"Is TikTok US still profitable right now?"

That's the question I've been asked more than anything else lately.

Some are suppliers planning to enter the market in 2026. Some are sellers switching from other platforms. And some have been on TikTok for a few months but still haven't seen results.

A lot of people jump straight into:

  • Which products to pick?

  • How to shoot content?

  • What strategy to use?

But honestly, lately I've been pulling the conversation in a different direction. A more one.

1. Why You Need to Do the Math

I usually ask back:

"Have you actually sat down and calculated the numbers for this project?"

Not roughly—I mean, really broken it down line by line.

Advertising costs, product cost, shipping, influencers, platform commission, returns…

Add all that up—does this project still make money?

Over the past two years, we've run more than six projects across different categories at Whale (a cross-border agency). Obviously every project has different specifics. But if you're running a long-term, sustainable product model—not just hopping from one quick flip to another—you'll notice something:

The projects that actually scale… their financial structure ends up looking surprisingly similar.

2. Advertising Costs

Let's start with ad spend.

In the projects we've actually run, if you can keep ad spend under 15% of total GMV over the long term, that's a very healthy model.

In that range, as long as your product and content aren't a disaster, hitting 10%–15% net profit is absolutely achievable.

But you've definitely seen the other side: some big sellers have ad-to-sales ratios at 70%, 80%, or even higher.

How can they still make money?

Simple: they often have access to terms that regular sellers can't get—things like:

  • Ad rebates above 7%

  • Lower product costs

  • Longer payment terms

  • Bigger platform incentives

  • And the marginal advantages that come with scale

3. How to Estimate Ad Costs Before You Start

So before you even enter the market, can you estimate ad costs?

Yes, and you should.

The core metric we look at is CPA—how much it costs to get one order.

Here's a real US market example.

Using data from tools like Minea or Pipiads, we looked at a top-selling product in the US. The #1 video over the past 30 days had:

  • 14.1 million views

  • 12,500 units sold

That means its view-to-order conversion rate is roughly:

1,128 views per order

If we assume an average CPM of $10 (reasonable for TikTok), even if this video's traffic was 100% paid, the ad cost per order would be:

1,128 ÷ 1,000 × $10 = $11.28

And this product's price? $69.

For a product at that price point, being able to maintain that level of efficiency at such massive scale is pretty insane.

Normally, for this price range, a CPA of $15–$20 is already considered solid.

4. Now Look at the Ad-to-Sales Ratio

Using the same tool, you can see which videos are boosted ads.

For this top product, the ad-to-sales ratio across its top videos was over 80%.

Combined, its overall ad-to-sales ratio is likely above 70%.

But if we use the 1,128 views-per-order number and a $10 CPM to back-calculate, the ad cost as a percentage of GMV comes out to around 13.18%.

This product does about $5.06 million in GMV per month. At that margin structure, a net profit above 15% is not unrealistic.

5. Fixed Costs: Product + Shipping

In my model, I usually group product cost, inbound shipping, and last-mile delivery together.

Because these are the most fixed and hardest-to-move costs.

For some high-ticket products, product cost alone can hit 40%, but because the price is high, shipping gets squeezed down to single digits.

For low-ticket products, even if product cost is under 20%, once you add shipping, the combined percentage can get scary.

In our experience:

Product cost + inbound + last-mile should ideally be kept between 40%–45%.

Add:

  • Platform commission: around 6%

  • Return rate: 1%–3%

Your total fixed costs land in the 50%–55% range, which is a very healthy place to be.

6. Pricing Depends on Your Strategy

Different models have completely different pricing logic.

Some go for the "last dollar" approach—ultra-low prices, pure volume.

Some just undercut the current top seller by a few dollars.

Some choose the long-term product play—using content and operations to hold a stable price point.

We lean toward the third option: take the middle range of the market, don't compete on lowest price, but don't try to sell on brand premium either.

In that range, gross margin is usually 40%–45%. With good operations, hitting 15% net profit is a comfortable and sustainable place to be.

7. The Overlooked Cost: Influencers

If your model relies heavily on influencers, sampling often runs 8%–10% of expected sales volume.

If your product + shipping cost is 45%, sampling cost adds roughly 3.6%–4.5% of GMV.

Then add affiliate commissions:

  • Organic affiliate commissions: 10%–12%

  • Paid ad affiliate commissions: 6%–8%

Average around 9.2%.

If affiliate-driven sales account for over 80% of your total, affiliate commissions alone will eat 7.36% of GMV.

That means for categories with heavy affiliate dependency, total influencer cost often lands between 11%–12%.

If instead you run a more balanced model—keeping affiliate sales at 40%–50% of total—total influencer cost usually drops to 6%–7%.

Final Thoughts

Over the last year, I've run projects—some succeeded, some failed—and I've watched a lot of other sellers' cases. Over time, a clear pattern emerged:

The projects that consistently make money aren't the ones with one brilliant move. They're the ones where, from day one, the math was done right.

So honestly, the thing that determines whether you can succeed on TikTok US isn't whether you know how to shoot videos, and it's not whether you know how to run ads.

It's whether you sat down before you started and actually did the math.

If you're interested in tools to analyze competitor ad performance and cost structures, check out Minea, Pipiads, or TikTok's own Creative Center. They'll give you the data to run these numbers yourself.