Opening your Tmall shop is not as complicated as one might think; in fact, the process is rather straight forward, making it easy for even a novice business owner to do. Furthermore, the fact that you do not need a license to do business in China when you are selling through the global site offers yet another reason for businesses who would like to expand, and would like to grow online to consider opening their online marketplace with the online site.
Tmall is the largest business-to-consumer (B2C) sales platform in Asia, which allows business owners from different regions of the world to sell their goods to consumers in China. Opening a Tmall store is the easiest way to penetrate the market, to get your goods sold throughout China and to become a leader in the online marketplace. However, the process is not always as cut and dry as you would hope. In fact, it is a tedious process, and in most cases, it is going to take at least two weeks prior to your shop being opened, and being accepted to be a merchant on the site. Due to the fact that you are selling to a global market, and are going to be dealing with a consumer audience of more than 500 million potential buyers, you have to submit all necessary documents and information to ensure you are going to be accepted as a merchant, and will be able to sell your goods to the online consumer that you are trying to target as a merchant.
Below are the basic requirements if you are applying to be a merchant. From the application, to the fees, to the required documents you have to submit when you are applying.
How Do You Open Your Store?
When setting up your shop, there are two ways in which the process can be completed, which are:
1. If you are an in-country business, you can apply directly to be a merchant through Tmall.
2. Companies who run a global business can also apply to be a merchant for Tmall global.
Below businesses can see how to begin the process, what documents are required and the steps which are required if they plan on selling through the online platform.
The open platform marketplace allows business owners from anywhere in the world to open their store front, and to begin the sales process to billions of consumers who shop through the online site. However, for global companies, a China-based return policy must be in place, and customer support and services must be set up in the Chinese language in order to ensure the online consumer can communicate, and can easily return their product if they are not happy with the sale process.
The application process can either be completed online or it can be done via a paper application. For those who complete the application online, the time it will take is usually around two weeks from the time you fill out the application, to the time your shop is up and running (as long as there are no delays and you are not missing any documents when you apply).
If you choose to apply by paper, the process can take up to three weeks (if there are no delays). Again, all required documents must be sent in, and all applicable licenses have to be included in order to ensure you are not denied access to sell. And, you must send in all fees in order to ensure you are not turned down and to avoid delays that would otherwise occur in the application process.
A license is only required if you are going to be a Tmall merchant that works directly through China. If you are a global vendor, you are not required to attain a license, as long as you have sufficient registrations in an overseas market. If you are a brand owner, or reselling agent that is authorized to sell to any region in the world, then a license is not going to be required of you in order to be able to sell to the Chinese market. For the specialty shops and for local businesses, you will be required to submit proof of license prior to being able to operate your business, and prior to the application process being approved when you want to sell through the Tmall site.
What Merchant Are You?
Because there are different merchant categories, you have to know what to apply for when you are setting up your Tmall shop. When you apply it can be as a Flagship store, a Monopoly or you can apply to sell as a specialty store. Each has their own requirements, and will vary based on the merchandise you are selling. These are a few factors to keep in mind, when you are applying to sell as any of these types of vendors.
This type of merchant is one that has a trademark logo; if you do not, THEN you will not be able to sell under this category. You must be a formal rep of the brand, or you must have exclusive authorization documents which show you are able to sell the products which are sold by that trademark brand.
If you apply to become this type of merchant, you will be required to have brand authorization documents, which give distribution rights to sell certain products. It is also a requirement that there are no geographical location restrictions for the merchandise you will be selling to the Chinese market which you will set up the shop in.
Here, you are required to hold licensing goods to run this shop. You can sell more than two goods, and you can sell goods under a variety of categories when you apply to sell as this type of merchant. You are authorized to sell the goods, or you are authorized to sell different categories of goods by the manufacturer, or via the sub manufacturers of the brand you want to sell.
“Merchant Workflow” by about.tmall.com.
The above chart shows how the sales process occurs through the tmall.com infrastructure. From order placement, to the warehousing, to the final delivery and payment, this is the process for local as well as global merchants who are selling through the online platform.
It is essential to have some money set aside in order to open your online store with tmall.com. For starters, a onetime deposit is required, which is used as a collateral in the event of damages or expenses which are incurred by Tmall if the merchant breaches any of the rules and regulations set forth by the online marketplace. Upon terminating your account, if you so choose to close your marketplace, if none of the terms were breached, then you will receive a refund on the one time deposit which was put down in order to open your shop. The deposit is $25,000, for Tmall Global merchants, regardless of the type of online store you plan on opening. Furthermore, your account may be terminated at any time, and, Tmall has the right to deduct any amount required to cover costs for breach, damage or other expenses incurred if you do not follow the terms of service which are set forth by the company.
Tech & Service Fees
In addition to the one time deposit as a merchant, there are additional fees for those who are planning on opening their online Tmall store front, and selling goods through the marketplace. Below are charts which describes the annual fee structure, and how much each shop owner will have to pay, based on the goods they sell, and the profits which are earned through the site. The following images show the commission fee schedule charts.
The amount you will pay in fees will vary based on the goods you are selling, and the amount which you sell annually to your customer. For those who sell items such as clothing, shoes, and other goods, the fees tend to be higher than with certain specialty shops. Due to the fact that there are a number of items you pay more for, it is important to know what you will pay, and what type of fee is associated to the item in order to ensure you are going to earn the highest profit margin possible when you are selling through the site.
As a merchant on the site, you are also going to pay a commission fee. This is going to be based on the amount of the items sold (purchase price), as well as how much you are selling on an annual basis. This figure is going to be calculated by adding the product price and the logistics fee. This will then be multiplied by the applicable commission fee. Depending on the type of store you run (monopoly, franchise, flagship), the amount sold annually, and the type of fee structure you are working with, the total which will be paid out annually is greatly going to vary from one online vendor to another. Also, the size of your store front is going to determine how much you are going to pay out annually, depending on the amount of sales that you are doing each year through your shop on Tmall.
In addition to the fees you are going to pay (the onetime fee) and the annual fees you pay for the merchandise you are selling, you will also pay a one percent fee for the use of the Alipay online system. The fee will be equal to the product price, plus the logistics fee. When you add these two numbers, you will then multiply by the .01%, in order to find out how much you are going to pay towards the third party merchant, for the ability to accept payments through their portal.
Due to the fact that it is a third party portal, you are going to pay to be able to accept payments through this portal; but, because the customer only pays after receipt, you are not paying as much as other portals (such as PayPal) which merchants tend to pay a much higher fee in order to be able to use their site to accept payments on.