E-commerce is booming, but online marketers are not making money

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The Covid-19 pandemic has revealed opportunities in Singapore’s e-commerce sector. Most retailers have realized that digitization is one of the best ways to reach their customer base and have developed an e-commerce strategy.

Singapore and the world have experienced a boom in e-commerce, with consumers buying from groceries to home appliances online. In accordance with Statistician, e – commerce market revenue is expected to reach US $ 2.793 billion (US $ 3762.67 million) in 2021.

In addition, Singapore is one of the top five markets in Southeast Asia leading the load in terms of e-commerce market growth.

Because of the e-commerce boom, it’s reasonable for many to assume that e-commerce marketers are spending a lot of money, but Atsell co-founder and CEO Jacob Chee considers it a mere misconception.

Therefore, it is reasonable for many to assume that e-commerce marketers are making money due to the e-commerce boom. However, Jacob Chee, co-founder and CEO of Atsell, tells us this is a misconception and we learn about the problems that e-commerce marketers have.

The Singapore-based company offers end-to-end services, consulting and automation solutions to companies that want to charge for their ecommerce sales.

Atsell Co-Founder and CEO Jacob Chee / Image Credit: Atsell

When he worked at an e-commerce company before starting Atsell, Jacob witnessed first-hand the challenges marketers face when moving their online business.

For example, to move your entire catalog online, business owners need to take photos of professional products, create search-optimized listings, manage queries, orders, delivery, and reviews.

On the other hand, the rise of online “e-commerce gurus” who preach the misconception that running an e-commerce business is easy has only delved into the misconception.

He went on to launch e-commerce facilitator Atsell, which basically helps make a difference in helping companies sell better.

It currently operates in two countries, but plans to expand to the Philippines this year.

The challenges of running an e-commerce store abound

Shopee e-commerce Singapore
Image credit: Bigstock

According to Jacob, the profit margins of many e-commerce vendors in Singapore are shrinking, and many local businesses can only “get” e-commerce.

The following is a breakdown of some of the commissions and costs incurred by e-commerce vendors:

  • Platform transaction fees from 2 to 12%, depending on the platform
  • Marketing commissions of five percent of sales or more, depending on the sellers’ budget
  • Shipping costs between $ 1.50 and $ 8, depending on weight
  • Warehouse expenses from 500 to 1000 USD
  • $ 5,000 to $ 8,000 per count, if there is an e-commerce team

Some other intangible costs include resolving customer complaints, attending to customer inquiries throughout the day, dealing with fraudulent activities, and fulfilling orders seven days a week.

While Singapore leads the pack in terms of e-commerce market growth, the domestic market is small. So marketers need to go beyond the coasts of Singapore and explore cross-border e-commerce in countries like Malaysia, Indonesia, the Philippines and Vietnam in order to really flourish.

In addition, competition from overseas sellers is rampant. Globalization offers convenience and choice to consumers, but it also hinders the growth of local vendors who need to find ways to differentiate themselves.

When was the last time you remembered the name of the store or seller you bought from Shopee or Lazada? Thousands of new stores are set up in the markets every day. It’s hard to create brand differentiation and remember on these platforms.

Jacob Chee, CEO and co-founder of Atsell

Therefore, Jacob shared that a couple of good practices that all marketers should pursue include having clear and relevant product listing titles, displaying high quality images, and having well-written product descriptions.

He added that a good performance in e-commerce requires a snowball effect: gaining momentum and continuous sales is extremely important to do well for an extended period of time.

Do e-commerce marketers really thrive?

Shopee and Lazada in Singapore
Image credit: PingWest

The e-commerce boom has led to increased traffic, a high online presence and higher sales volume. Individual marketers therefore experience an increase in revenue, even if they only have a small percentage of e-commerce.

On e-commerce platforms, customers are agnostic to the sellers and are engaged in the marketing efforts of the platform, not the sellers themselves. However, Jacob tells Vulcan Post that markets “will always favor consumers over sellers, and it’s evident in the platform’s policies.”

For example, platforms hire third-party logistics partners to provide satisfaction to vendors. After sellers deliver their items to third parties, they have no control over delivery issues, lost packages, or damaged merchandise.

In these cases, sellers will be forced to face the weight of consumer complaints and could have negative ratings because of them.

Although a review resolution system exists, it is tedious to present evidence and resolve it. In most cases, sellers still have to absorb the cost of damaged products and returned items. While

While platforms have invested heavily in detecting copyright infringement, it’s not uncommon to see duplicate listings of overseas sellers. In extreme cases, there are even duplicates of entire stores.

Finally, while profit and loss accounts are available to marketers, they are not always intuitive. Sellers have to consider platform commissions, discounts and charges, and it’s hard to figure out the profit margin sometimes, Jacob said.

This then raises the question: how much do e-commerce marketers really earn?

In general, e-commerce markets benefit sellers with lean operations. Smaller traders also have the ability to operate more flexibly according to market guidelines, especially in areas such as shipping and return.

However, it is clear that while e-commerce has experienced a sharp boom over the past year, individual marketers still face a number of challenges, and rising e-commerce sales do not necessarily it translates into benefits for traders.

Featured Image Credit: SBR





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