September TikTok Shop Malaysia Seller Commission Adjustment

TikTok Shop Malaysia recently announced an increase in seller commission rates, which will take effect on September 5. This policy change may affect profit margins and overall business strategy, especially for sellers who rely heavily on TikTok Shop as a sales channel.

As a professional third-party order fulfillment service provider, we understand the challenges brought by these changes and are here to provide expert advice to help you make this transition smoothly.

Understand the new commission policy of TikTok Shop Malaysia

TikTok Shop Malaysia has decided to increase seller commissions as part of a broader strategy to improve the profitability and sustainability of the platform.

Sellers' transaction fees will increase from 2.16% to 3.78%, and include 8% service tax (SST), and the commission rates will vary for different product categories. This change will have different impacts on ordinary user sellers (Marketplace sellers) and authorized retail stores and brand flagship stores (Mall sellers) on the platform.

For example, the commission rate for electronics will increase from 2.70%-4.32% to 4.86%-9.18%, and for fashion products from 4.32% to 8.10%-10.26%. The commission rates for Mall sellers will be higher, ranging from 8.10% to 12.42% for electronics, 11.34% to 13.5% for fashion products, 3.24% to 14.58% for fast-moving consumer goods, and 9.72% to 13.5% for lifestyle products.

However, for sellers, this means paying higher fees for each sale, which may erode already tight profit margins. To cope with this change, sellers need to re-evaluate their cost structure and pricing strategy, while also taking advantage of the various tools and resources provided by the TikTok Shop platform to boost sales and optimize marketing strategies.

Potential impact of increasing seller commissions

Reduced profit margins: Higher commission rates will directly reduce the revenue sellers receive from each sale, affecting your profit margins.

Increased operating costs: To maintain profitability, you may need to adjust your pricing strategy or seek ways to reduce operating costs.

Competitive pressure: Other sellers may also adjust their pricing strategies, which may increase competition.

Mitigation strategies

Potential impact on different businesses or sellers

Small and medium-sized enterprises: Small and medium-sized enterprises may feel the pressure more severely, as they generally have lower profit margins and may find it difficult to absorb additional costs without passing them on to consumers.

High-volume sellers: For sellers with high transaction volumes, the cumulative effect of increased commissions may significantly affect overall profitability.

Consumer behavior: Price-sensitive customers may be deterred by any necessary price increases, resulting in a potential decrease in sales.

Professional advice and solutions to mitigate the impact

Optimize product pricing

Re-evaluate product pricing: Conduct a thorough analysis of your current pricing strategy to determine whether adjustments are needed to compensate for the increased commissions without alienating customers.

Bundle products: Consider offering product bundles or value packs to increase perceived value while maintaining competitive prices.

Reduce operating costs

Streamline fulfillment: Partner with a reliable third-party order fulfillment service such as ChinaDivision to optimize your supply chain, reduce shipping costs, and improve efficiency.

Leverage bulk shipping: By consolidating shipments and taking advantage of bulk shipping rates, you can reduce fulfillment costs per order.

Enhance customer engagement

Focus on customer retention: Invest in customer loyalty programs and personalized marketing strategies to retain existing customers and encourage repeat purchases.

Leverage data analytics: Use data analytics to gain insight into customer behavior and preferences, allowing you to more effectively customize your products and pricing strategies.

Enhance product value: Differentiate your products by offering unique features, high-quality materials, or exceptional customer service.

Diversify sales channels

Leverage marketing tools: Effectively leverage TikTok Shop’s marketing tools to increase visibility and sales.

Explore alternative platforms: While TikTok Shop is a valuable sales channel, consider diversifying your business on other e-commerce platforms to reduce your reliance on a single revenue source.

Direct-to-consumer (DTC) strategy: Strengthen your DTC channels, such as your own website, to better control your profit margins.

In the face of the increase in TikTok Shop commissions, sellers can reduce costs and improve efficiency by optimizing supply chain management and logistics strategies. ChinaDivision’s professional team will work closely with you to provide you with customized logistics solutions to help your business remain competitive in a changing market environment.

How ChinaDivision can help you navigate these changes

At ChinaDivision, we specialize in providing comprehensive third-party order fulfillment services to help businesses meet the challenges of online marketplaces while optimizing logistics operations and reducing shipping costs. Here’s how ChinaDivision can support you:

Efficient order fulfillment: Advanced logistics technology and an experienced team ensure your orders are processed quickly and accurately, helping you maintain high customer satisfaction even in times of change.

Cost-effective solutions: A range of cost-effective fulfillment options are available, including bulk shipping and optimized warehousing to help you manage expenses as seller commissions increase.

Customized support: We understand that every business is unique, and whether you’re a small startup or a large enterprise, we offer customized solutions to meet your specific needs.

While the new TikTok Shop Malaysia seller commission policy presents challenges, it also provides an opportunity to reevaluate and optimize business operations. By implementing the above strategies and working with a reliable logistics provider like ChinaDivision, you can streamline operations, reduce costs, and focus on growing your business on TikTok Shop. If you’d like to learn more about how ChinaDivision can help you navigate the TikTok Shop commission increase, or would like more logistics service support, please feel free to contact us.