TikTok Shop increases fees by 300%: Small businesses cry for help, what is the way out for online shops?
TikTok Shop adjusted its commission fee to increase by 300%, causing many small businesses to fall into a situation where the more they sell, the deeper the loss, but they still dare not leave the platform.
Record-breaking fees, sellers are "sitting on fire"
Many sellers on TikTok Shop have expressed concern in recent days after the platform announced an adjustment to its commission fees effective July 18. The highest increase is up to 300% compared to before.
According to the new announcement, standard sellers on TikTok Shop must pay a commission fee of 10 - 12% for fashion products, while previously it was only 4%. Other product categories such as home - living, groceries, health, beauty, mother and baby... also recorded fees ranging from 4 - 12% and 8.5 - 12%, significantly higher than the old rate.
For genuine sellers (Mall), the increase is only slight, around less than 2%.
Shipping is "free" but not really free
At the same time as increasing the commission fee, TikTok Shop also changed its shipping subsidy policy (Shipping Fee Program - SPF). Instead of collecting separately as before (4.5% of order value, maximum 30,000 VND/product), SPF is now included by default in the commission fee.
As a result, the total fees that sellers have to pay have increased dramatically. For example, fashion sellers who previously paid only 3-4% now have to pay 10-12%, not to mention an additional 5% transaction fee. In total, the cost can be up to 17% of the revenue per order.
Sellers "cry out" because of heavy fees
Many small traders shared that they had almost no profit left after being deducted all kinds of fees. Ms. Lieu (HCMC) said that an order worth 239,000 VND, but after deducting more than 60,000 VND of various fees, the actual amount received was only about 175,000 VND.
Mr. Hoang (HCMC) also encountered a similar situation: an order worth more than 2.5 million VND was deducted more than 500,000 VND in fees. He compared: "Selling online now is no different from renting a real place."
Many sellers said that although they wanted to withdraw from TikTok Shop, they could not because their main revenue still depended on this platform. Switching to another platform would require large costs to rebuild the sales channel and brand from scratch.
