Methodology
Review formulas and limits for seller profit, refund administration, inventory recovery, CNY payouts and break-even pricing.
Methodology & assumptions
Deterministic arithmetic, with explicit limits.
Model boundary
One item per order, full refunds and one planning period. This is not bookkeeping, tax filing or a full marketplace settlement simulator. US reference assumptions are editable; custom markets require your own fee inputs.
Buyer item payment = list price − seller discount − platform-funded discount.
The platform subsidy replaces buyer payment; it is not added twice.
Referral and refund fees
Original referral fee per order = max((list price − seller discount + buyer shipping) × rate, minimum fee). Retained orders pay the full fee; refunded orders retain min(original fee × retained percentage, admin cap). The US reference is 20%/$5. Exemptions, media categories, multi-unit SKUs and partial refunds are not determined automatically.
Creator commission applies to item price after seller discount, excluding shipping. Its refund treatment is separately editable. Processing charges apply to original buyer payment plus the entered processing-base tax; refundability is editable. Additional transaction fees are separate.
Inventory and cash
Consumed product cost = unit cost × (all orders − refunded orders × recovered fraction). Inbound, fulfillment and advertising still apply to all orders. Recovered inventory reduces COGS but does not return purchase cash, so operating profit and cash balance are shown separately. Resale of recovered stock is not modeled.
Settlement, FX and profit
Settlement subtracts referral/admin, creator, processing, additional fees, tax provision and expenses selected as platform-withheld. A positive settlement incurs percentage and fixed payout fees once. Externally paid fulfillment and ads are deducted after payout, without double counting.
CNY profit = non-negative payout − negative-balance funding at reference FX − CNY sourcing costs − external USD costs at reference FX.
USD-equivalent profit = CNY profit / reference FX; margin = USD-equivalent profit / net sales after refunds.
CNY sourcing stays fixed in CNY. Other sourcing currencies first convert to USD using costFX (currency units per USD), then to CNY using scenario FX; costFX is held fixed. Annual provider fees are shown separately; allocate applicable annual/subscription costs to overhead yourself.
Return shipping & handling loss
Original ads and outbound fulfillment are already included for all orders. Recovered inventory is separate asset value, not returned cash.
Decision thresholds & cost ROI
Cost ROI = operating profit / all consumed operating costs (net sales minus profit), independent of whether the same costs are withheld or paid externally. Target price is solved by binary search and rounded up to cents. Ad and creator limits are solved one at a time. Break-even ROAS = net sales after refunds / break-even ad budget; it differs from order-date GMV ROAS in ad platforms. Infeasible targets are reported.
File checks
Checks are limited to the signed CSV columns you map. The statement check uses TikTok’s Net sales + Shipping + Fees + Adjustments formula. Payout matching requires the same currency/period, payout IDs and signed reserves. Duplicates and variances prompt review, not automatic recovery claims.