Setting up your account is not a difficult process, but can take some time to do. In fact, it can take two weeks or more in some cases, especially with the delays that may arise and costs you may incur. So, knowing how to set up, what you will go through and what issues may arise are all issues to keep in mind to ensure you will have your site up and running in less time. This will also ensure you avoid the heavy wait times, and potential fees when you are getting ready to open your online shop.
Set It Up
When setting up the Tmall account, there are a number of items which will be required based on the type of account you wish to open. These are a few of the requirements set out for each merchant on the site:
Whether you are a flagship or franchise store, there are different requirements in place. Knowing these will not only help the transition of opening your account go as smoothly as possible, but will also allow you to get your shop up and running in less time, with fewer delays and with fewer hiccups when you are just starting out as a merchant.
The Setup Process
1. Apply in Alipay
First up, the seller must have a bank account in China. This is going to be linked to your Alipay account, where the buyers are going to pay for the goods they purchase through your store front. Once your account is verified, it will link up to your Alipay account and you are up and running, ready to accept payments for the product lines you sell.
2. Tmall Application
Here the regulations exam will be completed; you will also decide to set up as a boutique or a flagship. You will then set up the shop name and platform, so you are ready to run your business and can open the store front once your application is accepted as merchant.
3. Licenses & Documents
Depending on whether it is a global account or a China merchant, you are required to submit certain documents, and receive all licensing information. This must be set up with the business logo and other relevant information. All shop information will be verified and government documents checked prior to the merchant being able to sell any items through their shop page.
Once up and running and accepted, photos, product information, specials and other information can be posted to your account.
“Alibaba Tmall China – Operation Procedure” by Charlotte Lee. Accessed October, 2014 on slideshare.net
General requirements include:
• The business registration license must be included and submitted.
• Tax registration forms must be included.
• Trademark certifications are included with your application.
• Brand authorization and Alipay authorization letter must be included with the application package.
You must also include whether you are applying for a flagship or a franchise shop when setting up your account and applying. For a flagship a ¥100,000 (approximately $16,300) deposit is required, and franchise is a ¥150,000 (approximately $24,400) deposit which must be submitted along with your application for approval. Technology services charges should also be included, all businesses must follow China law, and you will be required to have customer service which can speak the Chinese language in order to set up your shop.
Store Application Process Time Frame
Although the total amount of time will vary for each store front, and delays can accumulate, there is a basic time frame of about two weeks to get your shop up and running once you complete all application requirements and submit all the forms that are required.
The process goes as follows:
1. Apply for your merchant account.
2. Sign the online contracts and submit all required documents for the type of business you choose to run.
3. Pay the required service fees and application fees, based on the type of store front you plan on opening.
4. Your Tmall store front will be ready to open.
In some cases, it may take a bit longer based on the type of application process which you choose to use. If you are applying online as opposed to by paper, the time it will take may be a bit shorter. Depending on the type of store, your application and how quickly it goes through, the delays and wait period will vary for each merchant that is going to apply to open a store front with Tmall.
With the three phase application process, the time frame is going to look like the chart below, as to how long it is going to take for your store to get up and running, if there are no delays in the process of applying for your store front.
There is a fee structure in place for becoming a merchant. First, there is a fee of up to ¥150,000 (approximately $24,400) for a cash security deposit. The next fee is the annual subscription fee, which can go up to ¥60,000 (approximately $9,700) based on whether you are a flagship or franchise. Depending on annual turnover and rating, a part of your annual fee may be returned to you as a merchant. Selling fees are also fixed at a 5% rate, so this should be added to the cost structure, when you are deciding which type of business to run as you are setting up the type of operation for your sales.
A one percent charge is also going to be paid for your Alipay account. The total is going to vary from business to business, based on their commission, total earnings annually and the types of goods they are going to be selling. It is important to keep this in mind when you are ready to determine the type of shop you are going to open, and the goods you are going to sell through your account as well.
Commission fees will be paid out as a merchant. Visit Chapter 2: Discover How to Get Started with Tmall to see the commission fee charts.
As a merchant it is important to understand these costs, the fees associated with items you sell and what you will be paying for each. Not only will this have an effect on profit margins, but also on the total that will be paid out to Tmall as well.
Set Up Marketing
Once the application is approved, if there are no delays, you are ready to begin to sell. Depending on the type of business you are running, what you are going to be selling and who you are going to market to, the type of tactics you are going to employ to get your products sold is going to vary for each online merchant. You have to know how to market, and who to market to in order to ensure you are turning the largest sales and profit margins, as an online merchant.
The above chat shows the marketing practices which can be used when you are trying to sell in Tmall. Depending on what you sell, who you will sell to and the type of business that you are running through the merchant site, these are a few of the marketing tactics to employ to ensure you are turning the largest profit margin possible as a merchant on the site.
Possible Delays & Complications
Like any business, the delays can greatly vary. For example, sending in certain documents may cause a delay. Some businesses will require a business license in China to operate, if this is the case, delays in receiving the license may occur. If you have to register tax certificates, delays may arise in the event there is a long wait period, or several other businesses doing the same. Agreements of service must be stamped and require certain documentation. If any items are missing, the two week process will all of a sudden take one month to complete.
It is important to understand delays will occur, licenses will get delayed and other issues will arise. If you plan on opening your shop, it is important to keep such delays in mind, plan for them and understand what issues may arise, so as to avoid the headaches when you are setting up your account.
Delays are a part of the application process. More often than not you are going to experience some type of delay in the process. Whether that is for your payment account to be activated, for the payment and your application fees to go through or if there are issues with documents that are required or other important information. All of this is going to have an impact on how long it is going to take for you to be able to open your store front, and to be able to begin to make sales through the online store front.
Additionally, depending on whether you are a flagship or a franchise application, the process may take a bit longer for approval. So, understanding these issues and knowing it may take longer in certain cases will allow you to easily set up your account, and avoid losses when you are going through the exhaustive application process to become a merchant.
As an applicant, one must also understand there are no guarantees in the process. Although most merchants are approved to sell on the site, it is not an automatic given; and, even if all fees are paid and the application process is properly complete, you may not be accepted right away. So, you must also understand this factor if you plan on selling through the online merchant site. Due to the high demand, applications may take longer than described above as well, so you should budget these wait periods as the possible delays that may take place once you have submitted your application as well.
Becoming a merchant on Alibaba and Tmall, is something that is generally a simple process, but there are the cases which are tougher than others. Even if the process goes seamlessly and as quickly as possible, you must keep in mind delays may occur and issues may arise when you are trying to set up a new account.
Furthermore, you must understand all terms of service, and must be willing to abide by them; from the fees, to the charges for applying, if you are not willing to abide by the terms, you will be excluded from the site; or, if you are accepted, your account may be terminated at any time if you do not abide by the terms of service that are set in place.