Is Selling on TikTok Worth It for Your Small Business?

TikTok is more than just a place for silly dance routines and cute dog clips. The platform has the power to take anyone from zero to hero… and that includes brands. 

The growth and reach of TikTok is unparalleled. The platform boasts over 3 billion downloads worldwide and 50 million daily active users. Through harnessing the power of short-form video content, TikTok offers opportunities for business sellers to sell products in a new and interesting way.  

If you’re considering setting up a new venture or already have an established business, have you considered TikTok as a sales channel? We don’t just mean using it for marketing either – TikTok has its own shopping feature that makes it easy for businesses to sell to new audiences. 

To help you decide if a TikTok Shop is right for you, we’ve created this handy guide. In it, you’ll find everything you need to know about running a TikTok Shop, including crucial details on UK tax and business legislation that you need to be aware of. 

Is TikTok the right sales channel for you?

TikTok’s social commerce model, known as TikTok Shop, is a novel approach that allows ecommerce businesses to: 

• Sell direct through video content with shoppable video ads
• Create live-stream shopping events to display a wide range of your products
• Display products with an in-app shop which can be personalised with your branding 
• No costs for getting started – fees are taken as a commission based on your sales
• Access a huge potential customer base, with approximately 9 million active monthly users in the UK. 

How to sell on TikTok: is a TikTok Shop the answer?

Selling on TikTok allows you to reach a whole new audience, with a far younger demographic that is actively engaged in consuming content. However, due to its relative infancy in the ecommerce space, we wouldn’t recommend TikTok as your sole platform – but as an additional channel to sell your products. 

With that in mind, the ideal seller will either be a sole trader or operating a limited company that has already established sales on other platforms such as Shopify, eBay or Etsy. TikTok’s Shop feature grants you access to a new customer base and some exciting tools, many of which are unique. 

Before TikTok allowed for direct selling with the Shop feature, businesses used it solely for advertising. Now, UK sellers can leverage a TikTok Shop to sell straight from the app – which comes with plenty of advantages (and a few notable downsides). 

Advantages

• TikTok users spend lots of time on the platform, viewing over 89 minutes of content daily. 
• Conversion rates are strong, with 35% of users reporting that they’ve bought items they see from the platform. 
• Brands discovered via TikTok are remembered 40% more than those discovered elsewhere. 
• TikTok’s shop tool is simple to set up and free to get started with, making it easy for brands to try it out. 
• Content created for TikTok can be easily repurposed to fit other platforms
• TikTok Shops can also register for TikTok’s new UK fulfilment service to cut down on logistics and make purchases smoother than ever

Disadvantages

• Selling via TikTok means your business will have to create video content that appeals enough to sell products or invest in influencer marketing. 
• TikTok charges fees on purchases, which can add up over time and lead to increased costs. Costs start at 1.8% for the first 90 days and then rise to 5%. 
• TikTok may not suit your brand – it’s only relevant for sellers whose audiences spend time there. 

Setting up your TikTok business account

Businesses that want to use TikTok must register for an account in much the same way as a personal one. However, you’ll need to select a ‘Pro’ account if you’d like to start a shop. Fortunately, getting set up is simple. Follow these steps to get going:

1. Visit the TikTok Shop landing page and click ‘Open Store Now.’ 
2. Enter your details under ‘Create advertiser account’. We’d suggest using your business email address rather than a personal one – but only if that email is actively managed and not a general inbox for your whole business. 
3. You’ll also have to supply your business entity’s legal name and address. 
4. During registration, you may be prompted to submit identification. TikTok can ask for your passport, driving license or another form of photo ID. 

Choosing the right products to sell on TikTok

TikTok has been responsible for certain products shooting to success – such as the Revlon hairdryer brush, which rose to fame through viral videos depicting some fabulous hairstyles. However, you can’t expect a product to sell simply because it’s featured on TikTok – you must also understand buying habits. 

As a platform predominantly used by a younger demographic, choosing which products to sell on TikTok is a case of interpreting generational buying behaviours and browsing habits. Here are some top tips for selecting products the right way: 

• Find the hashtags relevant to your customers and see which products are already being shown or discussed. 
• Gen Z looks for opportunities to buy quickly and securely, so doing as much as you can towards minimising friction between your product ads and being able to complete a purchase is essential. 
• Contact influencers and ask them if they want to collaborate to sell your products. 
• Research indicates that Gen Z makes purchase decisions based on product exposure - they buy things they've seen in videos, advertisements etc. You can use TikTok’s video shopping feature to showcase products and their benefits, then allow for direct purchase through the video itself. 
• Encourage users who buy your products to create their own content – potentially asking for video reviews in exchange for future discounts etc. This will help generate increased demand for your range. 

Creating Engaging Content for TikTok

Due to its visual-first approach, TikTok Shops live and die based on their content output. If your content isn’t up to scratch, you won’t sell your products. Here are some easy tips to follow to ensure you get off to a good start. 

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• Capture interest quickly: people have short attention spans, so try to create a hook within the first few seconds of any video. This example from ASOS quickly establishes the focus of the video and rapidly demonstrates multiple products that will appeal to users drawn in by the title. 
• Use captions to ensure people who have their devices muted can still understand the video, as well as increase overall accessibility. 
• Consider making videos directed at viewers, asking them questions or prompting engagement in some way. Much of TikTok is about passive watching, so creating this type of video will help your brand stand out. 
• Always record in the best possible lighting you can find - preferably with natural light or photography lights that have the glare diffused. 
• Use a tripod or other stabilising device to keep your camera still during recording. 
• Record videos vertically rather than in landscape mode. Doing so means your video output will display more accurately rather than having to be edited to fit Tiktok’s vertical format. 
• Use competitor research and hashtag research to see what’s trending and create content based on ‘hot’ topics. 
• Divide any long-form content into a series. This works particularly well for products, as you can break several features down into multiple videos to avoid overwhelming viewers. 
• Have experts in your product areas create videos on your behalf. Elf Cosmetics, for example, uses a bridal makeup specialist to advertise products in this video. https://www.tiktok.com/@elfyeah/video/7252840597591952683?is_from_webapp=1&sender_device=pc&web_id=7268245601568474657 
• Use other creators to advertise your products. Lean into humour where possible, as TikTok users really value authenticity. Crocs, the footwear brand, does this extremely well. Take a look: https://www.tiktok.com/@crocs/video/7263115047373704490?is_from_webapp=1&sender_device=pc&web_id=7268245601568474657 

Utilising influencers for powerful product promo

Influencer partnerships have been big business for a long time, with older social media platforms such as YouTube and Instagram popularising the concept. Thanks to branded content tools, TikTok allows for even more direct collaborations between brands and influencers. 

Using TikTok, influencers can create videos and then set them as branded content, which ensures both parties comply with advertising standards and helps establish trust and a sense of honesty with viewers. 

TikTok takes things further by offering the creator marketplace, where influencers and brands can find each other and organise campaigns. This game-changer removes the old barriers associated with finding influencers, such as tracking down contact details and negotiating through third-party channels. 

Advertisement through TikTok 

TikTok, like any other platform, also allows for direct paid promotion. Costs can vary wildly and there are no fixed figures available for general research purposes. Instead, prices are based on negotiations with TikTok itself. 

Paid advertising on TikTok is done via a number of fixed advertising formats:

These ad formats aren’t the only ways to promote products. Remember our discussion on the new ‘TikTok Shop’ feature, which gives you more versatility in advertising thanks to unique shoppable ads, hosted live events and more.

FAQs About Selling on TikTok

Is TikTok going to be the right channel for your brand? It’s hard for us to say – it depends on your business, your products and your approach. Here are some answers to the most commonly asked questions to help you better understand what to consider when selling on TikTok. 

Is it worth selling on TikTok?

There’s no definitive answer to this question, but we’d say that any business that can nail down TikTok’s content style and find its target audience will see an increase in sales thanks to the platform. Considering its popularity with young people, TikTok helps brands find new customers in a way other social media channels don’t. 

What’s TikTok Shop?

TikTok Shop allows UK sellers to create a shoppable experience that integrates with video content to sell products direct. This is an exciting new idea which is entirely unique compared to the capabilities of other social media channels. 

When did TikTok Shop start?

TikTok Shop originally launched in 2021, though only recently began to offer fulfilment services in August 2023. 

Why is TikTok good for marketing? 

TikTok is good for marketing because it enables brands to get their products or services directly in front of audiences via video content. Video tends to be a more engaging form of media than other ad types. Better yet, TikTok’s focus on low-tech, authentic videos shot on smartphones rather than expensive cameras means even small businesses on tight budgets can achieve great results. 

Is TikTok the right sales channel for your business? 

TikTok is one of the world’s biggest social media platforms, so it’s naturally a very noisy and competitive space. Some businesses lack the resources necessary to compete.

However, if you can successfully manage your cash flow enough to have some budget left over for investing in marketing, a TikTok Shop may be the perfect way to branch out your existing business and sell to a new audience. 

Ultimately, deciding it TikTok is right for you is all about understanding your own business, your target demographic and working out if the potential gains associated with the platform are worth the time and monetary investment.

To help make these types of budget-driven decisions easier, why not use Crunch? Our free software allows you to keep a tight grip on your business’s finances and can help keep you on the right track as you diverge into new marketplaces like TikTok or other channels. Give it a try for free today.