The app’s shopping features won over sellers and shoppers by offering deals that can seem too good to be true. Now TikTok is raising sellers fees, which may translate into higher prices.

The days of buying ultracheap stuff on TikTok Shop may be winding down.

Starting today, the fees TikTok charges sellers increase from 2 percent to 6 percent of the price of each order. They will creep up to 8 percent in July. The changes may mark a crucial moment for people who shop on TikTok and for the platform itself, potentially forcing up prices and testing shopper’s loyalty to the social app’s ecommerce play.

TikTok Shop launched in the US in September with strikingly low prices compared to other online stores, thanks to its subsidies to sellers and shoppers. Influencers and entrepreneurs embraced the opportunity: TikTok saw a surge of sellers that outpaced growth in vendors at competitors like Shopify and Amazon, according to a March report from Similarweb, which tracks web traffic. But from the beginning TikTok Shop has hosted deals that appear too good to be true, such as deeply discounted—and possibly counterfeit—snail mucin skin care products and Stanley tumblers, as well as jewelry, socks, and other odds and ends for less than $1.

After a successful holiday shopping season, TikTok Shop’s fee increases see the platform trying to prove it can become a sustainable, habit-forming mainstay in ecommerce. “The true test for [TikTok Shop’s] longevity and its sustainability will be as these incentives start to roll back,” says Jasmine Enberg, principal analyst for social media at Insider Intelligence, a market research firm. “A lot of the sellers that have found success on TikTok Shop are smaller businesses that really benefited from the incentives.”

If TikTok Shop continues to increase its fees, those sellers may struggle, Enberg predicts. TikTok did not provide a comment on the fee changes for this story.

Source: TikTok Shop’s Era of Super Subsidies Is Ending | WIRED