Introduction to Fulfillment by Lazada

(FBL)
Q1/2018

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 1
Introduction to Fulfillment by Lazada (FBL)

▪ What is FBL

▪ Why FBL will help you

▪ How to join FBL

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 2
What is fulfillment by Lazada?

YOU SELL IT, WE SHIP IT

Fulfillment By Lazada (FBL) is a hassle free fulfillment solution

provided by Lazada to our local sellers

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 3
How does FBL work?

End-to-end fulfillment solution

You send Lazada Customer Lazada takes Lazada delivers Return

products to the stores your purchase care of the products to management
Lazada products your products pick & pack customer handled by
fulfillment Lazada
center
Full flexibility to only use FBL
for parts of your assortment

Lazada will be responsible for your order fulfillment

We store, pick, pack & deliver all orders for you

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 4
Introduction to Fulfillment by Lazada (FBL)

▪ What is FBL

▪ Why FBL will help you

▪ How to join FBL

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 5
Why FBL will help you?

Key benefits How? Importance to seller

• Shorter delivery lead time: faster • Higher seller rating

1 fulfilment & multi-warehouse • Customer
network satisfaction is
• Reduce OOS issue higher and leads to
Improves buyer satisfaction repeat purchases

• Higher seller rating leads to • Higher profit for the seller

higher conversion rate
2 • Results in higher sales for
sellers
• Increase page vies with FBL
Higher sales filter

A hassle-free • Lazada handle most of the process • More time to focus on

fulfilment solution 3 • No warehouse cost merchandising and
• No additional employee cost marketing
• More money left to invest
Save time and cost for sellers in the business

• Unlimited Order Volume Limit • Can grow your business

4 (OVL) for FBL SKUs without the need to invest
• No penalties (for cancellations, in capital
fake RTS)
Easy to expand business

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 6
 What are the benefits of FBL?
1
Onsite visibility - FBL Filter

FBL filter has been released!

• The function is applicable across

desktop/mobile/app platforms.

• This is key step in improving overall customer

experience and will be supplemented by actions
to create brand recognition and help customers
understand the benefits of FBL.

• In turn this will give FBL products more visibility

and favourable sales uplift.

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 7
 What are the benefits of FBL?
2
FBL branding on product page

Fulfilment by Lazada for Brand allow customers to recognize the product branding and enjoy fast
shipping service at the same time. Beneficial to seller in results of higher seller rating.
This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 8
 What are the benefits of FBL?
3
Simplify operations for seller

Process

Source or Store product in the Manage inventory, Pick, pack, label 3PL delivered the Return management
manufacture warehouse minimize OOS, know product to deliver product to buyers /after sales
the products when to replenish Seller in charge of 3PL pick
up
Dropship
FBL

No need to invest in this area giving more

time focus on core activities

Seller handles Lazada handles

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 9
 What are the benefits of FBL?
4
On-site marketing exposure will be higher for your FBL products

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 10
 What are the benefits of FBL?
5
FBL SKUs join our “Buy More Save More” shipping fee program across all FBL
and Lazada products

Customers are encouraged to buy more

• For purchases below RM80 shipping fees will

fully pass thru to customer within West
Malaysia.
• For shipping to East Malaysia seller bear
RM5.00 on 1st kg
• Above RM80 full shipping fees will be borne by
RM 80
the merchant
• Buy more save more applicable to all
warehouse items. i.e. FBL and own Lazada
products

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 11
What is Buy More Save More?

In order to maximize your revenue and profitability from cheap items, we suggest the following levers to
be utilized hand-in-hand. What are they?

Shipping fee pass-through

1
• Moving to a shipping fee module full pass-through means that the customer has to bear the full cost of
shipping fees
• This will allow you to price all your assortment competitively in line with other online and offline retailers

2
Enable a cart rule to incentivize minimum spend for free shipping
• What is a cart rule? A cart rule is a mechanism that allows for certain automatic levers to be enabled if
certain conditions are met
• In this case, the idea would be to incentivize the customer to spend a minimum amount with FBL
products, and if this threshold is breached – you offer the customer free shipping. EG:
❖ Spend RM80 with <FBL> and be eligible for FREE SHIPPING
• This works as you are able to cover the free shipping fees offered to the customer through the sale of
multiple items

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 12
Exclusive shipping rate cards for selling in FBL
Buy More Save More apply to item below 5kg (volumetric weight), Standard shipping type and within West
Malaysia only

Within West Malaysia

Delivery Type Standard
Buy More Save More
< RM80 > RM80
Weight < 1 Kg > 2 Kg < 1 Kg > 2 Kg
Shipping Paid by Customer RM 5.00 Based on the New Rate Card Nil Nil
Shipping Paid by Seller Nil 0 RM 5.00 Based on the New Rate Card

Within West Malaysia

Delivery Type Express Standard (Bulky)
Weight <4kg >5kg
Shipping Paid by Seller RM5.00 RM2.00
Only SKU with volumetric weight < 4KG SKU with volumetric weight > 5KG will
Notes: will be applicable for Express Delivery. not be applicable for BMSM

Origin to Destination West Malaysia to West Malaysia East Malaysia to West Malaysia East Malaysia to East Malaysia West Malaysia to East Malaysia West Malaysia to East Malaysia
Delivery Type Economy / Postal Standard
Weight < 0.5 Kg < 2Kg < 2Kg < 0.5 Kg 0.5 - 2 Kg <1kg
Shipping Paid by Seller RM 2.00 Nil Nil RM 4.00 RM 5.00 5.00

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 13
Exclusive shipping rate cards for selling in FBL
FBL shipping rate card and MP drop ship rate card comparison

Shipping
Weight (kg) FBL Rate Card MP drop ship Rate Card
type
1 5.00
2 5.50 6.50
3 5.50 8.00
4 5.50 9.50
SAVE
5 5.50 11.00 shipping
6 6.50 12.50
Standard shipping

7 8.50 14.00 fees up to

8 9.50 15.50
9
10
10.50
11.50
17.00
18.50
50%
11 12.50 20.00
12 14.50 21.50
13 16.50 23.00
14 18.50 24.50
15 20.50 26.00
16 23.50 27.50
17 26.50 29.00
18 29.50 30.50

14presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.
This 14
Exclusive shipping rate cards for selling in FBL
How much will you save on shipping fees in FBL vs Marketplace Drop Ship?

FBL with BMSM MP Dropship

Pass through shipping fees to • Seller pay 1st kg shipping fees
Scenario 1 customer - RM 5 (1st kg) FBL Seller save
(Basket < RM 80): • Customer pay subsequent kg) RM 2.50 on shipping
Item price: RM 60 RM 5 (< 1kg) - RM 1.50 (subsequent kg) cost and landing price
Buy a 3kg item RM 5.50 (1-5kg) is more competitive
Item landing price: Item landing price:
RM 60 + RM 5.50 = RM 65.50 RM 60 + RM 8.00 = RM 68.00

Scenario 2
(Basket > RM 80):
*Package-level Shipping *Item-level Shipping FBL Seller A save
• Free shipping for customer • Seller pay 1st kg shipping fees RM 3.85 on shipping
• Shipping fees share by 2 - RM 5 (1st kg) cost and landing price
Buy 5 items RM20 each, merchant – Total RM 11.50 • Customer pay subsequent kg) is more competitive
total order RM 100
Cost of Shipping Fee to Seller A: RM - RM 1.50 (subsequent kg) by 11%
Total Parcel weight: 9.7 4.15 ((3.5/9.7)* 11.5) • Shipping fees borne by
Kg ~ 10 Kg Cost of Shipping Fee to Seller B: individual merchant
(2 items from Seller A; RM 7.35 ((6.2/9.7)* 11.5) FBL Seller B save
3 items from Seller B) RM 6.65 on shipping
Item landing price: (Seller A) Item landing price: (Seller A)
RM 40 + RM 4.15 = RM 44.15
cost and landing price
RM 40 + RM 9.50 = RM 49.50
Total weight for Seller A: is more competitive
3.5 Kg (2 items) Item landing price: (Seller B) Item landing price: (Seller B) by 9%
Total weight for Seller B: RM 60 + RM 7.35 = RM 67.35 RM 60 + RM 14.00 = RM 74.00
6.2 Kg (3 items)
15presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties.
This 15
FBL only charges you an all inclusive fee per item and
eliminates all your fixed operations cost

Includes manpower for pick & pack

FBL charge

RM1.99
Includes cost for packaging materials
ex gst
per item

Includes storage cost (rent, utilities, insurance)

Direct delivery from your supplier to the Lazada fulfillment center

can reduce cost even further

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 16
FBL simplifies all of your operation processes to make your
life easier

Full flexibility to put only parts of your assortment on FBL

No penalties for cancellations, fake RTS or wrong product sent

Easier returns management as re-sellable items go directly back into stock

Unlimited Order Volume Limit (OVL) for FBL SKUs

Faster payments

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 17
Introduction to Fulfillment by Lazada (FBL)

▪ What is FBL

▪ Why FBL will help you

▪ How to join FBL

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 18
How to move to FBL?

Joining FBL is easy!

• If you wish to join FBL, let us know and we firstly check if your contract
already covers FBL services; If not, a brief addendum needs to be signed
• Lazada will contact you and suggest you a first order of items to be sent
to the fulfilment center; If you agree with the items and the quantities, you
just need to approve the order on Seller Center
• Lazada will contact you on a regular basis and coordinate future
replenishment orders to make sure that your products are never out of
stock
• The management of FBL is quite easy for you! Seller Center provides full
control to issue replenishment orders, check stock levels, retrieve stock
back and manage your products
• Orders, shipments and returns will be fully managed by Lazada

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 19
What changes?
Your life just got easier

Dropshipment

Upload products You You

Manage prices You You

Update stock You

Process orders You

Ensure 3PL pick-up You

Focus on selling your products and let Lazada do the rest

This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 20
I have a question!

No! Actually, with FBL you avoid additional personnel, packaging

? Is FBL expensive? ! and WH costs for the fulfilment of your orders
If I sell products through FBL, can I still sell other products through Yes! You can sell your products through different fulfilment models
? drop-shipping? ! simultaneously
Yes! All FBL products are fully covered by Lazada’s insurance
? Are my FBL products covered by insurance? ! (against loss, damage, fire, etc.)
Generally, 24 hours, but if the documents are incorrect or the
? How long does the inbound take? ! packaging is faulty, it can take longer
No! With FBL, Lazada helps you to optimize your stocks and avoid
? Does FBL mean that I need more stock? ! unnecessary inventory costs

? Do I need to update the stock on SC? ! No! Stocks will be automatically updated by Lazada

Can I get my products back from Lazada’s fulfilment center? How Yes, through Seller Center In 7 business day you are free to
? long does it take? ! collect the product from our fulfilment center
I need to match the product serial number with the Customer Yes! Lazada’s WH team can track this information and share it
? order. Is it possible with FBL? ! with you

? Can I monitor my stocks and my returns? ! Yes! You can monitor your stocks and returns directly on SC

The returns policy remains untouched by FBL. However, if an item

? Do I receive the Customer Returns? ! is in good condition it will be stored back in the fulfilment center
This presentation is for illustrative purposes only. It will not supersede the contractual arrangements effective between the parties. 21