How to Start Selling Online in Indonesia

According to a survey by Forrester, online retail sales are going to grow to $2.5 trillion in 2024, with a compound annual growth rate (CAGR) of 11.3%. The study further reveals that 50% of the total global online sales are accounted for by Southeast Asian buyers alone and is expected to cross the mark of 64% by 2024. Given the immense opportunity, there is no dearth of retailers and businesses looking to enter the digital space.

Nowadays, starting your own online selling business is just a matter of a few clicks. But, it wouldn’t be right to say that it doesn’t have its own complications. Given the diverse nature of the Southeast Asian market and the fragmented network, it is a confusing and jumbled mess in itself. So, if you are just getting started, you need to carefully figure out initial steps. Without proper research, strategy, and planning, setting up a successful online business will be really complex.

If you have decided to enter your business in the eCommerce space, here is a complete guide to help you with it.

( Note: Check out how you can become a Power Seller on any Sales Channel you sell on )

Plan WHAT to sell

If you aren’t already selling offline, then the first and most important thing is to define your offer. Increasing opportunities invariably lead to cut-throat competition. To gain success, it is very important that you spend time analyzing what are the best products you should sell. Keep in mind that your product choice is going to impact many other aspects of your business, like your shipping operations, production and inventory storage, as well as other costs.

Depending on the product categories you select, the region you want to service, and the buying behavior of potential customers, find out which are the top-selling products in Southeast Asia.

If you are already a seller, start with your ongoing offer. In case you plan to start from scratch, you need to ensure you have a working strategy to iron out the kinks while planning to take your existing business online.

Plan HOW to sell

1. Know Your Competition

Once you know what to sell, your next step should be focused on understanding the current state of the market. This includes gaining detailed knowledge about who your competitors are and what they offer.

Prepare a short list of all organizations, companies, and even individuals that are selling similar products. Include some important pointers such as strengths, weaknesses, tagline, and sales mission.

After you understand your competition, you can start creating unique propositions to make your business stand out from your competitors.

2. Know Your Customers

To be successful in an online business, you should be acutely sure about your group of potential buyers, their preferences, needs, and problems.

So, to improve the accuracy of your target audience data, you can use psychographic and demographic information from related marketplace segments. This will include the following details based on the following diagram.

Depending on the above information, you can get closer to what your customers actually expect from you. This should always be a recurring activity as buyer personas keep changing when new customers are introduced or your retaining customers can change their behaviour based on their latest needs and interests. So, make sure you value your customers as they will value your brand/service.

3. Know How to Satisfy your Customers

Remember, getting orders is not the only key to success. Instead, focus on your customer’s everyday problems and try to resolve them, by providing them with your products as a solution.

Do your research and identify the most common issues your customers must be facing. Then come up with an innovative solution to it or try to improve the existing ones. Once you start receiving orders, you need to make sure that you don’t mix up the orders or delay them. So you might want to work with third-party logistics and fulfillment partners instead of doing everything on your own. This will help you focus more on your products, promotions, sales, and improve the efficiency in what you truly like to do (sell online).

In addition to all this, if you are not planning to set up your own production unit, plan precisely where you will be sourcing your products from.

4. Determine your pricing & promotions strategy

After you figure out which products you will be selling, you need to start preparing a short checklist of the things you will have to take on priority.

• Select top online selling channels that work the best
• Device a pricing strategy
• Prepare an online marketing plan
• Plan for promotions and incentives to encourage customers

Plan WHERE to Buy From

Your business and operation costs highly depend on the supplier you choose. Hence, deciding on a trustworthy supplier before going online is a great choice. Also, calculate the manufacturing costs, shipping price, and profit margin, when you select your supplier.

The three most common sources to procure products are through:

• Manufacturer
• Wholesaler
• Dropshipper

So, it’s important to understand how each of these sources will be beneficial in order to make the right choice for your business. Depending on the nature of your product, the market you cater to, and consumer preference, one method may be more suitable for your business than the others.

a. Manufacturers

Who is it for?

• Businesses that want to develop their own products and gain competitive advantage
• Businesses that wish to set their own pricing structure

Pros

• You have better control over the product quality and branding.
• Per unit cost is much lower.
• Buy products at low cost and add extra margin while selling.
• Swift delivery as shipments are directly transported from factories.

Cons

• High investment as you will have to put in a lot of money in developing your own products and managing inventory
• A lot of time consumption in product research, planning, designing, development, and testing, which can eventually take a longer launch time

Risks

• The highest risk involved is acquiring unnecessarily bulk stocks since manufacturers generally sell minimum order quantity (MOQ).
• If you are purchasing from overseas manufacturers you have to beware of fraudulent practices, transportation, and shipping damages, etc.

b. Wholesaler

Sourcing from a wholesaler is a great choice as there is no minimum order quantity and they buy in bulk from manufacturers and redistribute them.

Who is it for?

• Businesses that want to have a swift go-to market strategy
• Businesses that wish to sell different categories of products

Pros

• Wholesalers are happy to work with small businesses
• They can help position your selling operations as they sell known brands
• Lessen the risk associated with purchasing inventory
• Once you build strong relations, they provide you reliable and long term supply of items

Cons

• Difficult to manage different supply partner
• Highly scrutinized price control which prevents you from selling a product below the assigned price range
• Disparity in supplier requirements

Risk

• The biggest risk of sourcing from a wholesaler is the demand uncertainty
• It is difficult to stand out since there are many retailers selling the same brand/ same product

Negotiate with the wholesaler to source the products at lower price and minimize your costs to earn better revenue

c. Dropshipper

A Dropshipper is a business that sources products from one business and places them on sale through your online store. In this scenario, you will have to completely depend on an independent entity to fulfill the orders you receive from your customers. Both dropshipping and manufacturing have their own pros and cons.

Who is it for?

• Businesses that prefer to keep startup costs as low as possible
• Businesses that are less concerned about margins

Pros

• Less stressful as all the worries related to shipping and returns, are handled by the drop shipper.
• Low risk in terms of financial losses
• No risk of overstocking or losing money on production
• Low overhead costs

Cons

• Low-profit margins, as you need to pay a lot to the drop shipper
• Lack of control on the quality of the products you sell under your brand name
• You have no control over the stock, ending up into potential inventory issues

Risks

• Very slim margins and high level competition
• Tricky to acquire new customers or invest in marketing activities

Plan WHERE to Sell Your Products

As discussed, eCommerce gives you an open space to be creative in running your business successfully. There are different beneficial platforms to choose from, and selecting the right one is an essential step in reaching your desired target audience.

Two of the most popular platforms to sell online are:

1. eCommerce Marketplace

The eCommerce marketplaces are the easiest ways to start selling online if you are relatively new to the field. You can create a seller account with these online marketplaces and start selling your products immediately. For that, you will need to add some basic details such as VAT registration number, identity proof, address, and bank details.

Popular online marketplaces include Lazada, Zalora, Qoo10, Matahari Mall, BliBli, JD amongst others.

[ Note: Did you know SelluSeller is connected with more than 150 marketplaces in the region. Check them out here.]

2. Set up a Web Store

Another simple and effective way of launching your store online is by setting it up through an eCommerce store development platform. There are many technically advanced and popular solutions that allow you to design your own web store. They use their own server for this and help you reach potential buyers from all over the world.

You just need to register with these platforms, select one of their packages (whichever is most suitable to your brand, product, and budget), upload your product catalog and start selling.

But, running your own webstore means you will have to do a lot of marketing and promotion, in order to compete with the bigger competitors.

As an online seller, both options- marketplaces and web stores are equally good for generating sustainable revenue.

The two most important decisions you will have to make from this checklist is choosing the right sales channels and how you plan to manage them. Many businesses choose to go with a comprehensive order management system for a better performance.

Sellers who sell on multiple sales channels generate 190% more revenue than sellers who sell on a single channel.

While selling on marketplaces gives you the opportunity to get quick sales, having your webstore can help you promote your own brand gradually as you grow. Being on marketplaces helps people to know about your brand, leading to more direct traffic to your webstore.

In order to find real success, you must think about selling on multiple channels and increase your overall revenue. Naturally, multichannel selling requires way more effort, but the benefits you will get after implementing it are equally rewarding.

Why is it better to manage your online selling through a multi-channel selling software?

Multi-channel selling software applications let you manage all your online operations on one unified platform. Instead of managing each channel separately, you can simply integrate them through a multi-channel selling software. This not only automates your entire selling operations but also helps you save time, effort & money. It enables complete control and visibility over all your sales channels and lets you manage a centralized inventory, process orders receive across multiple channels on a single dashboard, monitor key insights and analytics to measure the success of your operations

Legal Do’s & Don’ts of Online Business

Setting up an online business is easy, but finding success takes a lot of hard work. Apart from setting up the business, you also need to get various legal formalities & paperwork in place:

a. Permits and Licenses

Before you start selling online, you need legal authorization documents for your business. Apply for a business license and become eligible to sell digitally. In addition to business licenses, you will also need a seller's permit, employer identification number, and sales tax license. Although it can vary by each country, you need to make sure you are complying with legal requirements by checking in with licensing boards from time to time.

b. Shipping Restrictions

If you are planning to deal in perishable goods like fresh fruits and vegetables or products such as cigarettes, alcohol, or perfume, you should know that they come with a restriction to shipping. Hence, you may require some extra paperwork to ship them across to the customers.

c. Intellectual Property in eCommerce

When you are selling different products from multiple brands, you will have a huge database of product descriptions, images, logos etc. Additionally, may have brand videos, background music, clip art, audio files etc. Make sure you have the rights to use them, and have checked for permissions with relevant stakeholders if needed.

There are three elements that safeguard every eCommerce actor to facilitate fair business practices. They are copyrights, trademarks and patents. Here’s how they have been defined:

• Copyrights: It protects your creative content, product descriptions, images and product photographs, digital content, sound effects or background music, graphics and videos. These attributes are mostly used in your web stores or when you add different products in marketplaces or similar online sales channels.You can copyright everything mentioned above as your intellectual property.


• Trademarks: A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. Brands and retailers mostly use this on product packaging, branding, advertising and marketing material to distinguish themselves and safeguard their intellectual property. Make sure you use them properly when you are dealing with products that have been trademarked.


• Patents: Patents are something that are registered to an individual or an entity who creates new, previously undeveloped ideas that take the form of inventions. This distinction is important to note, as it is one of the major terms that separates patents from trademarks and copyrights. Patents do not apply to creative works which are used regularly by businesses. For example: Coke has patented its formula of unique taste but has registered its logo under trademark.

Try to keep yourself away from all kinds of intellectual property issues when dealing online. Neither let anybody take credit for your work nor get involved in any kind of stealing yourself. Get your property rights counseled beforehand to be safe.

Although you have seen businesses transform their physical stores and explore the advantages of online selling, it is equally hard work to execute multichannel online selling.

While it may seem challenging at the start, if you acknowledge the steps that we’ve shared in this article, you can definitely simplify your transition to the online world and maximize your profits! Since your consumers are no more confined to one particular channel, going online will in fact be a smart way to stay relevant in this competitive yet lucrative eCommerce space.

References and Sources: 1, 2, 3, 4, 5