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TikTok Shop Costs
TIKTOK SHOP
WHAT ARE THE COSTS?

TikTok Shop is not cheap….. but compared to Amazon:
Cost Component | Amazon | TikTok Shop |
---|---|---|
Referral Fees/Commissions | 6% - 45% (varies by category) | 5% - 8% (varies by region and category) |
Subscription Fees | $39.99/month (Professional Plan) | No monthly subscription fee |
Fulfillment Fees | Varies by size/weight (FBA Fees) | Typically 1.8% - 2.8% (depends on fulfilment) |
Advertising Costs | PPC costs (varies widely by keywords) | Variable (depends on GMV Max ads) |
Other Fees | Storage fees, refund fees, removal fees, long-term storage fees | Refund administration fee (20% of referral fee) for returns |

Let’s assume you sell a kid’s toy that costs $5 to manufacture and sells for $20:
Cost Component | Amazon (USD) | TikTok Shop (USD) |
---|---|---|
Selling Price | $20.00 | $20.00 |
COGS (Cost of Goods Sold) | $5.00 | $5.00 |
Referral Fees/Commissions | $3.00 (15% of $20) | $1.20 (6% of $20) |
Fulfillment Fees | $3.50 (Approximate FBA fee) | $0.36 (1.8% fulfilment fee) |
Payment Processing Fees | Included in Referral Fees | Included in Referral Fees |
Other Fees | $0.50 (e.g., storage, refund fees) | $0.24 (Refund admin fee, if applicable) |
Profit Before Advertising | $12.00 | $13.80 |
Affiliate Commission | N/A | Based on 20% of the sale price. $4 |
Profit After Affiliate Commission | N/A | $9.80 |
But there are 2 important factors
Affiliate Commission:
20% is the average rate…. anything less and you won’t get any interested affiliates
Affiliates are the ‘lifeblood’ of TikTok Shop, so this expense is needed
Advertising:
We all know Amazon Ads are very expensive and hence, profit dwindles.
I would estimate that Amazon advertising takes most of the budget 🤬
When it comes to TikTok Shop Ads, right now TikTok is focussing on their ad platform and hence, we are seeing ROI’s at least 2x-3x. In that case, the more you spend, the better the results. Which make ads on TikTok Shop somewhat relative (most of my clients do not budget for TikTok Shop Ads due to the success rate)
Conclusion:
Generally, TikTok Shop is cheaper that Amazon, especially when Amazon Ads are involved.
You are essentially substituting the the Amazon Ad budget with TikTok Shop Affiliate commission.
Bear in mind, TikTok Shop requires sending out tons of samples to potential affiliates….. that is a necessary expense.
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