I have been dealing with ecommerce for a few years now. Some friends have been asking me how to start on e-commerce.
My local sales is about $150k SGD per month with about 500 SKUs, while my Amazon USA sales can break $200k a month (in the peak season) with only less than 20 SKUs. The local company has enough profitability record to purchase and finance to own our own property in Singapore for our expansion.
I am no guru, and no suitable courses to share. I will be sharing a few pointers for newbies on ecommerce.
TLDR version:-
Do Aamzon USA if possible.
Local (Singapore) Ecommerce is easier to start with lower capital, easier learning curve, and more leeways to repair mistakes and manage the business.
Local Singapore Market Places
- Shopee
- Lazada
- Qoo10
- Carousell
- Own Websites (.com or .com.sg)
Qoo10 used to the king of e-commerce in Singapore but Shopee and Lazada are the biggest platform marketplaces now.
Carousell is great for newbie, but only for goods that are relatively higher value. If not you are going to be doing a lot of manual work, which may not be worth it.
Doing your own website is tedious but its a must if you want to build your own brand and services in the long run.
Advantages of doing local ecommerce
- Lower capital required
- Shipping goods from China to Singapore is easy
- Advantages of using alibaba, aliexpress, taobao etc.
- Easy to manage and handle goods, refunds, customer services
- Home ground advantage
- You can even start with no warehouse, but shipping out of your own home
Disadvantage of doing local ecommerce
- Small market (only 5m population)
- Very difficult to scale out.
Overseas Market Places
- Amazon USA
- Amazon Europe (or other Amazon marketplaces)
- Ebay
- Shopify with dropshipping
Advantages of doing international marketplaces
- Large market size (400m for USA)
- Easier to scale up or to other regional places
Disadvantages of overseas marketing
- Large capital needed.
- Difficult to handle refunds, product flaws or shortcoming.
- Steep learning curve
- Lots of extra costs involved
I will say huge capital is needed. If you bootstrap, i think $10,000 USD is required.
If you want to do well, perhaps at least $30,000 to $50,000 for a few SKUs of products.
Amazon is fiercely competitively, and you may face lots of extra costs, from shipping, customer services, PPC (advertisement costs) to even disposal of units. Yes, you have to pay Amazon to throw away your units.
And since you are unable to handle and manage your own units, even small defects or missing accessories that can be easily fixed are not fixable when you are doing Amazon or eBay sales because your goods are in Amazon or 3PL (third party) logistic warehouse.
We have thrown away goods with silly flaws, simply because it costs too much to fix it.
For example, if an important sticker is missing or some part is problematic
1) Ship from Amazon warehouse to your 3PL warehouse = shipping costs
2) Acceptance and handling of goods costs in 3PL
3) Fixing of the problems in 3PL = at least $0.50 per unit or more
4) Reboxing and shipping back to Amazon warehouse for asles
How do I get started on e-commerce?
If you have at least $10,000 USD and more, go for Amazon.
Its a steeper learning curve, but one that can get you out of Singapore.
Doing local e-commerce is easy but you would not get super rich doing local business, go for the skies, go for international market.
If you need help, google for Jungle Scout, read through their case study and learn via their course.
You can also google for Helium 10, its another great way to learn about Amazon.
Learning from them is FREE.
Here are the Amazon vendors that I have used and highly recommended
- Jungle Scout
- Helium 10
- Viral Launch (for getting the statistics in researching products)
Have fun and remember, most people failed in starting their businesses not because its hard. Its because they think that its easy to get rich, and forgot that starting a business is just work. Highly rewarding work if you are prepared to work hard and learn hard.
Hope you can start your own business and if you succeed, do donate money to local educational charities :)
No comments:
Post a Comment