TikTok Shop Glossary
Your complete A-Z dictionary of TikTok Shop terms. From "Affiliate" to "Winning Product" - everything defined in plain English.
Affiliate Commission
A percentage of the sale price paid to creators/influencers who promote your product and generate sales. Typically ranges from 10-25% depending on product category and margin structure.
Affiliate Marketplace
TikTok Shop's platform where creators browse products to promote. Sellers can list their products here with commission rates to attract affiliates.
Average Order Value (AOV)
The average dollar amount spent per transaction. Higher AOV means fewer transactions needed to hit revenue goals. Calculated as: Total Revenue ÷ Number of Orders.
Base Commission
The standard percentage fee TikTok charges on each sale. Varies by region: 8% (US, Brazil) or 9% (UK, Europe). This is separate from payment processing fees.
Bounce Rate
The percentage of visitors who leave your product page without taking action. High bounce rates (>70%) indicate problems with pricing, images, or description.
Buy Box
The prominent placement on a product page where customers can directly purchase. On TikTok Shop, having clear product info and good reviews increases your buy box visibility.
Chargeback
When a customer disputes a charge with their bank/credit card company. Chargebacks can result in lost revenue plus additional fees. Keep good records of shipments to fight invalid chargebacks.
Commission Rate
The percentage TikTok Shop takes from each sale. Includes base commission (8-9%) plus payment processing (2%), totaling 10-11% depending on your region.
Conversion Rate
The percentage of product page visitors who make a purchase. Formula: (Number of Sales ÷ Number of Visitors) × 100. Good TikTok Shop conversion rates are 2-5%.
Cost of Goods Sold (COGS)
The direct cost to produce or purchase your product, including manufacturing, packaging, and inbound shipping. Does not include TikTok fees or fulfillment costs.
Creator Marketplace
TikTok Shop's platform connecting sellers with content creators for collaborations, product reviews, and affiliate partnerships.
CTA (Call To Action)
The prompt that encourages users to take action, like "Shop Now" or "Add to Cart". Strong CTAs in videos increase conversion rates.
Direct-to-Consumer (DTC)
Selling directly to end customers without intermediaries. TikTok Shop is a DTC platform where you sell straight to buyers without a middleman retailer.
Dropshipping
A fulfillment model where you don't hold inventory. When a customer orders, you purchase from a supplier who ships directly to the customer. TikTok Shop supports some dropshipping models.
Engagement Rate
The percentage of viewers who interact with your TikTok content (likes, comments, shares). Higher engagement typically leads to more product views and sales.
Fulfillment
The process of receiving, packaging, and shipping orders to customers. TikTok Shop uses their logistics partners for fulfillment in most regions.
For You Page (FYP)
TikTok's main feed showing personalized content recommendations. Getting your product videos on the FYP can dramatically increase sales.
GMV (Gross Merchandise Value)
The total value of goods sold through a platform before deducting fees, returns, and costs. Your GMV is: Number of Units Sold × Sale Price.
Gated Category
Product categories requiring special approval to sell, often due to safety or regulatory concerns. Examples: supplements, medical devices, certain electronics.
Hashtag Strategy
Using relevant hashtags in your TikTok videos to increase discoverability. Mix trending hashtags with niche ones for best results. Example: #TikTokMadeMeBuyIt + #YourProductCategory.
Impression
Each time your product or video is shown to a user, regardless of whether they watch or click. More impressions = more potential buyers.
Inventory Management
Tracking stock levels to avoid overselling or running out. TikTok Shop allows you to set inventory limits, which automatically hide listings when out of stock.
Lead Time
The time between ordering inventory from your supplier and receiving it. Longer lead times require holding more inventory to avoid stockouts.
Listing
Your product page on TikTok Shop, including title, images, description, price, and variants. Optimized listings have clear photos, detailed descriptions, and competitive pricing.
Logistics Partner
The shipping and fulfillment service TikTok Shop uses to deliver products to customers. Varies by region but typically includes national postal services and courier companies.
Margin
Your profit as a percentage of the sale price. Formula: (Profit ÷ Sale Price) × 100. Healthy margins for TikTok Shop are 30-50%.
MOQ (Minimum Order Quantity)
The minimum number of units a supplier requires per order. Lower MOQs are better when starting out to test products without huge upfront investment.
Net Profit
What you actually keep after all costs: Sale Price - (TikTok Fees + Shipping + Product Cost + Other Expenses). This is your true profit per sale.
New Seller Discount (EU)
A special 4% commission rate (instead of 9%) for sellers' first 60 days in European markets. Launched January 2026 to encourage new sellers.
Order Defect Rate (ODR)
The percentage of orders with problems (returns, negative reviews, chargebacks). TikTok monitors ODR; high rates can lead to account suspension. Keep ODR below 2%.
Organic Reach
The number of people who see your content without paid promotion. TikTok Shop sellers can succeed with 100% organic reach through engaging content and affiliates.
Payment Processing Fee
The 2% fee TikTok charges for handling payments. Covers credit card processing, fraud prevention, and transaction security. Charged on top of base commission.
Payout
The money deposited to your bank account after TikTok deducts their fees. Typically occurs 7-14 days after order delivery.
Product Cost
How much you pay to acquire the product, including unit cost, packaging, and inbound shipping to your warehouse or TikTok's fulfillment center.
Profit Margin
See "Margin". The percentage of each sale you keep as profit after all costs.
Refund Rate
The percentage of orders that are refunded. Varies by category: cosmetics 3-5%, clothing 20-30%. Budget for your category's typical rate.
Return Window
The timeframe customers have to return products, typically 30 days. TikTok Shop requires sellers to accept returns within this period.
ROI (Return on Investment)
How much profit you make relative to what you spent. Formula: (Net Profit ÷ Total Investment) × 100. Good TikTok Shop products have 100%+ ROI.
Seller Fulfilled
When you handle packaging and shipping yourself instead of using TikTok's logistics partners. Available in some regions/categories but requires meeting performance standards.
Shipping Cost
What you pay TikTok for order delivery. Weight-based: $4 (0-1lb), $6.50 (1-3lb), $9 (3-5lb), $12 (5lb+). Significantly cheaper than retail shipping rates.
SKU (Stock Keeping Unit)
A unique code for each product variant (size, color, etc.). Example: If you sell t-shirts in 3 sizes and 4 colors, you have 12 SKUs.
Supplier
Where you source your products from. Can be manufacturers (Alibaba), wholesalers, or local distributors. Reliable suppliers are crucial for TikTok Shop success.
Take Rate
The total percentage TikTok takes from each sale. Combines commission (8-9%) and payment processing (2%) for a total of 10-11%.
TikTok Shop Affiliate Program
The system allowing creators to earn commissions by promoting your products. You set commission rates and creators apply to join.
Tracking Number
The unique code customers use to track their package. TikTok Shop requires valid tracking for all orders to ensure seller protection.
Unit Economics
The profit/loss on a single unit of product. Must be profitable at the unit level before scaling. Our calculator shows your unit economics.
UGC (User Generated Content)
Content created by customers or affiliates featuring your product. UGC builds trust and is often more effective than brand-created content.
Variant
Different versions of the same product (sizes, colors, etc.). TikTok Shop lets you group variants under one listing instead of creating separate products.
Velocity
How quickly a product sells. High-velocity products move fast and require frequent restocking. Low-velocity items tie up capital longer.
Weight-Based Shipping
TikTok Shop's shipping model where costs increase with package weight. See "Shipping Cost" for specific rates by weight bracket.
Winning Product
A product that sells consistently well with healthy margins and low return rates. Finding winning products is key to TikTok Shop success.
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