• Tmall Global Seller Fees Guide: An Overview

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    Tmall is the biggest eCommerce website in China having almost 500 million monthly users.

    Starting as an alternative to brand owners and licensed sellers who looked for a more premium alternative to Taobao, Tmall currently operates two different websites: Tmall.com (Tmall Classic) and Tmall.hk (Tmall Global).

    If you plan to sell cross-border in China, the latter one should be at the top of your list. Selling cross-border brings many benefits as you don’t need a Chinese entity or undergo rigorous testing and registrations with local authorities.

    However, before you go into detailed planning, you must understand how much it costs to sell on Tmall Global. In this article, I explain all the costs involved.

    1. Deposit

    One of the big outlays that SMEs often feel concerned about is the initial deposit. This refundable deposit is required to cover any unexpected issues that might arise, such as disputes between buyers and sellers.

    Worth having in mind is that the deposit is generally higher for Tmall Global (the cross-border eCommerce platform) compared to Tmall Classic, which is for local sales.

    The background is that you don’t need a local Chinese entity for Tmall Global, resulting in risks for Tmall.

    So how much do you have to pay as a deposit?

    The deposit is around USD 25,000, as it speaks, it’s a deposit. Unless anything goes wrong, it’s refunded in full when you close the Tmall store.

    As mentioned, if any disputes of problems would arise as a result that you don’t follow the Tmall Service Agreement and rules, they have the right to deduct money from the deposit.

    2. Technology and Service Fees

    In addition to the deposit, Tmall also charges so-called Technology and Service Fees. The fees are divided into an annual fee and real-time transaction fees.

    Let’s have a look at both.

    a. Annual Fee

    The annual fee can also be referred to as a service fee and paid yearly. Tmall charges the fee as they allow you to use the platform and for the services rendered.

    The fee generally ranges between USD 5,000 – 10,000 and changes depending on your product category. In a majority of the cases, the fee is USD 5,000.

    Below you can find some examples of annual fees for different products:

    • Apparel/Accessories/Hats/Scarfs: USD 5,000
    • Women’s/Men’s Clothing: USD 10,000
    • Milk Powder: USD 5,000
    • Skincare & Make up: USD 5,000
    • Snacks/nuts: USD 5,000
    • Home Appliances: USD 5,000
    • Vitamins: USD 5,000

    Worth mentioning is that if you want to sell products in multiple categories, you have to pay the highest annual fee.

    b. Real-Time Transaction Fee (Commission)

    Real-time transaction fees are also part of the Technology and Service Fees. I prefer to call this a sales commission as it’s clearer to the seller.

    Simply put, Tmall charges a percentage on each sale you make.

    The commission is calculated as follows: (Sales Price + Logistics Fee) * X%

    Let’s take one example:

    • Product: Can of Vitamin C
    • Sales Price: USD 50
    • Logistics Fee: USD 5

    Commission: (USD 50 + USD 5) x 3% = USD 1.65

    The commission rates usually range from 2% – 5%, below you can find examples of products and the different commission rates:

    • Apparel/Accessories/Hats/Scarfs: 2%
    • Women’s/Men’s Clothing: 5%
    • Milk Powder: 2%
    • Skincare & Make up: 4%
    • Snacks/nuts: 2%
    • Home Appliances: 5%
    • Vitamins: 3%

    The Technology and Service Fees don’t include any duties, taxes, or other financial charges. Such costs will be levied and born by the seller.

    3. Alipay Service Fee

    In addition to the above-mentioned fees, you also have to pay a payment service fee. On Tmall, sellers use Alipay and you pay an Alipay Service Fee.

    The fee is 1% and multiplied by the sales price plus the logistics, the same as it goes with the commission.

    Let’s take the same example as above:

    • Product: Can of Vitamin C
    • Sales Price: USD 50
    • Logistics Fee: USD 5

    Alipay service fee: (USD 50 + USD 5) x 1% = USD 0.55

    Conclusion

    To sum up, your major financial will be the initial deposit and the yearly category fee in the first year. The deposit and yearly category fee will add up to around USD 30,000 but can be as much as USD 35,000.

    This is also the time when you try to break into the Chinese market and sales volumes stay low.

    My general advice is for you to set aside a budget for the first year. Don’t expect to break-even, as you’ll have to pay for marketing, 3rd party service providers, and more.

    If your company doesn’t have the financial capabilities to enter the Chinese market yet, it can be better trying on markets such as the US or Europe.

    If you want more information about the fees charged when selling on Tmall.com, the local eCommerce platform, simply visit this page. You can also drop a comment below if you have any questions.

    FAQ

    Below you can find some commonly asked questions and my replies.

    How much should I budget for the first year?

    It’s not easy to share exact figures as it all comes down to how much brand awareness you have in China. It also depends on what product you sell, which partners you hire, and how much you have to spend on marketing.

    Be ready to set aside at least USD 100,000 for the first year, including the marketplace and Tmall Partner fees.

    Can I get back the deposit from Tmall?

    The deposit is refundable and repaid once you close the Tmall store. With that said, Tmall has the right to deduct amounts from the deposit to cover costs that arose from issues where you didn’t follow the Tmall rules.

    What is a Tmall partner?

    Tmall Partners are either local or foreign-owned eCommerce agencies that help foreign companies to sell on China eCommerce platforms. Don’t let the name fool you as they can help you to start selling on platforms like JD, Pinduoduo, Kaola, and Vip shop as well.

    In addition to creating and running stores on behalf of sellers, they can also help with market research, translation, CIQ registration, customs registration, fulfillment, and more.

    In general, it’s not easy to enter the Chinese on your own and if you have limited knowledge about the market. As such, many foreign companies decide to get help from local eCommerce partners first.

    Does Alibaba own Tmall?

    Yes, Tmall spun off from Taobao and is run by Alibaba Group.

    What is Alipay?

    Alipay is an online and third-party mobile payment platform that was launched by Alibaba in 2004. Alipay is used as a payment method on Tmall and the number of users has reached around 870 million.


  • Disclaimer: The content on this website is provided for general information about exporting products to Asia, e-commerce platforms, logistics, regulations, taxes, and other related topics. However, we don't guarantee that we keep the content up to date or that it's free from error. We do make mistakes from time to time. We never provide legal advice of any sort.

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