TikTok Shop is an in-app shopping solution for TikTok, the incredibly popular video-based social media platform. It officially launched in the US in September 2023 and results have been massive.
Retailers, merchants, brands, artists, creators, and influencers showcase and sell products on TikTok directly through TikTok Shop. You can sell through in-feed videos, LIVE videos, the shop tab, and the product display page. Users get an all-in-one shopping experience without needing to leave the app.
Learn more about TikTok shop, how it has impacted the US ecommerce landscape, and the many ways you can use it to grow your retail business in our guide below. Or, visit TikTok for Business to create your own account.
TikTok Shop’s Impact on US Ecommerce
Key takeaways:
- In the US, TikTok has more than 150 million users and 5 million businesses.
- TikTok is the highest-earning app that’s not a mobile game today ($10 billion global consumer spending).
- TikTok is emerging as a threat to ecommerce giants like Amazon, with several small businesses focusing on the social platform for online selling as consumers are using the platform more and more.
Facebook and Instagram have long enabled consumers to shop on their platforms without having to leave their apps. However, TikTok has introduced an innovation to social shopping by letting its users shop directly from in-feed videos with one-click shopping.
With more than 150 million users and 5 million businesses in the US making it their preferred platform, TikTok is bound to impact the ecommerce industry in so many ways.
In fact, it was reported that TikTok is the first app (that is not a mobile game) to reach $10 billion in global consumer spending, making it the highest-earning app in the present day. The hashtag #TikTokMadeMeBuyIt has generated close to 88 billion views as of this writing, proving that TikTok is not only a key player in ecommerce sales but also in retail marketing.
TikTok also made a huge impact on holiday shopping last year, challenging ecommerce giants such as Amazon and Walmart. TikTok competed with these big names by providing big discounts in seller fees (as much as 50%) which not only meant a price war between online shops but also a battle between brands for social ads on the platform. TikTok also ran Black Friday deals earlier, starting on October 27th and ending on November 30th.
Some brands have found significant success from their new focus on TikTok, too. According to Marketplace Pulse, Amazon-native brand Wyze reportedly sold nearly 40,000 units of one of their products priced at $33.99 on TikTok in September. Smaller brands have become famous after one of their videos went viral on the platform, too, such as Made by Mitchell.
As a retail business or online merchant, TikTok should clearly be in your business strategy. It is often said that businesses should “go where the people are,” and in 2024, where people are is definitely on TikTok.
How TikTok Shop Works
There are four ways TikTok users can shop on the platform—through shoppable videos, product showcase, Shop tab, and live shopping.
Shoppable videos: Users can shop directly from a shoppable in-feed video by tapping the basket icon with a product link shown on their For You page, as seen below.
(Source: TikTok)
Product Showcase: Users can browse product tiles, read user reviews, and buy directly from a brand’s profile.
(Source: TikTok)
Shop Tab: Under the Shop Tab, users can find your products, shoppable content, and promotional campaigns. Customers can also manage their orders in this tab.
Live Shopping: TikTok is a leading platform for livestream shopping. Brands can go on LIVE and sell. Users buy products by tapping the pinned products or browsing the shopping basket icon.
(Source: TikTok)
TikTok Shop Eligibility Requirements, Fees & Setup
Setting up a TikTok Shop is easy. Learn more about its requirements, associated fees, and more.
Requirements
To be able to set up a TikTok Shop in the US, you need a US phone number and email address to sign up, and a certificate of incorporation, a US passport, or a US driver’s license to verify your identity and complete the application. A linked TikTok account is also required.
Some documents need to be submitted for payment and tax information, too.
- For individual sellers: Merchant category code; W9/W8-BEN form / US TIN
- For corporate sellers: Business name; Employer Identification Number (EIN); registered business address; last four digits of tax ID (US Social Security Number / Individual Taxpayer Identification Number); legal name; date of birth; residential address, Merchant category code; W9/W8-BEN Form; related person’s information; entity type
TikTok also has a list of restricted and prohibited products to sell on its platform.
TikTok Fees
Setting up a TikTok Shop is free. However, TikTok collects seller fees (also known as referral fees) from every product sold on the platform.
Currently, TikTok referral fees are at 2% plus $0.30 per transaction. Starting July 1, 2024, TikTok Shop will increase the referral fee on all qualified transactions to 8% per order. This will be done in increments, so the referral fee will increase to 6% from April 1, 2024, to July 1, 2024. Referral fees will also depend on the product category.
How to Set Up a TikTok Shop
Setting up a TikTok Shop is straightforward. We have outlined a more detailed process in our how to sell on TikTok guide. As mentioned earlier, you just need a TikTok account and some documents to verify your US identity so you can get started on selling.
Moreover, if you already have a standalone online store and want to also sell on TikTok, ecommerce platforms like Shopify have built-in integrations that let you sync your products to the social platform. You don’t have to set up separate product listings on TikTok.
Do you want some inspiration to get started? We made things easier for you and rounded up TikTok viral products to sell.
TikTok Shop Success Stories
The following are small businesses who implemented the TikTok ecommerce marketing strategies we mentioned above to promote brand awareness and increase sales.
SHOCK’D Golf Balls
(Source: TikTok)
SHOCK’D Golf Balls is a family-owned business in La Habra, California, that turned to TikTok Shop to showcase and sell their products. The brand created relatable, funny, and engaging content by doing product demos and unboxings, and leaned into TikTok’s sound-on culture by showcasing the loudness of when a SHOCK’D golf ball is hit. They also utilized TikTok Shop Ads.
They increased their gross merchandise value (GMV) on the platform to over $100k per month.
MySmile
(Source: TikTok)
MySmile, a provider of oral care and teeth whitening products, set up a new distribution channel via TikTok Shop. To build on its content, the brand leveraged the creator affiliate program to promote its products. After launching TikTok Shop, MySmile drove >$1 million in GMV within three months.
TikTok Shop Tips for Success
TikTok is a potential avenue of huge online sales for your business, but it won’t magically happen without some effort and planning on your part. Here are some tips for success:
- Consistently put out new and authentic content. TikTok thrives on content so it’s crucial to keep posting new content. Share stories on how people use your products and show them the behind-the-scenes of your business—operations and people. This helps you to be relatable. People like buying from real people and putting a face behind the business greatly helps.
- Stay updated with TikTok trends. TikTok is fast-moving. Trends come and go quickly so try to stay updated with what’s going viral and what’s popular.
- Engage with your audience. Respond to comments and answer questions to let your viewers know you’re listening.
Learn more TikTok marketing strategies for your business.
Frequently Asked Questions (FAQs)
Click through the sections below to get answers from your TikTok Shop frequently asked questions.
TikTok Shop is an in-app shopping solution for TikTok. Users get an all-in-one shopping experience without having the need to leave the platform while browsing.
TikTok Shop motivates TikTok users to shop by letting them purchase directly on videos they see on the platform. They can shop through LIVEs, in-feed videos, or by tapping the shop icon on a brand profile, and checkout directly within TikTok.
To get started on selling on TikTok Shop, you need a valid US phone number and email address to sign up and a valid US ID to confirm your identity. You also need to submit documents such as your W9/W8-BEN form / US TIN for payment and tax information.
Bottom Line
TikTok is a great platform to expand your business for online sales. TikTok Shop has been proving to be a great success for small business brands since its launch in the US, but marketing and staying on top of TikTok trends is key to boosting sales.
