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How to sell on Taobao

How to sell on Taobao

 

In the last post, we wrote a long article discussing some different kinds of foreign products we see sell well on Taobao basing on our shopping experience on Taobao in these years, if you already have such products at hand, please read this article further about how to sell on Taobao.

 

There are 2 types of shops on Taobao:

 

1. Personal Shops:

 

To open a personal shop, you should already have a Taobao account with real name certified Zhifubao account. You need to input your real name, ID number, contact phone number, front and back photocopy of your ID card, ID expiring date, Bank account holder name and account numbers…You also need to upload your photos to Taobao. Unfortunately, only Chinese residents can do above procedure now.

 

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Taobao claims there is no fees to personal shops now. However, there is still many invisible cost you should consider:

l  FYI, the monthly salary here in China for an average white-collar is around US$1000-US$1500, this is your cost to hire a good shopkeeper to handle all things for your Taobao shop, such as: before-sale communication with buyers 7 days a week, packing and shipping, processing item returns.

l  You should deposit 1000-2000CNY (depends on different products) as a Buyer Protection Fund held by Taobao, in case there is some disputes arise, Taobao will use this fund to reimburse the buyer. This is not a must, but 99% Taobao sellers do it as almost no customers are willing to buy from shops without such a fund. Finally, if you decide to close the shop, this fund is refundable.

l  Besides above, there are still some other cost: Shop decoration fees, advertising fees. Even if your product is very good, it takes at least several months for a new Taobao shop to make money. If you want to shorten this period, you need to spend more money on decorating your shop or buying some traffic from Taobao.

 

2. Company Shops (Tmall shops):

 

It is more complex and expensive to open a Tmall shop on Taobao.

 

Firstly, the business entity should be a registered company in China. Normally the register capital of a Tmall company varies from 100,000CNY to 1,000,000CNY (16k-160k US dollars), among them 100,000CNY is the majority. You can use this 100,000CNY as circulating fund in the shop running later. If you don’t plan to deposit such a capital in the bank, we have contact with some company registration agency, the register fee is around US$500. And there is still some other fees such as Bank account openning fees, Invoice fees, Accounting Fees…

 

However, company registration fees is not the big fees to open a Tmall company, there are still 2 big fees

 

Initial Margin:

 

The amount varies from 100,000-150,000CNY, this margin is refundable. Main purpose is to prevent fraud sellers running away with customers’ money.

 

Annual Service Fees(ASF):

 

Either 30000CNY or 60000CNY charged by Tmall each year according to different categories.

 

Technical Service Fees(TSF):

 

This is 2%-5% of your transaction amount according to different categories. If your transaction volume reaches certain amount in one year, above Annual Service fees is refundable at the end of that year according to Tmall’s Policy.

 

For example:

 

A. If you sell health supplement products, the ASF is 30000CNY with 3% TSF. If your annual transaction amount reaches 180,000CNY, you are entitled to be refunded 50%ASF (15000CNY) ; If your annual transaction amount reaches 600,000CNY, you are entitled to be refunded 100%ASF (30000CNY).

 

B. If you sell PC related digital products, the ASF is 30000CNY with 2% TSF. If your annual transaction amount reaches 360,000CNY, you are entitled to be refunded 50%ASF (15000CNY) ; If your annual transaction amount reaches 1,200,000CNY, you are entitled to be refunded 100%ASF (30000CNY).

 

C. If you sell women clothing, the ASF is 60000CNY with 5% TSF. If your annual transaction amount reaches 360,000CNY, you are entitled to be refunded 50%ASF (30000CNY) ; If your annual transaction amount reaches 1,200,000CNY, you are entitled to be refunded 100%ASF (60000CNY).

 

Really a long article, isn’t it? You must feel headache when reading here, now you know the basic cost to open 2 different kinds of shops on Taobao.

 

 

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