Want to sell on TikTok shop? The social media platform has over a billion active users globally, and it can be useful for businesses looking to showcase their brand and market to a younger audience.
In fact, a recent study found that 40 per cent of consumers are using TikTok as a search engine – which goes up to 64 per cent when you only take into account Gen Z.
The platform also recently announced changes to seller fees and shipping options as part of a push to become the “marketplace of the future”.
But as with all ecommerce platforms, there are a few considerations. Some small businesses selling on Tiktok platform haven’t received payments, while consumers have complained about poor quality products.
Here’s what you need to know if you’re thinking of using the platform – plus how to set up a TikTok Shop account.
What is TikTok Shop?
TikTok Shop advertises that you can ‘grow your business’ with a shopping experience driven by video content. Brands and influencers are encouraged to advertise their products through videos, live streams, and a product showcase as a way to boost sales.
You can register as a merchant for free, create a selling TikTok account, and start marketing products to a captive audience. And TikTok says users are 1.5x more likely to immediately go out and buy something they discovered on the platform compared to other platforms’ users.
It’s worth noting that the TikTok shopping feature is different to just making money on TikTok, which is where influencers get paid for creating popular content through the app’s advertising model.
How much does selling on TikTok shop cost?
Tiktok is raising seller base commission fees to nine per cent from September 2 2024 as part of a commitment to building the “marketplace of the future”.
UK sellers will be able to reduce these fees by completing “seller missions” – creating a “target number of TikTok live or shoppable videos”. Sellers are able to partner with TikTok creators to reach these targets.
Tiktok is also planning to launch a new co-funded shipping model to help sellers benefit from free shipping. The platform aims to achieve this by covering the portion of the shipping cost that sellers usually have to pay for.
How to set up TikTok Shop
If you want to sell your products on TikTok shop, you’ll need to set it up through the TikTok Seller Center. To fully set up a TikTok Shop, you’ll need to:
- Create a shop by signing in with your TikTok account and providing a business address for your shop.
- Verify your identity by uploading a copy of your ID and wait to be approved (usually within 1 to 2 days).
- Link your bank account to your TikTok Shop in order to receive payments and process returns. Don’t have a business bank account yet? We list the best business bank accounts here.
You’ll then be able to start selling on the platform and can start thinking about how this ties in with your overall marketing strategy.
Is TikTok Shop legit?
We had a look at some online reviews to see what buyers and sellers are saying about TikTok Shop.
The picture on Trustpilot doesn’t look great for the app, with 84 per cent of reviewers giving a one star rating – many of whom are sellers on TikTok shop. Many TikTok Shop reviews cite problems with items not turning up or the company not responding when an issue is reported.
The platform is trying to improve, though. TikTok has partnered with Shopify, one of the world’s most popular and trusted online shopping platforms – which could be a turning point for the platform’s reputation. This partnership allows Shopify sellers to connect their store to a TikTok store through a new specially designed app. This will give Shopify sellers the same marketing opportunities as TikTok sellers – such as selling through videos and live streams.
It’s also important to note that there are many genuine sellers and small businesses selling on TikTok. A NY Mag reporter even managed to sell a used pencil on the app – after their livestream advertising the product reached 1,200 viewers (on an account with only 34 followers).
Why is TikTok Shop so cheap?
One of the main reasons people wonder about the legitimacy of TikTok Shop is how cheap the items can be – and if you’re looking to sell on the app, you may be worried about the amount of competition from other sellers.
Many items for sale on TikTok Shop are so cheap because they’re sold via dropshipping – which is when the seller is never actually in possession of the item and instead orders them from a third-party supplier to be sent straight to the customer’s address.
If dropshipping is a part of your business model, TikTok Shop could be a way for you to reach more customers (especially if you take into account the video and livestream advertising opportunities).
However, if your business focuses more on handmade goods and you’d struggle to make a profit selling your products so cheaply, perhaps a platform like Etsy could work better for you.
Is TikTok Shop safe?
TikTok is not end-to-end encrypted, meaning messages and chats are read by the company – and could be read by third parties. This could leave you vulnerable to computer hackers and scams.
End-to-end encryption changes any data into scrambled text so it can only be read by you and the person receiving the message. Without this layer of security, it’s even more important not to share personal information on TikTok.
On top of this, there’s been warnings about TikTok’s data collection practices and how that information is shared.
If you want to learn more about keeping yourself and your business secure, read our guide to cyber security.
Alternatives to TikTok Shop
If you’re looking to make money by selling products online, there are plenty of other apps available with a better reputation for small businesses:
- sell second-hand and vintage fashion on Depop
- integrate your shop with Instagram
- sell your products on Facebook Shops
Our step-by-step guide has more information on how to set up an online shop.
You could also make money by exploring passive income streams or affiliate marketing.
Legal responsibilities if you sell on TikTok Shop
If you do decide to set up a TikTok Shop for your business, make sure you’re aware of the tax and legal responsibilities of making money online. Our guide to paying tax when you have a side hustle is a good place to start.
Do you need business insurance if you sell on TikTok?
If you’re selling products to customers then it’s a good idea to protect yourself with business insurance. For example, if one of your products is damaged or faulty and causes injury to someone (or damages their property) then you could be liable. Product liability insurance is designed to support you and your business if something goes wrong.
Have you got any experience with TikTok Shop? Let us know in the comments.
Useful small business guides
- How to make money on YouTube – a simple guide
- How to write a business plan – with free template
- How to write a marketing plan for your small business
- Is business insurance a legal requirement?
Ready to set up your cover?
As one of the UK’s biggest business insurance providers, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?
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