Marketplace vs Own Website: Where Should Malaysian SMEs Sell?

If you’re running a business selling products online in Malaysia, chances are you’ve considered this question:
Should I just sell on Shopee, Lazada, or TikTok — or do I need my own website too?

It’s a common dilemma. Marketplaces are easy to get into, and they seem to offer everything you need. But as your business grows, you may start to feel the limits. In this post, we’ll break down the pros and cons of each option and help you decide the best path for long-term success.

Marketplace vs. Own Website: A Quick Comparison

Selling on Marketplaces: Convenient but Competitive

1. Low Setup Cost

Selling on Shopee, Lazada, or TikTok Shop requires very minimal investment. You don’t need to hire a developer, purchase a domain, or worry about hosting.

All you need is:

• A valid business registration (for verified seller status),
• A product catalogue,
• Basic images and descriptions.

In many cases, you can even start with just a smartphone and your stock. This makes marketplaces ideal for home-based sellers or those testing out new products without committing a big budget.

2. Affordable Logistics

One of the biggest headaches in e-commerce is delivery — but marketplaces make this easier.

Marketplaces like Shopee and Lazada have:

• Integrated shipping solutions (J&T, NinjaVan, PosLaju, etc.),
• Pre-negotiated bulk shipping rates,
• Automatic waybill generation and tracking,
• Subsidised shipping programs (e.g. Shopee Free Shipping).

This helps sellers offer competitive delivery fees, improving conversion rates and customer satisfaction — especially important in price-sensitive markets like Malaysia.

3. Fulfillment Services

Inventory management can be a full-time job. Thankfully, marketplaces offer optional fulfilment services such as:

• Fulfilled by Shopee (FBS) – You store your stock in Shopee’s warehouse, and they handle packing, delivery, and returns.
• Lazada’s Fulfilment by Lazada (FBL) works similarly.

These services save you time and space, especially if you have limited storage or run a one-person operation. It also enables faster delivery (same-day or next-day), which can increase customer trust and sales.

4. Huge Traffic & Exposure

Marketplaces already attract millions of visitors every month. Shopee alone reportedly gets over 37 million monthly visits in Malaysia.

This means:

• You benefit from built-in traffic,
• Your products can appear in search results, homepage feeds, and recommendations, even without running ads,
• There’s a higher chance of impulse purchases during peak sales days.

For small sellers, this level of visibility would cost thousands of ringgit in advertising if done independently.

5. Free Marketing Perks

Marketplaces regularly run massive marketing campaigns that include:

• Mega Sale events (11.11, 12.12, Ramadan Sales, Payday Sales),
• Free shipping vouchers,
• Coins cashback and bundle promotions.

Sellers who meet certain criteria can join these campaigns for free and benefit from the marketplace’s nationwide advertising efforts — including billboards, TV ads, and influencer partnerships.

These campaigns often lead to:

• Sudden traffic spikes,
• Increased product exposure,
• Higher order volumes.

Even if you’re a small seller, you can “ride the wave” during campaign periods to grow your customer base without spending on ads.

The Cons of Selling on Marketplaces

1. High Commission & Transaction Fees

While marketplaces like Shopee, Lazada, and TikTok Shop make it easy to start selling, the hidden cost of doing business adds up quickly — especially when your sales volume increases.

Here’s a breakdown of typical fees:

TikTok Shop (as of 2025):

• Commission Fees range from 3.24% to 14.58% depending on product category:
  • 3.24% for fresh & frozen food
  • 14.58% for makeup & perfume (Mall)
  • 11.34% for makeup & perfume (Marketplace)
• Transaction Fee: 3.78%

Lazada:

• Commission Fees vary from 0% to 20.5%
• Transaction Fee: 3.5%

That means for a RM100 sale, you could be paying up to RM18.36 in fees (or more during campaign periods or when using paid features like product boosting).

And these fees don’t include:

• Marketing or ad spend to boost visibility,
• Packing materials or logistics costs,
• Platform-specific campaign participation costs (e.g., 11.11 Mega Sales).

The fees will only continue to increase! According to one of our customers, it went from 0% when he started selling on Shopee many years back, to ~17% in 2024. Over time, these charges eat into your profit margins and limit your ability to scale.

2. Price Wars & Intense Competition

Marketplaces encourage product comparison and price-driven buying behavior.

Your product is listed right next to hundreds of similar items, often with filters like “Lowest Price,” “Free Shipping,” or “Most Popular.” This creates a race to the bottom.

You’ll often find:

• Sellers undercutting by 10 cents just to win the sale,
• New sellers copying your listing style or price,
• Overseas sellers selling at your cost price.

To stay competitive, you are forced to slash your prices, which isn’t sustainable in the long term.

3. Review-Based Trust Barrier

On marketplaces, customer trust is heavily tied to reviews and seller ratings.

This presents two key challenges:

• New sellers struggle to gain traction: Without reviews or sales history, customers are less likely to buy from you, even if your product is excellent.
• One bad review can hurt you: Negative reviews (even unreasonable ones) can lower your average rating and reduce conversion.

This often leads sellers to play the long game — offering discounts, absorbing losses, or even giving away products just to build reviews.

4. Limited Control Over Your Business

When you sell on a marketplace, you don’t truly own the platform — you’re building on rented land.

This comes with limitations:

• Design and branding are restricted to their templates.
• You can’t build a full customer database (emails, phone numbers).
• You must follow marketplace policies — even when they change without warning.

A real-world example: TikTok Shop’s ban in Indonesia caused thousands of SMEs to lose their income source overnight. Even in Malaysia, TikTok Shop sellers face uncertainties due to changing policies and political discussions about online trade.

This lack of control puts your business at significant risk.

5. You Don’t Own the Customer Relationship

When a sale happens on a marketplace, the customer belongs to the platform, not you.

You can’t:

• Retarget them easily with email marketing,
• Offer them loyalty rewards or birthday discounts,
• Build brand affinity outside the platform.

This means you’re always dependent on the marketplace to keep bringing in sales. Without repeat customers, you constantly fight for new ones — which is more expensive and less sustainable.

Pros of Selling Through Your Own Website

While marketplaces help you start fast, owning an e-commerce website gives you full control and sets your business up for long-term sustainability and brand growth.

1. Full Control Over Your Business

Unlike marketplace where you’re at the mercy of their platform rules and ever-changing regulations, with your own e-commerce website, you’re the boss:

• You decide how your brand looks and feels — no more generic layouts.
• You set your own policies for returns, shipping, and promotions.
• You’re not affected when platforms change algorithms or suddenly ban products.

This control is crucial for building brand identity and offering a unique customer experience.

2. Stronger Customer Retention

Marketplace buyers are loyal to the platform, not to you. But with your own website, you can build lasting customer relationships:

• Offer membership discounts, loyalty points, or birthday vouchers.
• Run exclusive email campaigns or WhatsApp broadcast promos.
• Use tools like Mailchimp, Moosend, or WhatsApp API to automate follow-ups.

These features encourage repeat purchases — which means lower marketing costs and higher lifetime customer value.

3. No Commission Fees

Platforms like Lazada or TikTok Shop take a 10-20% cut of each sale, not including transaction and ad costs.

With your own website:

• You keep 100% of your revenue (aside from small payment gateway fees).
• You have more flexibility to run discounts without killing your margins.

For example, using SenangPay, you only pay a flat transaction fee of 1% for FPX or 2.5% for credit card payment — no commission on product price.

Over time, these savings can add up to thousands of Ringgit a month.

4. SEO & Ads Scalability

Unlike marketplaces that control traffic and visibility, your website lets you grow organically and predictably:

• Rank on Google through Search Engine Optimization (SEO).
• Run Facebook, Instagram, or Google Ads directly to product pages.
• Create blog content to attract visitors (e.g., “Best Raya Gift Ideas in Malaysia”).

This gives you multiple sources of traffic instead of relying on just one platform.

Plus, leads from search are often higher quality, because the buyer is actively looking for your product — not just browsing like on social media.

5. More Pricing Flexibility and Profit Control

On marketplaces, you’re often forced to lower your prices to stay competitive, especially during big campaigns like 11.11 etc. Plus, you’re hit with commission fees and transaction fees.

With your own website:

• No commission or forced discounts — you set your own prices and keep more of the revenue.
• You can bundle products, offer upsells, or run your own promos without approval.
• Control your own margins — great for niche or premium products where brand value matters.

This makes it easier to run a sustainable business without racing to the bottom on price.

Cons of Selling via Your Own Website

1. Higher Setup Cost

Unlike marketplaces where you can list products for free, setting up your own e-commerce website involves upfront investment:

• Domain & Hosting – Typically RM150–RM300 annually depending on provider. If you are expecting a high traffic though, you need a better a hosting, which is at least RM300 per annum.
• Web Design & Development – Can range from RM1,000 to RM5,000+ depending on features.
• SSL Certificate, payment gateway integration, and other technical setups may also incur additional costs.

However, this cost should be seen as an investment in your long-term growth and brand. If you want a more detailed breakdown, check out our guide on how much a website costs in Malaysia.

2. You Handle Logistics

With your own site, you’re responsible for shipping, returns, and customer support. That means:

• You need to negotiate rates with courier services like J&T, DHL, or Poslaju.
• Handle tracking, damaged items, and delivery issues on your own.
• No access to marketplace services like Fulfilled by Shopee.

For growing businesses, this adds complexity — but it also means you have more control over the customer experience.

3. You Must Drive Your Own Traffic

Marketplaces provide built-in traffic from millions of users daily. Your own website won’t have that benefit — you’ll need to actively bring people in through:

• SEO (Search Engine Optimization)
• Paid Ads (Google Ads, Meta Ads, TikTok)
• Email Marketing, social media, etc.

Without a clear digital marketing strategy, your website might struggle to get noticed. That’s why understanding how SEO drives traffic to your website is so important — and why many SMEs choose to work with agencies (like Solbright Digital Services!) to help run these campaigns effectively.

4. Slower Start Compared to Marketplaces

If you’re launching a new website today, don’t expect instant sales. Unlike marketplaces where buyers are already browsing daily, you need time to:

• Build brand awareness
• Earn customer trust
• Gain visibility on search engines

This early-stage period can feel discouraging without a plan — but it’s also where consistent effort pays off in long-term independence.

Conclusion: It’s Time to Think Long-Term

Since the commission rate hikes across marketplaces in 2024, many Malaysian online sellers have started exploring alternatives — and building their own e-commerce website is often the top consideration.

Marketplaces like Shopee, Lazada, and TikTok offer great initial traction. But as your business grows, the high fees, limited control, and intense competition may become obstacles rather than advantages.

Business owners should take time to understand what their business truly needs, and carefully weigh the short-term convenience of marketplaces against the long-term benefits of owning a website.

If you’re ready to future-proof your online business, building your own e-commerce website is a powerful next step — and Solbright Digital Services is here to help make it affordable, strategic, and effective.