They Think It's an Opportunity.
I Think They're Working for TikTok. For Free.
Malaysian sellers are messaging every creator and agency they can find, asking for free collaborations. Most of them genuinely believe TikTok's affiliate model is their path to building a brand. I think the math tells a completely different story — and the only party getting paid at the end is the platform.
What I'm seeing
Lately my inbox has been full of collaboration requests from Malaysian brands. Free content production. Free livestream hosting. Free creative. They send a long message explaining their product, attach some photos, and end with some version of: "We will provide the products, and you keep whatever commission you earn."
I am not going to pretend this is new. But the volume has increased significantly, and so has the confidence with which these requests are made. There is a genuine belief on the other side that this is a reasonable ask — that free collaboration is a normal, legitimate marketing strategy.
I disagree. And I want to explain exactly why, because the problem goes much deeper than etiquette.
TikTok created this
This behaviour did not come from nowhere. TikTok's affiliate marketing model created it.
When TikTok Shop launched its affiliate programme in Southeast Asia, it offered something that felt revolutionary: a seller could list their product, creators would promote it for free, and everyone would earn commission on sales. No upfront cost. No production budget. Just upload your product and let the creators do the work.
For a certain kind of aspiring entrepreneur, this looked like a golden door. You did not need capital to start. You did not need a marketing budget. You did not need a plan beyond "find enough creators to push my product." The platform seemed to be handing out businesses for free.
TikTok promoted this narrative aggressively because it served them. More sellers meant more products. More creator content meant more traffic. More transactions meant more platform fees. The affiliate model was never designed to make sellers rich — it was designed to make TikTok's marketplace denser and more active. The sellers and creators were the supply chain. The platform was the beneficiary.
Who actually wins
Let me trace what actually happens when a free collaboration works — when a creator promotes a product, drives views, and generates sales.
The creator spent hours planning, filming, and editing. They promoted the content, engaged with comments, and drove their own audience to a transaction. Their reward is a commission — typically 10 to 15 percent of the sale price.
The seller moved product. Their reward is their margin minus all platform costs.
TikTok collected a platform fee on every transaction, earned advertising revenue from all the organic content the creator produced, accumulated purchasing data on every buyer, and grew its GMV numbers — the metric that determines its valuation and negotiating power with investors and brands globally. TikTok contributed nothing to the production. It took a percentage of everything.
Both the creator and the seller generated real economic value for TikTok. Whether either of them generated real economic value for themselves depends entirely on the numbers — and the numbers are the part most people refuse to look at honestly.
The margin math
The majority of Malaysian traders on TikTok Shop are not brand owners. They are resellers and dealers — businesses that source products from manufacturers or distributors and mark them up for retail. This is not a criticism. It is a description of the market structure.
A reseller with a strong sourcing deal might achieve a 70 percent gross margin. The average is closer to 50 percent. Many operate below that.
Fifty percent sounds healthy until you account for the actual cost of selling on TikTok Shop.
| Item | % of Sale Price |
|---|---|
| Product cost (at 50% margin) | 50% |
| TikTok platform fee (varies by category — can hit 20%) | ~5–20% |
| Affiliate commission (to creator) | ~10–15% |
| Logistics and fulfilment | ~5–8% |
| Returns, packaging, customer service | ~3–5% |
| What is left | ~2–27% |
Two to twenty-seven percent net — and that upper end assumes a low platform fee, a low affiliate rate, and no returns. In high-fee categories where TikTok's platform charge hits 20%, combined with a standard affiliate commission and logistics, a trader at 50% gross margin can break even or make a loss on every single order. Before accounting for their own time, paid promotion, platform penalties for low ratings, or the cost of product samples handed to creators for free.
This is not a bad month. This is the structure of the business.
Why 50% margin is not enough to build a brand
Here is the harder truth. Even if a reseller maintains a 50 percent gross margin and operates efficiently, that margin is still not sufficient to build a brand.
Building a brand requires consistent marketing investment — paid media, creative production, community building, and the slow accumulation of trust with an audience over time. These are not optional costs that can be replaced by free collaborations. They are the work. A business that cannot fund them is not building a brand. It is selling product — and there is a significant difference.
Brands command premium pricing, customer loyalty, and repeat purchase rates that resellers cannot access. Brands survive platform fee increases, algorithm changes, and new competitors because their customers come back regardless of where the product is listed. Resellers have none of this. When the margin gets squeezed, they have no buffer. When a competitor sources the same product cheaper, they have no defence.
The free collaboration request is, in this context, not just a sign of a tight budget. It is a sign that the business model itself cannot support the investment that brand building requires. The seller is not underfunded — they are structurally incapable of funding it, because the margin was never there to begin with.
China is already regulating this
Malaysia tends to follow China's e-commerce market by twelve to twenty-four months. What happens on Douyin, Taobao, and Pinduoduo today usually arrives on TikTok Shop and Shopee in Southeast Asia within two years. So when China's government starts regulating its own live commerce industry, it is worth paying attention — because the same corrections are coming here.
Two regulations in particular are directly relevant to this conversation.
The first is fraud liability. Previously in China's live commerce market, when a seller committed fraud — misrepresenting a product, selling counterfeit goods, making false claims — the legal and financial responsibility fell on the seller. The host, the agency that managed the host, and the platform were insulated. That is no longer the case. New regulations make all parties responsible: the host who presented the product, the agency that arranged the collaboration, the seller who listed it, and the platform that facilitated the transaction.
Think about what this means for the free collaboration model. A creator who does free work for a seller in exchange for commission is not just taking on commercial risk — they are now taking on legal risk. If the product turns out to be misrepresented, the host is a liable party. The agency is a liable party. They received no upfront payment, they carried all the production cost, and now they carry the legal exposure. The "free" collaboration was never actually free — but now the hidden cost has a legal dimension that cannot be ignored.
The scale of platform extraction from traders is not theoretical. China's listed e-commerce companies publish annual reports. Some of the largest report revenue of RMB 10 billion in a single year — and post a net profit of just RMB 50 million. That is a net margin of 0.5 percent on 10 billion in sales. The line that explains it: platform marketing fees as high as RMB 1.4 billion. Fourteen percent of total revenue, paid directly to the platform before a single yuan reaches the bottom line. That figure does not include affiliate commissions, logistics costs, or returns. Just the platform's marketing toll.
These are not small operations run by first-time entrepreneurs. These are listed companies with professional management, economies of scale, and sophisticated operations — and they are handing 14 percent of revenue back to the platform just to remain visible. If that is the reality at scale in a mature market, the Malaysian trader running a TikTok Shop with a 50 percent gross margin should understand exactly what kind of future they are building toward.
The second regulation targets low-price competition. For years, the dominant strategy in Chinese e-commerce — most aggressively executed by Pinduoduo — was to sell below cost, use capital to sustain losses, and drive competitors out of the market through price destruction. Chinese regulators have moved to outlaw this. Selling below cost as a deliberate competitive strategy is being restricted, and platforms that facilitate or incentivise it face penalties.
This matters for Malaysian resellers because the entire free collab, race-to-the-bottom model depends on price being the primary competitive variable. If you have no brand, no differentiation, and no marketing budget, the only lever you have is price. The market structure that made that viable — where capital could be used to subsidise losses indefinitely — is being dismantled at the source. When the same regulatory pressure reaches Southeast Asia, and it will, resellers who have spent years competing on price alone will have nothing left to compete on.
The honest answer
I am not saying this to dismiss every reseller or small seller in Malaysia. There are resellers who transition into real brand owners — who develop proprietary products, build genuine audiences, and invest in their own growth. That journey is real and I respect it.
What I am saying is that the TikTok affiliate model gave a lot of people a false picture of what building a business actually costs. It created the impression that marketing is free, that content is free, that brand building is free — because the platform needed sellers to believe that in order to grow its own marketplace.
When I receive a free collaboration request today, I do not see an entrepreneur. I see someone who was sold a version of commerce that was never designed to make them wealthy — only to make the platform more valuable. They are working hard. They are genuinely trying. And most of them are generating more revenue for TikTok than they will ever keep for themselves.
If you are a seller asking creators and agencies for free work, here is my honest advice: stop. Not because it is rude, though it is. Stop because it tells you something important about your business — that the model you are running cannot support the costs that every real business has to pay. That is the conversation worth having. Not with a creator's inbox, but with yourself.
And if you are genuinely serious about building something — start with the margin. If the margin cannot support a marketing budget, the product pricing is wrong, the sourcing is wrong, or the category is wrong. Fix that first. Everything else comes after.
Published by IMA AI — June 2026.