Starting an online store or dropshipping business in Singapore

DISCLAIMER: This article is for informational purposes only, and does not constitute professional legal advice. Please take independent legal advice for information specific to your country and circumstances. KLoc Technologies Pvt Ltd, is not liable to you in any way for your use of this information in any way.

Ideation:

So, it’s a lazy Sunday afternoon and you are relaxing on the beach thinking – life is just status quo – I need to stir things up a bit – make it crazy – add some pizzazz.  How about starting a new business?

Oh I know – everybody I know is jumping into ecommerce because that’s an easy, cost effective way to get my feet wet without burning a hole in my pocket. What’s even better – I should try dropshipping? I don’t have to do a thing – just make an online ecommerce site, set up a dropshipping account and I am in business. Whoa! Why didn’t I think of this before?

Sounds cool – sounds easy?  You bet. But when it all sounds too good to be true – read the FINE PRINT!

But hey – don’t get disheartened – we are here to help with step-by-step instructions. You just need to plan well, cover all the bases and then jump into it with your eyes wide open so the challenges don’t catch you off guard. Here’s some free advice and tips to help you launch an online business in Singapore

This article will help you if you are thinking of starting a dropshipping business in Singapore. You can decide whether you want to only sell within your country or partake in cross-border commerce.

Why wait?   Let’s dive in!

Before You Start:

• It’s good to know your competition. Take some time to research what other dropshippers are doing. Join social media groups, watch You Tube videos, research government information to find out statistics – all through the internet.
• Next do some targeted market research to find the most credible dropshipping companies in your region. China is obviously one of the biggest markets for dropshipping – starting from simple arts and crafts to high end electronics.
• Call up/contact multiple dropshipping suppliers and interview them. Compare their pricing, inventory levels, discounts, shipping/fulfilment processes, return policies, damage management. This will take time but it is totally worth it.
• Once you have shortlisted a few suppliers, compare the products they are selling. Try to procure credible market research data to understand trends – which products are selling, which ones offer good margins, which products are less damage prone, which ones have a high percentage of returns…  Try to understand consumer behavior.
• If you are ready with your supplier and product mix, it is time to move into the next phase

Setting up the business: Navigating the legal / regulatory maze

• For starters, it helps to be in the country that is known for ease of doing business. Singapore takes top honors when it comes to helping individuals or companies set up a legal entity authorized to do business in Singapore. In fact, even non-Singapore residents can set up a legal entity to operate out of Singapore. If you are a citizen of a country in/around Singapore, you may actually find it easier to incorporate your company in Singapore than in your own country – at least it is worth a thought!
• All online businesses in Singapore fall under the supervision of the Singapore Broadcasthing Authority. All ecommerce companies including dropshippers need to obtain the regulatory licenses before starting operations in Singapore.
• Which license do you need? If you are a Singapore resident, in order to incorporate your business you need to weigh the pros and cons of each type of business entity – Partnership, Limited Partnership, Sole Proprietorship, Limited Liability Partnership. For more information: refer to this really informative site on the options. Get professional help if you don’t want to be embroiled in regulatory hassles.Keep these in mind while
  • All ecommerce companies in Singapore need to comply with the INTERNET CODE OF PRACTICE.
  • If you are sending restricted goods or services or used products, you may have to get additional regulatory approval.
  • All promotional activities on the internet are subject to Common Gaming Housing Act and the Public Entertainment Act in Singapore
  • All online advertising has to comply with Singapore Code of Advertising Practice, the Computer Misuse Act and Consumer Protection Act. Ensure your company incorporation professional considers these while setting up your firm.

Regulatory Framework for Web Contracts

• As an ecommerce business, you need to be cautious while making any online promises or implied contracts. Web contracts are bound by Singapore contract law. One statute that you must know about, is the Electronic Transactions Act (ETA) that was enacted in 1998. This is in order to boost consumer confidence in e-commerce and to provide legal recognition to web contracts. 
• Singapore also has statutes for consumer protection legislation such as Unfair Contract Terms (UCTA), Sales of Goods Act (SOGA), Misrepresentation Act that safeguard the rights of the consumer.

Protection and Security of Digital Content / Consumers’ Data

• Digital Assets Protection: The Computer Misuse Act protects computers, programs and data that is stored in computers from unauthorized access, modification, interception and interference. This protects your digital assets.
• Privacy and protection of personal information is a matter of great concern to the consumers. You must have an information management policy to safeguard the information gathered from customers from inadvertent disclosure. This could call for managing employee access control, having corporate firewalls, periodic system audits or advanced encryption technology (for secure data).
• Credit card Fraud As an online vendor, you must ensure the protection of any credit card data that is transmitted to you. This is automatically taken care of by going through a payment gateway.

Intellectual Property (IP) Protection on the Internet

Owing to ease of distribution of pictures/information/data, it is very important to protect intellectual property (IP) rights in cyberspace. As an ecommerce business owner, you must be particularly concerned about Copyright law and trademark law. Copyright is protected in Singapore under the Copyright Act and extends to creatives and anything that is tangible.

Trademark registration and regulation in Singapore is govered by the Singapore Trademark Act.

Another aspect to be cognizant of is domain names. You have to ensure that you register your domain name as early as possible as it is unique and done on a first come first served basis.

Jurisdictional issues relating to legal issues

It it important to be aware of the jurisdiction and choice of law in the event of any dispute arising out of your online business especially cross-border commerce. Typically, a Singapore court will have jurisdiction over a matter if the defendant is served with a claim in Singapore or the court permits service on a defendant outside Singapore. Please note that there is no “blanket rule” that in the event of a dispute, the laws of a country that claims jurisdiction will apply.

To protect yourself, you should have an explicit web contract that specifies the choice of law (Singapore jurisdiction in your case). You may also consider keeping an “I Agree” type checkbox as part of the purchase process, to protect yourself against legal problems.

Legally registering the business – The final step!

• Once your business is registered with the official Singapore Trade Register, it is time to get into the exciting part of setting up the online store

Building your online presence: Setting up your brand identity

You are done with all the paperwork and you can’t wait to get started. This is my favourite part. With over 10 years of experience in eCommerce, KLoc is the place where we help entrepreneurs launch their dreams online. Don’t get me wrong. I am not selling my services. Just like you asked you to research well before picking a dropshipping company, I will advise you to do the same to find the “right online” partner who can help you build, maintain and grow your business. Please be informed that you may need more than one vendor to handle different facets of your business. Let me explain.

• Set up your trademark – Shopify has an excellent article on registering your trademark in Singapore here. Do go through it to “reserve” your very own trademark. You could engage with a designer to help you create a unique brand identity / name and branding assets.
• Choosing the right brand identity – Your brand reflects you – your ethos, your passion, your goal. It should clearly indicate what you stand for. The logo/tag line should shed light on your line of business. You could try sites like designcrowd.com to engage with talented designers and then choose the design assets you like.
• Register a domain name – A domain name is an extension of your brand identity. You should try to research and reserve the domain name in parallel with the above activities as it is an integral part of your online business.  Here is a good place to get started.

Start Selling Online

• Choosing the right platform for your business can be a daunting task. With 600,000 merchants over 160 countries, Shopify is clearly the market leader when it comes to setting up an easy-to-use, branded storefront for your dropshipping business
• Don’t have inventory or fulfilment process in place – no worries.
• Oberlo is the answer. Oberlo lets you start selling online ind products to sell, add them to your Shopify store and you are ready to sell.
• Once, you have all this set up, register your names/branding assets with the Intellectual Property Office to protect your trademark.
• Ensure your payment gateway is set up (Shopify Payments or  Shopify Payment Gateways, Singapore)

Building the Store

• Shopify is arguably the only DIY platform there is but if you have better things to do with your time, leave the setup, design and development to an agency like us and focus on what is important to you – your business.
• Hiring an expert helps as they can help you make the RIGHT choices when it comes to the setup such as choosing the right theme or third party app, picking the suitable features for your stores, tips and tricks to improve traffic and conversions and optimize performance.
• The expert can help you integrate the payment gateway, integrate the dropshipping application and deploy the store so you are open for business.
• Oh wait – there is one other thing. It is always a good idea to explicitly document all your policies such as Privacy Policy, Shipping and Returns Policy, Terms and Conditions and a general FAQ (Frequently Asked Questions) clearly on your site in compliance with your coutriey
• Testing the entire workflow is the foolproof way to ensure your customers have a smooth buying experience.