Social commerce has emerged as a powerful force transforming the way consumers shop and interact with brands. Amazon's recent partnership with Meta to enhance customer reach and conversion is a testament to the evolving landscape of social commerce.

TikTok is making its grand entrance into the US ecommerce arena with the debut of TikTok Shop.

This year has marked the rapid ascension of “Retail Media Networks” – traditional retailers launching advertising businesses to help you drive more sales on their marketplaces.

TikTok is one of the fastest growing advertising platforms that is now moving in the opposite direction, becoming a traditional marketplace retailer.

A study by Neuro-Insight, a neuromarketing company reveals that TikTok is 44% stronger than Social Media on average in terms of “the likeability of what was seen and with the in-the-moment action.” In terms of correlation to memory, TikTok is 15% stronger than other platforms.

With its widespread popularity and captivating, visually-driven approach, many brands are contemplating the idea of joining the TikTok Shop journey.

When considering your marketplace strategies going into the future, TikTok is increasingly important to consider as a distribution channel alongside your other 3P options.

In the following sections, we'll explore crucial points that brands should consider when navigating TikTok Shop in the US.

Overview of the TikTok Marketplace

What is the TikTok Shop?

An all-in-one ecommerce platform embedded within the TikTok social media app, TikTok Shop allows creators, brands, and merchants to conduct ecommerce directly within the TikTok ecosystem.

With TikTok Shop, sellers have the power to offer customers three distinct, user-friendly ways to shop:

It also allows users to discover products, explore product details, manage their shopping preferences, initiate shipping, handle billing transactions, make purchases, and even manage returns, all without leaving the TikTok app.

How do you set up your brand?

To join TikTok Shop as a seller:

1. ‍Sign Up with TikTok: Start by creating a TikTok account using your US phone number and email address.
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2. ‍Fill out an Application: Upon signing up, you'll be prompted to fill out an application. Depending on whether you're an individual or representing a corporate account, different requirements may apply.
   
   For instance, if you're representing a corporate account, you'll need to provide essential business information, including the business name, Employer Identification Number (EIN), registered business address, as well as payment and tax information, along with some personal details pertinent to your application.
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3. ‍Wait for the result: You can expect to receive the result within 3-5 days. Once your application is approved, you'll gain the green light to connect your TikTok account with your shop. You're now set to start selling your products directly on TikTok.
   
   For those who previously had a Storefront account (prior to September 12, 2023), please note that it will be disconnected from your account upon successful integration with TikTok Shop.

How do you set up products to sell?

If you had previously managed a Storefront account, note that your product list won’t automatically transfer to TikTok Shop. You also need to set up your products by bulk upload or one by one.

Batch Product Upload

When you choose to perform batch-product uploads on TikTok Shop, the most important tool you'll need is the product template. This template can be downloaded, filled out with your product information, and then uploaded back to TikTok Seller Center. In this template (spreadsheet format), you should be prepared to provide the following details:

• Category: Indicate the category or product type to help organize your listings.
• Brand: Specify the brand of your product and include any qualifications or certifications associated with it.
• Parcel Weight and Dimensions: Include the weight (in pounds) and physical dimensions (length, width, and height in inches) of the parcel in which the product will be shipped.
• Variations: If your product comes in different variations (e.g., size, color), list these variations and their relevant details.
• Retail Price: Set the price at which you intend to sell the product.
• Quantity: Indicate how many units of the product you have available for sale.
• Mandatory Attribute: Specify any attributes associated to the category

You also need to add media (such as the main product image) and product descriptions, which will be covered below.

Your next step from here is to review the entries to ensure accuracy. Afterward, you can upload the template to TikTok Seller Center. You can download the failed entries report and if there are any issues, you may need to make corrections in the entries and re-upload the template.

Single Product Upload

Another way to upload your products is to do it one by one. In this method, you'll need to provide details organized into four distinct categories: Basic Information, Media, Sales Information, and Shipping and Warranty.

Some of the details required in these categories may overlap with those covered in the Batch Product Upload method. For instance, the Shipping and Warranty section will inquire about parcel weight.

An important tip when filling in the Basic Information section pertains to the product name. TikTok recommends using a specific title format:

[Product Brand] + [Product Details] + [Application Scope] + [Product Type] + [Main Features/Functions/Advantages]

The title’s length also matters: TikTok Shop recommends 80 characters for the maximum.

In the Sales Information section, you have the flexibility to set up as many as 300 SKUs. To ensure a smooth setup, ensure you have your variations (up to 3 sales attributes), SKU list, and GTIN (Global Trade Item Number) ready for use.

How much does it cost?

TikTok Shop applies fees to sellers for each eligible transaction.

From April 3, 2023, to September 30, 2023, TikTok Shop is running a referral fee promotion to make it easier for new sellers to get started. During this period, sellers will not be charged any fees, except for shipping and tax-related expenses. This period is designed to provide new sellers with a fee-free introduction to the platform.

After the initial 90-day period, which starts from your first transaction, a referral fee per order will be implemented. This fee will be calculated as (2.0% of Customer Payment + Platform Discount) + a fixed fee of $0.30 USD per order.

Starting October 1, 2023 (UTC-05:00), sellers who achieve "Active" status in the Seller Center will continue to be charged on a per-order basis using the formula (2.0% of Customer Payment + Platform Discount) + $0.30 USD.

Who handles payments?

Sellers don't have to worry about getting payments from buyers. Tiktok handles that area and agrees with sellers on a payment schedule.

The rule is, Tiktok settles the amount 15 calendar days after an order is delivered.

In all other cases, TikTok ensures a smooth payment process for sellers.

Who handles shipping and fulfillment?

When it comes to shipping on TikTok Shop, there are two distinct approaches: TikTok shipping and Seller shipping, each with its own considerations.

TikTok Shipping

Opting for TikTok Shipping offers a more convenient process for sellers. Here's how it works:

• Shipping Carriers: Sellers using TikTok Shipping can simply send orders via TikTok-endorsed carriers like USPS, UPS, and FedEx within 3 business days.
• Real-Time Tracking: The platform provides real-time tracking updates, allowing sellers to stay in the loop about the status of their shipments.
• Shipping Costs: The carrier rate is typically charged to the seller. TikTok may provide cost savings and incentives for sellers, through negotiated rates and promotional subsidies during the settlement period.
• Customer Service: In cases of delayed, lost, or damaged products, the seller is relatively hands-off, as TikTok takes the lead in addressing buyer complaints.

Seller Shipping

If you're using ISV/Integration/Shopify Integration or prefer a more hands-on approach, Seller Shipping is your go-to option. Here's what to expect:

• Shipping Carriers: Sellers using Seller Shipping also need to ship via TikTok-endorsed carriers, ensuring timely deliveries.
• Buyer's Shipping Fees: Sellers are responsible for setting up buyer's shipping fees, offering more control over this aspect.
• Tracking Updates: Sellers using Seller Shipping are required to upload tracking updates through TikTok Seller Center.
• Customer Service: Unlike TikTok Shipping, sellers using Seller Shipping handle customer service directly when it comes to addressing buyer complaints or issues with delayed, lost, or damaged products.

Detailed Setup

What content do you need to upload?

For your TikTok Shop product listings:

• You can upload 3 to 9 high-resolution images for each product, preferably following a square (1:1) aspect ratio.
• Elevate your product presentation with engaging visuals, such as a product video, to captivate potential buyers.
• Some categories also require size charts. If you think it will help your customers to know the sizes of your products, then include a size chart as well.
• Craft catchy yet informative descriptions and ensure your product details are crystal clear.
• To handle your media efficiently, take advantage of the free Product Media Center. It's a dedicated storage space for images and videos, allowing seamless uploads to Seller Center when listing individual products.
• You may also upload ownership documents to establish product authenticity and ownership history.

How do ratings and reviews work?

Sellers have the ability to collect and manage customer reviews from external websites and showcase them on TikTok Shop. This feature is accessible through the Seller Center.

On TikTok Shop, customers are also encouraged to leave reviews, including a rating, written feedback, and media content, for any product they've ordered. Only the rating field is mandatory when leaving a review.

As a seller, you have the option to respond to customer reviews or request the removal of a review through a ticketing system.

If your products are rated 1-2 stars out of 5, they will be considered negative reviews, and will be subject to evaluation and to the Customer Target Requirements in relation to Negative Review Rates (NRR) and Quality Return & Refund Rates (QRR) metrics.

How do you run ads?

First thing to make sure is that your Business Center, Ads Manager, and TikTok accounts are connected. Once this setup is complete, users can access Ads Manager by clicking on the Ads tab in Seller Center and selecting ‘Create Campaign’:There are two types of Shopping Ads you can create:

• Live Shopping Ads: These allow you to utilize your live stream as an in-feed ad. During live sessions, you can engage with viewers while promoting your products and store, and viewers can make purchases directly.
• Video Shopping Ads: These will let you make your in-feed video ads shoppable. When users see your Video Shopping Ad, they can browse and purchase products from your TikTok Shop by tapping the Product anchor link or card.If you’re planning to create Video Shopping Ads, be sure that you already have a TikTok Shop or Showcase in place.

The campaigns for both types of ads are created through Ads Manager. For both, you can target your audience based on age, so double-check if the age selection is set to +18. Specifically for Live Shopping Ads, you can customize:

• daily budget along with start and end dates and time for your campaign
• ad creative, whether it’s from your livestream or video (uploaded or sourced from your TikTok profile)

For Video Shopping Ads, you can specify:

• your full-funnel optimization goal (from four options: GMV, Purchase, Initiate Checkout, and Click)
• bidding option (‘Highest value/lowest cost’ or ‘Set minimum ROAS/cost cap’).

In terms of targeting, TikTok Ads Manager offers a wide range of options to help advertisers effectively reach their audience on TikTok Shop. Here are some of the key ways advertisers can utilize targeting, until TikTok introduces more changes to the platform:

• Audience targeting: Create Lookalike or Custom Audiences based on various parameters, including customer file, engagement, app activity, website traffic, shop activity, lead generation, or business account.
• Interest targeting: Target users based on their interactions with specific interests, creators, hashtags, as well as search and purchase behavior.
• Behavior targeting: Deliver ads based on a user's in-app behaviors, such as following and viewing home pages of TikTok Creators within the past 30 days.
• Demographic targeting: Narrow down your audience by factors like gender, age, location, language, household income, and spending power.
• Device targeting: Tailor your ads based on the user's device attributes, including operating system, connection type, or mobile phone carrier.
• Smart targeting: Leverage TikTok Ads Manager's smart targeting features, which allow you to expand your audience, utilize automatic targeting, or receive targeting recommendations.

Brands on TikTok Shop US

We checked out some brands on TikTok Shop and here are three examples of the first ones who hopped onboard:

Pacsun

Apparel brand Pacsun joined TikTok Shop early this year as one of the platform's early adopters. Originating as a surf and skate apparel shop, Pacsun has since expanded its product range through partnerships with established and emerging brands, and this is seen in their diverse collections on TikTok Shop spanning contemporary, streetwear, and creative collaborations.

Pacsun’s TikTok Shop caters to both men and women, with products including New Era Men’s caps and John Galt Women’s tops, cargo pants, and skirts. Their TikTok account has such a huge following and it would be great to see how that correlates with their performance on TikTok Shop.

Hero Cosmetics

Another brand we found on TIkTok Shop is Hero Cosmetics, the first skincare brand to introduce hydrocolloid acne patches to the US market. Over time, they have diversified their product line to encompass over 20 offerings, all dedicated to providing effective solutions for various skin concerns.

In September 2022, Church & Dwight acquired Hero Cosmetics for $630 million, with Church & Dwight CEO Matthew T. Farrell highlighting the growth of the Mighty Patch® brand to 18% of the acne treatment category and Hero’s top position in the category, among other criteria met for the acquisition.

A glance at their TikTok Shop reveals this diversity of skincare solutions. This includes their popular Mighty Patch, along with cleansers, nose patches, and blackhead remedies. Some of their products feature an enticing 60% off coupon at the time of writing.

Wyze

Wyze is also on TikTok Shop. Wyze has garnered recognition for their high-quality cameras and their commitment to offering electronic devices at wallet-friendly prices. A quick scan on their storefront shows that their product offerings are mostly concentrated on accessories, featuring items such as the Wyze MicroSD Card and the Wyze Night Light.

Aside from applying the free shipping coupon to their product offerings, Wyze’s strategy includes using Live Shopping Ads as the first image shows.