How to sell on TikTok Shop – a small business guide

Person browsing TikTok on their mobile phone

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

The social media platform launched its shopping feature in the UK in 2021, 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, Search Engine Journal recently reported 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.

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 – 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.

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 83 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.

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

However, TikTok has also recently 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.

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:

  1. Create a shop by signing in with your TikTok account and providing a business address for your shop.
  2. Verify your identity by uploading a copy of your ID and wait to be approved (usually within 1 to 2 days).
  3. 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.

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.

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’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/stock.adobe.com

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.

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