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Foregrade

How profit is calculated

The exact formula Foregrade uses to compute net profit on every order.

Last updated: 2026-04-25

Every profit number in Foregrade comes from the same formula, applied per-order and rolled up.

The formula

Net Profit = Sale Price (gross, VAT-inclusive)
           - Referral fee (TikTok platform fee — 9% default,
             5% electronics, 7% books)
           - Transaction fee (payment processing)
           - Shipped-by-seller fee (£0.50 per self-fulfilled order,
             live since July 2025)
           - Fulfillment fee (FBT or zero for self-ship)
           - Affiliate commission (if sold via creator)
           - Campaign fee (~1% on flash-sale orders)
           - COGS (your supplier cost)
           - Shipping cost (if you ship yourself)
           - Return cost (if returned)

Data sources for each component

  • Sale price + all TikTok fees — pulled directly from TikTok Shop Order API (UK 202309/202507 endpoints)
  • Affiliate commission — pulled from TikTok Affiliate API per creator
  • COGS — what you enter in Foregrade Settings
  • Return cost — calculated when a return is refunded (see Return costs)

VAT handling

UK TikTok Shop quotes prices VAT-inclusive (the £24 a buyer pays includes the £4 VAT a seller remits to HMRC). Foregrade follows the same convention: the Sale Price in the formula above is the gross price the buyer paid. The 20% VAT portion is tracked separately on every order so your reports can break out:

  • Gross revenue — what TikTok charged the buyer (matches TikTok's seller-centre report)
  • Net revenue (ex-VAT) — what's actually yours after VAT remittance
  • Net profit — gross revenue minus every fee + COGS, before VAT remittance

Why net-profit-before-VAT-remittance? Because VAT is a pass-through tax: you collect it on TikTok's behalf and pay it to HMRC, so it doesn't affect operational margin decisions (which products to push, which to drop). For tax-time numbers, use the VAT breakdown in Reports → VAT summary.

Why it's in pennies internally

All profit calculations use integer-pence arithmetic internally. Floating-point drift across thousands of orders causes "off by a penny" bugs; pence-based math eliminates that. Numbers convert to pounds only when displayed.

Partial refunds

If TikTok issues a partial refund, Foregrade recalculates that order's profit using the partial refund amount. TikTok doesn't always report exact fee reversals on partial refunds, so the calculation uses the most conservative estimate (full fees kept, partial sale revenue only).

Refund admin fee

When a return goes through, TikTok charges a refund admin fee equal to 20% of the original referral fee, capped at £5 per SKU. Foregrade subtracts this on returned orders so the per-order profit reflects the true after-return margin.

Flash sale fees

TikTok charges a ~1% campaign fee on orders from flash sales. Foregrade reads the campaign_fee field from TikTok's API and subtracts it. See Flash sale fees for details.

Verify it yourself

Pick any order in your dashboard, click into the detail view, and you'll see the full breakdown with every fee line. The totals match TikTok's own settlement report (once you add in COGS, which TikTok doesn't know about).

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