Increasing commissions is a necessary step for almost every cross-border platform. Most platforms offer lower commissions in the early stages to attract sellers. However, as the number of sellers increases, most platforms will choose to start increasing commissions until the ratio is equal to that of other platforms.
According to relevant reports from foreign media, TikTok recently notified sellers on its US site that the commission ratio will increase from the original 2% to 6% from April 1, and will be adjusted to 8% on July 1. Of course, not all categories have the same commission ratio. For example, higher-priced categories such as electronic products will have lower commission ratios.
Increasing commissions, where should cross-border sellers go?
For cross-border sellers, increasing commissions is obviously bad news, so how should cross-border sellers deal with it?
1. Change e-commerce platforms: Since different e-commerce platforms are at different stages of development, the commission ratios charged are also very different. If sellers only want to do short-term business, they can consider directly changing e-commerce platforms and finding a platform with a low commission ratio to continue operating.
2. Change categories: If the commission is increased, the seller’s profit margin will inevitably be compressed. However, some low-price, low-profit categories will be difficult to continue operating. Therefore, sellers can also maintain profit margins by changing the unit price category of high customers.
However, it should be noted that for sellers, changing the operating category is basically equivalent to “starting all over again”, so sellers must be mentally prepared.
3. Product innovation iteration: If the seller does not want to change the product type or the e-commerce platform, he can only innovate and optimize the product so that he can raise the price while maintaining the competitiveness of the product.
4. Choose an independent station: From the perspective of long-term operation, it is actually recommended that sellers choose an independent station. On the one hand, independent stations do not require commissions, do not face competition directly, and have free pricing, so the profit margin will be higher. On the other hand, independent stations can play more space, so it is more conducive to brand building. Brand building is actually one of the most obvious trends in the development of cross-border e-commerce in the future.
In addition, even if the seller changes the track to an independent station, he can use TikTok’s huge traffic pool and put the link to the independent station on the homepage.
In fact, since the TikTok Indonesia storm, selling goods directly on social media has a higher risk factor. Therefore, for cross-border sellers, whether it is directly changing the track or taking into account independent sites, it is one of the effective ways to reduce business risks.