces: What You Will Like
You don’t have to build your own website
When you build your own e-commerce website, you will need to build the website, include a payment system as well as set up an order management system.
With online marketplaces, you don’t have to do the heavy lifting. It is all done for you.
All you have to do is sign up and list your products. The online marketplace will usually have an order management system in place for you to handle orders as they come in.
You don’t even need to do marketing for your products. The online marketplace company will usually invest heavily in marketing for its campaigns.
Your payment gateway is taken care of
When you sell online, you will need to use a payment gateway. A payment gateway will allow your customers to pay you in a safe way.
When you create your own e-commerce site, you also need to setup a payment gateway. A payment gateway can cost you a between RM400 to RM600 to set up:
But when you sell on an online marketplace, payment gateway comes as part of your seller account. You do not have to pay extra money for the payment gateway to be set up for you.
You can join promotional campaigns
Online marketplaces run promotional campaigns from time to time. Promotional campaigns are where you can sell your products at a discounted price.
The benefit of promotional campaigns is that you can get your product in front of more customers than you usually can.
If you have your own e-commerce website, it can cost you a lot of money to run similar promotional campaigns.
But when you are a seller on an online marketplace, you can join the promotional campaigns run by the online marketplace for free.
You don’t have to spend money to maintain your website
When you create your own e-commerce website, you will need to spend money to maintain it on a monthly basis.
As a start, you will need to pay for your domain name and hosting services. These can cost upwards of RM100 a month for a website with less than 5,000 visitors and a few thousand RM a month for a website with more than 100,000 visitors.
When you sell on online marketplaces, you do not have to spend money to maintain your website. This will all be taken care of by the online marketplace.
Online Marketplaces: What You Might Not Like
Though there is a lot to love about online marketplaces, it is not a perfect solution to selling online.
Let’s look at some of the aspects you may not like about online marketplaces.
You can’t control how it looks
Most online marketplaces use a one size fits all design for all its seller stores. Even for online marketplaces that offer sellers the option to customize, it is usually limited.
These two stores may be selling products in different categories on Lazada, but they share exactly the same store design:
Not being able to control how the website looks can mean that the colors and design not matching with your brand.
With your own e-commerce website, you can design it any way you want to.
You can’t decide on what promotional campaigns are run
While you may not need to pay for promotional campaigns, the marketplace owner decides on the campaign to run. You will not have a say in it. This means that while the marketplace may have many campaigns throughout a year, you may not be able to benefit from all of them.
Other than that, you won’t be able to run your own.
The promotional campaigns run by the online marketplace may not be specifically targeted towards your ideal customers.
You can’t build a brand following
When most customers buy from an online marketplace they will think they are buying from the online marketplace company itself, not the sellers.
For example, when someone purchases perfume from Lazada Malaysia, they will most likely remember that they bought the perfume from Lazada. But if you ask them, ‘Which seller did you buy it from?’, they would likely not remember.
This means that no matter how well you serve your customers on an online marketplace, they will not remember your brand.
You can’t collect your customers’ email addresses
When you have your own e-commerce website, you can collect your customers’ contact, address and email address.
But when you sell on online marketplaces, you are unlikely going to be able to collect your customers’ email addresses. Only the online marketplace have access to customer email addresses.
This means that while the online marketplace can email customers, you will not be able to. This means that you will likely miss out on using email marketing as a way to resell to your customers or to use it to build brand loyalty.
You may become the victim of changes
In June 2016, without warning, Ensogo shut down its marketplaces.
This left many sellers in a limbo for months as Ensogo was unclear about payments owed to sellers.
When you sell on online marketplaces, you do not have any control over the highest level of decisions. Like Ensogo, an online marketplace can make drastic decisions without informing its sellers in advance.
Top Online Marketplaces to Sell on in Malaysia
Now that we have looked at the good and bad side of using online marketplaces vs building your own e-commerce website in Malaysia, let’s look at online marketplaces you can start selling on.
With around 24-25 million visitors a month, Lazada Malaysia receives the highest amount of traffic for an online marketplace.
Other than that, compared with other online marketplaces, Lazada has the most developed seller dashboard.
This makes it easy for anyone to get started selling on Lazada.
Want to Start Selling on Lazada Malaysia? Click here to read my guide on the pros and cons of the Lazada Malaysia online marketplace and how to get started.
Shopee is most popular peer-to-peer mobile shopping app. This means that if you want to reach customers in the Gen Z generation, you must get on Shopee.
The reason for this is because Gen Z in Malaysia spends more time on their mobile phones than the Gen X and Gen Y before them.
If you are trying to sell them something, you can bet they will see it first on Instagram or a mobile shopping app than any other desktop platform.
Want to Start Selling on Shopee Malaysia? Click here to read my guide on the pros and cons and how to get started.
Although less popular compared to Lazada and Shopee, 11Street is also a popular online marketplace in Malaysia.
One of the pull factors for customers to 11Street is the discounts. At the moment, more discounts can be found on 11Street compared to Lazada.
However, the biggest drawback with 11Street is the poor customer service and outdated backend for sellers.
Want to Start Selling on 11Street Malaysia? Click here to read my guide on the pros and cons and how to get started.
Don’t Like Online Marketplaces? Create Your Own Ecommerce Website
There may be good reasons for someone to sell on online marketplaces. But not everyone would want to sell on online marketplaces.
Perhaps you are interested in investing time and money into building your own brand name.
There are many brands that have become quite successful in Malaysia including:
By selling exclusively on their own websites, Fashion Valet and Twenty3 have been able to build loyal customers that would return to buy from them over and over again.
Other than the ability to build a strong brand loyalty, let’s look at some other benefits that creating your own e-commerce website might offer.
The Benefits of Creating Your Own Ecommerce Website in Malaysia
You can control the design of your website
Unlike an online marketplace, you can control the design of your own e-commerce website. This means you can make it look and feel the way you want your brand to look and feel.
As you can see from the above example, Fashion Valet and Twenty3 have quite different website designs.
And unlike online marketplaces, they are able to place their own logos prominently on the website.
You can build your brand
With your own e-commerce website, you will be able to collect the email addresses of your visitors as well as customers.
You can later re-engage them using email marketing. By doing so the visitor may make a first purchase from your website or a customer may return to your website to purchase again.
However, as we have highlighted before, when you have your own website, you will need to bear all the marketing costs.
You can offer customers more customization
When you use your own e-commerce website, you can be more flexible on your offers.
For example, if a customer wants to make modifications on their dress, you may be able to do so for them. You may not have this flexibility when it comes to online marketplaces.
Being able to offer customizations may mean you will be able to capture not only B2C customers, but also B2B customers.
Three Easy Ways to Create Your Own Ecommerce Website
There are more than one thousand ways to create an e-commerce website. But if you are a beginner, you may not have the budget or skills to create a complicated website.
Instead, you might be looking for an easy and affordable DIY solution.
The good news is that nowadays it is easy for anyone to create their own e-commerce store, even if they do not have any technical background.
Here are two options I recommend:
Create your e-commerce website using WooCommerce
WooCommerce is a free plugin that helps you set up a shop on your WordPress website. WooCommerce is most suitable for small businesses with less than 2,000 products.
Read my article on how to create your own e-commerce website using WooCommerce:
Use a web builder like Wix or SquareSpace
Using WooCommerce may be easy, but an even easier option is to set up your site using page builders like Wix and SquareSpace.
Wix and SquareSpace are drag and drop website builders that anyone can use to build any website, including an e-commerce website.
Since they offer more convenience than the previous option using WooCommerce, Wix and SquareSpace cost more to use. If you really want the convenience of not having to figure out everything yourself, check out Wix and SquareSpace for e-commerce:
The Big Question: Should You Sell on Online Marketplaces or Your Own Ecommerce Website?
There are no right or wrong answers. Your decision to sell on an online marketplace or to create your own website will depend on many factors such as:
- Can you afford to create your own e-commerce site now?
- If you can’t afford to hire someone to create the website, can you create it yourself?
- If you use your own website, are you willing to spend time and money on marketing for your website? This can be a costly monthly expense for most businesses just starting out.
- Are your products best displayed on online marketplaces? (placing luxury products on online marketplaces, for example, can reduce its perceived exclusiveness)
In the end, your decision will depend on your goal for starting your online business.
For some products, you might even do well by listing your products on both your own e-commerce website and on online marketplaces.
For other products your time and money may be better spent in building your own e-commerce store.
Creating your own website is not the only option for you to start selling online. If you are tight on budget and time, you can even start by listing your products on online marketplaces like Lazada, 11Street and Shopee.
Though so, if you are interested in building a loyal brand following it would be a good idea for you to create your own e-commerce website instead.
Deciding between creating your own e-commerce website and selling on online marketplaces can be tough. To make a decision, consider the reason why you want to sell online. If it is only to make money, the fastest way to start can be to sell on online marketplaces. But if you want to build a long-term business with a strong brand, investing in your own e-commerce website can be the way to go.