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What small businesses should know about selling on TikTok Shop

2-minute read

Person browsing TikTok on their mobile phone
Catriona Smith

Catriona Smith

16 August 2022

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Thinking of selling on TikTok Shop? You might want to think again.

The social media platform launched its shopping feature in the UK last year, but has since been plagued with criticism over poor quality products and lack of payments.

TikTok 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, TechCrunch recently reported that 40 per cent of young people are using TikTok and Instagram to find information rather than using Google Search and Maps. This could be why some businesses are even finding success using TikTok to recruit staff.

But when it comes to selling directly in the app with TikTop Shop, it might not be the best tool for small businesses. Here's what you need to know if you're thinking of experimenting with the platform for your online shop.

What is TikTok Shop?

TikTok Shop advertises that you can ‘grow your business’ with the new 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.

However, the Chinese-owned company ByteDance has halted plans to expand TikTok Shop in parts of Europe and the US after reportedly poor sales and failing to hit targets in the UK. The firm has also come under fire for devaluing manufacturers' products by encouraging heavy discounting, according to a report in the Financial Times.

It’s worth noting that using the 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.

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’s marketplace, with 63 per cent of reviewers giving a one star rating. Many TikTok Shop reviews cite problems with items not turning up or the company not responding when an issue is reported.

Meanwhile, the Financial Times reports that many influencers are leaving the ecommerce platform because of “poor pay, long hours, and promoting cheap products”.

That’s not to say there aren’t genuine sellers and small businesses selling on TikTok though. Forbes spoke to several shop owners who’ve found success on the platform, including Nisrin Kachar who says they made £10,000 in sales in one TikTok LIVE session.

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:

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.

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 guides to running a side business and paying tax when you have a side hustle are a good place to start.

Do you need business insurance?

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.

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Photograph: Shi/
Catriona Smith

Written by

Catriona Smith

Catriona Smith is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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