Work out exactly what lands in your bank after TikTok Shop referral fees, affiliate commission, payment processing, product cost and shipping.
Net payout = Sale price − (Sale price × referral %) − (Sale price × affiliate %) − payment processing − COGS − shipping − returns allowance. Margin % = Net profit ÷ Sale price × 100.
A $45 product with an 8% referral fee ($3.60), a 15% affiliate commission ($6.75), $12 COGS and $5 shipping nets $17.65 — a 39% margin. Push the affiliate rate to 25% and margin collapses to 28%.
A referral/transaction fee on the order total (introductory rates around 2% stepping up to roughly 6–8% in the US), plus any affiliate commission you set, plus payment processing. Fees are deducted before payout, not billed separately.
10–20% is the working range for most physical products. Below 8% you struggle to attract creators; above 25% only works on margins above 70%. Higher open-collaboration rates buy volume, targeted rates buy quality creators.
Funds settle after the order is delivered plus a return buffer — typically 7–15 days from delivery in the US. Plan working capital for roughly a 3-week cash cycle from ad spend to payout.
The seller absorbs the product and often the return shipping. Model a 5–15% return rate depending on category — apparel runs highest — because it hits margin harder than the platform fee does.
On fees, usually yes: TikTok's referral rate is comparable to Amazon's 8–15% but there are no FBA fulfilment or storage fees. The trade-off is that you fulfil yourself and creator commission replaces Amazon's built-in demand.
Aim for a gross margin above 65% before platform fees. After a ~8% referral fee, 15% affiliate commission and shipping, that leaves roughly 25–35% net — enough room to also fund paid boosting.