Bizzy

Blog   5 min read

How to work out your real profit on TikTok Shop and Shopee

Sales are not profit. Here is the simple calculation and a worked example.

Selling RM100 does not mean earning RM100. Platform fees, vouchers, shipping, packaging and ads all come out of the same sale.

The formula

Profit per item = price - voucher - platform and payment fees - product cost - packaging - shipping you pay - ad cost per order - other costs.

A worked example

These numbers are only an example. Your fees will differ.

  • Price: RM50.00
  • Voucher you fund: RM3.00
  • Platform and payment fees: 8% of RM47.00 = RM3.76
  • Product cost: RM22.00
  • Packaging: RM1.50
  • Shipping you pay: RM4.00
  • Ads per order: RM5.00

Profit = 47.00 - 3.76 - 22.00 - 1.50 - 4.00 - 5.00 = RM10.74, a margin of about 21.5% of the RM50 price.

Check the current rates

Platforms change commission and payment fees from time to time. Look at your seller centre for the current numbers instead of using last year's.

Then count the month

Per-item profit does not include rent, salary or stock you could not sell. Record those as expenses so the month's net profit is honest.

Use the tools

Bizzy's Profit Calculator does the formula for you and shows the price you should charge for the margin you want. The Expenses screen and Sales report show the whole month.

Get it on Google Play