TikTok Shop has its own language. Some terms are borrowed from ecommerce. Others are platform-specific and not well-documented. If you are managing a TikTok Shop, or evaluating an agency's reporting, understanding the terminology is not optional.
Every entry below is written as a direct answer, so you can look up exactly the term you need. Updated August 2026.
A
What is an affiliate on TikTok Shop? A creator who promotes your products in exchange for a commission on sales. Affiliates are recruited through TikTok Shop's affiliate marketplace or through direct invitation. Our affiliate strategy guide covers how to build the programme.
What is an affiliate commission on TikTok Shop? The percentage of the sale price paid to a creator when their content drives a purchase. Rates are set by the brand and vary by category: the platform average is around 13%, with beauty running 15-30%. See our commission structures guide.
What is the affiliate marketplace on TikTok Shop? TikTok Shop's built-in platform where brands list products with commission rates and creators browse, apply, and accept partnerships. Also called the "Open Collaboration" marketplace.
What is AOV (Average Order Value)? The average amount spent per transaction on your TikTok Shop. Calculated by dividing total revenue by number of orders.
B
What is a Branded Mission on TikTok? A TikTok feature where brands post briefs and creators submit content. The brand selects winning submissions for amplification. Used for large-scale content generation campaigns.
C
What is a closed collaboration on TikTok Shop? A private affiliate arrangement where you invite specific creators with a custom commission rate, rather than listing in the open marketplace.
What is COGS (Cost of Goods Sold)? The direct cost of producing or acquiring the products you sell. Includes manufacturing, raw materials, and inbound shipping to your warehouse.
What is a commerce engine? A systematic approach to TikTok Shop that integrates economics, content, creators, and paid amplification into a unified revenue system rather than treating each element separately.
What is content velocity on TikTok Shop? The rate at which new content about your products is published. Higher content velocity (more pieces published per day or week) sends stronger signals to the algorithm. Full breakdown in our content velocity guide.
What is contribution margin on TikTok Shop? Revenue minus all variable costs (COGS, platform fees, commissions, shipping, returns, samples, ad spend). The amount that actually contributes to covering fixed costs and generating profit. The most important financial metric on TikTok Shop; we explain why in our contribution margin guide.
What is a good conversion rate on TikTok Shop? The percentage of product page visitors who complete a purchase. TikTok Shop organic traffic typically converts at 0.5-1.5%; above 2% is strong. LIVE sessions convert far higher when content-product fit is strong.
What is CPA (Cost Per Acquisition)? Total spend (commissions, ad spend, samples, and operational costs) divided by total new customers acquired. Measures the cost of acquiring each new customer through TikTok Shop.
What is a creator ecosystem? The network of affiliates and content creators who produce content about your products. A healthy ecosystem has 30-50+ active creators posting regularly; see how to recruit creators.
D
What is Data Compass on TikTok Shop? TikTok Shop's analytics platform within Seller Center that provides insights on traffic, conversion, product performance, and market trends.
F
What is FBT (Fulfilled by TikTok)? TikTok Shop's fulfilment service where TikTok handles storage, packing, and shipping of your products. Similar in concept to Amazon's FBA. Our FBT guide covers when to use it.
What is a flash deal on TikTok Shop? A time-limited promotional price used during live shopping sessions or promotional events to create urgency and drive immediate purchases.
G
What is GMV (Gross Merchandise Value)? The total value of all goods sold through your TikTok Shop before any deductions (fees, commissions, returns). GMV is a revenue metric, not a profit metric. Reporting GMV without margin context is misleading.
What is GMV Max on TikTok Shop? TikTok Shop's automated advertising product that uses machine learning to maximise GMV from your ad budget. You set a daily budget and the system optimises creative selection, audience targeting, and bid amounts. Full setup in our GMV Max guide.
H
What is a hero SKU? Your highest-performing product on TikTok Shop: the one that converts best from creator content, maintains strong margin, and drives the most revenue. Not always the same as your hero product on other channels. See our hero SKU strategy.
L
What is LIVE shopping on TikTok? Real-time video sessions where a host demonstrates products and viewers can purchase directly within the stream. LIVE shopping typically converts at higher rates than static content and enables flash deals and interactive selling. Start with our LIVE selling guide.
M
What is an MCN (Multi-Channel Network)? An organisation that manages multiple creators, connecting them with brands for affiliate partnerships. MCNs operate as intermediaries in the creator ecosystem.
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O
What is open collaboration on TikTok Shop? TikTok Shop's affiliate marketplace where brands list products with public commission rates and any eligible creator can apply to promote them. Compared against targeted deals in our open vs targeted guide.
What is an order limit on TikTok Shop? A restriction on the number of daily orders a shop can process. Applied during probation for new sellers and may be adjusted based on shop health and fulfilment capacity.
P
What is the payment processing fee on TikTok Shop? The fee for processing customer payments, typically around 1% of the transaction value, charged in addition to the referral fee.
What is probation on TikTok Shop? The initial period for new sellers during which order limits and distribution restrictions apply, typically 30-90 days depending on performance. New shops start with caps around 50 orders per day and 100 listings. Our new seller guide covers how to exit it fast.
What is a product link on TikTok? The clickable link attached to a TikTok video that directs viewers to the product page on TikTok Shop. Product links are the bridge between content and commerce.
R
What is the TikTok Shop referral fee? TikTok Shop's platform fee charged on each sale, currently 6% of the transaction value. This is separate from affiliate commissions. The full cost stack is in our fees guide.
What is a good return rate on TikTok Shop? The percentage of orders returned by customers, tracked at SKU level. Apparel typically runs 15-25%, beauty and wellness 8-15%. High return rates hurt margin and shop health; see our returns reduction guide.
What is ROAS (Return on Ad Spend)? Revenue generated divided by ad spend. A ROAS of 5x means every $1 in ad spend generated $5 in revenue. ROAS does not account for COGS, commissions, or other costs; contribution margin is a better profitability measure.
S
What is sales velocity on TikTok Shop? The rate at which products sell, measured as average units per day over a rolling period. Consistent daily velocity is a strong algorithmic signal, and velocity trends indicate channel health.
What is a sample-to-post rate? The percentage of creators who received free product samples and subsequently posted content. Typical seeding rounds of 30-50 creators see a 20-30% post rate; below that indicates problems with outreach quality, product appeal, or briefing. See our sampling ROI guide.
What is Seller Center on TikTok Shop? TikTok Shop's management dashboard where sellers handle products, orders, fulfilment, customer service, and analytics. The operational hub for all seller activity.
What is the Shop Health Score on TikTok Shop? TikTok Shop's composite metric measuring operational performance: fulfilment rate, cancellation rate, return rate, response time, and policy compliance. A declining score directly reduces algorithmic distribution; our shop score guide explains the levers.
What are Spark Ads on TikTok? A TikTok ad format that amplifies existing organic content (including creator posts) as paid ads. Spark Ads keep the authentic look of the original content while reaching a broader audience. Setup in our Spark Ads guide.
T
What is a target collaboration on TikTok Shop? A feature allowing brands to invite specific creators to promote products with customised commission rates and briefing. Targeted deals typically carry 18-22% commissions against 12-18% for open collaboration.
What is a TSP (TikTok Shop Partner)? An officially vetted agency, technology provider, or service organisation approved by TikTok to manage seller accounts, creator programmes, or technical integrations. Verification and what the badge does and does not guarantee: our TSP explainer.
V
What are Video Shopping Ads on TikTok Shop? A TikTok Shop ad format specifically designed for commerce, showing shoppable products within video ad placements. Combines brand awareness with direct purchase capability; see our Video Shopping Ads guide.
Financial Terms Quick Reference
| Term | Formula | What It Tells You |
|---|---|---|
| GMV | Total sales value (before deductions) | Top-line volume, NOT profitability |
| Contribution Margin | Revenue - all variable costs | Actual profit per sale/SKU/channel |
| CPA | Total spend ÷ new customers | Cost to acquire each customer |
| ROAS | Revenue ÷ ad spend | Ad efficiency (but not profitability) |
| AOV | Total revenue ÷ total orders | Average transaction size |
| Return Rate | Returns ÷ total orders | Product/listing quality signal |
| Sample-to-Post Rate | Posts received ÷ samples sent | Creator outreach efficiency |
One Thing to Do This Week
Review the last report you received from your TikTok Shop agency or internal team. Check whether the key financial terms (GMV, contribution margin, CPA, ROAS) are being used correctly and whether the report includes margin data, not just revenue data. If the report only shows GMV and creator count, you are missing the metrics that determine whether the channel is profitable.
FAQ
What is the difference between GMV and revenue on TikTok Shop? GMV (Gross Merchandise Value) is the total value of orders placed. Revenue is what you actually receive after platform fees, returns, and cancellations. GMV is always higher than net revenue, so reporting GMV alone overstates performance.
What does shop health mean on TikTok Shop? Shop health is a composite score reflecting operational performance: fulfilment speed, cancellation rate, return rate, customer response time, and policy compliance. It directly affects how much traffic the algorithm sends your shop.
What is the current TikTok Shop referral fee? 6% of the transaction value, plus approximately 1% payment processing fee. That is lower than most marketplace referral fees but does not include affiliate commissions, which are a separate variable cost.
What fees does TikTok Shop charge sellers in total? The referral fee (6%) and payment processing (around 1%) are the platform's direct cut, but total platform costs, including affiliate commissions, samples, shipping, and returns, typically run 35-55% of revenue. The full breakdown is in our fees guide.
Where can I learn TikTok Shop basics beyond definitions? Start with our how to sell on TikTok Shop guide for the full setup process, then the launch playbook for the first 90 days.
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About Social Tale
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