TikTok Shop: Marketplace Commission, Transaction and Referral Fees

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Last Updated: 27th August 2024

From the historic Billingsgate Fish Market in London to the bustling Lau Pa Sat Hawker Centre in Singapore, markets across the globe impose charges on their tenants for the privilege of offering their goods for sale within these spaces. TikTok Shop is, of course, no different in that regard and understanding the fees associated with using TikTok Shop is paramount for sellers who want to ensure they are making profitable sales. With different terminology and fee structures across markets, this article pulls together all the relevant information, consolidates and simplifies (just enough so the details aren’t lost) in order for you grasp the full picture of the costs involved in TikTok Shop. Please note that the figures provided are accurate as of the article’s last update but may be subject to future adjustments.

Types of TikTok Fees

Let’s break down the three types of fees that sellers might encounter:

1. Marketplace & Transaction Fees (SEA):
   • Marketplace Fees: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, the marketplace commission fee is a percentage that TikTok Shop deducts for each sale made on the platform. This fee is for leveraging TikTok’s digital infrastructure, customer base, and services like the search and recommendation algorithms that help customers discover products.
   • Transaction Fees: These are additional fees applied to each sale or transaction to cover operational costs, such as payment processing. They are separate from the marketplace commission fees and depending on the market can be either a flat fee per order or a variable percentage based on the transaction amount.
2. Platform Commission Fee (UK Only):
   • The UK has a platform commission fee and it functions in the same way as the marketplace commission fee in Southeast Asia. Sellers are charged the sole fee (TikTok has yet to introduce a transaction fee in the UK) for using TikTok Shop’s services in the UK.
3. Referral Fees (US Only):
   • In the United States, TikTok Shop has introduced the concept of referral fees, which is a consolidated fee that includes both the marketplace commission and the transaction fees.

Each of these fees plays a different role in the e-commerce ecosystem of TikTok Shop. Marketplace or platform commission fees are essentially the cost of doing business on TikTok Shop, giving sellers access to its vast audience and selling tools. Transaction fees are more operational in nature, covering the costs associated with the financial processing of each sale. Referral fees in the US serve a dual purpose, acting both as the commission for using the platform and covering transactional expenses, thereby simplifying the process for sellers.

Types of Fees: Quick Explanation

What are the TikTok Shop fee rates?

Firstly, it is important to understand that the marketplace commission fee structure on TikTok Shop varies by region; in some markets, it is determined by a range that depends on the product type, while in others, a flat percentage is applied across all products.

For example in Malaysia, where the marketplace commission fee for selling items within the food and beverages category related to baking is set at 0%. In contrast, products falling under the fashion category incur a marketplace commission fee of 3.18%. Regardless of the category, a consistent transaction fee of 2.12% applies to all sales.

For those markets with variable commission fees contingent on the product category, please reach out to Stickler (hello@stickler.live) to be sent a comprehensive breakdown of the fees applicable to their specific products.

Current TikTok Fee Rates

Fees are current as of the 27th of August 2024.

Upcoming Changes to TikTok Fee Rates

No published changes for the Philippines or US markets.

Historical Changes to TikTok Fee Rates

If you woud like to learn more about historical changes to TikTok Fees please reach out via email at hello@stickler.live

TikTok Fee Calculations Overview

TikTok Fee Calculation Examples

For clarity and simplicity in our calculation examples, we’ll apply the fee structure from TikTok Shop Vietnam, which includes a 2% marketplace commission fee rate and a 4% transaction fee rate. Each example features the sale of a luxury handbag priced at $1000, with a seller discount of $50, and accompanied by a shipping fee of $60.

We also need to define two more terms and explain their formulae; Subtotal After Seller Discount and Customer Payment.

Subtotal After Seller Discount = Original Item Price - Seller Discount

Customer Payment = (Subtotal After Seller Discount - Customer Refund Amount) + Customer Shipping Fee

Customer Refund Amount can be full or partial.

Customer Shipping Fee is the amount paid for shipping by the customer.

Calculation Example Numbers

Original Item Price = 1000
Seller Discount = 50
Customer Shipping Fee = 60

Customer Refund (Partial) = 400
Customer Refund (Full) = 950

Purchase (No Refund)

MCF = Marketplace Commission Fee

MCF = Subtotal After Seller Discount * MCF Rate

MCF = 950 * 2%
MCF = 19.00

Transaction Fee = Customer Payment * Transaction Fee Rate

Transaction Fee = 1010 * 4%
Transaction Fee = 40.40

Total Fees = 59.40

Purchase (With Partial Refund)

MCF = Marketplace Commission Fee

MCF = Subtotal After Seller Discount * MCF Rate

MCF = 950 * 2%
MCF = 19.00

Transaction Fee = Customer Payment * Transaction Fee Rate

Transaction Fee = ((950 - 400) + 60)) * 4%
Transaction Fee = 610 * 4%
Transaction Fee = 24.40

Total Fees = 43.40

Purchase (Full Refund)

MCF = Marketplace Commission Fee

MCF = Subtotal After Seller Discount * MCF Rate

MCF = 950 * 2%
MCF = 19.00

Transaction Fee = Customer Payment * Transaction Fee Rate

Transaction Fee = ((950 - 950) + 60)) * 4%
Transaction Fee = 610 * 4%
Transaction Fee = 2.40

Total Fees = 2.40 

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