TikTok Shop charges a 6% referral fee for every order, up from its original fees of 2% + 30 cents when it first launched in the US in September 2023. By July 1, 2024, referral fees for every order will go up to 8%, with above $10,000 orders for certain product categories slightly lower at 3%.
Even with its recent fee hike, TikTok Shop fees are still considerably lower compared to Amazon and Etsy. It is currently the most profitable app, earning $10 billion in global consumer spending1, and has 23.7 million shoppers in the US2 alone. TikTok is certainly the place for product discovery and selling. Open a TikTok Business account today.
Read on to learn about all the fees you need to know as a TikTok Shop seller—from transaction fees to sales tax, returns fees, and more.
TikTok Shop Fees: Referral Fee
Selling on TikTok is free, the platform just takes a referral fee for every transaction. A referral fee
is a service fee charged on every successfully paid and delivered order in TikTok Shop.
As of April 1, 2024:
- Referral fees are at 6% per qualified order (successfully paid and delivered).
- Exemptions include pre-owned bags, luggage, watches, and collectible trading cards with referral fees at 5%, and any portion of the sale over $10,000 of the said category items at 3%.
By July 1, 2024, TikTok Shop is expected to raise its referral fee to 8%.
Referral Fee Promotion for New Sellers (February 1 to October 31, 2024)
To ease new TikTok sellers into the fee transition increase, TikTok Shop is offering its original referral rate of 2% + 30 cents per qualified order to new sellers for 60 days once their shop gets activated. Note that the referral fee promo covers only up to $500,000 in initial sales.
Let’s say you just opened a TikTok Shop. Your referral fee is at 2% + 30 cents per sale for the next two months. But once you hit $500,000 in sales revenue, your referral fee changes to the current rate (6%) regardless of how many days you have been selling (less than 60 days).
How to Calculate a Product’s Referral Fee (+ Example)
To calculate your referral fee, you can use this formula:
Where:
- Referral fee rate: 6%
- Customer payment: Product price
- Platform discount (if there is any): TikTok-issued discount (TikTok gives this back to the seller)
- Tax: Calculated upon checkout. For sales made in the US, sales taxes are generally imposed and collected from the buyer at the point of sale, irrespective of the seller’s location.
What Is a Platform Discount?
TikTok Shop gives platform discounts to customers in the form of product and shipping discounts. These are on top of and independent of any discounts given by sellers themselves.
Platform discounts are funded by TikTok Shop and are given back to the seller when calculating the referral fee. This is partly why TikTok Shop is such a hit—product pricing can be slashed with huge discounts because of platform discounts.
To calculate the referral fee of new TikTok Shop sellers within the 60-day active status (and less than $500,000 in sales):
For example, if you sell an item priced at $75. Refer to the table below for a sample computation on referral fees for existing and new TikTok Shop sellers
Existing TikTok Shop Seller | New TikTok Shop Seller | |
|---|---|---|
Product Price | $75 | $75 |
Sales Tax + Retail Delivery Fee | $2 | $2 |
Customer Payment | $77 | $77 |
Platform Discount | $5 | $5 |
Referral Fee Calculation | 6% * ($77 + $5 - $2) | 2% * ($77 + $5) + $0.30 |
Referral Fee Cost | $4.80 | $1.94 |
TikTok Shop Fees: Returns & Refunds
Effective April 1, 2024, if a TikTok seller refunds or returns any processed order, TikTok Shop will refund the referral fee amount for the product(s), minus the appropriate Refund Administration Fee (RFA), which is 20% of the referral fee.
Your customers can file a request to cancel, return, or refund their orders through the Orders section in the TikTok app within the return period.
TikTok Shop’s standard return and refund period is 30 calendar days. However, buyers may still be entitled to raise a case for a return and refund under the TikTok Shop Buyer Protection Program within 90 calendar days.
Let’s take the example above. If your product’s referral fee is $4.80, your RFA is 96 cents. TikTok Shop will issue you the whole product price, platform discount, and sales tax, less 96 cents.
Now that you have learned more about TikTok Shop fees, read our related articles about selling on TikTok and marketing your TikTok Shop:
Is Selling on TikTok Shop Worth It?
The long and short of it? Yes, absolutely.
TikTok Shop’s recent fee hikes are pretty steep. Most TikTok Shop sellers note that this will impact their bottom line in the long run, especially if the sellers continue offering deep discounts the platform is known for. TikTok also announced that it will cut down on platform discounts, except for extremely viral products, which will also affect how sellers promote their products.
However, if you compare it with marketplaces like Amazon and Etsy—which have a huge audience ready to buy like TikTok Shop—TikTok Shop’s 8% referral fee is still way less than the two platforms. You can check our articles on Amazon seller fees and Etsy seller fees for a comparison.
TikTok is the place to be, even with the controversial legislative ban. Our TikTok Shop statistics article clearly shows how massive its audience is—both for product discovery and purchase.
Ultimately, though, your TikTok Shop’s success on the app will depend on how well you can capture your audience through your content—and that requires some serious work.
Frequently Asked Questions (FAQs)
Click through the tabs below to get answers to the most asked questions about TikTok Shop fees.
TikTok Shop takes a 6% referral fee from TikTok sellers on every successfully paid and delivered order from their stores. For returns, TikTok Shop returns the total amount paid, including the referral fee (less 20%).
The TikTok seller fee is a service fee charged by the platform on every successfully paid and delivered order on TikTok Shop. It is known as the referral fee.
As of April 1, 2024, TikTok Shop charges a 6% referral fee on every order successfully delivered from seller stores. By July 1, 2024, the referral fee will increase to 8%.
Bottom Line
Learning all about TikTok Shop’s fees is important whether you are an existing seller or thinking of setting up shop on the platform. It helps you price your products better and position yourself competitively without sacrificing too much of your bottom line because of fees.
TikTok is an all-in-one platform to promote, market, and sell your products. Getting started is free—all you need is to open a TikTok business account.
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