20th Sep 2018, Shopee First Malaysia Conference. At first, the rumor was that the conference ticket will be very exclusive. Perhaps due to their closest friend upcoming conference, Shopee up the game by having it big, one week in advance in Grand Hyatt.
Typical Shopee, as their closest friend is charging nominal fees for the conference (Not that I am complaining since now is zero commission), they charge half the price in comparison. Adding salt is that they threw in RM 50 ads for early bird RM 25 tickets. Haha, so Shopee. Anyhow, the marketplace should charge some nominal fee for such events to avoid non-seller coming in just for free food.
It started with Ian Ho giving a great speech and ..... (blah blah blah on how fast Shopee has grown).
Haha, lets cut the chase and go straight to the 1st Major Shocking Revelation to a lot of sellers.
Previously. I couldn't share such information publicly, as it still Shopee P&C info. But then since it was shared in the conference with a lot of smartphone snapping photos, I guess it is public information.
Shopee sellers always offered the ZERO commission, ZERO payment gateway, and subsidize and FREE shipment. It always seems too good to be true. How the heck Shopee is able to generate revenue?
If you think Shopee is doing charity and a good company, pls don't continue reading. It will break your heart hahahaha.
GOLDEN RULE: You have much higher possibility of winning if Shopee EARNS FIRST!
First is of course myAds. In the usual days, in order to be on top of the list of a keyword search of a specific keyword, sellers are able to buy keywords and pay per click. I had written about this in my past few blog.
In this event, Shopee did ask the seller to be careful not to spend more than your earn hahaha. for bench marking, Shopee had shared best cases ads strategy, and ads expenses is around 4% of the GMV. Extreme case is 2%. The point is by investing in ads, your sales will grow a lot.
In order words, please reserve at least 5% of your sales price to pay for the ads in order to get good sales. Let's say your competitor and your cost is the same. If the competitor paid the 5% ad and price their product 5% higher than your product, Shopee system will want to help the competitor wins!
Bro, this is the commission hahaha. You have a higher possibility of winning if Shopee EARNS FIRST! (REMEMBER THIS GOLDEN RULE)
The good thing is, of course, this is voluntary compare to fix commission. if you are that good, 2% is the minimum (I guess to cover at least the payment gateway fee), else 10% also might not be enough. So please do read my 3 blog about ads. to find your right strategy to win with the least cost. The most recent one is this article: https://www.kkecommerce.com/single-post/2018/07/29/Shopee-Ads-Maximizing-Keywords-with-Cost-like-a-Newbie
But just like Facebook ads, once everybody doing it, the cost will increase because it is a bidding war.
Now, ads only apply when Customer searching for keywords only.
What about product placement the first screen on Shopee apps and website?
What about key shopping dates like 9/9, 11/11 and 12/12 !?
What about shocking sales !?
Do You still believe that if you set the lowest price even at lost, you will win in this marketplace?
Sorry bro, please read the golden rule again!
Yes, for the first time, Shopee is revealing to all 700 sellers and with many RM (Relationship Manager) ready to serve you.
You got to pay for it !
In fact, when Shopee was talking with big sellers, they were selling packages to them!, rather than asking the big sellers to set at the lowest possible price. If setting the lowest price was without giving a cut to Shopee, they indirectly discouraged it!
Before you got upset about this, I felt that it makes sense logically and there is nothing wrong with it. Come on, Shopee is not a charity organization. Shopee, of course, will divert more customer to a seller, only if they earned more to cover their cost.
In such, sellers are their customer also! Thus Shopee culture is to ensure the seller has a good selling experience also. They are doing it quite well.
So for branded goods, you need to pay good money for good position in Shopee platform. Min RM 10k!. You will enjoy more if pay more. But again after you pay, you still need to meet the requirement as a good seller for them to accept you. If you are a bad seller, selling low value with bad operation, the money will not save you. However if you are a superb seller, and you are not paying, you are mostly at a significant disadvantage.
Thus to invest in this, for an average selling price of RM 50, the brand needs to plan to sell at least 2000 unit in that period. Total revenue expected is RM100,000. Thus it is ok to consider this 10k (10% of expected revenue) as marketing funding. So don't use this marketing fund to price your product lower. Use it to get more traffic to your listings, because only if Shopee Earns! you have a higher possibility to win. (Remember this golden rule again).
To put in perspective, if you make 2000 sales in another platform, You had to pay at least 10k (2000 X 5) shipment cost, 2@ gateway fee and some commission. So it is just giving back to Shopee what they need to earn hahaha. No money no honey.
What about unbranded goods？No worries, the net cast is for every fish in the sea.. For the prime day like 11/11, also prepare RM10k minimum.
But for other days, it is much cheaper. Some you can get for RM1000 as well.
And that's why you need to come to this conference. The RM will discuss you and propose to you appropriate plans and packages which suits you. If you are not able to talk to them, at least get hold of their contact numbers hehe. There is much details discussing with RM which I wont be able to share everything here.
Thus, relationship with RM and Shopee is also an important factor in future. If you are not paying Shopee anything, try not to abuse them when something went wrong. Work with them because nobody wants to help am unreasonable seller which didn't pay Shopee anything and still demand the sky from them.
And If you had pay, you should treat them even better!
So guys, if you envy why some having so many sales in key dates, the secret is out. It is not the cheapest price. It Is working with Shopee to ensure they EARN FIRST, then You Might Win! (Golden Rule again)
Now even if you are not willing to pay, you will still see some increase in sales. Of course, Shopee presented at that conference, that it will be much lower than those who pay loh.
They hinted again in this slide hahaha. Price is not the top requirement at number 3. More convenient to shop is number 2. How to be more convenient !? Pay Shopee Lah.
Then there is even more than just Shopee apps and website !
Shopee is actually also working to link celebrities with you, doing social compaign with you with you and even product placement in TVC ads!,Of course if you have the moo lah. This is serious marketing campaign.
Again reminder, Small or Big marketing, The worst thing is you pay for it, and you had insufficient stock to support the event, or you "Hentam" the wrong SKUs, then it will be a double whammy! So pleases again read my blog again about the importance of Inventory management and data analysis. Of course, marketing material like good artworks is important, but it is not a game stopper. The first mention two mistakes are! This skillset at times is most unappreciated in seller.
Of course after all this, Shopee is issuing a war cry on 11/11 and 12/12 to their friend. It will be interesting to see their best friend responding on this.
Ok on other matters. We know Shopee closest friend is building their own efficient and cheap fulfillment expertise. Shopee actually have been doing this a while offering to selected sellers.
Shopee strategy is to same half, different half.
For the warehousing fulfillment, SHopee is coming out with FBS (Fulfilment by Shopee). I wonder why they always like keep using the same FB = "Fulfilment By" ?
As expected of Shopee, the rates announce is lower than their friend. I like competition hahaha.
But for 3PL (3rd Party Logistic), they are partnering with one of the best player in town - "DHL eCommerce" (after Poslaju) to compete with their friend own setup. Who will do better here in the future will be an interesting show.
3PL is important for the eCommerce Industry to move forward. Competition and Market Growth should drive the 3PL growth as well. Hopefully, fulfill by same day or within 2 hours thru drones will arrive one day in Malaysia. That will completely change the retail in Malaysia.
Now, this is my insight from Shopee Conference. I might be wrong and please let me know what you think.
Again, I like to thank all which said HI and encouraged me. It is very meaningful for me to continue sharing. Please forgive me if I didn't remember your names (I am bad in this). Of course, the best was even Ian Ho recognize me and had read my blog before about Shopee.
That makes my day!