This article was first published on 10 April 2020 and has been updated with additional reporting.
The E-Commerce Booster Package unveiled by Enterprise Singapore earlier in the year to retail businesses navigate poor business sentiments and safe distancing measures due to COVID-19. The deadline to sign up is 31 December 2020.
If you are a Singapore retail business targeting the domestic market, you can receive a one-time support for 90% of eligible costs (of up to $9,000) to start selling your products at one out of the four approved platform providers – Amazon, Lazada Singapore, Qoo10 and Shopee. This is provided you do not have an existing account with that particular partner.
To qualify, you need to:
- be a registered business in Singapore with SSIC code starting with 47 (on or before 31 March 2020)
- have a minimum of 30% local shareholding
- have a group annual turnover under $100 million per annum, or group employment not exceeding 200 employees
- have products ready for sale to retail consumers
- have a physical retail storefront
In addition to the E-Commerce Booster Package, retail (and F&B) businesses can also qualify for an additional $10,000 cash payout under the Digital Resilience Bonus (DRB) when you adopt digital solutions.
To help you select the most suitable e-commerce platform for your business, here are some considerations.
#1 Costs Of Setting Up Shop
Lazada Singapore: If you are simply an individual seller on Lazada Marketplace, you will not have to pay any fee to create an account.
Qoo10: You will have to pay a regular upfront fee of $100 simply to register for an account here. If you decide to register for a Qstore, you would have to pay $500. Note that your initial setup fees will be for the purposes of boosting posts and advertisements. If you opt for the “Premium List” advertisement method, Qoo10 will raise the display rank of your items a little higher in the search result list along with red premium icons, to enable your products to better stand out to garner customers’ attention . Apply for this service at the time of listing items in QSM with the relevant amount of Q-cash as per the display duration. (1 day: 500 Q-cash / 2 days: 1,000 Q-cash / 7 days: 3,000 Q-cash / 2 week: 5,000 Q-cash / 1 month: 8,000 Q-cash)
Shopee: You only can register your business with Shopee Mall if you are already a recognised brand or a high-ranking seller.
Amazon Singapore: Enjoy a waiver of the professional selling account fee until the end of this year (31 December 2020). Sellers under the professional plan will have to pay a $29.99 monthly subscription fee to be able to sell an unlimited number of products.
#2 Commission Fee Structure
Lazada Singapore: Lazada Marketplace does not charge sellers any commission, while LazMall sellers pay between 3% to 5% in commissions, depending on category. And in both cases, there is a 2% payment gateway fee to facilitate online credit card payment processing.
Qoo10: Relatively higher commission fee of 12% (as compared to the other three e-commerce platforms). This means that your business might have to charge consumers higher prices to ensure that your profit margins remain the same. That being said, you will be paying these higher prices for Qoo10 to do the marketing work for your brand.
An interesting thing to note would be that Qoo10 offers a service fee rate according to the seller account grade and the basic item price (Qprice). The service fee is calculated based on the total transaction amount (price of basic item + option price + shipping fee). The credit card service fee is included in the Qoo10 service Fee, herein there is no additional fee on it. The additional tax incurred from the service fee would be borne by the seller. More details can be found here.
Shopee: Shopee Marketplace charges zero commission. That being said, since August 2018, Shopee has begun to charge 1% transaction fees for processing and payment matters upon every successful order.
Amazon Singapore: The US e-commerce platform which has a Singapore marketplace charges a varying fee on each product that is sold, depending on category. You can refer to the fee schedule here.
Also, when you use Fulfilment by Amazon for customer service and shipping purposes, you have to pay another per-unit fee according to the weight and dimensions of your product.
#3 Delivery Options
Lazada Singapore: You will have to use SingPost or Ninja Van for delivery of your products to your customers. If you choose the Fulfillment by Lazada, you would have to pay additional fees ranging from $1.60 to $9.00 per cubic metre per item to cover manpower, storage and packaging costs.
For shipping fees, sellers will have to pay a flat rate of $2.49 (inclusive of GST) for all Order Shipping Fee charges, regardless of shipping tiers and parcel weight. Please bear in mind to key in an accurate parcel weight as Lazada will recover any differences due to inaccuracies directly from seller payouts.
Refer to the following image for the different shipping tiers.
Qoo10: If you are a seller on Qoo10, you would have to use Qxpress (similar to how Shopee and Lazada use Ninja Van). You have 2 types of delivery services to choose from – namely the standard delivery and quick delivery (more expensive than the standard one). For the standard option, there are no same-day orders and deliveries. Instead, choose a pickup date from the subsequent day onwards upon a successful order. You can get your goods delivered from Mondays to Saturdays from 10am to 7pm. For the quick delivery option, you have the option of choosing a pickup time slot. Check out coupons from Qxpress store to enjoy any possible cost savings.
Shopee: If you are a Shopee seller, rely on Speedpost economy and Ninja Van for your logistics and delivery services. To get started, indicate the weight and dimensions of your goods before choosing an option to ship them out. You have to indicate the dimensions for your products to be shipped, failing which, your final chargeable shipping fee by Ninja Van might not align with the shipping fee calculated by the Shopee system.
Amazon Singapore: You might choose to indicate a local Merchant Fulfilled Network (MFN) item by “Ships from and sold by (seller name)” messaging on the product detail page. Check out the various fees if you choose the “Fulfilment by Amazon” scheme to have your product packed and distributed by an Amazon Fulfilment Centre.
#4 Penalties For Errant Sellers
Lazada Singapore: Lazada measures sellers on a metric called Seller Fault Cancellation Rate to maximise customers’ purchase experiences on the platform. Either sellers or Lazada itself can cancel orders. Lazada will cancel orders when sellers fail to comply with the Ship On Time service level agreements on the platform. Having a high cancellation rate will adversely affect your reputation as a seller and ability to sell on Lazada. Consequences of having numerous cancellation rates include but are not limited to exclusion from participating in Lazada campaigns as well as a Lazada-imposed restriction of the number of orders you can transact for a period of around 2 weeks following your various cancellations.
Qoo10: Upon payment from buyers, Qoo10 sellers must ship and input delivery information including the name of the delivery company, the tracking number, etc. through Qoo10 Sales Manager (“QSM”) within 3 business days from the date of the delivery instruction. If you fail to do so, Qoo10 may cancel the transaction and shall not be responsible or liable for any loss or damages to the seller due to such cancellation. Moreover, sellers will have to bear all liabilities relating to failed deliveries because of reasons not due to buyers.
Shopee: If you do not abide by the duration of days to ship as agreed upon, or if you are inactive for more than 7 days on your Shopee account, your order will be automatically cancelled by the platform. You will be subject to a Late Shipment Rate penalty as well if you do not ship out your products within 2 days.
Amazon Singapore: If your late shipments exceed a certain percentage, your account might be deactivated and you might have to incur additional fees. Check out the latest Amazon Singapore resources and updates for sellers here.
Choosing The Right E-Commerce Platform For Your Business
Each of the four e-commerce platforms provide different features, which are designed to cater to different retail businesses, with specific needs based on type of products sold, target demographics, as well as customer service requirements.
Besides the E-Commerce Booster Package, and the Digital Resilience Bonus (DRB), you can leverage on other grants and schemes for digital adoption when you sell and when you buy or operate your business. OCBC lists down the different government and bank-specific support you can tap on.
Open A New Business Banking AccountLooking for a bank account for all your business transactions? The OCBC Business Banking provides a wide range of business accounts for you to choose from so that you can find the most suitable account for your business needs.
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