You can now run coupons on your TikTok Shop ads.
A new pop-up turned up in a client's dashboard last week. TikTok calls it "GMV Max Coupon."
Sounds great. Cheaper prices, more sales.
Then I worked out what it does to the P&L…..
(Already seeing it on your shop? Hit reply and tell me.)
First, the jargon
Two terms you need
GMV Max is TikTok Shop's main ad campaign. You set a budget and the return you want. TikTok picks the videos, the shoppers and the bids.
Think Amazon Sponsored Products on autopilot. No keywords. TikTok picks everything.
GMV Max Coupon is a new switch inside that campaign. Turn it on and TikTok hands discounts to people who see your ads.
You don't pick who gets one. TikTok aims them at shoppers "on the fence."
And you pay for it. That's the bit nobody's explaining…..
It’s NOT FREE
A fee on every sale. Not just the coupon ones
You pick a coupon cost rate. That's the share of your sales you hand TikTok to fund the coupons. The default is 3%. You can set 1% to 50%.
Here's the line that matters, from TikTok's own help page:
"All net sales within an active GMV Max campaign are charged at the fixed coupon cost rate you set."
Net sales = what shoppers paid, minus refunds. All of it. Not just the orders where someone used a coupon.
On Amazon, a coupon costs you on the orders that use it. Here, it costs you on every order the campaign brings in.
And it's billed separately from your ad spend. So the ROI number in GMV Max won't show it.
Sound familiar? It's how Smart Promotion (covered in another article) works too. That's TikTok's automatic discount tool. It cost one shop $12,508 in a single month.
What your shoppers get
Plus TikTok's top-up. "Up to" 60%.
TikTok adds its own money on top. Up to 60% of what you put in. So $300 from you could become $480 of coupons.
"Up to" could mean a lot less. TikTok doesn't say how it works it out. Do your maths as if it's zero.
In the US, a shopper might see 5% to 50% off (capped at $12 to $18). Or a fixed amount, like "spend $34, get $17 off."
They see it in the feed, in search, on LIVE and on your product page. On LIVE, only official accounts can use it.
What it does to your P&L
Napkin math on $10K a month
Say $10,000 a month goes through GMV Max. After product cost, TikTok's fees and creator commission, you keep 30%. That's $3,000 profit.
Turn coupons on at 3%. TikTok takes 3% of the full $10,000. That's $300.
It comes out of your profit. $3,000 becomes $2,700.
Unless the coupons bring in new sales. To win back the $300, they need about $1,100 of sales you'd never have had. That's 11% more.
💡 The fee is guaranteed. The extra sales aren't.
Do this now
Test it. Don't trust it.
Check you have it. Open your GMV Max dashboard and look for GMV Max Coupon. It's still rolling out, and the shop owner may need to approve Net Sales Access (a Seller Center permission) first.
Start at 1%, not the 3% default. You only need 3.4% more sales to cover it.
Write down your net sales for the two weeks before. Use Seller Center, not the ROI in GMV Max.
Run it for two weeks. Pull the coupon cost from Seller Center > Finance. Net sales need to be up at least 3.4%.
Finish before Black Friday. Start today and you're done by 13 Nov. Test across Black Friday and the spike hides everything.
💡 A coupon only pays if it brings in a sale you wouldn't have had.
It opens an email straight to me. One line is enough.
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Don't take the default.
- Paul 👊
PS. Got a question? Hit reply.
