How to set categories for your online store on Lazada

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When it comes to online stores, organization is key for better online shopping experience, product discovery and seamless navigation. One crucial aspect of organizing your online store is how you categorize your products. Product categories are more than just labels; they play a vital role in how easily customers find what they’re looking for. A well-categorized online store is like a well-organized shop—it makes browsing a breeze and increases the chances of a sale.

However, the benefits go beyond customer experience.  The categories you choose on Lazada can also impact your search ranking, product visibility and also tie down to the seller commission you earn from a sale.  Lazada’s search engine prioritizes listings placed in relevant categories, meaning the right categorization can significantly boost how easily potential customers find your products.

 Lazada has a tiered commission structure, with some categories having lower fees than others.  By strategically choosing the right categories for your products, you can potentially maximize your profit margins.

In this blog, we’ll explore best practices and strategies for setting the right product categories for your Lazada store, optimizing your online storefront, and unlocking its full potential.

Structure of product category on Lazada

Now that we’ve established the importance of product categories, let’s explore how they’re structured in Lazada.  Lazada utilizes a hierarchical system, with broader categories branching out into more specific subcategories. This structure allows for a comprehensive yet organized presentation of products.  Here’s a breakdown:

  • Category: The broader classification for your product. Think of it as a department in a store. Lazada offers a wide range of categories that encompass most product types.
How to set categories for your online store on Lazada
  • Subcategory: A more specific level within a category, further narrowing down the product type. Going back to our department store analogy, subcategories are like the specific sections within a department. For example, the “Men’s Fashion” category might have subcategories like “Shirts,” “Pants,” and “Suits.”
How to set categories for your online store on Lazada

How to Map Product Categories on Lazada

Once you’ve identified the  product categories on Lazada and how they are structured, mapping the right categories for the products you sell is important.  There are two main approaches you can take, depending on the number of products you’re uploading:

  1. Single Product Upload:

This method is ideal for sellers with a smaller product inventory.  Here’s a step-by-step breakdown:

  • Log in: Log in to your Lazada Seller Center account.
  • Go to “Products”: Navigate to the “Products” section. Here, you’ll find everything related to adding and managing your product listings.
  • Add Products: Click “Add Products.” This initiates the product creation process.
  • Add Product Details: Fill in the product details. This includes essential information like product name, category selection, product attributes, key features, description, any variations (size, color, etc.), images, pricing, and packaging details.
  • Select Category: This is crucial for optimal product visibility. Use the knowledge you gained from the previous section to choose the most relevant category and subcategory for your product.
  • Submit: Once everything is filled in, click “Submit” to upload your product.
  1. Batch Product Upload

If you have a large product catalog, a batch upload can save you significant time.  Here’s how it works:

  • Go to “Products”: Head over to the “Products” section in your Seller Center.
  • Manage Products and Import: Click on “Manage Products” and then select “Import.” This option allows you to upload a bulk list of products.
  • Download Template: Download the “Product Creation Template” for the relevant category. This template provides a specific format for listing your products electronically.
  • Add Details: Fill in the mandatory attributes in the template. This includes essential details like product name, description, variations, and, most importantly, the category code for each product. Lazada provides these category codes within the template.
  • Upload and Review: Once you’ve completed the template, upload the file back to Lazada. Review the status of your uploaded file. Lazada will notify you of any errors or inconsistencies. Pay close attention to category-related issues and ensure everything is mapped correctly.

Product Miscategorization on Lazada and its Consequences

While the importance of choosing the right category is clear, it’s also essential to understand the potential consequences of miscategorization.  Product miscategorization on Lazada can negatively impact both your account health and seller credibility. 

Imagine a customer searching for a new phone case.  If a seller mistakenly lists it under “clothing,” the customer will never find it.  This leads to a frustrating experience for the buyer and potentially lost sales for the seller. Miscategorized products become invisible to the right audience, hindering discoverability and ultimately hurting sales.

Lazada is committed to a well-organized sales experience on the platform. They have the authority to deactivate products identified as miscategorized. Your product listing could vanish entirely, further hindering your sales potential.

Some sellers might be tempted to categorize products incorrectly on purpose.  However, this is a risky strategy with significant consequences:

  • Product Lock: Lazada can lock your product, essentially taking it off the platform until you categorize it correctly.
  • Non-compliance Points: Willful miscategorization can lead to non-compliance points on your seller account. Accumulating too many points can result in serious penalties.
  • Lower Search Ranking: Even if Lazada doesn’t deactivate your product, it’s unlikely to rank well in search results if it’s in the wrong category. This means potential customers searching for your product are much less likely to find it.
  • Increased Advertising Cost: If your product is miscategorized, any advertising spend won’t reach the target audience. This translates to wasted advertising dollars and potentially lower sales.
  • Inventory Management Issues: Incorrect categorization can lead to inaccurate inventory management. You might end up overselling or underselling products, creating logistical headaches.

Impact of Lazada Store Product Miscategorization on E-commerce fulfillment 

When improperly or wrongfully categorized, the products you sell on Lazada can do more harm than good. It impacts the way you store inventory and the ability to sell products to shoppers, and it significantly dents customer loyalty. Not setting the right Lazada product category can increase shipping, storage and fulfillment costs in more than one way, here’s how:

  • Picking and packing errors: When a product is incorrectly categorized, the number of errors increases during inbounding and inventory record updates. There is a possibility that the wrong item will be picked up due to miscategorization, which leads to high returns, fulfillment delays, and frustrated customers.
  • Incorrect shipping costs: Different products sold on Lazada may have different shipping profiles. Miscategorized items could require different packaging mandated by the platform. This, in turn, could lead to an increase in package dimensions/weight. Repeated occurrences subsequently eat into your business profits due to over-charging for shipping and fulfilling orders.
  • Wasted warehouse space: A product’s warehouse location depends on its size, weight, and category. Miscategorized products impact inventory storage, leading to wasted warehouse space that could otherwise be allotted for other products. This, in turn, results in higher inventory storage costs for the seller.
  • Inaccurate inventory levels: When you rely on an Order Management System that tracks your inventory levels, improper Lazada product categories can impact multi-channel sales.
  • Missed Sales Opportunities: Product miscategorization throws off inventory counts, leading to stockouts or overstocking of certain items. If you rely on sales reports to log sales forecasts and allocate inventory specific to marketplaces, an appropriate product category is important. The wrong product category may lead to overstocking, underselling, or potential stockouts that could impact sales.
  • Increased Returns: When a shopper visits your online store, assigning the wrong Lazada product category for your product can damage your reputation. Customers who end up ordering might receive the wrong product, immediately raising a return. Increased returns may cost your business, and adding the returned product back to the inventory pool may be carried out haphazardly. This sets off a chain of events that could impact future sales and may increase distrust among your loyal shoppers. 

Best Practices for Product Categorization

Now that we understand the consequences of miscategorization, let’s explore some best practices for mapping your products to the most relevant categories on Lazada.

  1. Leverage Lazada’s Suggestion Tools

During the product creation process, Lazada offers category suggestion tools.  These tools analyze your product name and description and suggest relevant categories.  Utilize these suggestions as a starting point, but don’t rely solely on them.  Double-check and ensure the suggested category aligns perfectly with your product.

  1. Choosing the Most Specific Category

While Lazada’s suggestions are helpful, it’s important to choose the deepest relevant category possible.  Imagine clothing – “Fashion” is a broad category, but “Men’s Shirts” or “Women’s Dresses” are more specific.  By choosing the deepest relevant category, sometimes referred to as sub-subcategories, you ensure your product reaches a more targeted audience.

If you use Locad as your fulfillment partner, you can download automated reports to see which categories have been selling the best. These reports can analyze your product data and suggest the most optimal category placement for maximum visibility.

  1. Selecting the Correct Category

This might seem obvious, but it’s crucial!  Select the category that truly reflects your product’s function and use.  Avoid the temptation to place your product in a seemingly unrelated category with a lower commission rate since Lazada has a tiered commission structure.  This is considered willful miscategorization and can lead to serious consequences.

  1. Providing Detailed Product Attributes

Once you’ve chosen the right category, don’t stop there!  Lazada allows you to provide detailed product attributes within the chosen category. These attributes can include things like size, color, material, brand, and more. Providing comprehensive and accurate attributes further refines your product listing and makes it easier for customers to find exactly what they’re looking for.

Conclusion

Accurate product categorization is your roadmap to success on Lazada.  By strategically placing your products in the right categories and subcategories, you ensure they reach the intended audience, boost their search ranking, and ultimately drive sales.  Remember, miscategorization can lead to a frustrating customer experience, hidden listings, and even penalties from Lazada.

Take advantage of Lazada’s category suggestion tools and explore best practices for choosing the most specific and relevant category for each product.  Providing detailed product attributes within the chosen category further refines your listings and makes them shine in search results.

Don’t underestimate the power of proper product categorization. By investing the time to categorize your products accurately, you’ll unlock a world of opportunity on Lazada, attract more customers, and propel your online store to new heights.

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