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Even before the COVID-19 pandemic, starting a retail business through the e-commerce route was already looking like a more business-savvy way of getting started. When starting an e-commerce business, recurring costs such as rental costs and manpower requirements are not variables that entrepreneurs have to worry about, as opposed to them operating a physical shop.
While it’s likely to be much cheaper than having a physical retail outlet, starting an e-commerce business does also come with some costs. Some businesses have to invest to create and refine their products, establish a digital presence, and spend marketing dollars to reach their target audience. They also need to find suitable logistic partners such as Lalamove that can deliver their products – which may come in all shapes and sizes – to customers in a timely and professional manner.
Meet Jessica Tan, Founder Of Local E-Commerce Brand, DrawnBy:
To better understand how much it may cost for aspiring business owners that want to start an e-commerce retail brand, we have a chat with Jessica Tan, the founder of DrawnBy:, a home-based e-commerce retail brand that creates and sells products that enable children to express their artistic talent.
Jessica Tan, Founder & Owner Of DrawnBy:
Its signature DrawnBy: Silicone Mats are an ideal tool to help kids colour, scribble or draw anything that they want in their free time, whether they are at home, or out for a meal.
A kid-friendly item that you can bring to keep your young ones occupied
In fact, even before I met Jessica, my wife and I were already putting these silicone mats to good use after receiving them as a gift for one of my kids’ birthdays. It’s particularly useful in keeping our two girls occupied whenever we are out for a meal and to keep them off the gadgets, and channel their boredom into coloring and drawing instead.
An illustration of how DrawnBy: works
Timothy Ho (Timothy): What were the reasons that led to you starting DrawnBy:?
Jessica Tan (Jessica): I’ve always enjoyed drawing, as a hobby or just to kill time. And now with my kids, I’ll entertain them with little things. When I was expecting my 2nd kid in 2017, I drew an A4-sized paper full of animals – configured everything to fit. I was quite proud of it so I posted it on Facebook.
To my surprise, I got a LOT more comments than I expected. This encouraged me and I ended up doodling a series of 12 drawings based on different themes. Then, someone suggested that I should compile it into a colouring book.
I sat on the idea for a long time until I was surfing online one day and stumbled upon the idea of putting my images on something that is reusable and sustainable, as opposed to traditional paper. I decided to pursue this further, knowing that it’s an idea that is within my budget and capabilities. While such products are not new, they are not common in Singapore, so I felt that it was an opportunity.
DrawnBy: is the first colouring mat company in Singapore and I am pleased to have brought this awesome, family-friendly idea to everyone.
DrawnBy: signature Silicone Mats
Timothy: Was it a natural decision to start your business online, as opposed to finding a physical retail space?
Jessica: To be honest, I didn’t know where and how to start. Like most parents in Singapore, I am a member of a few “mummy chat groups”. My first customers were the ones who encouraged me to turn my doodles into a business.
After selling out my initial inventory, I realised I needed to tap on a wider audience to sustain the business since my products are reusable. It was during this period when I established our digital presence – from uploading pictures to a website, setting up the accounting to sharing some social media marketing hacks for e-commerce. In the early days, practically all my stocks were stored at home, so my flat was constantly in a mess!
Timothy: Besides investing your time and talent to work on your business, how much did you invest in your business?
Jessica: While it’s not a huge sum, I did borrow a 4-figure amount from my mom to start DrawnBy. Since it’s a product-based business, most of the capital went into purchasing the initial stock and shipping it to Singapore. All the other work like designing, marketing, and packaging were all done on my own.
So, if you are thinking of starting your own e-commerce business, one way to reduce costs is to do as many things as possible on your own. You will also get to learn and experience what it’s like to handle different parts of the business.
I was afraid that the idea would not take off, so the running joke with all my friends then was that the leftover products would be their Christmas gifts for the next decade. Thankfully, that didn’t happen! I sold my first batch of inventory quite quickly and used the revenue to order more stocks. After some time, I was able to return the money I borrowed back to my mom!
Subsequently, I spent a fair bit of money registering my trademarks legally and doing product testing, on top of what my factory had provided me with.
Now, I have allocated some budget to co-share an office with a friend for storage space and the applicable utilities, as well as advertising, web hosting subscription, online marketing tools and social media advertising. I also pay myself a salary these days.
Timothy: What are some early-day challenges that you face when starting an e-commerce business?
Jessica: At the start, I operated my business solely through word of mouth. Since I was a member of a few mommy chat groups, group buys were a trend and I had a big group of mums buying my products at one go.
But prior to launching my business, I wasn’t sure of how to price my products, so I had to ask around for advice on good pricing strategies. I had to be very careful with planning my production timeline since it takes about 2-3 months before a new batch of designs and stock is ready.
I realised it’s important to complement online sales with offline channels, especially if the product is physical and experiential. Besides the high costs of online advertising, it is still a balance to mix in other retail avenues such as online retailers, as I need to offer a discount and receive limited brand exposure. Taking part in large-scale offline community events like baby fairs on my own is not only profitable, but also effective in meeting new people and marketing my brand. Working with physical retailers also helps to grow my brand presence, though my business is still predominantly online.
Timothy: Share with us some of the challenges you face when it comes to logistics matters when dealing with e-commerce sales?
Jessica: I struggled in the beginning, with managing my delivery and packaging through snail mail. Singpost is obviously the first line of action for most e-commerce owners, but I had to repackage my products. So while it’s cheaper to send by mail, I invested more time and money in packaging the products.
When I first started using a courier, I used a platform that compared prices across different couriers, including international ones. While it was nice to have a comparison site, it was also a little hard to get hold of the headquarters if pickups were missed, or the couriers were a no-show. When the customer didn’t receive their items or deliveries were delayed, it was a headache to resolve.
During the circuit breaker period last year when EVERYONE moved to online business, there was a massive shortage of couriers as well, so I had to preempt customers on potential delays. To solve this problem, I used multiple courier services including Lalamove which is great because it offers same-day delivery service. In fact, I even made some last-minute deliveries by myself!
Timothy: What are challenges that you continue to face as your e-commerce business continues growing?
Jessica: Before COVID-19 happened, I signed up to take part in some physical baby fairs. In preparation for that, I had paid for booth space rental, topped up products with low inventories and bought new stocks. However, it’s uncertain as to when the fairs will resume so I have quite a significant amount of capital locked in.
When it comes to online marketing, it is not easy to quantify the effectiveness of my digital marketing campaigns, as a promoted post may not lead to an immediate sale. However, they do contribute to my brand’s visibility and help potential customers to recall DrawnBy. For instance, I have a customer who knew about DrawnBy: in the early days, but only purchased the products after having kids.
Timothy: My wife and I first saw your product at a physical shop. How’s the experience like consigning your products to be sold at physical stores?
Jessica: I think that any publicity is good publicity. But for me, DrawnBy: is a passion project. So when I first started, I hesitated with putting my items up at other retailers because it might affect my income. If I sold everything myself, I would certainly earn more without having to split the profits with other sellers.
These days, my mindset has changed. I believe that it’s important to place your items effectively so that customers can see your products. With other businesses willing to represent your brand in store, there’s no greater stamp of trust and assurance for parents – or customers in general – that your product is worth buying.
I’m happy to say that a lot of my retailers have been with me for at least a few years. We have gone through the COVID period together and are still supporting each other. It makes me happy to know that someone believed, and still believes, in my products.
Deliveries and sales report consolidations are just part and parcel of the consignment process. I do handle some customer service issues from my local retailers, but that’s mainly good handling where the customer touches base directly with DrawnBy: apart from the retailers that they’ve purchased from.
An E-Commerce Business May Require Lesser Capital, But It’s No Walk In The Park
Our conversation with Jessica affirms one of the initial thoughts we have when starting a retail business – it’s much cheaper to start an e-commerce retail business, than to have a physical store.
With an e-commerce business, we can keep our initial costs low by working with the existing resources that are available around us. These could include keeping our inventory at home instead of spending money to rent a storage space and doing our own product development, or with friends who are willing to help us. By keeping our costs low, we can reduce our overheads, earn a reasonable profit margin, and rechannel our revenue to purchase more inventories for future sales.
However, a low initial cost doesn’t mean that it’s easy. As shared by Jessica, the barrier to entry for e-commerce businesses is low and this makes the marketplace very competitive. To stand out from our competitors, we not only need to provide our customers with quality products that they want but also ensure excellent service standards.
For e-commerce businesses, one vital component of providing excellent service is delivery. After all, the basis of e-commerce business lies in speed. While they cannot impress their customers with a beautiful storefront, they can leave a good impression with efficient delivery services. In fact, if you think about it, the person who delivers the products to your customers is playing a service role on behalf of your company. A delayed package, or a damaged package, not only leaves customers with a bad impression but also leads to additional logistic challenges if a replacement or refund must be made.
This is why many e-commerce business owners such as Jessica prefer to use a trusted delivery service instead of conventional postal delivery. Despite the perceived higher delivery costs, you actually save on time and resources in the long run without having to deal with as many replacements/refunds. Besides that, you are not limited by weight and parcel size dimensions.
For e-commerce business owners, courier service providers like Lalamove can provide fast and reliable on-demand deliveries for businesses of any size. With a vast array of vehicles including trucks, cars, vans and motorcycles, delivering products of any size isn’t a problem. Whether it’s small and fragile goods, or large and bulky items, Lalamove can offer the right mode of vehicles to deliver your goods.
Source: Lalamove
Besides offering you various transport vehicles based on your goods, deliveries can be arranged in advance or even on the same day, depending on when your customers need it. This applies regardless of the size of your business, whether you are a new e-commerce serving your first clients, or an established enterprise with a consistent stream of orders.
Having used Lalamove regularly for our personal and business requirements, one thing we really like about Lalamove is that it offers 24/7 instant delivery and real-time tracking. This not only makes it exceptionally convenient as we can deliver, on-demand, to partners and clients as and when it’s required, but also gives us a high level of assurance as we know whether our recipients have received their items.
Also, with transparent and competitive pricing, we will know exactly how much we are paying for each delivery before confirming any bookings.
Lalamove Expands Alongside Your Business
One challenge that all business owners face is finding ways to scale up their operations as their business expands. When we grow bigger and have more customers, we need to ensure that our logistic partner can cope with the increase in orders.
For home-based businesses like DrawnBy: which may sometimes have multiple orders from customers each day, one advantage that Lalamove offers is that you can opt for multi-stop delivery across Singapore. This allows you to save money by grouping up to 19 orders in one trip. Based on the locations of these orders, Lalamove system optimises the best route for drop-offs, so that businesses can save more with less mileage!
By using a courier service like Lalamove, we can outsource the logistics and delivery function of our e-commerce business. This gives us one less important business function to worry about, so we can focus on developing better products for our customers to enjoy.
With a trusted and reliable delivery service provider, we can provide great delivery service to our customers, without needing to incur fixed overheads like a vehicle purchase or full-time/part-time driver. This is prudent, as it transforms what would potentially be a fixed business cost into a variable cost where you only pay-as-you-need. More importantly, having a great delivery service is a key aspect to retaining your customers for an e-commerce business.
Find out more about how Lalamove can support the delivery requirements of your business today.
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