Makeup-savvy high school teacher Grace Esmaya carefully packs lip tints and blushes for customers of her Instagram store after a long day of teaching students online. She is a reseller, the less formal version of a franchise business that has become a lifeline for those who want to profit from an established brand.
The products, ordered from her by women antsy to show off their makeup outside, is part of a cosmetics line she resells under her online shop “Mukhang Maganda.”
“The teaching set-up was affected since we had to switch to online classes from the face-to-face set up. Ever since the pandemic started, I have been working from home. I wanted to earn an extra income during the pandemic,” Esmaya told reportr.
Armed with a curated Instagram feed and the social media flair of a typical millennial, Esmaya, 25, opened Mukhang Maganda on July 2 as a reseller of Xtreme Beauty Cosmetics, and Skin Reborn Essentials in Cavite—one of the thousands of online resellers that cropped up as Filipinos turned to digital commerce to augment their income during the pandemic.
“Even if there is a pandemic, people are still buying it and surely even after the pandemic, people will still buy,” she said.
Reselling is among the digital commerce trends that boomed in the Philippines as the government quarantined the 100-million strong population for nearly seven months since March.
Similar to franchising a business, a reseller gets to market and profit off legitimate brands online for a price that can be considered as coins compared to the hefty price tags that come with franchising.
From take-home samgyupsal kits to face masks, and cosmetics, a quick scroll on Facebook or Instagram will surely show a sea of products resold online.
Reselling is easier than launching your own product
Reselling offers an easy way to sneak into the competitive market without the nitty-gritty of thinking and forming your own brand. For Esmaya, it was a quick way to earn money with something close to her heart—makeup.
“I love makeup products so that is actually the number one factor I considered. I wanted to resell products that are interesting for me, because it will help me promote the products online better,” she said.
Several brands online offer reseller “packages” which benefits both the seller and reseller in terms of advertising and profit. In the case of Esmaya, she paid P1,280 for a reseller package that contains 10 products.
“Sulit din kasi enough yung profit from wholesale price to SRP (suggested retail price),” she said.
The amount is not even a tenth of the one has to shell out to franchise a business in the Philippines—especially known ones. A typical food cart franchise in the Philippines usually cost at least P500,000.
Resellers also have it easier in terms of marketing since promotional materials—such as online advertisements are already pre-packaged or prepared. Some even have influencers to persuade customers into buying the products.
“Reselling is easier than producing my own line because coming up with my own cosmetics line needs a huge investment—from the product manufacturing to processing in FDA (Food and Drug Administration), and I'm not ready for that kind of investment yet,” Esmaya said.
Is reselling covered by government regulation?
Like any other business—whether online or offline—resellers are covered by government regulation.
“The same as any kind of seller, whether reseller siya of pre-loved items or first-hand products, pareho lang ang regulation ‘nun. They need to be registered also as a business, kahit reseller they have to be registered as a business because they profit also,” Trade Undersecretary Ruth Castelo told reportr.
Resellers, like any other businessman, need to register with the Department of Trade and Industry and the Bureau of Internal Revenue as the law offers “no distinction” in terms of regulation.
“If it’s a business of offering goods, the law has no distinction on coverage. Consumer protection will apply to both equally,” Castelo said. “We don’t distinguish between resellers and online sellers.”
Unregistered resellers can be held liable by the BIR and their local government which is why Castelo said it is important for online sellers to register their business names.
The government might also soon come up with additional regulation for online businesses with the proposed Internet Transactions Act which would require all online businesses and e-commerce plaforms to register with the government.
Online registration with the DTI, she said, is now “as fast as 8 minutes” given that transactions are purely digital.
“We encourage everybody doing business online to have themselves registered because they, of course, would want to formalize their business at one point or another. They would want to increase patronage and consumers would not feel confident buying from them if they are not a registered business,” she said.
While the DTI has no available data on how many online resellers there are in the Philippines, their data show a surge in online business registration this year with 84,446 new registered online sellers as of Oct. 16. This is far from a similar 8-month period of May to December 2019 which only saw 1,642 online business registrations.
Boost from #SupportSmallBusinesses trend
Resellers, considered as among small businesses, are also getting support online as Filipinos shift buying preference to neighborhood suppliers.
Lockdowns have opened the doors of many Filipino homes to Instagram-ready sushi bakes of childhood playmates, to the homemade chili oils of former colleagues.
Many media outfits have also allotted online spaces in support of small businesses. Business daily Business Mirror, for instance, has a podcast that features small businesses. Lifestyle blog When In Manila meanwhile regularly features small businesses.
While online selling and reselling initially boomed as a way to augment lost income during the lockdown, some see it as a long-term source of passive income.
“At this moment, I do plan on reselling for a long time because personally, it's a fun way to spend my free time and another good way to earn extra income,” Esmaya said.