You’re probably planning as well to put up a business, say a brick-and-mortar store, but the thought of securing all necessary business permits and documents from public offices such as the BIR, DTI, and LGUs prevents you from getting more serious about it.
In the Philippines, it’s a hassle doing this by oneself. Now quite discouraged, you rather wondered, “What if I just sell on Lazada? Do I still need these business permits and documents?”
Quick answer is no.
Many, as in tens of thousands, of sellers on Lazada are small-time online sellers, or also known as microsellers, who do not have such business documents, but surprisingly, they operate their small online shops legally.
That is because of their membership in a cooperative, a legally existing business entity. But before we dig deeper into that cooperative, hence the main topic here, let’s first talk about the two general types of online sellers on Lazada:
[a] Individual Sellers. Also known as microsellers, they are the small-time online sellers without business permits and documents but who just signed up on the platform with the goal of reaching a wider national market for their products and who were able to provide and upload just a valid ID and bank account details.
Individual sellers are entirely cooperative-dependent for their issuances of receipts and tax filings in exchange for a one percent (1%) cut on the revenues. That cut is the coop admin fee.
[b] Corporate Sellers. Mostly the big brands, established businesses, and LazMall sellers, they joined the platform for online presence and expansion and had the business permits and documents such as from the BIR, DTI or SEC, and LGUs uploaded upon sign up.
Corporate sellers are entirely independent business entities who have the capacity to issue sales receipts and file business taxes with BIR on their own.
Yes, anybody can be an online seller on Lazada for as long as basic requirements such as valid identification card and bank account details (for financial transactions such as sales) can be provided.
Upon sign up, the seller has to choose between the two types — individual or corporate — depending on the available documents.
Individual microsellers are given months of grace period to comply with the membership requirements, i.e., pre-membership education seminar and capital share, of Lazada’s exclusive partner cooperative. Thus, the seller account is transferred to the latter.
If the seller fails to do so, the account is returned to Lazada, and so the seller needs to comply with the corporate seller requirements anew, otherwise kicked out of the platform.
Equally worth mentioning, individual microsellers who have reached around PHP3M annual sales are then required reclassification and transition to a corporate seller account, thus a need to secure all the necessary business permits and documents however still with the assistance of the cooperative.
It is a common assumption that the goal of all individual microsellers is to transform their small online store into a multi-million peso business and do the transition from an individual to a corporate account.
In most cases, it is, but still many do the tricks to stay in the cooperative so to avoid the higher corporate account fees and the overwhelming paperwork.
So, if you’re interested to join the band of microsellers on Lazada, here are some of OMSMPC frequently asked questions (FAQs) answered for you:
- What is Online Micro Sellers Multipurpose Cooperative (OMSMPC)?
- What exactly is OMSMPC for?
- What are the membership requirements?
- What are the benefits of OMSMPC membership?
- What are the obligations of an OMPSMPC member?
Online Micro Sellers Multipurpose Cooperative (OMSMPC) FAQs
[1] What is Online Micro Sellers Multipurpose Cooperative (OMSMPC)? Formerly Online Micro Sellers Marketing Cooperative, Online Micro Sellers Multipurpose Cooperative (OMSMPC) is a Philippine e-commerce cooperative that helps thousands of microsellers jumpstart and grow their online business.
Its internal network of Ka-seller communities and external partnerships with Lazada and the cooperative sector allow its members an access to training and growth, ultimately leading more socio-economic development opportunities.
[2] What exactly is OMSMPC for? OMSMPC operates a legal business with registration under the Cooperative Development Authority (CDA) and represents its microseller members on the Lazada platform. It thus issues sales invoices and other legal documents upon request on behalf of the members. On papers, it’s OMSMPC that sells on Lazada.
It takes the advantage of a cooperative in terms of government support, special tax exemptions and privileges, and democratic member control, among others.
[3] What are the membership requirements? Membership simply requires initial signup to Lazada platform as an individual seller, completion of its Pre-Membership Education Seminar (PMES), accomplishment and submission of the Membership Application Form (MAF), payment of the initial share capital (PHP100), and fully paid capital share over time (PHP4,900).
A membership e-certificate and an ID number are issued via email after the completion of the basic requirements.
[4] What are the benefits of OMSMPC membership? Microseller members of the coop enjoy access to the Lazada e-commerce platform, sales invoicing assistance, bank processing of payouts, access to a network of Ka-Seller communities, relevant trainings and events, annual dividends based on share capital and patronage refund, and many more programs for individual microsellers and business growth and development.
[5] What are the obligations of an OMPSMPC member? Apart from the compliance with the membership requirements, OMPSMPC microseller members are also expected to participate in various programs and activities organized by the cooperative and in democratic practices such as the election of officers and collective decision-making.
Microseller members also pay cooperative admin fees equivalent to one percent (1%) of the total weekly net revenues.
You might want to read more about the cooperative, Online Micro Sellers Multipurpose Cooperative (OMSMPC) on their official website.
As a Lazada microseller myself, I should say that membership in the cooperative is a big advantage. It provides me all the necessary means for the legalities and smooth operations, as well as assistance, for my humble online store to exist on the platform and as I always hope just like tens of thousands of microsellers do, grow into a profitable business.
Aside from these, what’s even more exciting is that I receive dividends yearly for my PHP5,000 capital share, occasional event prizes, and free Lazada vouchers which in a rough estimate, already amounted to like double that share. Yes, the coop gives away vouchers!
Read also:
Lazada Seller Startup Checklist and Other Requirements. This article simply shares the basic requirements and other needs to jumpstart your online business with Lazada platform.
Lazada Seller Experience: How I Made PHP6,000 Sales in Just Two Weeks. This article details out my first two weeks of experience selling on Lazada and how I made PHP6,000 sales despite the limited product listing.
7 Benefits of Selling on Lazada. As the title says, this article provides a list of major benefits of selling on Lazada which include bigger market size, easy store management, minimal platform fees, and cooperative membership, among others.
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