Note: This is not a sponsored post. This post is written as a how-to article.
Selling online has become a popular way to make money in Malaysia. According to Statista, the e-commerce market in Malaysia is expected to grow 23.2% every year. For anyone who wants to make money online, this is a promising growth rate.
Of the many ways to make money online, selling on online marketplaces is one of the most popular. At the moment, the most popular online marketplaces in Malaysia are Lazada, Lelong, 11 Street, Shopee, and Carousell. Altogether, these five marketplaces gather more than 50million views a month.
This is good news for those who have been thinking of making money online.
But even if you were to start selling on these online marketplaces, which one should you go for?
In this e-commerce series, I will show you an overview of each of these marketplaces. By the end of this series, you will have an informed view of the marketplaces available to you and the one which you should post on.
In this post, I will talk about the pros and cons of selling on Lazada and how you can set up your own store there. Even if you have never sold in an online marketplace before, you will know what to do.
Are you ready?
Before we get into the post, here’s a quick summary:
Review of: Lazada.com.my / Use: Sell products in online marketplace
|The good:||The bad:|
|Good training support
Market rate commissions
Good shipping system
Largest traffic for online marketplace in Malaysia
|No product or product information exclusivity (anyone can replicate your products)|
I put this review together to explain the pros and cons of selling on Lazada as well as how you can set up your own store there. Enjoy!
The Online Marketplace Advantage: Ready Credibility and E-commerce Platform
Though online marketplaces are not without flaws, they offer two main advantages.
First, online marketplaces like Lazada have established brand names. If you are new to selling online, you can piggyback on Lazada’s brand name to do so.
Second, online marketplaces have ready-made strong e-commerce website and logistics. Online marketplaces make it easy for sellers to market and ship their products to customers.
You would need to spend a lot of time and money to build a website like this yourself.
Online marketplaces are ideal for people who:
- do not want to spend time or money building their own e-commerce website
- do not have any e-commerce experience
- already have stocks of products but have not started selling them online
If any of these sounds like you, keep reading.
Who can sell on Lazada?
Lazada used to be a B2C online marketplace. This meant that only business owners with SSM-registered companies could sell on Lazada. The requirements for selling on Lazada have now changed.
Unlike before, now, anyone can sell on Lazada, even if you do not have an SSM-registered company.
The main requirement for selling on Lazada, however, is that your products must be genuine. This means you are not allowed to sell OEM versions of popular brands.
So now you know who can sell on Lazada, let’s look at the benefits of selling on Lazada.
The Pros of Selling on Lazada
Lazada provides training for onboarding
Lazada requires potential sellers to attend onboarding training before they are allowed to sell on Lazada.
This is beneficial for the seller because it gives them a good idea of what to expect and how to start selling on Lazada.
Comprehensive tutorials and FAQs
Lazada has one of the most comprehensive online marketplace help section in Malaysia.
You can find information on all kinds of topics that will help you to sell and sell more on Lazada:
Lazada’s backend is easy to use
Lazada has an easy to use backend for its sellers. This means that even if you are not good with IT, you can still use Lazada’s backend. In fact, Lazada recently updated its backend to make it even moreYou can have a look at the backend in the video below:
It is easy to upload products, process orders and check your sales on Lazada’s seller backend.
Lazada will send you a weekly report to help you improve your performance
Lazada will send you a sales report every week. The weekly report contains useful information you can use to improve your sales performance on Lazada.
Click for larger image
From the Weekly Report, you will be able to know:
- what your best selling products are
- what are the clickthrough and conversion rates on your bestselling products
- which of your products are popular but do not sell
From this information, you will be able to make changes to your products to improve your sales performance.
The Cons of Selling on Lazada
Now that we have looked at the benefits of selling on Lazada, let’s look at some of the disadvantages. It is worthwhile to note that the disadvantages of Lazada are common of online marketplaces.
No control over website design
Like most online marketplaces, you will not be able to control how your Lazada store looks. So if you are selling baby products, you will not be able to modify the look of your store to match your theme.
Limited control of customer experience
Again, like most online marketplaces, Lazada acts as a middleman between you and your customers. Although you will be able to package your products the way you want, you will not be able to design your invoices or get feedback from your customers about their experience.
Unfortunately, selling on Lazada is not entirely free. For every item you sell on Lazada, you will be charged a payment processing and item commissions fee.
Other than that, Lazada will only cover your first 1kg of shipping (or RM5.30). More than 1kg and you will need to bear the cost yourself.
This means your final profit will be:
Profit = Selling price – payment processing fee – item commissions fee – shipping fee
More information about fees can be found here.
No copyrights over photos or descriptions
Although Lazada places an emphasis on selling genuine products, anyone on the platform can copy your photos and other information you display on the platform.
Basically, the information and photos any product you list on Lazada belong to them.
This means that even if you work hard on creating the best copy or taking the best photos, any other seller can rip off your photos and product description on Lazada. To stay ahead, you will need to update your product photos and information once you find someone copying you. This can turn out to be a tedious process if you have many products.
This is a problem that is not unique to Lazada, however. Unrestricted plagiarism is common among online marketplaces.
How to Start Selling on Lazada Malaysia
If you have already decided to sell on Lazada, what should you do next?
Here are the steps you should take in order to start listing your products for sale on Lazada Malaysia’s online marketplace.
Step 1: Sign up and wait for approval
Update: Lazada has removed the SSM-registered company requirement. Both individuals and SSM-registered companies can now sell on Lazada.
To sign up as a seller, you first have to go to this page.
Select the category that fits you. On the next page you will be asked to fill up a form:
Once you have submitted an application, wait for 1-2 weeks for Lazada to get back with you on your account.
Step 2: Attend the onboarding training
Once your account is approved, you will be invited to attend a 2-hour onboarding training online. You will need to complete this training before you can start selling on Lazada.
This training will guide you on:
- How to upload your products on Lazada
- The picture quality Lazada expects and the type of photos that will get your product rejected
- How to handle orders
- How to ship customer orders
- The payment cycles you can expect
The onboarding training is available in English or Mandarin. Feel free to pick that you feel comfortable with.
Step 3: Upload your products
Once you have attended the onboarding training online, you will be required to upload at least one product to Lazada. If you are unable to upload a single product to Lazada within 24 hours, your account will be deactivated and you will be asked to reattend the onboarding training a second time.
Once you have uploaded your product, the Lazada team will check your product. If your products follow the Lazada guidelines, it will be approved and if not, it will be rejected.
The good thing is that Lazada will provide information about why it has rejected your product so you can make changes.
Once you have made the necessary changes, you have to re-submit your product and wait for approval again. Once your product is approved, it will be live on the Lazada website. Customers looking for your product can buy it from Lazada from you.
And that’s it! You have become a seller on Lazada!
Question: Will Your Products Sell on Lazada?
This is one of the biggest roadblocks that people face before they start selling. Sales in online marketplaces depend on three factors:
- product demand
- ranking on keyword search
- seller credibility
Let’s look at each of these.
This is the most important factor in deciding if your product will sell on Lazada. No matter how perfect your pricing, photos or description, if there is no demand for your product, it would probably not sell.
An easy way to check if there is demand for your product is to do a quick search on Lazada.
First, key in your product name in the Lazada search bar and see how many results turn up.
Here I have keyed in ‘Organic soap’. There are 416 products for sale. It shows there is enough demand for organic soap for over 400 products to be listed. While this check does not guarantee that your products will sell on Lazada, at least you will know there is some demand for it.
If your search comes up with nothing, it might mean there is no or low demand on your product. But this is not 100% accurate. If you want to be sure you can still list the product to test. There are opportunities to join Lazada promotions where you can show your products to a large audience.
Keyword Search Ranking
Ranking on keyword search means where you appear when people search for something.
For example, if a person is looking for a SanDisk USB, they will write ‘SanDisk USB’ into Lazada’s search bar:
If you are selling SanDisk USB, you would have a higher chance of getting a sale if you were ranked within the first line of the first page.
But how do you get to the first line of the first page?
While online marketplaces like Lelong lets you pay to be featured first, Lazada does not offer this. Instead, Lazada says you will be ranked according to:
- your stock levels
- number of clickthroughs
So to improve your ranking, you need to make sure that:
- your product title and photo is attractive enough for people to want to click on it
- make sure you keep enough stock most of the time
To improve your click-throughs, you must make your photo and product title attractive.
Once you have taken care of the photo and title, you need to consider your product price. Before you list, make sure to have a look at the price that other people on the platform are selling the same product at.
If you sell your products at a price high above or way below other sellers, your price may become uncompetitive.
Customers want to buy from a seller who is real and takes good care of their products.
To stand out, you can indicate under your product description why you are credible.
Other than that, ensure that you ship all your customer products within 24 hours. Lazada will give you a 5/5 rating if you manage to do so. When a customer sees a rating of 5/5 you are seen as a better seller compared to your competitors.
Lazada is a ready-made platform for people who have registered businesses. The ready-made sales system and comprehensive training library make Lazada a top choice for people who have just decided to sell online. The biggest downside of selling on Lazada is that the customer service can be slow to respond. Regardless, Lazada is worth exploring as an option for people who want to start selling online but do not have the time or money to set up their own e-commerce brand and website online.
Are you ready to sell on Lazada?
If yes, head on over to Lazada’s seller center and sign up.
Read more on online marketplaces
If you are curious about any of these online marketplaces, subscribe to Entrepreneur Campfire and I will email you when there is an update.