How to Calculate Profit on TikTok Shop

How much profit are TikTok Shop sellers really keeping after referral fees, shipping surcharges, affiliate cuts, and refunds? And with TikTok’s 2025 shift to category-based fees—most categories now sitting in the 5–8% range—are creators and agencies recalculating their margins correctly?

TikTok Shop has exploded into one of the fastest-growing e-commerce platforms, with viral products moving thousands of units in days. But the same forces driving growth—heavy affiliate reliance, Spark Ads amplification, and platform-wide promotions—also complicate the math behind profitability.

Many creators discover too late that discounts and high return rates wipe out their expected margins.

This guide introduces a profit calculator designed for TikTok Shop’s new economics. You’ll see how to plug in real inputs like COGS, shipping, and affiliate rates; adjust for regional fee structures; and model different AOV tiers.

The goal: Help creators and agencies turn viral reach into reliable revenue.

Core Inputs of Profit Calculation

Profit modeling on TikTok Shop is not as simple as “price minus cost.” Every sale is shaped by multiple inputs that can swing margins up or down by double digits. Creators and agencies who treat these variables as line items in a calculator—not afterthoughts—avoid the painful surprises that come with scaling campaigns too quickly.

Item Cost and Production (COGS)

The most obvious variable is Cost of Goods Sold (COGS), but it’s also the most misleading when looked at in isolation. A creator selling custom tote bags may think they have a $5 unit cost, but that excludes packaging, inserts, and even VAT on supplies.

When YouTuber-turned-TikTok seller Emma Chamberlain launched branded coffee products, her team built margin models that accounted not just for beans and packaging but also for warehouse handling and sample distribution. Smaller sellers should take the same approach, even at lower volumes.

A good practice is to split COGS into fixed per-unit costs (manufacturing, packaging, inserts) and variable costs (bulk order freight, last-mile packaging, platform service fees). Doing this ensures the calculator doesn’t underestimate the true base expense.

Shipping and Fulfillment Choices

TikTok Shop currently supports three fulfillment paths: Fulfilled by TikTok (FBT), approved 4PL partners, or direct seller-ship. Each choice has unique implications for cost and margin.

• FBT: Often the lowest “all-in” rate for light products, but comes with a per-order fulfillment fee and a $0.50 surcharge in the UK as of July 2025.
• 4PL partners: Competitive for mid-weight products, especially if integrated with multi-platform logistics.
• Seller-ship: Maximum control, but higher risk of penalties if late shipments or returns pile up.

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Returns and Refund Rates

TikTok Shop enforces strict return and refund policies, including refund administration fees in some regions. A creator selling jewelry at $20 AOV might have a 12% return rate, which can wipe out the equivalent of their affiliate commission savings. Returns also trigger secondary costs—restocking, lost packaging, and in some cases, non-resellable stock.

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Promotions, Vouchers, and Subsidies

Promotions are double-edged. TikTok often subsidizes discounts to fuel early adoption, but not all subsidies are permanent. In Q3 2025, for example, TikTok partnered with Printify to roll out category-specific promo credits for creators selling custom merch. While this boosts conversion, creators must calculate the “post-subsidy” margin once the promo window closes.

Voucher stacking is another risk: a 10% creator-issued voucher plus a platform-subsidized 10% can double the margin hit if not tracked carefully.

Affiliate Commission % and Spark Ads Assist

Affiliate-driven sales are the engine of TikTok Shop. Typical rates sit between 10 and 20%, depending on product category and negotiation. If your calculator doesn’t include this line item, your profit estimates are inflated.

Spark Ads further complicate the equation. While they amplify creator content to a wider audience, they shift part of the cost burden onto the brand.

TikTok Shop Fees by Region (2025 Update)

To build an accurate profit model, creators and brands must understand how TikTok Shop’s fee structure now varies by region and category. In 2025, the platform has shifted toward category-based commission (referral) fees in many markets.

Below is a breakdown of how the fees work today, regional differences, and recent promotion or subsidy programs you should layer into your profit calculator.

Core Commission / Referral Fees

• In many markets (e.g. US), TikTok Shop now charges a 6% referral (commission) fee on most product categories.
• For some jewelry and precious-goods categories, the rate is lower: 5% in the US for jewelry/precious metals categories. 
• In “Printify’s guide to TikTok Shop fees,” they note that in Q1 2025, many products incur a 6% referral fee, with “some jewelry items” charged at 5%. 
• TikTok may also adjust category-specific commission rates in certain local markets via the Seller Center / local policies. 

Thus, many creators should plan around a 5–6% baseline referral rate in markets like the US, adjusting upward or downward depending on the product vertical and country-level policy.

Regional Differences & Category Variation

While the US baseline is a useful reference, other regions exhibit variation:

• In the Philippines, Malaysia, Singapore, Thailand, and Indonesia, marketplace commission (market-specific) fees can span wider ranges depending on the category. For example, a fashion category in Malaysia might have a lower MCF (market commission fee) than, say, electronics or accessories.
• In the UK, some sources (e.g., M2E Cloud’s guide) state a standard commission rate of 9% (VAT included) for many product categories. 
• TikTok’s EU Seller Center pages also offer commission “reduction rates” (e.g., new sellers may benefit from temporary lower commission fees, sometimes down to 2% in certain markets). 

Because of these regional differences, your profit sheet should allow for a lookup table keyed by region and product vertical to select the correct commission rate.

Refund Admin Fees and Deductions

Commission (referral) fees aren’t the only platform deduction you must account for:

• If a customer returns or cancels an order, TikTok issues a refund administration fee equal to 20% of the original referral fee.
• For example, if you paid $3 in referral fee on an order and the buyer returns it, you may pay $0.60 (20% of the $3) as the refund admin fee (even though the original referral fee is partially refunded).
• In the US, the refund admin fee is capped at $5 per SKU (i.e. even if 20% of the referral fee exceeds $5, you won’t pay more than $5).

So your model should separately calculate (a) the referral fee on the gross order, and (b) a “refund admin” line tied to expected return rates.

Recent & Upcoming Promotions, Subsidies & Fee Changes

• For merchants using the Merchant-Fulfilled Network (MFN) (i.e., seller-shipped order model) in the UK, beginning July 15, 2025, TikTok is introducing a £0.50 per-order service fee (inclusive of VAT). It does not apply to orders fulfilled via TikTok’s logistics or FBT.
• Also, as of July 1, 2025, TikTok launched a Co-Funded Promotion Program: for a trial period, TikTok will fully subsidize promotional campaigns. After that, participating sellers pay 25% of promotion costs, and TikTok covers 75%.
• TikTok periodically offers commission-free or discounted commission incentive periods, especially to attract new sellers in certain regions. Admetrics reports that Europe saw commission-free periods for sellers joining in select markets. 

These subsidies temporarily reduce effective fees and should be toggleable in your profit sheet (i.e. allow “with subsidy / without subsidy” modes).

Example: Commission Comparison by Region

Say you sell a $50 beauty product in the US:

• Referral fee = 6% × $50 = $3.00
• If returned, refund admin = 20% of $3 = $0.60 (if applicable)

If that same beauty sale occurred in the UK with a 9% commission:

• Commission = 9% × $50 = $4.50
• If you’re in the subsidy window or a new seller reduction, you might pay less (e.g. 3–5%), but outside those windows you should plan for the full commission. M2E Cloud User Guides -+1

Modeling Profit Scenarios at Different AOV Tiers

Not all products behave the same on TikTok Shop. The economics of a $12 impulse-buy accessory differ radically from a $90 skincare kit or a $200 home appliance. This is why a profit calculator should allow you to model by average order value (AOV). B

elow, we’ll break down three tiers—low-ticket, mid-tier, and high-ticket—using real-world data and examples from active TikTok Shop sellers.

Low-Ticket Products (<$15 AOV)

Low-ticket items like phone cases, socks, or keychains thrive on TikTok’s viral discovery engine. Their cheap price point makes them impulse-friendly, but margins are razor-thin.

For example, Casekoo, a phone case brand popular on TikTok Shop US, often lists cases for $12–$15. At that price:

• Referral fee (6% US) = ~$0.72–$0.90
• Shipping (FBT, lightweight) = $3–$4
• Affiliate commission (15%) = ~$1.80–$2.25

If COGS is $3, the seller might clear only $2–$3 per sale before factoring in returns (which can run 8–10% in phone accessories). The lesson? Creators in this tier must rely on volume and virality—and keep return rates low—to avoid eroding margins.

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Mid-Tier Products ($20–$50 AOV)

This tier is the “sweet spot” for many TikTok-first brands. Buyers still see these items as affordable, but sellers gain more margin flexibility to cover fees, affiliates, and Spark Ads.

Take Glow Hub Skincare, which lists serums at around $30 on the TikTok Shop UK. At this AOV:

• Referral fee (9% UK rate) = $2.70
• Shipping (seller-ship or 4PL) = $3–$5
• Affiliate commission (15%) = $4.50

If COGS is $7–$10, profit after fees lands around $7–$10 per unit. That’s healthy enough to reinvest in Spark Ads, which Glow Hub used heavily in 2024 to amplify creator-led reviews. This tier shows why mid-priced beauty and personal care have become some of the fastest-growing TikTok Shop categories in both the UK and the US.

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High-Ticket Products ($75+ AOV)

At higher price points, absolute profit per order can be large, but conversion rates and customer expectations rise sharply. Shoppers often research more, compare reviews, and scrutinize return policies.

SharkNinja, which sells kitchen appliances through TikTok Shop US, offers blenders and air fryers in the $80–$200 range.

For a $100 order:

• Referral fee (6%) = $6
• Shipping (FBT or heavy-item surcharge) = $8–$12
• Affiliate commission (15%) = $15

If COGS is $40, the seller nets around $27–$31. On paper, this looks strong. But if return rates hit even 12%, the refund admin fees and lost restocking value can cut profitability by a third. High-ticket sellers, therefore, model not just the sale, but return-adjusted margins. Many also lean on TikTok’s co-funded promotions to soften the high acquisition costs of ads.

Why Agencies Model Across Tiers

Agencies managing creator-led TikTok campaigns often segment by AOV tier before deciding where to invest. Low-ticket campaigns need scale + affiliate reach. Mid-tier thrives with Spark Ads layered on influencer UGC. High-ticket requires tight return management and premium positioning.

By toggling your calculator across these tiers, both creators and agencies can see where margin resilience is strongest and allocate campaigns accordingly.

Calculator Walkthrough

A TikTok Shop profit calculator should do more than spit out net revenue. It needs to map how each input—fees, shipping, returns, affiliate payouts, and ad spend—shapes final profitability.

Here’s how to structure the tool and use it in practice.

Step 1: Define the Inputs

At the top of your sheet or tool, list every variable that affects profit:

• Item Cost (COGS): Your per-unit manufacturing, packaging, and handling expense.
• Shipping Fees: Whether you use TikTok Fulfilled by TikTok (FBT), 4PL, or seller-ship, costs vary by weight and region.
• Referral Fee: Category-based commission (5–9% depending on region).
• Refund Admin Fee: 20% of the referral fee in most markets if a return is processed.
• Affiliate Commission: Typically 10–20% of order value.
• Spark Ads Spend: Optional but critical—ads often drive incremental sales but cut into profit.
• Discounts/Promos: Both TikTok subsidies and your own vouchers.

The calculator should allow you to toggle these inputs, so you can model best-case and worst-case scenarios.

Step 2: Build the Profit Formula

The baseline formula is:

Net Profit = Sale Price – (COGS + Shipping + Referral Fee + Refund Buffer + Affiliate Commission + Spark Ads + Promos)

But instead of applying it to one order, you should model across 100 orders to account for average return rates. For example, if you expect 10% returns, include refund admin fees and loss of resellable goods across 10 out of 100 orders.

Step 3: Example Scenario — $30 Skincare Serum (US)

Let’s walk through a real-world category that performs well on TikTok Shop: skincare. Brands like Glow Recipe and Glow Hub have both leaned into TikTok’s beauty virality.

• Sale Price: $30
• COGS: $8
• Shipping (FBT, light parcel): $3.50
• Referral Fee (6% US): $1.80
• Affiliate Commission (15%): $4.50
• Refund Buffer (10% returns; $1.80 referral fee × 20% refund admin × 10 orders): $0.36 per order
• Spark Ads Spend (allocated): $3.00

Net Profit = $30 – (8 + 3.5 + 1.8 + 4.5 + 0.36 + 3.0) = $8.84 per order

That leaves about a 29% margin—enough to scale, but also sensitive to swings in return rates or higher Spark Ads costs.

Step 4: Sensitivity Analysis

The calculator should also allow sensitivity testing. For example, if affiliate commission rises from 15% to 20%, profit drops by $1.50 per order. If return rates climb from 10% to 15%, refund-related costs increase proportionally. Agencies often run these “what if” tests to stress-test a creator’s pricing strategy before investing in Spark Ads.

Step 5: Customizing by Region

Because TikTok Shop’s referral fees differ (6% US vs. 9% UK vs. varying SEA rates), the calculator should use a drop-down selector for market/region. Sellers like SharkNinja, who operate across the US, UK, and Southeast Asia, adjust their profit modeling region by region to avoid assuming one universal margin.

Why This Walkthrough Matters

By layering each cost transparently, creators and agencies avoid the trap of “phantom profit”—thinking they’re making $10 per unit when, after refunds and commissions, it’s closer to $4. With the calculator, you can confidently test pricing, commission levels, and ad budgets before scaling.

Turn Margins Into Momentum

TikTok Shop has matured into one of the most lucrative social commerce ecosystems, but profit isn’t automatic—it’s engineered. From category-based referral fees and region-specific surcharges to the hidden drag of returns, affiliates, and Spark Ads, every input shapes your bottom line.

A calculator isn’t just a spreadsheet; it’s a decision-making tool that helps creators and agencies stress-test their pricing, protect margins, and forecast at scale.

Whether you’re a solo creator experimenting with $15 accessories or a brand agency managing multi-region campaigns, profit modeling ensures you know exactly where your money goes—and how to get more of it back. With TikTok’s shifting fee structures and periodic subsidies, staying ahead means treating profit not as an afterthought, but as your growth engine.

Use the calculator, customize it by region and category, and run “what-if” scenarios before you scale. The result? Fewer nasty surprises, more sustainable campaigns, and the confidence to turn TikTok’s reach into reliable revenue.

About the Author

Nadica Naceva

Writer

Nadica Naceva writes, edits, and wrangles content at Influencer Marketing Hub, where she keeps the wheels turning behind the scenes. She’s reviewed more articles than she can count, making sure they don’t go out sounding like AI wrote them in a hurry. When she’s not knee-deep in drafts, she’s training others to spot fluff from miles away (so she doesn’t have to).