How should I price a product on TikTok Shop or Shopee?

Work backward from margin: take your cost and fixed fees, then divide by one minus your total percentage costs (platform fee, target margin, affiliate and ad rates). That gives the minimum price that still leaves your margin intact.

What is the minimum-price formula?

Minimum price = (COGS + fixed costs) / (1 − fee% − target margin% − affiliate% − ad%). Every percentage cost must be inside the denominator, not subtracted after.

Why is pricing off my competitor's price a mistake?

Their price reflects their cost base, category and volume, not yours. Matching it can lock you into a negative margin you cannot see until settlement.

What is the RM 0.54 trap?

TikTok Shop and Shopee charge a flat per-order platform support fee of about RM 0.54. It is a fixed cost, not a percentage, so it hurts low-priced items far more than expensive ones.

How to Price Products on TikTok Shop & Shopee (Malaysia): Work Backward from Margin

Short answer: Do not start from your competitor's price. Start from the margin you need, add every cost, and solve for the lowest price that still delivers it. On Shopee and TikTok Shop Malaysia your percentage costs (platform fees, target margin, affiliate, ads) all have to sit inside the denominator, because they scale with price.

Minimum price = (COGS + fixed costs) / (1 − fee% − target margin% − affiliate% − ad%)

Why work backward instead of marking up?

Cost-plus pricing ("RM 20 cost, add 50%, sell at RM 30") feels safe and quietly loses money, because the markup is taken before fees. The platform commission, affiliate payout and ad cost are all a percentage of the selling price, so they grow as your price grows. If you add them after your markup, you have already given away the margin you thought you kept.

Working backward fixes this. You decide the net margin you want to keep, treat every percentage cost as a slice of the final price, and let the formula hand you the floor price. Anything below it is a loss dressed up as a sale.

The formula, explained

Split your costs into two kinds:

Fixed costs — money that does not move with price: COGS (your product cost), packaging, and the flat per-order platform support fee of about RM 0.54.
Percentage costs — money that scales with price: platform fee%, your target margin%, affiliate commission%, and allocated ad%.

Then:

Minimum price = (COGS + fixed costs) / (1 − fee% − target margin% − affiliate% − ad%)

The denominator is "what fraction of the price you actually keep to cover fixed cost." If your percentage costs add up to 57%, you keep 43% of every ringgit to cover COGS and packaging — so you divide by 0.43.

Worked example (a RM 20-cost product)

Say your product costs RM 20, packaging and the RM 0.54 support fee add RM 2 in fixed cost, and you want a 20% net margin. On TikTok Shop a programme seller runs roughly 19% in platform fees (commission + transaction + cashback programme, all SST-inclusive on the Feb 2026 rate card — confirm your category). You pay 10% affiliate and allocate 8% ads.

Input	Value
COGS + fixed costs	RM 22.00
Platform fee %	19%
Target margin %	20%
Affiliate %	10%
Ad %	8%
Denominator (1 − 0.19 − 0.20 − 0.10 − 0.08)	0.43
Minimum price = 22.00 / 0.43	RM 51.16

Check it at RM 51.16: platform fees ~RM 9.72, affiliate RM 5.12, ads RM 4.09, fixed RM 22.00 — total cost RM 40.93, leaving RM 10.23, which is 20% of the price. The maths holds. Sell it at RM 45 to "beat a competitor" and your 20% margin is gone. Model your own inputs with the TikTok fee calculator, the Shopee fee calculator, and the profit margin calculator.

The mistakes that quietly kill margin

Pricing off a competitor's price. Their RM 45 might reflect a RM 12 cost base or a lower-commission category. Copying the number copies none of the economics.
Forgetting the flat RM 0.54 per order. It is small on a RM 200 item and brutal on a RM 12 item — a fixed fee is a bigger share of a cheaper product. Cheap, high-volume SKUs feel this most.
Using commission-exclusive rates. Malaysian platform fees are quoted SST-inclusive (for example 10.26% = 9.5% + 8% SST). If you plug in 9.5% you have under-costed every order.
Ignoring voucher and campaign erosion. Seller-funded vouchers, Raya and 11.11 discounts, and free-shipping commitments come straight out of your denominator. Price the everyday item to survive the campaign version.
Forgetting SPayLater. On Shopee, instalment orders carry a higher transaction fee than standard payment (confirm the current SPayLater rate). If a chunk of your orders are SPayLater, your blended fee% is higher than the standard card.

After you set the price

Pricing off a formula gets you a floor, not a guarantee. Actual settlement can differ from the rate card because of promotions, instalments and adjustments, so the last step is to check real per-order margin after the money lands. See how to calculate your real profit and, once you have prices set, rank your SKUs by net profit.

The Inseller angle

A pricing formula tells you what price should work; you still need to know what actually happened. Inseller connects Shopee and TikTok Shop and shows real net profit per order and per SKU from actual reconciled fees, so you can see whether the margin you priced for survived the vouchers, the SPayLater orders and the returns. Built by a seller who priced by gut for too long before doing the maths.