What the fee stack actually looks like
Three costs sit on every order. The platform referral commission, currently around 9 percent including VAT in the UK. The affiliate commission you offer creators, set per product. And payment processing, which TikTok bundles into the referral fee rather than billing separately. Ad spend sits on top if you run GMV Max.
Fees come off the gross order value including the shipping the customer paid. Free shipping promotions you fund yourself do not reduce the commission base. Model your unit economics on gross, then subtract cost of goods, pick and pack, postage and returns. Sellers who get burned usually modelled on net.
The margin you need before you start
Work backwards. A 9 percent referral fee, 15 percent affiliate commission and roughly 8 to 12 percent on postage and packaging takes about a third of the sell price before you have paid for the product. A 40 percent gross margin product loses money on TikTok Shop.
The workable floor is 65 to 75 percent gross margin at retail. That is why supplements, cosmetics and small homeware dominate the top sellers and why furniture and electronics struggle. If your landed cost is more than 30 percent of your price, fix the price or the product before you fix the content.
Fees TikTok does not put on the invoice
Sample seeding is a real cost. Sending 200 units to creators at £8 landed is £1,600 before a single sale. Treat it as marketing spend. Only a fraction of seeded creators post, and a smaller fraction sell, so seed in waves and cut the ones who go quiet.
Then there are refunds. TikTok can side with the buyer and refund without a return, and the referral fee on a refunded order is credited back but your postage is gone. Build a 4 to 8 percent returns provision into the model and review it monthly.