From the 2nd of September 2024, some TikTok Shop sellers in the UK will see a massive increase in their base commission fees, jumping from 5% to 9%.
This change marks the first adjustment to TikTok Shop’s fee structure since its launch in 2021 and reflects the platform’s broader strategy to develop the “marketplace of the future.”
What’s Behind the Fee Hike?
TikTok’s decision to raise fees is part of its effort to further invest in live commerce and shoppable content, areas where the platform has seen tremendous growth. By increasing fees, TikTok aims to enhance its operations and support services, helping sellers succeed in an increasingly competitive social commerce landscape. As you will see below, there is also a carrot-and-stick element, as TikTok decides to punish or reward sellers based on their strategy.
The Impact on Sellers
Even if TikTok’s fees are still behind Amazon’s, the increase is definitely steep. But TikTok is also introducing measures to offset the impact on sellers. One such initiative is the Seller Missions program (TikTok’s onboarding/gamification program), which allows sellers to reduce their fees by creating a specified number of TikTok LIVE or shoppable videos. This move not only encourages content creation but also strengthens community engagement, which is key to driving sales on the platform – no wonder that TikTok wants you to make videos.
TikTok will offer lower fees also to Sellers that operate in the Electronics, Collectibles, or some Beauty & Personal Care categories.
Additionally, TikTok plans to roll out a Co-Funded Free Shipping model starting September 4, 2024. This program will share the cost of offering free shipping between TikTok Shop and sellers, aiming to boost order conversions by making more products eligible for free shipping.
Is It Still Worth Selling on TikTok Shop?
Despite the higher fees, many sellers believe that staying on TikTok Shop is still a must. The platform is massive popular, and it’s unique focus on live and shoppable content offers sellers an engaging way to reach and convert customers. Some beauty brands have seen record-breaking sales during TikTok LIVE sessions, highlighting the platform’s potential for driving significant revenue.
Also, TikTok is apparently walking back on its decision not to expand the Shop functionality in the EU, and is in fact planning a limited debut this October, to Spain and Ireland. The rest of the EU will follow in 2025, according to Bloomberg.
If you’re a UK seller, it might be time to revise your TikTok strategy to minimize the impact of fees increase.
