A Practical Guide to Starting Your Online Business in Singapore [2025]

Before you can make your first sale online in Singapore, there is essential groundwork to cover. This includes registering your business with the Accounting and Corporate Regulatory Authority (ACRA), picking the right legal structure, and organising your finances.

Completing these first steps builds a solid foundation for your business to grow without hitting legal or financial problems later.

Building Your Foundation for Success

While it is tempting to start selling immediately, skipping these foundational steps can cause significant issues later. Taking the time now to register your business correctly and separate your finances creates a stable base that lets you scale with confidence.

Think of it this way: this initial setup protects your personal assets and shows the government, banks, and future partners that you are a legitimate, serious business.

Choosing Your Business Structure

Your first major decision is how to register your business with ACRA. For most new e-commerce sellers, the choice is between a Sole Proprietorship and a Private Limited Company (Pte Ltd). This decision affects your personal liability, how you are taxed, and your ability to bring in investors.

• Sole Proprietorship: This is the simplest and quickest way to get started. You and your business are legally the same entity. The main disadvantage is that you are personally responsible for all business debts. It is a good low-cost option if you are a solo founder testing an idea with minimal risk. For instance, if you sell handmade jewellery from home, this structure is straightforward and affordable.

• Private Limited Company (Pte Ltd): This setup creates a separate legal entity, shielding your personal assets from business debts. While it costs more to set up and has stricter annual filing requirements, it is the standard choice for any business planning to scale, hire employees, or seek funding. For example, if you plan to import and sell electronic gadgets, the liability protection offered by a Pte Ltd is crucial.

Here’s a practical way to think about it: If you’re selling handmade crafts from your living room, a Sole Proprietorship is probably fine. But if you’re importing electronics or products with potential safety issues, the protection you get from a Pte Ltd is absolutely essential.

Your Essential Legal and Financial Checklist

Once you have chosen a business structure, a few more critical tasks need your attention. Use this as your pre-launch checklist. Completing these tasks from the start will prevent major problems as you grow.

Domain Name and Website Policies Your domain name is your online address—make it memorable and relevant to your brand. Once you have secured it, you need to add key legal pages to your website. This is necessary for complying with local laws and building trust with your customers.

• Privacy Policy: Singapore’s Personal Data Protection Act (PDPA) requires this. You must clearly state what customer data you collect (e.g., names, addresses, phone numbers), why you collect it, and how you keep it safe. For instance, you must state if you use their data for marketing emails or share it with delivery partners like Ninja Van.

• Terms of Service: This page sets the rules for using your site. It should cover your payment terms, shipping details, return and refund policies, and any limits on your liability. An actionable tip is to clearly define your return window, such as “30-day returns for unused products in original packaging.”

Corporate Bank Account and Bookkeeping It is vital to keep your personal and business finances separate. Open a separate corporate bank account as soon as your business is registered. This makes tracking income and expenses simple and is crucial for accurate accounting and tax filing.

Start basic bookkeeping from your very first transaction. A simple spreadsheet is sufficient initially, or you can use accounting software like Xero. This discipline is essential for monitoring your financial health and makes year-end reporting less stressful.

Choosing Where to Sell Your Products Online

Once your business is legally registered, your next big decision is where to set up your online store. For anyone starting an online business in Singapore, this involves two main paths: selling on large marketplaces like Shopee and Lazada, or building your own direct-to-consumer (DTC) website on a platform like Shopify.

Each option has its advantages and disadvantages. Marketplaces provide immediate access to a large audience ready to shop. A DTC site gives you complete control to build your brand and own your customer relationships. The best choice depends on your product, goals, and how much hands-on control you want.

The Power of Online Marketplaces

Joining platforms like Shopee, Lazada, or Amazon.sg is the fastest way to get your products in front of millions of potential buyers. Singapore’s e-commerce market is large and growing, with a gross merchandise volume (GMV) of US$8.2 billion in 2022, projected to reach US$11 billion by 2025. A significant portion of this growth comes from these marketplaces.

These platforms handle many complex tasks for you. Payment processing is built-in, and their extensive logistics networks simplify shipping. This allows new sellers to focus on sourcing products and making sales rather than building an entire e-commerce infrastructure from scratch.

However, this convenience comes with trade-offs:

• Fierce Competition: Your products will be listed alongside hundreds of others, often leading to price competition that can reduce your profit margins.
• Commission Fees: Every sale you make includes transaction fees and commissions, which are deducted from your revenue.
• Limited Branding: You are essentially renting space in their digital mall. Your ability to create a unique brand experience is limited by the platform’s design and rules.
• No Customer Ownership: The marketplace owns all customer data, making it very difficult to build a loyal customer base or run your own targeted marketing campaigns.

If you want to get into the nitty-gritty, our guide comparing Lazada vs. Shopee can give you a much clearer picture of Singapore’s two biggest players.

Building Your Own Brand with a DTC Website

Setting up your own online store using a platform like Shopify or WooCommerce is a long-term strategy. This path is for founders who are serious about building a lasting brand.

The biggest advantage of a DTC site is simple: ownership. You control the website design, the entire customer experience, and, most importantly, the customer data. This is what allows you to build a true community and drive repeat business through your own marketing efforts.

This route requires more effort at the start. You are responsible for everything, from designing the website to driving traffic to your store. Marketing becomes your primary job, as you do not have the built-in traffic that marketplaces provide.

This decision tree can help you visualise some of the early structural choices you’ll face.

Choosing between a Sole Proprietorship or a Private Limited Company often goes hand-in-hand with your sales channel strategy and your ambitions for growth.

Marketplace vs Direct-to-Consumer (DTC) Website Comparison

To make the decision clearer, here is a comparison of the key differences between the two approaches.

Neither option is inherently better; it is about which model aligns with your business goals right now.

Making the Right Choice for Your Business

So, should you choose a marketplace or your own website? There is no single formula, but here is some practical advice.

• Choose Marketplaces If: You are just starting out, have a limited marketing budget, or are selling generic products where price is a key factor. It is an excellent way to test the market, validate your product, and generate initial cash flow. For example, selling phone cases or common household items is well-suited for marketplaces.
• Choose a DTC Website If: You have a unique, brand-driven product, a well-defined target audience, and are prepared to invest in marketing. This is how you build long-term brand equity and achieve better profit margins. For instance, a brand selling premium, organic skincare would benefit from the control a DTC site offers.

Many successful sellers use a hybrid approach. They often start on marketplaces to gain early traction and learn what sells. Once they have momentum, they launch their own DTC website to build their brand and capture higher-margin sales directly. This multi-channel strategy allows you to meet customers wherever they prefer to shop.

Mastering Your Operations from Inventory to Fulfillment

You have figured out where you are going to sell. Now it is time for the operational side of your business. Managing your operations effectively—from inventory management to order fulfillment—is what turns online clicks into satisfied, loyal customers. This is what distinguishes professional businesses from hobbyists in Singapore’s e-commerce market.

Getting this right from the beginning will save you from common problems, like overselling popular items during a sale or spending all your time packing boxes instead of planning your next marketing campaign.

Choosing Your Inventory Model

How you manage your stock is one of the most significant operational decisions you will make. It affects your startup costs, profit margins, and daily tasks. There are three main options.

1. Dropshipping: The Low-Risk Start

This is a popular model for those wanting to start an online business with minimal financial investment. When you receive an order, you forward it to your supplier, who then ships the product directly to the customer. It is an effective, low-cost way to test a product idea.

The downside is that your profit margins will be smaller, and you have very little control over the customer experience. Shipping times, packaging quality, and stock availability are all managed by your supplier.

2. Holding Your Own Stock: The Control & Margin Model

This is the traditional retail approach: you buy inventory, store it, and ship it yourself. This gives you complete control. You can inspect each item for quality, use your own branded packaging, and ensure faster shipping. This method typically results in higher profit margins since you are buying in bulk.

The disadvantage is the upfront capital required to purchase stock and the need for storage space. You also bear the risk of being left with unsold products.

3. Third-Party Logistics (3PL): The Scalable Approach

A 3PL partner can be a valuable asset as your business grows. These companies handle all your warehousing, picking, packing, and shipping. You purchase the stock and send it to their warehouse, and they manage the rest. This frees you up to focus on growing the business rather than just running it.

This is an ideal middle ground for businesses that have outgrown their initial storage space but are not yet ready to lease a full warehouse. It provides professional-level logistics without the high overhead costs. If you want to dive deeper, you can explore the differences between 3PL and 4PL models here.

From Your Living Room to a Logistics Partner

When you are just starting, fulfilling orders from your home is the standard choice. It costs nothing, and you can add personal touches, like a handwritten thank-you note.

However, once you start receiving 10-15 orders a day, the DIY approach becomes less efficient. The time spent printing labels, packing boxes, and going to the post office is time you are not spending on marketing or product development. At this point, using a Singapore-based 3PL becomes a very attractive option. They often have better shipping rates than you can get on your own, which can save you money in the long run.

By outsourcing your fulfillment, you are not just buying storage space; you are buying back your time. It allows you to transform from a stock packer into a business owner focused on strategy and growth.

For those serious about scaling, it’s worth understanding the principles of designing an efficient e-commerce fulfillment center.

Managing Payments and GST Obligations

A complicated checkout process can lead to lost sales. Making it easy for customers to pay is essential for any online business in Singapore.

At a minimum, you should offer these payment options:

• Credit/Debit Cards: This is a basic requirement. Payment gateways like Stripe and PayPal are easy to integrate with platforms like Shopify or WooCommerce.
• PayNow: This is a must-have in Singapore. Local shoppers expect to see the QR code option at checkout.
• “Buy Now, Pay Later” (BNPL): Services like Atome and Grab PayLater are very popular and can increase your conversion rates by allowing customers to split their payments.

Finally, a brief note on the Goods and Services Tax (GST). You only need to register for GST with the Inland Revenue Authority of Singapore (IRAS) once your annual taxable turnover reaches S$1 million.

Until you approach that threshold, you do not need to charge GST. However, once you cross it, registration is mandatory. Keep your financial records organised from the start, and this process will be much smoother when the time comes.

How to Attract Your First Customers in Singapore

You have a great product and a professional website. This is an excellent start, but it will not generate sales on its own. To make your online business in Singapore successful, you need a smart plan to attract customers.

This requires a focused marketing approach that connects with local shoppers, rather than just posting on social media and hoping for the best.

Let’s look at some practical ways to get your first customers, even with a limited budget. These are the fundamental channels that will build awareness and drive sales.

Get Found on Google with Local SEO

When people in Singapore want to buy something, they often start with a Google search. If your store does not appear in the search results, you are missing out on potential customers. This is where Search Engine Optimisation (SEO) is important. It helps Google understand what you sell so it can show your site to the right people.

Start with basic local keyword research. Think about what your customers would type into the search bar.

• If you sell artisanal coffee beans, they might search for “specialty coffee beans delivery Singapore” or “best arabica beans SG”.
• For handmade leather goods, searches could include “custom leather wallet Singapore” or “handmade leather passport holder”.

Include these phrases naturally in your product pages, descriptions, and page titles. To build a strong online presence that brings people to your site, understanding the basics of how to acquire organic traffic is absolutely essential. SEO is a long-term strategy, but getting the fundamentals right from the beginning will yield results for months and even years.

Run Targeted Ads on Facebook and Instagram

While SEO takes time to show results, paid ads on platforms like Meta (Facebook and Instagram) can bring customers almost immediately. The key advantage is the targeting capability. You can show your ads to specific groups of people based on their interests, age, location, and online shopping habits.

For example, if you sell eco-friendly yoga mats, you could create an ad campaign that targets:

• Location: People living in Singapore.
• Age: 25-45 years old.
• Interests: Yoga, Lululemon, wellness, sustainability, and organic products.

This focused approach ensures your ad budget is not wasted on people who are unlikely to buy your product, leading to a better return on investment. Start with a small daily budget of S$10-S$20 to test which ad images and messages perform best before increasing your spending.

The goal isn’t just to get clicks; it’s to get the right clicks. A well-targeted ad campaign brings qualified buyers to your site, making the path to purchase much smoother. Don’t be afraid to experiment with different audiences to see what works best.

Build Trust with Content Marketing

Content marketing is about creating helpful and interesting material that solves problems for your target audience. This helps build trust and positions your brand as an expert. A simple way to start is with blog posts.

Imagine your Singapore-based online business sells skincare for sensitive skin. You could write articles such as:

• “5 Common Skincare Ingredients That Irritate Sensitive Skin in Singapore’s Humidity”
• “A Simple Morning Routine for Calming Redness”

This type of content attracts people who are looking for solutions, not just products. By providing value, you start building a relationship. When they are ready to buy, your brand will be at the top of their mind.

Connect Authentically on Social Media

Your social media channels should not be just a product catalogue. Shoppers in Singapore value authenticity and want to connect with the brands they support. Use platforms like Instagram and TikTok to show the human side of your business.

Share behind-the-scenes content, such as how you pack an order or the story behind a new product. Run polls to ask your followers for their opinions. Most importantly, engage with every comment and message promptly. This is how you build a community and turn one-time buyers into loyal fans who will promote your business for you.

Scaling Your Business with Smarter Tech

When sales begin to increase, the manual tasks that were manageable at the start can become overwhelming. Juggling orders between your Shopify store and Lazada shop, constantly checking stock levels, and printing shipping labels one by one is not a sustainable way to grow.

At this stage, you need to shift your mindset from simply running the business to strategically scaling it.

For many online sellers, growth involves selling on multiple channels. You might start on a single platform, but expanding to places like Shopee, Lazada, or TikTok Shop can significantly increase your visibility and sales. The challenge is that more channels can lead to more complexity.

Taming the Multi-Channel Chaos

Imagine you have a popular product listed on your website and on Shopee. During a flash sale, you receive 20 orders on your site and 30 on Shopee within an hour. However, you only had 40 units in stock. Now you have 10 unhappy customers and risk a penalty from the marketplace for overselling.

This is a common and costly problem. Manual inventory management cannot keep up with high order volumes.

The solution is to centralise your operations. Instead of treating each sales channel as a separate business, you need a single system that connects everything.

Using a centralised commerce platform transforms your operations from reactive to proactive. It automates the tedious tasks that drain your time, prevents critical errors like overselling, and gives you the clear oversight needed to make smart growth decisions.

Technology can be your most valuable employee. A good system syncs your inventory across all channels in real time. When an item sells on Lazada, the stock count is instantly updated on your Shopify store and any other platform where you sell. This eliminates the need for manual spreadsheet updates.

Unifying Your Operations for Effortless Growth

A unified dashboard does more than just sync inventory. It consolidates your entire fulfillment process onto a single screen, allowing you to manage every order—whether from your website or a marketplace—in one place.

Here is what that looks like in practice:

• No more tab-switching. You can see, process, and manage all orders from one interface instead of logging into multiple seller centres.
• Bulk fulfilment is a lifesaver. You can generate a single picking list for all of your day’s orders at once. You can also bulk print shipping labels and invoices for dozens of orders across different channels in just a few clicks, saving a significant amount of time.
• Expand to new channels faster. A centralised system allows you to push your existing products to new marketplaces quickly, avoiding the time-consuming process of manual data entry for each item.

For businesses in Singapore, this level of efficiency is crucial. The local e-commerce market is diverse. According to recent data, Custom Carts lead with US$3.88 billion in sales (40.96%), followed by Shopify at US$1.93 billion (20.35%), and WooCommerce at US$628.47 million (6.63%). You can see more details about Singapore’s e-commerce platform distribution on oom.com.sg. This shows that sellers are finding success across various channels, and effective management is key.

Automating these core operational workflows is fundamental for scalable growth. You can dive deeper into the different ecommerce automation tools and strategies in our detailed guide to see what might fit your setup. By letting technology handle repetitive tasks, you can focus on activities that actually grow the business: marketing, customer engagement, and finding your next bestselling product.

Got Questions About Starting Your Online Business in Singapore?

Starting an e-commerce business for the first time can be daunting. Here are straightforward answers to some of the most common questions from new entrepreneurs in Singapore.

Can I Actually Run an Online Business from My HDB Flat?

Yes, you can. The government’s Home-Based Small Scale Business Scheme allows you to use your residential address for business registration, so you do not need to rent an office immediately.

There are a few rules to follow to ensure you do not disturb your neighbours:

• You cannot hire any external staff to work in your flat.
• Your business must not create a nuisance, such as loud noises or excessive deliveries.
• You cannot display a large sign outside your home.

This scheme is very helpful for solo founders and small teams, as it keeps overhead costs low while you validate your business idea.

Do I Really Need to Register My Business Straight Away?

The short answer is yes. According to the Accounting and Corporate Regulatory Authority (ACRA), if you are conducting any activity with the intention of making a profit, you must register your business. This includes selling through social media or a marketplace shop.

Failing to register can result in significant fines. Think of it as the first step to making your business official. It legitimises your brand and builds trust with customers.

Registering your business isn’t optional. It’s your legal foundation. It lets you open a corporate bank account, protects you personally, and shows customers you’re a serious, credible seller.

How Much Money Do I Need to Get Started?

The amount of starting capital you need depends entirely on your business model. It could range from a few hundred dollars to tens of thousands.

Here is a breakdown:

• Dropshipping: You can start with as little as S$300-S$500. This would cover your ACRA registration, a basic Shopify plan, and a small budget for initial ads. Since you do not buy inventory upfront, the entry barrier is very low.
• Handmade Goods: Your main costs will be raw materials and any necessary tools. You could likely start with around S$1,000-S$3,000, depending on your product.
• Private Label / Holding Your Own Stock: This is the most capital-intensive option. You will need to budget for buying inventory in bulk, which could cost anywhere from S$5,000 to S$20,000+, in addition to your other setup costs.

What About Licences? Do I Need One to Sell Online?

For most common products like clothing, accessories, or home decor, you do not need a special licence. Registering your business with ACRA is sufficient.

However, if you are selling products in certain regulated categories, you will need the appropriate permits from the relevant authorities. Key examples include:

• Selling food (requires a licence from the Singapore Food Agency).
• Selling cosmetic products (you must notify the Health Sciences Authority).
• Operating as a travel agent or selling tour packages.

Always check the specific rules for your product category before you launch. It is better to be safe than sorry.

Ready to scale your online business in Singapore without the operational headaches? OneCart centralises your orders, inventory, and listings from Shopee, Lazada, Shopify, and more into a single dashboard. Stop overselling and start growing faster by visiting https://www.getonecart.com.