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How To Start An Ecommerce Business In Sri Lanka

How to start an ecommerce business in Sri Lanka

If you have been daydreaming about starting your own online business and not knowing where to start or what to do, this post is for you. It doesn’t matter if you want to sell cupcakes or male underwear. As long as you want to start an online business, this post got you covered.

Starting your online store sounds daunting. I get that. But there isn’t a better time to start an e-commerce business in Sri Lankan than now.

From coming up with an idea to selling your first product, everything you need to know is covered in this post.

And yes. It’s a long post. What do you expect? If you don’t have the patience to read 3000 words, forget starting a business and do whatever you were doing. But if you’re serious, like super serious, you’ll thank me later.

What is an ecommerce business?

Forget every definition you learned about e-commerce in university. You don’t need to know the definition to start one. If you’re going to sell something online, that’s an e-commerce business. That’s it.

This post is all about selling a physical product online. But if you’re planning to offer a service as a product, you can still use the concepts here.

Why start an ecommerce business in Sri Lanka?

I think there isn’t a better time to start an e-commerce business in Sri Lankan than now. Look around you. How many ads, messages, and emails do you get asking you to purchase something online every day? Whether you like it or not, shopping is shifting from physical stores to online stores and if you’re ready to reap the benefits, now is the time.

Some benefits of starting an e-commerce business in Sri Lanka

  • You don’t need a store (so no rent, no electricity bills, no employees and no maintenance cost)
  • All you need is a laptop, a decent internet connection, and patience to sit and work alone
  • Starting up cost is super low
  • You don’t have to be in the business 24/7 (so that you can do something else while owing an ecommerce store)
  • You can work from anywhere in the world (I’m currently in Bali sipping a cocktail. No that was a lie. I’m in Malabe!)
  • You can work in your undies and no one will notice!

If you’re still not convinced, stop reading right now. This one is not for you. Go and live your same old life and be prepared to regret in your deathbed. But if you’re convinced and if you actually want to work from Bali, read on my friend, because this is the post you’ve been waiting for.

ecommerce business in sri lanka

Who is this article for?

This article is for anyone who is thinking about launching an ecommerce business in Sri Lanka. It can be an online cupcake business or it can be a handmade jewelry business.

This post is also for any business that doesn’t have an online store. If you have a physical store somewhere in Sri Lanka and thinking about selling your products online, this post is for you too.

And this post is for anyone who has no idea how to start any business in Sri Lanka. You don’t have to know coding or anything technical. You don’t even need a business degree. I don’t care if you have studied Latin dancing or French. You still can start your own ecommerce business if you have the patience to read this post.

One more thing before I forget. You don’t need million rupees to start an ecommerce business in Sri Lanka (unless you’re going to start Kapruka.com or Takas.lk).

Who am I to talk about ecommerce?

I love reading. I really do. Mostly I read to improve myself (there goes Fifty Shades of Grey and Twilight Saga). I mostly read non-fiction personal development kinda stuff.

The problem was I couldn’t find some of the bestselling books in traditional Sri Lankan bookstores. My only option was buying from Amazon.com but sometimes the shipping charges are higher than the book!

I figured there must be others who are facing the same problem. So I started an online bookstore that sells nothing but books that can improve your life. And I called it (drum roll…) Jump Books (that’s the extent of my creativity. Jump.lk and Jumpbooks.lk. Get it?).

It’s not a multimillion business. It’s a small online book business. But we have a super loyal customer base and most of all; we got one of the best book collections in Sri Lanka.

I started this purely from the ground up. I built the website. I found the suppliers. When the books were held at customs, I “cleared” them myself. I did the delivery for a while until I found a delivery company. I did bookkeeping (I feel your pain accountants!), I designed bookmarks, I did digital marketing. Basically, I created an ecommerce business in Sri Lanka.

I made so many mistakes. Some of them had the tenacity to make or break my business. But I somehow kept at it. If I were to do it all over again, this is the guide I would read before starting.

Here’s everything that I learned

Step 1 – Coming up with a business idea

If you know what you want to sell, forget this step. But if you don’t have a business idea, you need one!

Coming up with a business idea is not that difficult. Read our guide on coming up with a business idea here.

One thing to keep in mind. Don’t overthink about your idea. It doesn’t have to be earth-shattering and groundbreaking. All you need is a product that people want. That’s it.

What’s groundbreaking about Jump Books? Nothing! It’s just an online bookstore. If your idea is not revolutionary, that’s fine as long as you’re passionate and willing to put the work in.

Step 2 – Finding a supplier or manufacturing your product

Once you have an idea for a product, it’s time to look at how you can source the product. If it’s something like cupcakes, the process is simple. You and your sister are going to bake them. Manufacturing is something that you need to figure out on your own. I can’t advise you here because I don’t know your product.

If you’re going sell something that’s manufactured by someone else, time to find suppliers. If you want to start an online Batik store, you can Google suppliers. Start calling them and get answers to all your questions. The cost, minimum order quantity, delivery etc.

If your suppliers are not from Sri Lanka, time to start finding them. A simple Google search will do. One thing I want to emphasize is, don’t be scared to call them. I was so scared to find book suppliers in the beginning so all I did was email them. I was too scared to call. But nobody replied to my emails. Then I started calling them. That’s how I found my suppliers.

In the start, you’re not going to know much about their agreements and how they supply products. That’s completely OK. You’ll do some stupid mistakes in the beginning but believe me, that’s how you learn.

Step 3 – You need a website

You can sell your products on Facebook and other social media. But this post is for people who want to sell products from their own website. Here’s the basics you need to know about building your website.

Think of your website as a house. Every house has an address. That’s going to be your domain name. You can either get a .lk domain or something common like a .com. That depends on the availability and what you’re going to sell. If you’re purely targeting Sri Lankan customers, I recommend starting with a .lk domain. If you’re planning to sell internationally, you need to buy a .com domain.

Once you have the address, it’s time to build your house. There are so many platforms and ways of creating websites (WordPress, Squarespace, Shopify, Wix, Coding from ground zero). In this post, I’m going to recommend WordPress because that’s how I created my e-commerce business plus you need zero technical knowledge.

You can either create your own website or hire a web developer. But this post is for people who want to do it themselves so I highly recommend WordPress. If you want to learn exactly how I created my website, read our step-by-step guide on starting your own website here.

Step 4 – Registering your business

When I started my book business, I didn’t register it. But the first time I imported books, customs caught them. That’s when I realized that an individual can’t import anything unless it’s for personal use.

Then I registered my business as a private limited. If you’re serious about your idea, I highly recommend you to register your business.

Once you start operating as a business, you are going to deal with so many third parties and they require you to be a registered business. Opening bank accounts, dealing with delivery companies, implementing payment gateways, importing and exporting and almost everything requires you to be a registered business in Sri Lanka.

But keep in mind that you don’t need to register your business to start a website.

If you want to learn more about how to register your business in Sri Lanka, read this guide. 

Step 5 – How to deliver your products

Next step is figuring out how you’re going to deliver your products. In the beginning, I did almost all my deliveries. If it was out of Colombo, I used the Sri Lankan Postal Service. Even though delivering everything by me was time-consuming, I got to meet all my customers. Getting to know your first customers is one of the best parts of being the delivery guy. That helped me to connect with my customers in a level that no other business could.

But once I started expanding, delivery became onerous. Then I decided to hire a delivery company. Whenever I get an order, all I have to do is add it to their system. Then they come and pick up from our warehouse and do the delivery. They even collect cash from our customers and deposit into our bank account after some time.

There are several charges involved when using a delivery company.

  • Delivery charges – This is what they charge for their delivery. Based on the location and weight, they differ.
  • VAT & NBT – These are government taxes
  • Cash-on-delivery (COD) surcharge – When the delivery company collects cash from your customers, they usually charge a percentage or a flat rate per collection.

There are several delivery companies who offer the same service. I have listed them below. I suggest you experiment with several companies to figure out the best fit for you. Consider all the delivery charges and other costs before you select your delivery partner.

Delivery companies

Step 6 – How to get paid from your online customers

When purchasing online, there are so many ways to make the payment. I’m going to cover 3 of the most popular payment methods in Sri Lanka.

  1. Cash-on-delivery (COD) – This is by far the most popular payment method. Customer pays the amount upon delivery. This is also the safest one for customers. Most Sri Lankans are still reluctant to pay online. So you’ll have to offer COD. You can easily do this with your WordPress website.
  2. Credit card/ Debit card – This is how you can get customers to pay online. To receive money online, you need to integrate a payment gateway to your website. Banks and several other companies offer payment gateways. They usually charge an installation fee and a percentage for each transaction. I’m using Payhere.lk which doesn’t charge anything for installation. Their transaction fee (3.3%+Rs.30) is also by far the best rate in the market. I’ve been using them for quite some time and I simply love them. You can easily integrate their plugin with your WordPress website.
  3. Direct bank transfer – This is a very rare situation but some customers still prefer to make the payment directly to your bank account. You can dispatch the product once they make the payment.

Step 7 – Packaging

Unlike buying something from a shop, you can’t stuff your product is a sily sily bag. Don’t be silly! You need to properly pack your product because your delivery company may not be as gentle as you want them to be.

I use bubble wrap envelopes for shipping books. Based on your product, you can decide how you’re going to package them. There are so many packaging companies in Sri Lanka. Most of them will have a minimum order quantity to get a good price. Negotiate with them and try to get the best price possible.

Don’t forget the environment when you’re selecting your packaging material (yes, I’m also looking for an alternative.)

Here’s a hack to find a great packing supplier. Whenever you see a package you like, check the back of it. Usually, you’ll find the manufacturer’s contact details. That’s how I found my packing supplier.

Step 8 – Marketing your online store

It doesn’t matter how good your product is if no one knows you exist. If you’re going to start your own e-commerce business, be prepared to market it as well.

You don’t have to spend any money in the beginning to market your store. I still don’t spend any money on marketing.

There are so many ways of marketing your product online. This article isn’t enough to cover everything. But let me give you an overview so you know what to do when you start.

When you’re marketing something online, you need to know what digital marketing is.

Digital marketing consists of SEO, Email Marketing, Social Media Marketing, Content Marketing, and Relationship Marketing. I’m gonna touch on these. It’s your job to learn more.

SEO (Search Engine Optimization)

If you haven’t heard of this yet don’t worry. Whenever you Google something, this is how you get the results. If you’re selling pineapple cupcakes and if someone Google “buy pineapple cupcake in Sri Lanka” your website should come on top in Google search results. SEO does that.

ecommerce business in sri lanka

When I started my business, I didn’t know sh*t about SEO. But if you Google any book that’s listed on Jumpbooks.lk my site is going to rank top for Sri Lankan results. That’s because I have done my SEO.

The only resource you need to learn about SEO – Backlinko.com

WordPress plugin I use for my SEO – Yoast SEO

Email marketing

Those emails that you get from different companies every day; that’s email marketing. Most Sri Lankan companies think that no one reads emails but I’m a huge believer in email marketing. Trust me on this one and start email marketing from the very beginning. You’ll see the benefits soon.

There are so many tools for building your email list. Following are my favorite tools for email marketing.

Mailchimp – This is what I use to create all my email lists. They are free until your first 2000 subscribers.

Sumo.com – They are free and got so many tools to grow your email list. They also integrate with Mailchimp.

Social Media Marketing

Any marketing activity that deals with social media falls here. That includes Facebook, Instagram, Twitter, LinkedIn, Snapchat and YouTube. When you are starting don’t engage in everything just because they exist.

If you’re starting a clothing shop, it doesn’t make sense posting on LinkedIn. What you need to focus is on Instagram and Facebook.

Don’t try to be on every social media platform. Try to master one and if it makes sense, move on to the next.

Content marketing

They say content is king. I believe it. Content marketing is everything that you do to tell your story. It involves blogging, videos and whatever that you put out to tell your story.

Content is what you’re going to share on your email and social media marketing. Content is also what you’re going to align with your SEO strategy. Content marketing complements every aspect of digital marketing.

Generating content around your business is totally up to you. If you’re running a cupcake business and decide to write a post on 10 crazy cupcake flavors, that’s content marketing. Then you can share that post on your blog and social media. That’s how content marketing works. You’ll learn this as you go.

Relationship marketing

This is where everything you have heard about “networking” comes in. Imagine someone who has a huge following shares your video or post? Or an Instagram influencer recommends your cupcakes. That’s relationship marketing. Your job is to harness the power of relationships by meeting and getting to know different people.

But keep in mind that spamming and trying being a pain in the ass is not going to help you build great relationships. You have to be generous first. That’s how you’re going to build great relationships.

If you want to learn everything you need to know about Digital Marketing read this guide. That’s how I learned.

Other tools that I use for my social media

Canva.com – This is a free online tool you can use to create anything from flyers, posters, proposals, email headers etc.

Hootsuite.com – Posting things every day on social media is time-consuming. With Hootsuite, you can schedule your posts so that you can do it at once and forget it. This made my life super simple.

Step 9 – Do everything yourself

When I started my book business, I did everything from delivery, bookkeeping, pricing, designing, branding, and marketing. You name it, I did it. Some can argue that doing everything by you is stupid but that’s what I had to do when I didn’t have any money to hire anybody.

Doing everything requires you to learn everything. Learning takes time but you’re going to learn about your business like no other. Having that bird’s eye view of your business is important for a founder. You can only learn that by doing everything in the beginning.

When you expand, you’re going to come to a place where you simply can’t do everything on your own. That’s the time to hire or outsource your work.

Step 10 – You got this. You can do it

Starting your own business isn’t impossible. When you break it down, it’s nothing but a bunch of small tasks. You execute them one by one. That’s how you build a business.

Knowing this, most of us live our lives not doing what our hearts desire. Why? It all comes down to your FEAR.

If you really dig deep, beneath all those “excuses” you’ll find your FEAR. Everything boils down to it.

We are afraid the world will laugh at us. We are afraid of failing. The fear of failure kills more dreams than anything else.

If you’re afraid of failing, I have a trick for you. Start your business thinking that’s it’s going to fail. Now, there’s nothing for you to fear.

And that’s how you start your ecommerce business in Sri Lanka.

If you liked this post, don’t forget to add a comment below and let me know.

I wrote this post to give you the overall picture of starting an ecommerce business in Sri Lanka. Of course, there are so many details that I haven’t covered. I can’t do it in a single post. But I promise you that once you start, you’ll figure them out.

Have I missed anything? Do you know anyone/company that I should list on the post? Add a comment below and let me know.

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Nishan De Silva

Nishan is the founder of Jump.lk. He is a life enthusiast who loves reading and eating. His ambition is to travel 100 countries before dying (even though he hasn't been out of the country yet!)

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