Profits are 'squeezed' because the floor increases fees, traders sell less to keep profits

Many small traders on e-commerce platforms are pivoting, focusing on optimizing profits on each order, selling less but making sure profits, reducing pressure when platforms increase fees.

E-commerce platforms adjusting fees up is an inevitable trend that forces sellers to re-evaluate their strategies - Photo: QUANG DINH

The fact that the floors are increasing fees, along with a series of taxes, promotions, transportation, operations... can cause total costs to exceed 40% of revenue, erode sellers' profits, and push up the risk of great losses.

Selling thousands of orders but still afraid of loss

Immediately after the TikTok Shop platform increased seller fees to 17% of each order's revenue, many small businesses spoke out in protest because profits were increasingly squeezed.

Ms. Ngoc Bich (household goods business) said that for an order worth 1.75 million VND, taxes and fees accounted for 387,000 VND (36% of revenue), of which TikTok Shop fees were more than 360,000 VND. After deducting additional shipping and packaging costs, she still lost money even if she sold the goods.

"The more you sell, the more you lose. If this continues, you will go bankrupt," she said.

According to Ms. Bich, TikTok Shop's fees include transaction fees, platform commission fees, affiliate commission fees, Xtra voucher service fees... which account for (93% of total taxes and fees).

Similarly, Ms. Bich Chi (HCMC) used to process 1,500-2,000 orders/day, had to hire 5 more workers, but the profit was very thin. When the platform increased fees, she and her husband decided to change direction, focusing only on products with a solid profit margin, reducing the size of orders and cutting staff down to 2 people to maintain the business.

According to Tuoi Tre , facing the pressure of increasing fees from the floor, many online sellers have shifted to optimizing profits on each order, giving up the goal of hundreds or thousands of orders per day.

For example, previously selling an order for 200,000 VND only made a profit of 10,000 VND, now at the same price but trying to find a way to make a profit of about 60,000 VND. Any item with a profit margin that is too low is ready to be cut.

Selling household appliances, Mr. Hai Thanh (HCMC) said that a product with an original price of 50,000 VND is sold on the platform for about 90,000 VND, but after deducting labor costs, operating costs, taxes and platform fees, each order only makes a profit of about 5,000 VND. If the customer cancels or loses the item, the entire cost is considered a loss. "If you don't calculate carefully, you can easily go bankrupt," he said.

To maintain profits, Mr. Thanh was forced to cut costs, including limiting inventory. He previously rented an additional house as a warehouse, but has now returned it to use his own house as both a residence and a warehouse, saving more than 30 million VND per month.

Despite efforts to change, many retailers are still worried about the risk of the platform suddenly increasing fees in the near future and not knowing when it will stop. This uncertainty also causes many people to seek ways to diversify sales channels, taking advantage of Facebook, Instagram, Zalo... in parallel with e-commerce platforms. At the same time, they look for opportunities to attract customers to experience physical stores, applying cheaper prices than buying online.

Floor fee increase impacts and creates great pressure on both sellers and consumers - Photo: QUANG DINH

Optimize profits, reduce floor dependence

Talking to Tuoi Tre , Ms. Nguyen Thi Anh Hong, e-commerce director of the 24hStore retail system, shared her experience: in addition to restructuring the product portfolio towards prioritizing segments with high profit margins (from 17% or more), businesses should increase the rate of sales through proactive websites (CRM, email, Zalo, private livestream) to keep profit margins higher than the platform.

At the same time, sellers should also optimize advertising and operating costs by reducing the use of "compensation" coupons, switching to livestreaming technical instruction content, increasing the ability to upsell (encourage customers to spend more) without having to deeply discount.

According to Ms. Hong, sellers need to proactively negotiate transportation, consolidate orders, and optimize warehouses to reduce costs while still ensuring operating capacity. In particular, to retain customers for the long term, businesses need to strengthen after-sales value and customer service.

For example, deploying assembly services, equipment deposits, and periodic maintenance packages to create a standard revenue stream - reducing complete dependence on product sales...

"To protect their rights and maintain sustainable business operations, small traders and retailers can organize sales associations to discuss with platforms, provide official feedback, and request platforms to clearly announce industry-specific fee schedules to help small businesses make timely adjustments," said Ms. Hong.

Meanwhile, Master of Public Policy Huynh Ho Dai Nghia said that after many years of "burning money" to build the ecosystem, the fact that e-commerce platforms are starting to shift to collecting sustainable fees from sellers is an international trend. Amazon, eBay, Alibaba... have all operated in this direction for a long time.

However, in Vietnam, the fact that platforms are increasing fees but lack a consultation mechanism and transparency in fee usage information is making many people feel "put in a fait accompli" situation. At that time, it is clear that many small retailers are forced to increase prices, combine orders or withdraw from the platform. Some cheap products are eliminated because they are not enough to cover costs, causing consumers, especially in the low-income group, to lose diverse options and good prices.

The floor must comply with transparency

The current practice of e-commerce platforms increasing fees without dialogue is likely to destroy trust, a vital element in the digital ecosystem.

Mr. Nghia believes that to ensure objectivity, the State should not intervene in prices, but must intervene in the transparency and fairness of platform policies. E-commerce platforms currently have a high degree of autonomy, but that does not mean they can operate in a "gray zone".

Specifically, the expert proposed three mechanisms. First, a mechanism to make the fee structure transparent. In which, all information must be clear, easy to understand, and have regular reports. Second, a mechanism to consult the seller community, especially the small business group, before issuing policies that directly affect it. Third, building a code of conduct in e-commerce issued by the State, protecting the rights of both consumers and sellers.

"At the same time, it is necessary to build a legal framework to recognize and protect the group of e-commerce small traders, a force that is currently outside the protection of both the business association system and the Labor Law. More specifically, to build a sustainable and fair e-commerce environment, there needs to be clearer coordination and "role division" among the relevant parties," Mr. Nghia proposed.

Convenient tax collection floor, seller consensus

According to Tuoi Tre, after more than a month of implementation, the process of e-commerce platforms deducting, declaring and paying taxes on behalf of sellers is being carried out quite smoothly. The platforms clearly notify the tax rate on each order to the seller. The seller also completely agrees with the platform declaring and paying taxes on their behalf.

A representative of TikTok Shop said that the platform is currently completing the declaration of deduction and payment of taxes arising in the period of July 2025 on behalf of sellers according to tax laws. "Sellers can proactively track the amount of tax deducted for each order in the summary information of each order. Specific instructions are provided at TikTok Shop Academy," said a representative of this platform.

In addition to specifically publicizing the tax rate that sellers must pay on each order, Shopee representatives said they have implemented communication activities to act as a bridge between tax authorities and the seller community.

Through the events, the e-commerce tax branch under the Tax Department and representatives of Shopee Vietnam's finance department directly dialogued with the seller community to clarify the responsibilities of the e-commerce platform as well as answer questions that sellers are concerned about.

In addition, Shopee Academy - a specialized training channel for sellers - also updates many instructional documents, illustrative videos , Q&A lists and a dedicated support hotline on new tax policies.

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Source: https://tuoitre.vn/loi-nhuan-bi-bop-chet-vi-san-tang-phi-cao-tieu-thuong-ban-it-de-giu-loi-20250817002415933.htm