Opening a store on Lazada can be a great choice for companies that look to expand into Asian markets. China has become competitive over the years and it’s far more expensive to start selling there.
One of the benefits of selling cross-border on Lazada is that you instantly reach six countries in ASEAN, with a total population in the hundreds of millions. The second benefit is the low upfront and running costs that come with it.
Selling on Lazada is perfect if you just want to try-out the Southeast Asian market as the setup and running fees are low. That’s not the case for China.
In this article, you’ll learn about the following when selling cross-border on Lazada:
- Upfront fees
- Payment service fees
- Shipping fees
At the end of the article, you can also find a useful FAQ with commonly asked questions and our replies.
1. Upfront Fees and Initial Deposits
Lazada doesn’t charge sellers any major upfront fees or deposits for that matter. You can simply register an account, list your products, and get started.
This is not the case if you plan to sell on websites like Kaola, Tmall Global, or JD Worldwide in China, where deposits stretch between USD 10,000 – 25,000.
A yearly service fee of USD 1,000 – 5,000 applies when selling on these Chinese websites as well.
As mentioned, while Lazada gives you the opportunity to test the Asian markets, the major Chinese websites rarely don’t.
2. Lazada Commissions
The same as it goes with various E-Commerce platforms in China, Lazada charges a commission on each sale you make. The commission is only deducted when an order has been delivered and the client has paid.
Below I’ve made a *chart showing the different commission rates that apply for products sold in Thailand, Indonesia, Malaysia, Singapore, and the Philippines.
Keep in mind that the rates are valid for cross-border sellers, which means that you sell from a country outside of ASEAN and use Lazada’s LGS shipping service from Hong Kong.
Local sellers in Malaysia, except for Official Stores, Certified Stores, and Brands, have been exempted from paying commissions since 2018.
Possibly, this is a measure to compete with Shopee, one of Lazada’s biggest competitors, that doesn’t charge any commissions at all.
*Commission rates in Vietnam are not included below and can reach up to 8%.
|Cameras||Drones, DSLR, Instant Cameras, Point & Shoot, Video & Action Camcorder, Gadgets & Other Cameras, Camera Accessories, Lenses, Optics||1-4%|
|Computers & Laptops||Laptops, Printers & Accessories, Scanners, Desktop Computer, Computer Accessories, Computer Components, Network Components, PC Gaming, Software, Storage||1-4%|
|Mobiles & Tablets||Mobile, Tablets, Landline Phones, Accessories||1-4%|
|TV, Audio & Video, Gaming & Wearables||Audio, Gadgets, Televisions, Video, Wearable Technology, Gaming, TV Accessories, App-enabled accessories||1-4%|
|Home Appliances||Cooling & Heating, Garment Care, Home Appliances Accessories, Housekeeping, Small Kitchen Appliances, Large Appliances||4%|
|Health & Beauty||All Products||4%|
|Digital Goods||All Products||4%|
|Bedding & Bath||All Products||4%|
|Home & Living||All Products||4%|
|Baby & Toddler||All Products||4%|
|Media, Music & Books||All Products||4%|
|Pet Supplies||All Products||4%|
|Sports & Outdoors||All Products||4%|
|Toys & Games||All Products||4%|
|Travel & Luggage||All Products||4%|
|Watches, Jewelry, Sunglasses||All Products||4%|
How to Calculate the Commissions
Some countries charge a GST/VAT on the commissions made, thus, you need to include these when calculating the total commission fees.
Currently, deliveries to Singapore and the Philippines are exempt from VAT and GST, these only apply for deliveries to Thailand, Malaysia, and Indonesia.
So, let’s say that you sell pet supplies with the price of “100”, without using any currency, just to give you an example.
In Malaysia, a GST of 6% will be added which results in a total commission of 4 + (6% x 4) = 4.24.
In Thailand, a VAT of 7% is added, resulting in a total commission of 4 +(7% x 4) = 4.28.
The VAT in Indonesia is 10%, which would result in a total commission of 4 + (10% x 4) = 4.40. However, the VAT is already included so you only need to pay a total commission of 4, the same as in Singapore and the Philippines.
3. Payment Service Fees
You have two payment providers to choose among if you sell on Lazada: Payoneer and World First. After you register an account, you need to sign up and integrate your store with any of these companies.
The equivalents in China are Tenpay for JD Worldwide and WeChat, and Alipay for Tmall Global.
By using Lazada’s platform you need to pay a payment service fee of 1-2%. At the moment, the fee is 2% of deliveries to Singapore, Thailand, Malaysia, Indonesia, and the Philippines.
I highly recommend you to contact Payoneer and World First to get up-to-date information as the service fees can change.
Calculating Payment Service Fees on Lazada
The same as it goes with commissions, you need to add a GST or VAT when selling to Thailand and Malaysia (the VAT is included in the price for sales to Indonesia).
Let’s use the same example as we did when calculating the commissions.
If you sell a product that costs MYR 100 to Malaysia, a GST of 6% is added to the payment service fee of 2%.
Hence, the total payment service fee is: MYR 2 + (MYR 2 x 6%) = 2.12.
The payment service fee in Thailand, on the other hand, will be as follows with a VAT of 7%:
THB 2 + (THB 2 x 7%) = THB 2.14.
Don’t forget to include the commissions and payment service fees when calculating the final prices, before listing your products on Lazada.
When is the payment service fee charged?
The payment service fee is charged for delivered products, failed deliveries, customer returns, and canceled orders.
Can I see the calculations in the seller center on Lazada?
Yes, you can see the calculations in the seller center which is helpful. If you have any questions regarding the calculations, you can also contact Lazada directly.
4. Shipping Fees
Shipping fees always make up a big part of the final price used to customers.
Selling through a bonded warehouse in China to Chinese customers, for example, can save you much money compared to using a fulfillment center in Hong Kong.
Still, there are benefits of using Hong Kong as a hub. Cross-border sellers always need to weigh the benefits and make decisions, and where shipping rates play a big role.
When it comes to cross-border sales through Lazada’s fulfillment center in Hong Kong, rates are higher compared to local ASEAN sellers, of course.
There’s always a minimum fee, ranging from around HKD 12 – 37 (weight > 10g), depending on which country you ship to. Worth mentioning is that the Philippines tend to have significantly higher rates compared to other countries.
The rates then increase on on a per-gram level. Below I’ve included an overview for each country of how the *rates differ when shipping 100g to 1 kg, 1.5kg, 2kg, 5kg, 10kg, and 20kg.
*The rates below are just for reference. Shipping rates change frequently and you should request an up-to-date list from Lazada before you start selling.
Singapore shipping fees (in SGD)
The prices below are shown in Singapore Dollar (SGD) where: 1 SGD = 5.91 HKD = USD 0.75 (rounded figures).
100 g = 3.22
200 g = 4.48
300 g = 5.25
400 g = 6.96
500 g = 7.72
600 g = 8.33
700 g = 9.10
800 g = 10.33
900 g = 11.10
1 kg = 11.81
1.5 kg = 19.36
2 kg = 22.10
5 kg = 43.99
10 kg = 79.56
Thailand Shipping Fees (in THB)
The prices below are shown in Thai Baht (THB) where: 1 THB = 0.25 HKD = USD 0.03 (rounded figures).
100 g = 121.89
200 g = 142.18
300 g = 162.46
400 g = 192.62
500 g = 212.94
600 g = 230.79
700 g = 251.07
800 g = 280.79
900 g = 301.07
1 kg = 321.35
1.5 kg = 426.08
2 kg = 538.38
5 kg = 1,264.68
10 kg = 2,389.98
Indonesia Shipping Fees (in IDR)
The prices below are shown in Indonesian Rupiah (IDR) where: USD 0.13 = 1 HKD = 1728 IDR (rounded figures).
100 g = 34,035
200 g = 48,927
300 g = 63,837
400 g = 78,730
500 g = 93,640
600 g = 107,495
700 g = 122,405
800 g = 137,298
900 g = 152,208
1 kg = 167,100
1.5 kg = 323,265
2 kg = 433,767
5 kg = 1,100,253
10 kg = 2,174,711
Philippines Shipping Fees (in PHP)
The prices below are shown in Philippine Pesos (PHP) where: PHP 1 = HKD 0.15 = USD 0.019 (rounded figures).
100 g = 250.40
200 g = 349.84
300 g = 449.28
400 g = 548.72
500 g = 648.17
600 g = 731.68
700 g = 831.40
800 g = 930.84
900 g = 1,030.29
1 kg = 1,129.73
1.5 kg = 1,606.32
2 kg = 2,103.53
5 kg = 5,066.42
10 kg = 10,053.42
Malaysia Shipping Fees (in RM)
The prices below are shown in Malaysia Ringgit (RM) where: RM 1 = HKD 1.98 = USD 0.25 (rounded figures).
100 g = 9.01
200 g = 10.29
300 g = 11.58
400 g = 12.86
500 g = 14.14
600 g = 16.55
700 g = 17.67
800 g =18.69
900 g = 19.80
1 kg = 23.79
1.5 kg = 29.17
2 kg = 37.42
5 kg = 78.31
10 kg = 146.46
Below you can find commonly asked questions and our replies. If there’s anything else you wonder about or if you have interesting information to share, feel free to write a comment below.
Do I need to add a GST/VAT to my shipping fees?
Malaysia, Thailand, and Indonesia are the only countries that charge a GST or VAT to commissions and payment service fees. Malaysia has removed GST from shipping fees as of June 1st, 2018, hence no GST is added.
In the case of Indonesia, I didn’t manage to find any information but assume that VAT is included. Still, you should confirm this with Lazada, before you start selling your products.
For deliveries to Thailand, you need to add a VAT of 7% to the shipping costs.
Does Lazada have commissions?
Yes, Lazada does add commissions that generally range from 4% to 8%. With that said, the rate is typically 4%.
Most of the other eCommerce marketplaces, including Shopee, have started to charge commissions as competition is high and profit margins slim.
Is selling on Lazada free?
No, there is a small setup fee and Lazada will also pocket a commission on the sales you make.
Besides, keep in mind that a VAT/GST is added in countries like Malaysia and Thailand. Sellers sometimes also pay for advertising to stay competitive.
A bit of general advice is to work with a Lazada Agency, which in turn adds a bit to the total costs. With that said, it’s significantly cheaper to hire a Lazada Agency to Tmall Partners in China.
Be prepared to pay a few hundred US dollars instead of thousands of dollars.
How does Lazada earn profits?
Lazada earns profits through several means. First of all, they collect sales commissions for each sale made by a seller. The rate stretches from 4% to 8%.
Besides, they charge a small fee for new account setups. Be prepared to pay for additional advertising as well when needed.
Which is better, Lazada or Shopee?
Both websites have benefits and disadvantages and customers all have individual preferences.
With that said, Lazada has a slightly larger product assortment and more fulfillment and shipping capabilities for cross-border sellers.
Some benefits of buying and selling on Shopee, on the other hand, is that there are no shipping fees. Besides, Shopee is suitable for C2C sellers while Lazada requires that you have a company.
Does lazada charge for delivery?
Yes, as shown, Lazada does charge for deliveries. The rates differ and are charged in the local currency for cross-border sellers.
The rates for deliveries from Hong Kong to the specific local markets can be found in Lazada’s so-called Rate Cards.
How do I withdraw money from as a Lazada seller?
The process is simple. Sellers get paid via bank transfers to the bank details kept in Seller Center. It’s important that the Business Information and the required documents are uploaded to the site.
You also have to upload and maintain your Bank Account details, for verification. Lazada will not be able to manage any transfers if there are discrepancies or faulty information.
Can I pay using a credit card on Lazada?
Yes, Lazada accepts credit cards which are commonly used among buyers. In addition to credit cards, buyers have plenty of other payment options like Cash-on-Delivery, Lazada Wallet, GCash, and more.