If you are a Shopee seller, you will know the shopee commission fee and how challenging it is to sell your products on the platform. There is stiff competition among sellers, and you need a good strategy to optimize your chances of getting orders. You need to come up with strategies that will help you get more orders without compromising on the shopee commission fee.
You must understand what drives shoppers to buy from a particular product listing to get more orders. The key factor here is the Shopee commission fee. If you reduce your commission fee, customers will be more incentivized to buy from your product listing than another seller offering a higher commission fee for the same product. This article provides detailed information about Shopee Commission Fee, how it affects selling performance, and how to optimize this variable as much as possible.
What is Shopee?
Shopee is a Singaporean e-commerce platform headquartered in Singapore. Forrest Li and Jeffrey Lim in 2015 founded the company. Shopee provides sellers mode with a platform to sell their products online and buyers with a platform to purchase products.
Where does Shopee Operate?
Shopee operates in Taiwan, Thailand, Vietnam, Indonesia, Malaysia, the Philippines, and Singapore. In 2019, Shopee expanded its operations to Brazil and Mexico. Shopee is almost one of the best-selling platforms in the Asian Ecommerce Business.
What is the Shopee Commission Fee?
You will have to pay this fee to the Shopee platform for every transaction you make. On a per-product basis, Shopee Commission Fee is calculated based on the product price and the quantity of that product that a customer buys.
This fee is automatically deducted from the seller’s account once the customer has paid for the product. The Shopee Commission Fee for every product is predetermined. This means that it does not change as per the quantity of the product that a customer buys. For example, if you sell a product for $100 and the Shopee Commission Fee for that product is 10%, then Shopee will deduct $10 from your account for that single product sale.
Does Shopee charge buyers for the purchase?
Shopee does not charge the buyers any fee.
How does the Shopee Commission Fee work?
As discussed above, the Shopee Commission Fee is a percentage of the product price and the quantity of the product a customer buys. The commission fee is calculated based on the following formula: Commission Fee = Product Price x Commission Rate. The Commission Rate is the percentage that Shopee deducts from your account as a commission fee for that particular product.
Let’s say you are selling a smartphone on the Shopee platform. You have set the product price at $200, and the Commission Rate of the product is 10%. Therefore, you will have to pay Shopee $20 as a commission fee for that product sale.
Let’s say that your customer buys two smartphones. Then Shopee will deduct $40 from your account for that single transaction. The Commission Rate for the two smartphones is still 10%. Therefore, Shopee deducts $40 from your account for that single transaction.
How is the Shopee Commission rate calculated?
There are two types of Shopee commission fees: the platform fee and the seller fee.
The platform fee is a fixed rate that Shopee charges for every transaction made on the platform. The current platform fee is 2% of the total transaction value.
The seller fee is a variable rate based on the product category and ranges from 3% to 10%.
What is the Total Shopee Commission Fee?
Simply add the platform and seller fees to calculate the total Shopee commission fee. For example, if you sell a product in the Electronics category with a final transaction value of RM100, your total Shopee commission would be RM5 (2% + 3%).
How much does a shopkeeper get a commission?
As a Shopee seller, you will earn a commission on every product you sell. The amount of commission you earn will vary depending on the product category and the product’s price.
For example, if you sell a product in the “Fashion” category, you will earn a 5% commission on the product’s sale price. If you sell a product in the “Electronics” category, you will earn a 3% commission on the product’s sale price.
The following table shows the commission rates for all product categories.
| Category | Commission Fee |
|---|---|
| Health & Beauty | 5% |
| Electronics | 3% |
| Fashion | 4% |
| Home & Living | 2.5% |
| Health & Beauty | 2% |
| Baby & Toys | 1.5% |
What are the Commission Fees for Different Categories?
Shopee commission fees vary depending on the category of item being sold. For example, the commission fee for items in the Health & Beauty category is 5%, while the commission fee for items in the Home & Living category is 3%.
The table below outlines the commission fees for each category:
| Category | Commission Fee |
|---|---|
| Health & Beauty | 5% |
| Home & Living | 3% |
| Fashion | 4% |
| Electronics & Gadgets | 2% |
| Baby, Kids & Toys | 3% |
| Sports & Outdoors | 3% |
| Groceries & Pets | 2% |
| Books, Games & Hobbies | 2% |
| Others | 4% |
Which order type earns the most commission fee for the seller?
As a seller on Shopee, you will earn commission fees based on the order types you complete. The following order types will earn you the most commission fees:
1. Standard Orders – These orders are completed without special requirements or services. You will earn a standard commission fee for these orders.
2. Featured Orders – These orders feature your products prominently on the Shopee platform. You will earn a higher commission fee for these orders.
3. Express Orders – These orders are completed with expedited shipping services. You will earn a higher commission fee for these orders.
4. Prime Orders – These orders are completed with premium shipping services. You will earn a higher commission fee for these orders.
How to Avoid High Commission Fees?
The commission fees charged by Shopee can be quite high, especially for sellers who are new to the platform. There are a few things that you can do to avoid high commission fees:
1. Use Shopee Coins: Shopee Coins is a virtual currency used to pay for goods and services on the platform. When you use Shopee Coins to pay for your purchases, you will get a discount on the transaction fee.
2. Sell in Bulk: If you sell products in bulk, you can negotiate a lower commission fee with Shopee.
3. Use an Authorized Reseller: You can avoid paying high commission fees using an authorized reseller of Shopee products. These resellers can sell products at a discounted price and charge lower commission fees.
How to optimize Shopee Commission Fee?
As discussed above, a key factor that drives customers to buy from a specific product listing is the commission fee.
Therefore, if you want to boost your sales, you need to reduce your commission fee. However, it’s important to note that this doesn’t mean selling your products at a lower price.
If you reduce your product price, you will be competing with many other sellers who also sell that product. Therefore, you need to be careful not to get lost in the sea of other sellers. But if you reduce your commission fee, you will stand out from the rest of the sellers and have a better chance of getting orders. Let’s discuss how you can optimize the Shopee Commission Fee to increase your sales.
Different Strategies for minimizing of Shopee Commission Fee:
- Limiting order quantity per transaction
One trick many Shopee sellers use to reduce their commission fee is limiting the quantity of a product a customer can buy per transaction.
For example, you are selling a smartphone on the Shopee platform. You have set the product price at $200 with a Commission Rate of 10%. If you set the quantity limit per transaction at 1, the customer will have to buy just one smartphone. If that customer tries to buy two smartphones, Shopee will decline that order and show an error message: “There is an insufficient quantity.”
This is an effective strategy to reduce your commission fee. Let’s say the Commission Rate for the product is 10%. If a customer buys one smartphone, Shopee will deduct $20 as a commission fee. But if the same customer buys two smartphones at once with a quantity limit of 1, Shopee will deduct $40 from your account. Your sales will be the same, but you will save $20 by limiting the quantity per transaction.
- Promoting your best-selling products
You can also use the Shopee Commission Fee to your advantage by promoting your best-selling products.
If a product sells well, it’s usually because it solves a problem for the customer. So, it makes sense to promote this product on the Shopee platform. However, you will have to pay an automatic commission fee when you sell a single product. Hence, you will have to pay the commission fee out of pocket if you sell a single product.
For example, if you sell a pair of wireless headphones for $100 with a Commission Rate of 10%, you will have to pay $10 toward the commission fee. But if you sell multiple products at the same time, Shopee will deduct a commission fee from the sale of the product that brought the most revenue. For example, if you sell a pair of wireless headphones for $100 and a wireless keyboard for $50, Shopee will deduct a commission fee from selling the wireless headphones.
- Frequent product changes and fast listing refresh rate
If you change your product listing frequently and keep refreshing the product description and images, you will get a chance to promote products that are more than $0 in commission.
But if you want to do this and keep a product priced at $0, you need to promote that product through various other means like advertising, social media marketing, etc. You can also change your product listing frequently and keep refreshing the product description and images. If you do this, you will get a chance to promote products that are more than $0 in commission.
Conclusion
We hope this guide has given you a better understanding of Shopee’s commission fees and how they work. Whether you’re new to Shopee or have been using it for a while, As a Shopee seller, you need to keep an eye on the Shopee Commission Fee. This fee is an important variable that will determine how many orders you will get. You need to develop strategies that will help you get more orders without compromising on the commission fee. You can use the above strategies to optimize Shopee Commission Fee and increase your selling performance.
This guide should help you become more familiar with the platform and make the most of your selling experience. If you have any questions, feel free to leave them in the comments below.