My Experience Selling on e-commerce site - Shopee SG Part 1

 

I've mentioned in a previous post (The gruelling process of getting my own customise designed microSD cards!) that I've tried selling some of my custom designed microSD cards on Shopee. (Shopee SG to be more specific) 

I've been on Shopee for almost 2 weeks now, as of writing this. And ... well, made 1 sale. 2 if you count my trial sale.. (more about it later)

Well, I've to be honest. I started out with a mistake of ordering the MOQ of 20 pieces when I just needed 1. I got convinced that selling the excess off will be easy. And, I got ambitious, I started making labels with my own branding - "Pyu" without proper planning. This is an equation for "doom" (ok, just failure) but I realised it too late. And I only have myself to blame.
 
Anyway, now I'll share my experience selling on Shopee SG and how it failed.
 

What is Shopee?


Shopee is an e-commerce site which was founded in 2015 and are available currently in Singapore, Malaysia, Thailand, Taiwan, Indonesia, Vietnam, Philippines, and Brazil. 


Easy to Setup, No Entry Fee

Selling on Shopee is as easy as setting up an account and then listings the items you want to sell. There is no entry or setup fees but Shopee do charge a fee for transactions. So basically, it means that you don't have to pay anything till you sold something.

 

Transaction Fee

Taken from Shopee.sg FAQ:

Transaction Fee is 2% of the total payment of an order after application of any Shopee vouchers or Shopee Coins, including shipping fees. It will be rounded up to 2 decimal places.

There will also be 7% of GST charged towards the 2% value of your transaction fee.

Example:
Order value: $100
Transaction fee 2%: $100 x 2% = $2
GST Charges = $2 x 7% = $0.14

Be noted that Transaction Fee will still apply, on top of the Service Fee.

As for the service fee, it will only occurs if you decide to use Shopee's service for the sellers, like the Coins Cashback & Free-Shipping Special Programme.

Taken from Shopee.sg:  

I've never used these services. I don't want to incur more costs on my end.
I did tried out Shopee Ads, but I won't cover that in this post.


Platform/Seller's Page



The platform is easy to use. If you've setup a shop already you just have to click the "My Shop" at the top of your profile page to navigate to your seller page. If you haven't setup a shop already then it'll probably show "Start Selling".

 
 
To list a product to sell, just go to "Add New Product" and you'll be brought to a page whereby you can upload product images, type in the descriptions and all the neccesary information to start selling. To view products you've listed, click on "My Products".



To add different variations of a product say "64GB" and "128GB" and you can choose to add images to showcase the different options.


There is an option for you to choose your preferred shipment method which you've setup. Everything is simple and straight forward, so you don't need to be some tech-savvy guru to list your items and start selling.


Setting Up Shipment methods/Shipment Fees


Setting up shipment methods is by clicking "My Shipping" on the main page of the seller's page.


You'll be brought to this page with a few shipping options to select from. And that is probably the downside of it, very little options to choose from.

Note that other than Singpost Normal Mail, all other shipping methods will cost, even if you opted for buyer to pay for shipment.

 

Fulfiling an order


Basically, after a buyer paid for the item, you'll be notified by Shopee and provided the address and all the relevant details needed to ship the item. 
 
The order will appear under My Shipment >>> "To Ship" and you there you'll see an option that says "ship item" or similar. (Sorry, I really couldn't recall. I should have screenshot it) 

After which, you'll be required to provide evidence that you really did ship the item. I don't know what they're asking for, but I snapped a photo of the "package" with the address of the buyer in front of the postbox.
 
That's it. You just have to wait for the buyer to receive and accept the item. Only after the buyer click "Receive order" on his end, will the money be release to you.
 
If there is any dispute, Shopee will hold on to the money till it's settled. 


Business Insights


Shopee includes a very basic "analytics" feature whereby you can view number of Visitors to your item page, Page views, Sales ...etc. Do not expect it to be like Google Analytics, it's not even close, especeially on the mobile app. The website version have slightly more details and information but still not clear enough to deduce who is your audience, keywords and such.


Yeah I know my statsitics is really terrible.
 
 And I'll tell you why in a minute.

 


Competitions, Traffic and Sales


I guess it's no secret that competition is high on almost every category in Shopee. You're not only competing with local sellers but also sellers from China and some other Southeast Asia countries like Malaysia and Indonesia.
 
With a "market" so saturated, you can only compete with Price and Reviews.

But when I start selling on Shopee, some of the big players selling memory cards already have over thousands of sales and reviews. I could only try to compete in price, which sadly, I couldn't go too low.
 
To make things worst, I'm listed very low in the search results and buried deep under the bigger players' listings. I did a search for "microSD 128GB", only to find my listing at page 14. I even ranked lower than a listing for thumbdrives and another for Type-C OTG adaptor cable! And to be honest, most consumers will not go that far down the search results. I've like 0 visitors and views for days.
 
Not to mention that I can't participate in Flash Sales and I wasn't invited to join any of the Shopee campaigns (like the 9.9 Sales). I didn't meet their requirements and is not the "Preferred Seller".

Shopee keep track of their sellers with Penalty Points. There are numerous ways you can "earn" these points, like your Non-fulfillment Rate (orders cancelled by you) is too high, your Late Shipment Rate is high... blah.You need to have quite a nice "Report card" to be considered a "Preferred Seller" and to be able to create Flash Sales.
 
The only "free weapons" are to create vouchers for products and give discounts for my items and a "boost" feature which is available every 4 hours, but it doesn't really do much to move my listing up.
 
Most of the advertising/promoting options in Shopee will either incur cost (buying Advertisements, paying for shipment...etc), are not suitable for shops with less than X number of products or simply won't work without your listing getting seen in the first place!
 
So in the end, it's either you pay to get more presense on the site or you've really good promotion campaigns outside of Shopee that drives your sales.


Real Returns


My returns from Shopee are not high. Not surprising, right?
In actual fact, prior to starting this listing, I did a trial listing and made a "loss".

In my trial listing, I've asked a friend to buy a card from me, just to try out how the whole thing works. So I told her to buy like how she would usually on Shopee, which is how most users will buy on Shopee. They'll spam coins and vouchers to offset their shopping. And coins are not that difficult to earn.

So yeah, my friend spammed her coins on the purchase and after the 2% Transaction fee + 7% GST, ta-dah, I only gotten ~68-69% of the selling price!

According to Shopee, a buyer can use coins to offset shopping for up to 30% of the selling price. And up to 1000 coins per day. And I can tell you that 30% can really dimish a seller's profit!

Let me give you an example:

To combat this problem, sellers would need to set their selling price higher to cover for it. Now, the question is, will their price still be competitive?

And nope, there is no way to opted out of this "coin offset system" nor set a lower percentage on coin usage.
 

Conclusion


Overall, Shopee is user friendly in terms that its easy to pick up and start selling. However, I won't consider it a "small player friendly" site to sell on. 

Firstly, competition is high. You'll need to be really creative in your advertising or be prepared to spend on Shopee advertising just to have some "presense" on the listing. 

Also, the coin system can really "break" any small player who usually did not have the most competitive price. They'll almost definitely suffer a loss in cases where the buyer use the maximum number of coins allowed during the purchase.

Anyway, while I was writing this, I was invited to join their 10% Cashback "event" and I submitted my application ... waiting for news now...

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