As marketplace fees keep rising, is it still worth selling there?
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
I've recently been going through the fees on Malaysia's marketplaces.
Over the past two years, Shopee and TikTok Shop have both adjusted their fees several times. In August 2024, MyCC (the Malaysia Competition Commission) recorded Shopee commissions rising by about 3 percentage points across categories. A month later, TikTok Shop's went up by about 4.8 percentage points on average.
On top of that came transaction fees, programme fees and platform support fees, layer after layer.
Take fashion. Today, on a RM100 order, before counting ads, affiliate commission and seller-funded vouchers, the basic platform cost is already roughly:
- Shopee: RM19.44 to RM22.68
- TikTok Shop: about RM18.90
If you join certain platform programmes, it can go above RM20 in some cases.
So when people say marketplace costs are now over 30%, strictly speaking it isn't that Shopee or TikTok "take a 30% commission".
But add commission, transaction fees, programme fees, ads, affiliate and vouchers together, and a real cost above 30% is no surprise at all.
With marketplaces this expensive, are they still worth it?
So here's the question:
With marketplaces this expensive, are they still worth doing?
My answer is still: yes.
Because Shopee and TikTok Shop still gather a huge amount of consumer demand today.
The customers are already there.
The platforms take care of traffic, payment, logistics, reviews and trust. To test a new product, scale a bestseller or clear slow-moving stock, a marketplace is still a very strong channel.
So the question was never "should we leave the marketplaces?"
The real question is:
Have you mistaken the marketplace for your entire business?
Many companies really could do that before.
Open a Shopee shop, open TikTok Shop, buy ads, find affiliates, grow the GMV, and that was basically the whole online business.
But today, if every time a customer comes back you pay commission, ads, affiliate and discounts all over again, your customer acquisition cost has never really come down.
That's also why you can't run e-commerce on GMV alone.
On a RM100 order, say product cost is RM50, platform fees RM20, ads and affiliate RM10, fulfilment and operations RM5. What's actually left as contribution is just RM15.
Growing GMV from RM1 million to RM5 million feels great.
But if ads get a bit more expensive, discounts a bit deeper, or returns a bit higher, that RM15 easily becomes RM5, or a straight loss.
Growth without contribution margin often just means more activity.
How we look at an e-commerce business
This is how we now look at an e-commerce business:
Marketplace = Traffic
Shopee and TikTok help you reach demand that already exists.
Brand = Demand
One day, customers don't search for "RM29 shirt". They search for your name.
CRM = Retention
The first sale can happen on a marketplace, but you need to be able to turn one transaction into a long-term relationship.
Supply Chain = Margin
The better your sourcing, inventory turnover and product planning, the more margin you have to absorb ever more expensive distribution costs.
So of course you should still do marketplaces, and I think do them even better.
But the way you run the business should start to change.
Use Shopee and TikTok to get traffic and demand, but don't let their economics control your whole company's business model.
A marketplace should be your channel. It shouldn't become your destiny.