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TikTok Shop Philippines Seller Fees 2024: A Simple Guide with Examples

TikTok Shop Philippines Seller Fees

As TikTok Shop continues to rapidly expand in the Philippines, it’s essential for sellers to understand how each fee impacts their profits. Starting June 1, 2024, TikTok Shop will update its seller fees for every completed order. This guide explains these fees to help you build a strong, profitable eCommerce strategy tailored to the Filipino market.

TikTok Shop Seller Fee include: 

  1. Marketplace Commission Fee
  2. Transaction Fee 
  3. Affiliate Commission Fee 
 

1. Marketplace Commission Fee

TikTok Shop will automatically deduct this fee after an order is successfully delivered to buyers. The Marketplace Commission Fee is charged at rates that differ for each product sub-category.

The Marketplace Commission Fee structure and rate:

Marketplace Commission Fee Rate
(VAT inclusive)
effective August 15, 2024
Cluster Commission Fee
Fashion 5.0% – 6.7%
FMCG 4.5% – 6.4%
Electronics 3.2% – 6.8%
Lifestyle 5.0% – 6.9%
Note: For a detailed table of commission rates by sub-category, please refer to the official TikTok Shop Academy website.

How to calculate Marketplace Commission Fee?

To calculate the Marketplace Commission Fee:

  1. take the item price
  2. subtract any seller discounts, excluding Shipping Fee and TikTok Shop platform discounts.
  3. multiply the remaining amount by the category’s commission rate (includes VAT)
Formula: Commission Fee* = Commission Rate % × (Item Price – Seller Discount) ,*Commission fee is VAT inclusive

Example for calculating the Marketplace Commission Fee:

1. Seller Item: Black PVC Luggage

  • Original Price: PHP 6,000
  • Seller Discount: PHP 1,000
  • Item Price after Seller Discount: PHP 5,000

2. Black PVC Luggage falls under Fashion > Luggage & Bags > Commission Rate = 6.3%

3. The Marketplace Commission Fee calculation is:

Item Price (includes Tax) PHP 6,000
(-) Seller Discount PHP 1,000
Subtotal after Seller Discount PHP 5,000
(×) Respective Commission Rate (%) 6.3%
Marketplace Commission Fee PHP 315

This results in a total PHP 315 (VAT-inclusive) Commission Fee for this order settlement.

Exemption Rules: 

  • New sellers: Newly signed-up sellers can enjoy a 0% commission fee for the first 90 days.
  • Good Performing Sellers: Sellers who complete the monthly *Diligence Mission can enjoy platform fee waiver for 30 days. 

*Diligence Mission will be held on a monthly basis, and mission details will be updated monthly. 

 

2. Transaction Fee

Starting from June 1, 2023, all sellers (Local-to-Local and Crossborder) will incur a transaction fee of 2.24% (VAT inclusive). This transaction fee will be deducted directly from the order settlement.

Note:
(i) Only paid orders that are successfully delivered and accepted by the buyer are considered valid.
(ii) Orders that are cancelled, fully returned or refunded are not considered valid.

How to calculate Transaction Fee?

To calculate the Transaction Fee:

  1. take the item price
  2. deduct any seller discounts from the item price
  3. add the customer-paid shipping fee to the adjusted item price
  4. multiply the total customer payment amount by 2.24%
Formula: Transaction Fee = (Customer Payment – Customer Order Refund) × 2.24%

Example for calculating the Transaction Fee:

Case A: Successfully Placed Order

1. Seller Item: Black PVC Luggage

  • Original Price: PHP 6,000
  • Seller Discount: PHP 1,000
  • Item Price after Seller Discount: PHP 5,000
  • Customer Shipping Fee: PHP 50 

2. The Transaction Fee calculation is:

Item Price (includes Tax) PHP 6,000
(-) Seller Discount PHP 1,000
Subtotal after Seller Discount PHP 5,000
(+) Customer Shipping Fee PHP 50
Customer Payment PHP 5,050
(×)Transaction Fee Rate (%) 2.24%
Transaction Fee PHP 113.12

The total Transaction Fee for this order settlement is PHP 113.12, inclusive of VAT.

Case B: Successfully Refunded Order

1. Seller Item: Black PVC Luggage

  • Original Price: PHP 6,000
  • Seller Discount: PHP 1,000
  • Item Price after Seller Discount: PHP 5,000
  • Customer Shipping Fee: PHP 50 

2. Buyer successfully requested partial refund of PHP 500 from Seller

3. The Transaction Fee calculation is:

Item Price (includes Tax) PHP 6,000
(-) Seller Discount PHP 1,000
Subtotal after Seller Discount PHP 5,000
(+) Customer Shipping Fee PHP 50
Customer Payment PHP 5,050
(-) Customer Order Refund PHP 500
Subtotal PHP 4,550
(×)Transaction Fee Rate (%) 2,24%
Transaction Fee PHP 101.92

The total Transaction Fee for this order settlement is PHP 101.92, inclusive of VAT.

 

3. Affiliate Commission Fee

When a TikTok Creator successfully promotes and sells a product through their content (Short Video or LIVE), TikTok Shop charges an Affiliate Commission. It is automatically deducted from the order amount if the sale isn’t cancelled or refunded before the settlement period ends.

How to calculate Affiliate Commission Fee?

To calculate the Affiliate Commission Fee:

  1. take the item price
  2. deduct any seller discounts
  3. excluding TikTok Shop platform discounts and shipping costs
Formula: Affiliate Commission Fee = Affiliate Commission Rate × (Customer Payment – Tax Amount)

Sellers can use the Affiliate Commission Setting tool to maintain a commission rate for Creators. It will help sellers get less negative feedback from Creators stemming from multiple commission changes for one product. Any changers commission rate was effective after 30 days starting the lockdown period. 

Example for calculating the Affiliate Commission Fee: 

1. Seller Item: Black PVC Luggage

  • Original Price: PHP 6,000
  • Seller Discount: PHP 1,000
  • Item Price after Seller Discount: PHP 5,000

2. An Affiliate helped seller sell 1 x Black PVC Luggage to Buyer (via a livestream). 

3. The seller and Affiliate agreed on a 10% Affiliate Commission Rate through the Affiliate Plan.

4. The Affiliate Commission Fee Calculation for Tax Amount (illustration) PHP 50 is: 

Item Price (includes Tax) PHP 6,000
(-) Seller Discount PHP 1,000
Subtotal after Seller Discount PHP 5,000
(-) Tax Amount (illustration) PHP 50
Customer Payment PHP 4,950
(×) Affiliate Commission Rate (%) 10%
Affiliate Commission Fee PHP 495

The total Affiliate Commission Fee for this order settlement is PHP 495 (VAT-inclusive).

There are two versions of the Affiliate Program for connecting with Creators:

  1. Open Collaboration
  2. Target Collaboration

Advantages of each collaboration:

two versions of the Affiliate Program's benefit
Note: For detailed information of this Affiliate Program, please refer to the official TikTok Shop Academy website.

Are you facing these problems when selling on TikTok Shop?

SiteGiant Payment Reconciliation allows you easily tracking the TikTok Shop payment states which order were paid and unpaid order, late order payments, overcharged shipping fees and more. All of the data is conveniently available in various report formats and can be exported as a CSV file.

SiteGiant Payment Reconciliation

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Image Credits and References: TikTok Shop Academy

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