Shopee is one of the Filipinos’ go-to e-commerce sites due to how easy it is for a customer to purchase an item from different shops.
For sellers, Shopee boasts of an eye-catching yet deceivingly simple interface, which also accounts for the platform’s popularity.
Shopee has been in the Philippines for less than a decade but already has more than 300,000 active sellers. It is also the number one app on iOS and Android with more than 21 million mobile downloads.
Just like any business, however, Shopee charges certain fees to allow sellers to join the platform. These include i) commission fee; ii) transaction fee and iii) service fee. But more on this later.
In this piece, we’ll learn the things you need to know about Shopee seller fees. However, let us take a look first at the tools that can help Shopee Sellers do their business.
Advantages for Shopee Sellers
As a Shopee seller, you can easily ship orders to and from the buyer’s desired location.
Shipment of products has been optimized within the platform and provides contact with the chosen logistics provider. Due to this, the platform allows you to manage orders for each listed product effectively.
The Listing Optimizer allows the seller to see whether their listed products are of good quality or lacking in some cases, such as too-short product names or if a listed product has been put in the wrong category.
Due to its eye-catching interface, your listed items are promoted in the category they belong to through the use of filters. Buyers can easily find your product by filtering the items based on their budget and their preferences. These preferences go as far as where the buyer wants to order from, either domestic or international.
Money matters are settled through step-by-step instructions, with the option of cashless payment or cash on delivery. There is also the option of refunds. Once the buyer clicks Order Received, the money is sent to the seller’s linked bank account.
Shopee keeps track of the behavioral trends of listed items, providing business insights that can help a seller understand trends more. Product overview and product diagnosis offer information on whether or not your listed products have performed well in the market.
Shopee optimizes marketing tools such as add-on deals or gifts, flash deals, and shipping fee discounts. Buyers are encouraged and even incentivized to rate your products. After a buyer rates an item, they earn Shopee Coins. Ratings and reviews provide business insights that can help your shop grow, and also create a relationship between the seller and the buyer.
Key Metrics also widen your insights on trends, as this option in the marketing tools page allows the seller to see how many have viewed your items. The platform tracks your followers, how many buyers you have, and your sales revenue within some time. Through this feature, the seller can identify which bundle deals, add-on deals, and discount promotions garnered the most buyers. With this information, the seller can easily choose which event to repeat.
Aside from tracking your business growth, Shopee’s interface optimizes the branding of your shop by giving the seller options to personalize their account.
Once your products have gained popularity, Shopee frees up the option of mass uploads of your listed products and mass updates regarding your plans for your shop. The platform also allows you to edit the descriptions and details of multiple shipments and listings at once. Another option, mass shipment, allows the seller to ship multiple orders at once.
Shopee Seller Fees
Shopee indeed offers a wide array of services. However, these services are not entirely free, as the platform does require a commission fee and a transaction fee after every successful purchase.
Thankfully for new Shopee sellers, the platform only charges the commission fee after the first six months of the seller’s first listing.
As of April 18, 2022, Shopee has adjusted the Marketplace commission fee from 1% to 2%, including value-added tax.
Here’s how to compute the Commission Fee:
According to Shopee’s Seller Education Hub, the commission fee is calculated based on the final cost of goods paid by the buyer after applying seller-sponsored discounts and vouchers. It is already inclusive of VAT. Shopee-sponsored rebates, vouchers, and discounts will not be deducted from the cost of goods in the calculation of commission fees.
For example, the computation for the commission fee for a 100-peso item will look like this: P100 (cost of item)-P20 (seller sponsored discount)-P10 (seller sponsored voucher) equals P70 pesos. The P70 pesos will then be multiplied by the 2-percent commission fee, bringing the total commission fee to P1.4 pesos.
Here’s how to compute the Transaction Fee:
Apart from the commission fee, Shopee also charges the seller with transaction fees. According to Shopee’s Seller Education Hub, the transaction fee is the handling fee that covers the cost of payment transactions. Starting August 1, 2020, Shopee charges 2 percent (plus VAT) of the buyer’s total amount for every successful transaction using Shopee’s payment services.
For example, the cost of the merchandise added with the buyer’s paid shipping fee, once deducted by Shopee vouchers such as Shopee Coins and discounts, is called the total buyer payment. The total buyer payment will be multiplied by the transaction fee (plus VAT). The product of the total buyer payment and the transaction fee will be the seller’s transaction fee.
For example, the cost of the item is P400. The buyer pays the shipping fee (P50), to be added to the price of the item (now at P450). If the buyer has a Shopee Voucher (for example P25), this will be deducted to the item price (now at P425).
The total buyer payment will now be multiplied by 2.24 percent (including VAT), bringing the Transaction Fee to P9.52.
Shopee uses its earnings from seller fees to enhance its platform services, improve seller-related features and support programs, and improve shopping campaigns for both the seller and the buyer.
To boost the platform’s popularity and the morale of the buyers, Shopee has set up two shopping campaigns that open up wider options for buyers.
This includes the Free Shipping Special (FSS), a program that allows the seller to ship items without having to shoulder the shipping expenses. Shopee accepts applicants to this program at their discretion. Sellers who join this program will be charged a 5-percent service fee.
The Coins Cashback (CCB) program, another feature under Shopee’s services, allows the buyer to have options to receive cashback in the form of coins, which can then be used to offset future orders. The value of 1 Shopee Coin is equivalent to 1 Philippine peso.
Sellers can join the CCB system by providing their shop information. Much like the FSS program, sellers who are interested in joining the Coins Cashback system are accepted under Shopee’s discretion. Once the seller has joined the program, they will be charged a 3-percent service fee, limited to P100.00 per item at most.
Sellers can add fun games for their buyers. Shop Prize enables the buyer to have a chance at receiving gifts from their favorite shops. Set up by the seller, the program rewards faithful customers with simple games to earn gifts and Shopee Coins.
Marketplace sellers who participate in the Free Shipping Special and the CCB programs, on the other hand, will only pay the original 1 percent commission fee instead of the 2 percent.
To wrap things up, Shopee Sellers need to pay certain fees. In return, these fees will help Shopee support sellers to grow their online businesses through improved platform services, seamless payment transactions, and exclusive seller support programs.