TikTok Shop price for your target margin

From a profit margin to a price

TikTok's US referral fee multiplies the category rate by customer payment, adds any platform discount and subtracts tax. Postage charged to the buyer is included in that payment. The category fee page says so.

The menu applies one flat percentage. When a new shop has a promotional rate, or part of a large pre-owned sale uses a lower rate, type that percentage instead of the preset.

The amount paid is the price plus any postage charged on the order. The fee is the rate times that amount. Creator commission uses that price alone. If the collaboration agreement also counts postage, this result will be wrong, so read those terms before you publish. The steps for setting the commission are in Get TikTok Shop creators selling your products.

The fixed costs are what the product costs you once it has reached you, the postage and packing you pay, and the ads on that order. If TikTok warehouses the unit, enter the per-unit warehouse fee as the postage you pay. Fulfilled by TikTok vs self-fulfillment compares the two paths.

Net margin here is profit divided by the amount paid. Profit is that amount, minus the fee, the commission and the fixed costs.

The payment that hits your margin is those fixed costs, minus the commission rate times their postage, divided by 1 minus the fee rate minus the commission rate minus the margin. Subtract their postage and you have what to charge. When the divisor is zero or below, the fee, the commission and the margin already use up the payment, and no price reaches the target.

A worked US example

On the US most-categories preset of 6%, the sample product costs $8 landed and $5 to pack and post. The buyer is charged no postage, creator commission is 15%, ads are $4 and the target margin is 20%. The fields start with these numbers.

Add the product, your postage and the ads and you get $17. The divisor is 1 minus 0.06 minus 0.15 minus 0.20, which equals 0.59. Divide 17 by 0.59 and the buyer pays about $28.81. With no buyer postage, that figure is the list price too.

Fee, commission and profit on that result are about $1.73, $4.32 and $5.76. Profit is about a fifth of the payment.

List at about $28.81 to keep a 20% net margin after TikTok's 6% fee, 15% creator commission and $4 ad spend per order.

TikTok's fee update page runs the same rate on a $102 order, adds a five-dollar platform discount and subtracts two dollars of tax, for a fee of $6.30.

Check a price you already have

The TikTok Shop fee and profit calculator starts from a price you already chose and shows the margin. Put the figure from the example into that calculator when you want each cost on its own line. The full set is on Free TikTok Shop calculators.

A free-sample deal is judged on its own page. The creator sample ROI calculator works out how many sales those samples need before they pay for themselves. For ads, the GMV Max ROAS planner turns order profit into a break-even ROAS and CPA.

The rates in the menu

Each preset is listed below, with a link to the TikTok Shop page it came from. TikTok Shop fees explained covers refunds, and why the EU line leaves the rate blank.

Why a round price falls short

Sellers who have settled a run of orders say a sale around $50 can leave only a few dollars after the referral fee, fulfillment, discounts and creator commission. On a cheap item, free shipping leaves very little of that profit.

A $19.99 price on those same costs misses the margin in the example. The fee and the commission, added to the costs above, already exceed $19.99. The solved price is the one that holds the margin you typed. Research tools that estimate demand before you stock a unit are compared in Best TikTok Shop tools.