Are you a seller on Shopee? Do you know about the seller fees charged by Shopee? This article will explain everything you need to know about seller fees on Shopee.
As a seller, understanding seller fees is crucial because it directly affects your profits. It is important to know the different types of fees you may encounter and how they are calculated. With this knowledge, you can make informed decisions about your pricing strategies and optimize your profits.
So, let’s dive in and explore the world of Shopee seller fees!
Types of Seller Fees in Shopee
Seller fees are charges that Shopee imposes on sellers for every successful order made on the platform. These fees consist of three types:
- Commission fee
- Transaction fee and
- Service fee for certain marketing campaigns.
Let’s take a closer look at each of them.
Commission Fee
Commission fee is a fee charged to sellers based on the cost of goods sold (COGS) after seller-sponsored discounts and vouchers.
Effective January 1, 2023, Shopee charges a differentiated, category-based commission fee rate that depends on seller type, item category, and program(s) joined.
The commission fee rate for Shopee Mall ranges from 1.5% to 5%, while the commission fee rate for Shopee Marketplace ranges from 3% to 5%. The commission fee rate (%) depends on the seller type, item category, and program(s) joined. Here are the adjusted commission fee rates:
To calculate the commission fee, multiply the commission fee rate by the COGS.
For example, if a seller’s item is sold for ₱1,000 and the commission fee rate is 5%, the commission fee will be ₱50.
Transaction Fee
Transaction fee covers the cost of payment transactions and is charged for every successful transaction using Shopee’s payment services.
Starting September 1, 2022, the transaction fee rate is 2.24% of the buyer’s total amount, including VAT. This also applies to orders tagged as ‘lost’ by Shopee.
To calculate the transaction fee, multiply the transaction fee rate by the buyer’s total amount.
For example, if a buyer’s total amount is ₱1,000, the transaction fee will be ₱22.40.
Service Fee
Service fee is a fee that is charged for certain marketing campaigns, such as:
- Coins Cashback Program and
- Free Shipping Program.
Sellers under the Cashback Program will be charged a 3.36% service fee, limited to ₱100 per item at most, while sellers under the Free Shipping Program will be charged a 5.6% service fee. If the seller is part of the Free Trial, they will receive communication through the Shopee app, Seller Center, and email. The service fee is calculated as a percentage of the Cost Of Goods Sold (COGS) for all successful orders.
Here’s a sample of how seller fees are calculated and deducted from orders:
- Commission Fee Sample Calculation using 4%
- Transaction Fee (+ VAT) Sample Calculation Using 2.24%
- Service Fee Sample Calculation
Sellers who are part of the FSS and/or CCB Programs will receive a 1% discount for the Commission Fees charged to them.
By understanding these fees, sellers can accurately calculate costs and adjust pricing and promotion strategies to maximize profits.
To calculate the service fee, multiply the service fee rate by the COGS.
For example, if a seller’s item is sold for ₱1,000 and the service fee rate is 3.36%, the service fee will be ₱33.60.
Here’s an example of how the seller fees are calculated and deducted from an order:
Assuming a seller’s item is sold for ₱1,000 and is part of the Coins Cashback Program, the commission fee rate is 5%, and the transaction fee rate is 2.24%.
The seller will also be charged a service fee of 3.36% for the Coins Cashback Program.
Commission fee = ₱1,000 x 5% = ₱50
Transaction fee = ₱1,000 x 2.24% = ₱22.40
Service fee = ₱1,000 x 3.36% = ₱33.60
Total seller fees = ₱50 + ₱22.40 + ₱33.60 = ₱106
Therefore, after deducting fees, the seller’s income will be ₱1,000 – ₱106 = ₱894.
Note that the above example is for illustration purposes only, and the actual seller fees may vary depending on the item category, seller type, and program(s) joined.
Sellers are advised to check the Shopee website or app for the most up-to-date information on seller fees.
Why Shopee is a Great Platform for Online Sellers: Advantages of Selling on Shopee
Shopee is a rapidly growing e-commerce platform that has become increasingly popular among online sellers. Its user-friendly interface and innovative features have become a go-to platform for many online entrepreneurs. Here are some of the advantages of selling on Shopee:
Easy Shipping and Order Management
With Shopee, you can easily ship orders to and from the buyer’s desired location, and the platform allows you to manage orders for each listed product effectively. This means you can focus on providing excellent customer service without worrying about the logistics of shipping.
Listing Optimizer
The Listing Optimizer tool helps you ensure that your listed products are of good quality and are in the right category.
It checks for issues such as too-short product names or if a listed product has been put in the wrong category, ensuring that your listings are optimized for visibility and sales.
Eye-Catching Interface
Shopee’s interface is designed to showcase your products and make them stand out in their category. Buyers can easily find your products by filtering items based on their budget and preferences, and the platform promotes your listings through filters.
Easy Money Matters
Shopee provides step-by-step instructions for settling money matters, including the option of ShopeePay cashless payment or cash on delivery.
Refunds are also easy to manage, and once the buyer clicks Order Received, the money is sent to the seller’s linked bank account. To learn more about avoiding, check out our blog.
Business Insights
Shopee keeps track of the behavioural trends of listed items, providing business insights that can help you understand trends more. Product overview and product diagnosis offer information on whether or not your listed products have performed well in the market.
Key Metrics widen your insights on trends, allowing you to identify which bundle deals, add-on deals, and discount promotions garnered the most buyers.
Marketing Tools
Shopee optimises marketing tools such as add-on deals or gifts, flash deals, and shipping fee discounts. Buyers are encouraged and even incentivised to rate your products, providing business insights to help your shop grow and create a relationship between the seller and the buyer.
Personalisation
Shopee’s interface allows you to personalise your account and showcase your brand. Once your products have gained popularity, you can take advantage of 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 simultaneously. Another option, mass shipment, allows you to ship multiple orders at once.
Discount Programs: How Shopee Helps Sellers Save Money
As a seller on Shopee, you’ll be pleased to know that the platform offers various discount programs to help you save money. These discounts can be a real game-changer, especially if you’re a new seller looking for a foot in the door.
Types of Discount Programs
Shopee offers different types of discount programs for sellers. These include:
- Promotional discounts for new sellers: Shopee offers a discount voucher for new sellers that they can use to reduce their fees for their first month of selling on the platform.
- Volume-based discounts: Shopee offers volume-based discounts for sellers who sell more items. This means that the more items you sell, the lower your fees will be.
- Loyalty discounts: Shopee also offers loyalty discounts for long-term sellers. If you’ve been selling on the platform for a while and have a good track record, you may be eligible for a discount on your fees.
Eligibility Criteria
The eligibility criteria for each discount program may vary. For example, new sellers may need certain requirements to qualify for the promotional discount. Volume-based discounts may require sellers to meet certain sales targets, while loyalty discounts may be awarded based on the seller’s overall performance on the platform.
Savings for Sellers
By taking advantage of Shopee’s discount programs, sellers can save significant money on their fees. This can make a big difference, especially for small businesses or new sellers just starting.
Selling Strategies: Tips for Optimizing Your Sales on Shopee
Selling on Shopee can be lucrative if you know how to optimise your listings and build a successful store. Here are some tips and strategies for doing just that.
Optimize Your Listings
One of the keys to success on Shopee is to optimize your listings. This means ensuring that your product titles, descriptions, and images are all well-crafted and designed to attract potential buyers.
- Use high-quality images: The images you use to showcase your products can make a big difference in how well they sell. Make sure your images are high-quality and show the product from different angles.
- Write compelling product descriptions: Your product descriptions should be detailed and informative, highlighting the features and benefits of your products.
- Use relevant keywords: Including relevant keywords in your titles and descriptions can help your products appear in search results.
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Increase Sales Promotions
Once you’ve optimized your listings, the next step is to increase your sales. Here are some tips for doing just that.
- Offer discounts: Offering discounts can be a great way to attract buyers and encourage them to make a purchase.
- Run promotions: Running promotions, such as buy-one-get-one-free or free shipping, can also effectively boost sales.
- Cross-promote your products: If you sell related products, cross-promoting them can help increase sales. For example, you could cross-promote socks or shoe inserts if you sell shoes.
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Build a Successful Brand
Finally, to truly succeed on Shopee, you’ll need to build a successful store. This means creating a strong brand image and building a loyal customer base.
- Focus on customer service: Providing excellent customer service can help build loyalty and encourage customers to leave positive reviews.
- Build your brand: Building a strong brand image can help differentiate you from competitors and increase brand loyalty.
- Encourage customer reviews: Encouraging customers to leave reviews can help build social proof and increase sales.
By following these tips and strategies, you can optimize your sales on Shopee and build a successful e-commerce business.
Bonus: Managing Shopee Seller Fees with Third-Party Fulfillment Services
As a seller on Shopee, managing your seller fees can be a challenge. One way to streamline your operations and reduce costs is by partnering with a third-party fulfillment service like Locad.
Locad is a logistics and fulfillment provider that helps businesses manage their inventory, pack and ship orders and track them. With Locad’s technology-driven solutions, you can save time and money by automating your fulfillment processes and reducing errors and delays.
Using Locad, you can also take advantage of economies of scale, which can help you save on shipping costs and packaging materials. Locad’s network of warehouses across Southeast Asia can help you reach your customers faster and more efficiently.
Using a third-party fulfillment service like Locad can also help you focus on growing your business instead of managing logistics and fulfillment. With more time and resources, you can optimize your listings, build your brand, and scale your operations.
Wrapping Up
In conclusion, managing your Shopee seller fees can be challenging. Still, by understanding the various fees and programs that Shopee offers, optimizing your selling strategies, and using third-party fulfillment services like Locad, you can reduce costs, improve efficiency, and grow your business on Shopee.
FAQs
What fees does Shopee charge sellers?
Shopee charges sellers with various fees, including a commission fee, payment processing fee, and cross-border transaction fee. The commission fee is a percentage of the total transaction value, while the payment processing fee is charged for each successful transaction made through the platform. The cross-border transaction fee applies to international transactions.
How are commission fees calculated on Shopee?
The commission fee on Shopee is calculated based on the total transaction value, including shipping fees and taxes. The commission percentage varies depending on the category of the product being sold. For example, the commission fee for electronics is typically higher than the commission fee for clothing.
Can sellers negotiate their commission fees with Shopee?
No, sellers cannot negotiate their commission fees with Shopee. The commission fee is determined by Shopee based on the category of the product being sold and the platform’s standard rates.
Are there any other fees that sellers should be aware of on Shopee?
Sellers should also be aware of the payment processing fee and the cross-border transaction fee. The payment processing fee is charged for each successful transaction made through the platform, while the cross-border transaction fee applies to international transactions.
How can sellers lower their fees on Shopee?
Sellers can lower their fees on Shopee by optimizing their listings to attract more buyers, which can lead to more sales and higher revenue. Additionally, sellers can take advantage of any discount programs offered by Shopee, such as promotional discounts for new sellers, volume-based discounts, or loyalty discounts for long-term sellers.
