U.S. Beauty & Health TikTok Profit Margins: What Sellers Need to Know

U.S. Beauty & Health TikTok profit margins matter more than ever. If you’re running a beauty or health brand on TikTok Shop, every dollar counts. Charm data shows the average net profit margin is just 10.15 percent across the top 1,000 products. But that number hides a deeper problem. A lot of sellers are still losing money.

Beauty & Health Profit Margins in the U.S. TikTok Shop

Not every seller is operating at the same level. Among the top 1,000 products, 214 are actually losing money. That means over 1 in 5 top-performing products aren’t profitable. So even if your sales look strong, your margins might be thin or negative.

Take Anua’s Ultimate Skincare Routine Set. It sells for an average of $73.92. After subtracting TikTok’s referral fees, influencer commissions, ad costs, fulfillment, and product costs, the seller ends up with a 20.48 percent profit margin. That’s pretty solid.

Now look at Goli’s 3-pack of ashwagandha gummies. It’s priced much lower at $30.59, but it still generates a 22.33 percent margin. That’s because Goli keeps its ad spend low and controls the cost of goods. The takeaway is simple. You don’t need high prices to hit strong margins. But you do need to keep a close eye on your cost structure.

Where the Money Goes

Margins disappear fast when you don’t track every cost tied to each sale. Sellers often look at revenue and assume they’re in good shape, but that can be misleading. It’s the breakdown of fees and expenses that tells the real story. Here’s where your money goes:

• TikTok referral fees: 6% is automatically taken from every order. It’s the platform cost of doing business.
• Influencer or affiliate commission: This can reach up to 15%, especially if you're relying on high-performing creators. It's effective but expensive.
• Advertising cost per unit: Easily hits $10 or more if you're scaling aggressively or trying to outrank competitors.
• Fulfillment costs: If you're using TikTok's FBT program, expect to pay $3.58 per item. It saves you time but cuts into margin.
• Placement and storage fees: These charges add up over time, especially if you’re moving large volumes or carrying excess inventory.
• Cost of goods: Typically 30% to 50% of the retail price, and that doesn’t include packaging or custom inserts.

To see how these costs stack up in real life, look at Anua. They pay over $11 just in affiliate commissions on each order. If they offer discounts or increase ad spend, their margin tightens quickly. On the other hand, Goli keeps their commission lower and has a leaner product cost. That gives them more flexibility and helps them maintain a 22.33% margin, even at a lower price point.

If you're not watching these costs closely, your profit will vanish before you even notice. High revenue looks good on the surface, but what matters is what you keep after every fee is taken out.

Is TikTok Losing Money for Some Sellers?

Yes, TikTok is often seen as a channel to drive a halo effect to boost other sales channels. However, that means brands are often losing more on the platform than many people realize. When you hear the question "Is TikTok losing money?" you might think it’s about the app itself. But for many sellers, the real concern is how much money they’re losing on each sale.

Selling on TikTok Shop isn’t just about getting clicks or going viral. It’s about making each order profitable. And that’s where many shops are struggling. Between high referral fees, creator commissions, ad costs, and fulfillment charges, it’s easy to end up in the red, especially if you don’t track your spending closely.

According to the latest Charm data, 214 of the top 1,000 products are operating at a loss. That’s over 20 percent of high-volume listings that aren’t bringing in profit. These sellers are doing everything right in terms of visibility and volume, but their margins aren’t holding up.

The bottom line is this: high sales don’t mean your business is healthy. Without solid profit margins, those big numbers at the top of your dashboard won’t matter. What you really need is for each sale to leave money in your pocket after every fee is paid.

What You Can Do

Start by doing a deep check on your numbers. Look at what you’re spending on every single order, ads, fees, shipping, and product. Calculate your true net profit, not just gross revenue.

Next, test ways to improve it:

• Bundle products to lift order value
• Cut ad spend where the return is low
• Use content creators with better performance at lower commission rates
• Shift to more efficient fulfillment or in-house handling

You don’t have to make drastic changes overnight. But if you’re not checking profit by product, you’re flying blind.

The best TikTok profit strategy is one that balances growth with sustainability. Focus on what moves the needle without draining your bottom line. Request a demo with Charm to break down your numbers and see what you could be keeping.