We’ve all heard the buzz about TikTok Shop. Its seamless in-app purchasing experience is game-changing.
TikTok has a highly engaged global audience of 1.59 billion monthly active users. Popular with Gen Z and Millennials, users spend an average of 95 minutes per day on the app.
But is Tiktok Shop worth it?
What are the benefits…
Quick and easy to set up, you don’t need any followers on your TikTok account to begin, you simply sign up as a TikTok Shop seller, upload your products to TikTok Shop, then link your TikTok Shop account to your TikTok account.
It is a video based platform, so you sell by producing shoppable videos, by going LIVE, or collaborating with professional content creators in the affiliate programme. You can also boost your top-performing content by using TikTok Ads to increase views and drive sales.
TikTok Facts
- The channel targets the 18-34 age group.
- Micro-influencers achieve engagement rates of around 18%
- TikTok is banned in India, but still available in 154 countries across the globe.
- Globally, “TikTok” remains the 2nd most-searched term of all time.
Why brands love TikTok Shop
– 1 viral video can get thousands or even millions of views on your product – more instant reach than other channels such as Shopify.
– Seamless shopping – users buy without leaving the app – which means less clicks and more impulse purchases.
– The creator marketplace makers it easy to partner with influencers who call sell your products for you.
– TikTok Shop isn’t yet saturated so there is the opportunity to stand out.
– Conversion rates for impulse-friendly, trend-led products under £30, TikTok Shop is leading over other channels. Shortform videos with creator-led testimonials drive high engagement and fast action. For fashion, beauty, and homeware brands, TikTok is delivering double the ROAS compared to other channels.
Fees/ what to expect
- It is free to sign up and list products on TikTok Shop. Fees are taken as a commission based on your sales.
- TikTok takes a percentage of each sale. Most products have a 9% referral fee, some jewellery items have a 5% fee.
- Transaction fees apply when processing earnings. More detail on TikTok fees and commissions are listed here
- In the same way advertising on Google requires daily/campaign budgets, TikTok Shop slso requires a minimum budget of at least $50 per day or $50 total for the whole campaign, ad groups are $20 per day.
- You can also sell without inventory, but this involves using a dropshipping model. You list the products on your shop and act as a middleman between the supplier and the buyer. When you receive an order the supplier ships directly to the customer.
- TikTok also offer a fulfilment service, Fulfilled by TikTok (FBT) with fees starting at $3.58 per item, storage fees also apply after an initial 30 day free storage offer.
What’s the downside?
– TikTok own the audience, data and the checkout process unlike Amazon and Shopify where you have some visibility, TikTok controls everything and can change the rules.
– Margins can be tight – TikTok charge commission on every sale (between 5 and 9%), plus influencer payouts and ad spend you might find you can make more selling directly from your own website.
– Be aware of high return rates, this goes hand in hand with impulse buying behaviour. Things that look good in a 15 second video do not always deliver expectation. TikTok Shop generally experiences higher return rates than other ecommerce channels.
– It can be difficult to build brand identity – you could go viral today and be forgotten tomorrow. Unlike a channel like Shopify when you control the experience on your website.
– TikTok may not suit your brand. It is successful with inexpensive, trend-driven items (for example beauty, gadgets, or trending accessories). But if you’re a premium brand tread carefully. You might make quick sales, but could struggle to build long-term loyalty.
– It is worth noting that TikTok can adjust the commission fee at any time, and this has already doubled since launch in 2023.
– Time and creative commitment – to sell on TikTok your business will have to create regular engaging video content that appeals enough to sell your products, or invest in influencer marketing. Content must capture attention instantly (within 3 seconds) – generally bold text, strong visuals or an intriguing question will draw users in.
So when should you sell on TikTok Shop
If you sell lower-cost, impulse-buy products such as fashion, clothing, accessories and beauty products, you should absolutely test TikTok Shop. The upside is huge if you can crack the content + influencer formula.
TikTok is a tool not a strategy, integration of the platform will help drive discovery.
Overcoming Hesitation: How we can support your business
With our fulfilment expertise you can confidently get your business on TikTok shop, knowing that we manage the logistics of every sale, allowing you time to generate content and build your social presence.
With TPS Global Logistics
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Orders will be picked and packed accurately
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Delivery times meet or exceed customer expectations
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Returns are processed efficiently
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Your operational challenges are handled by professionals
Contact us today to discover how simple it is to launch on TikTok Shop, when you have the right 