Welcome to an Unboxing: How Does TikTok Shop Actually Work?

TikTok has gone from a dance challenge and acting skit platform to an e-commerce shop where users can purchase things they never knew they needed. The app has revolutionized how people discover and buy products. When a video showcasing something pops up, you can easily add it to your cart without disrupting your video-watching experience. That’s TikTok Shop in action — it’s marketing via entertainment, and it’s becoming a decisive underdog in the e-commerce industry. So, how does TikTok Shop actually work?

What Is TikTok Shop?

TikTok Shop is a built-in marketplace feature on the TikTok app that allows users to find and buy products. Since its launch in 2023, it has given “scroll and shop” a whole new meaning as it combines the fun of social media with the convenience of online shopping. It lets buyers access the most-raved products while consuming engaging content. It’s also a golden opportunity for sellers to showcase their offerings to billions of potential customers since TikTok has 1.5 billion active users a month.

TikTok’s e-commerce feature contributed to a surge in social commerce in 2023, with 77% of small businesses attributing their increased sales to the platform. It’s rewriting what e-commerce should be in a world where short-form videos reign supreme.

How Does TikTok Shop Work for Buyers?

The feature is designed to be user-friendly and interactive for those on the spending side, allowing people to find advertised products easily. You might see shoppable tags in videos, discover items in live shopping events or browse through a seller’s TikTok Shop tab — it’s like a mini storefront that houses all their products. The algorithm brings the experience to you instead of having to search for it actively.

If you see something you like, just tap on the product tag, add it to your cart and check out — it’s an entire shopping ecosystem in your palm without ever leaving the app. The payment process is secure and supports various methods, including debit or credit cards or digital wallets such as PayPal, Apple Pay or Google Pay.

You can track your order directly within the app after making a purchase. TikTok also keeps you updated on the shipping progress, so you’re always in the loop regarding when products will arrive. TikTok Shop’s return and exchange policies make it easy to resolve issues if you need to return an item.

What to Consider Before Purchasing From a TikTok Shop

TikTok’s online shop feature offers many conveniences, but users must be aware of potential drawbacks before purchasing.

• Product authenticity: TikTok Shop’s attractive purchasing system has paved the way for many independent sellers and small businesses, leading to a risk of counterfeit or low-quality products being sold. Always check seller reviews, comments and ratings before buying.
• Misleading advertisements: Creative TikTok videos used to market products may exaggerate functionality or quality. Be cautious of items that seem too good to be true because they just might be.
• Shipping times: Shipping times can vary greatly depending on the seller’s location. Some users report delays, especially with international shipments.
• Return policies: TikTok enforces customer service standards, but individual seller policies may differ. Ensure that the return or exchange policy is clear before buying.

How Does TikTok Shop Work for Sellers?

The U.S. market is the second largest audience for the app, with 120.5 million users as of July 2024. About $7 million worth of products are sold via TikTok Shop daily.  If you’re a business or creator looking to tap into this growing market, here’s what you need to know about how the shop works for sellers.

Setting up a Shop

You must ensure that you meet regional requirements before setting up a shop. TikTok Seller Center is only available in select Asian countries, the United Kingdom and the United States.

You’ll need a TikTok business account to start selling. You can convert an existing TikTok account or create a new one. A business account unlocks features like analytics and TikTok Ads Manager, which aren’t accessible to other users.

Once eligible, register your TikTok Shop in the seller portal and fill out the necessary details on the application. You’ll have to provide your legal business name and other documents and ID if setting up a shop for a business, but you can also set up one under your own name. After one to two days, you will receive an email with the result of your application.

Creating Product Listings

Once approved, you can upload product photos and specify details for each item. Include details like materials, color names or size guides in the descriptions. Ensure your offerings adhere to TikTok’s guidelines or they may fail authorization.

Promoting Products

TikTok has easily positioned itself as a go-to for product discovery. Marketing on the platform is easier since business accounts can leverage the algorithm to reach potential customers based on their interests and previous interactions. This means your items will be seen by people who are already interested in them.

TikTok Shop offers sellers various ways to market their products, including shoppable videos and showcases. Users spend an average of 55 minutes on the app, which sellers can capitalize on. They can host live shopping events to market items in real time. Another option is collaborating with influencers to expose products to their audiences. Hopping on trends as a marketing strategy can also reach large audiences, especially hashtags like #TikTokMadeMeBuyIt, which has millions of posts of an assortment of items.

Handling Payment and Shipping

Payment processing for the shop is integrated within the app, so you don’t need third-party systems to manage those processes. When it comes to shipping, sellers are responsible for following TikTok’s shopping guidelines to ensure timely product deliveries.

Analyzing Performance

Tracking sales, engagement and overall shop performance is easy, as the app provides analytics. These insights help sellers adjust and refine their marketing strategies and understand what works best for their audiences.

From Scrolling to Selling on TikTok

The rise of TikTok Shop is changing the game for e-commerce businesses worldwide as it blends entertainment and e-commerce. Instead of stationary photos, people can now purchase items accessible via videos without looking them up. Whether you’re on the user side discovering quirky gadgets to add to your cart or are a small business ready to go viral, TikTok is undoubtedly becoming the future of shopping.