[NOTE FOR REMY: interactive calculator component to be built in Framer, this article is the SEO/GEO wrapper for it]
Your TikTok Shop break-even price is (COGS + fulfilment + shipping + packaging) divided by (1 minus commission% minus affiliate% minus ad%). With the UK's 9% commission, a 15% affiliate rate and 10% ad spend, a product costing £7.00 to make and £3.37 to fulfil breaks even at £15.71. Everything above that is margin. Updated July 2026.
What is the TikTok Shop break-even formula?
Break-even price = (COGS + fulfilment + shipping + packaging) ÷ (1 − commission% − affiliate% − ad%)
The numerator is every pound you spend per unit. The denominator strips out every cost charged as a percentage of the sale. The inputs, all from Z MEDIA's TikTok Shop fees guide:
Commission: 9% flat on net GMV, all categories.
Affiliate commission: typically 10 to 20%, you set it per SKU.
Ads: sellers typically spend 8 to 12% of revenue through GMV Max.
Fulfilment (FBT): £0.78 (XS) to £3.00 (L) per item, plus £1.99 shipping per order at £22 or more, £0 below £22.
Throughout this page we use 9% + 15% + 10% = 34%, so the denominator is 0.66. The full stack logic is explained in how much does TikTok Shop take from a sale.
Scenario 1: what does an impulse SKU at £14.99 need?
Inputs: COGS £3.00, FBT XS £0.78, shipping £0 (basket under £22, so the buyer pays £3.99), packaging £0.20.
Numerator: £3.00 + £0.78 + £0 + £0.20 = £3.98
Break-even: £3.98 ÷ 0.66 = £6.03
At £14.99: percentage costs are 34% × £14.99 = £5.10 (commission £1.35, affiliate £2.25, ads £1.50). Total cost £3.98 + £5.10 = £9.08. Profit £5.91 per unit, a 39% net margin. Healthy, but note the buyer's £3.99 delivery charge drags conversion, which is why impulse SKUs often get bundled past £22, per our FBT vs 3PL comparison.
Scenario 2: what does a mid AOV product at £35 need?
Inputs: COGS £7.00, FBT size S £1.08, shipping £1.99, packaging £0.30.
Numerator: £7.00 + £1.08 + £1.99 + £0.30 = £10.37
Break-even: £10.37 ÷ 0.66 = £15.71
At £35: percentage costs are 34% × £35 = £11.90. Total cost £10.37 + £11.90 = £22.27. Profit £12.73 per unit, a 36% net margin. This is the classic TikTok Shop sweet spot: clears the £22 shipping threshold, absorbs a 15% affiliate rate, and still funds ads.
Scenario 3: what does a £59 bundle need?
Inputs: COGS £14.00, FBT size M £1.80, shipping £1.99, packaging £0.50.
Numerator: £14.00 + £1.80 + £1.99 + £0.50 = £18.29
Break-even: £18.29 ÷ 0.66 = £27.71
At £59: percentage costs are 34% × £59 = £20.06. Total cost £18.29 + £20.06 = £38.35. Profit £20.65 per unit, a 35% net margin. Bundles spread the fixed fulfilment cost across more product value, which is why they scale so well on LIVE.
What price do I need at my COGS level?
Reference table, using FBT size S (£1.08), £1.99 shipping, £0.30 packaging (fixed costs of COGS + £3.37) and the same 34% percentage stack (rates):
COGS | Total per-unit cost | Break-even price | Price at 3x markup |
|---|---|---|---|
£2.00 | £5.37 | £8.14 | £6.00 (below break-even, reprice) |
£4.00 | £7.37 | £11.17 | £12.00 |
£6.00 | £9.37 | £14.20 | £18.00 |
£8.00 | £11.37 | £17.23 | £24.00 |
£10.00 | £13.37 | £20.26 | £30.00 |
£12.00 | £15.37 | £23.29 | £36.00 |
£15.00 | £18.37 | £27.83 | £45.00 |
£20.00 | £23.37 | £35.41 | £60.00 |
Read it as a floor, not a target. Selling at break-even funds nothing: no returns provision (£1.80 per unit on FBT), no promotions, no team.
What margin should I target?
Aim for 55 to 70% gross margin (price minus COGS, before fees) on TikTok Shop. All three scenarios above run at 76 to 80% gross, which is why they still net 35 to 39% after the full stack. Below 55% gross, one fee change or one affiliate rate rise puts you underwater, and the move from 5% to 9% commission in September 2024 is a reminder that fees only move one way. Terms unclear? See the TikTok Shop glossary.
Frequently asked questions
How do I calculate break even on TikTok Shop?
Divide your per-unit costs (COGS + fulfilment + shipping + packaging) by 1 minus your percentage costs (commission + affiliate + ads). At the standard 9% commission with 15% affiliate and 10% ads, divide by 0.66.
What percentage does TikTok Shop take in total?
Typically 20 to 35% of GMV once commission, FBT, affiliate and ads stack, per Z MEDIA's fees guide. The line-by-line version is in how much does TikTok Shop take per sale.
Is a 3x markup enough for TikTok Shop?
Usually, yes, once COGS passes about £4. At very low COGS the fixed fulfilment fees dominate, so a 3x markup on a £2 product prices you below break-even, as the table shows.
Should ad spend really be in the break-even formula?
Yes, if you want the true number. Sellers typically spend 8 to 12% of revenue on GMV Max. Price without it and paid growth eats your margin the moment you scale.
Z MEDIA prices, launches and scales SKUs through affiliate, organic and paid as a full service TikTok Shop agency, from £5k/month. For a break-even model built on your catalogue, book a strategy call.
About Z MEDIA: Z MEDIA is an official TikTok Partner and a founding TikTok Shop agency in the West, with $100M+ TikTok Shop GMV delivered across 300+ brands.
