TikTok's growing differentiation and how to minimize risk during experimentation
E-commerce leaders targeting Gen Z are increasingly tapping into TikTok's ecosystem, recognizing the platform's rising influence in social shopping. With TikTok Shop's growing popularity for discovering new products, brands are exploring how to engage audiences without escalating costs or risks, focusing on operational strategies over traditional marketing. A key to minimizing risk and investment during early exploration of the channel is to leverage TikTok Creators to drive sales and then utilize efficient fulfillment solutions like Amazon Multi-Channel Fulfillment (MCF) for support and shipping orders. The optimal strategy, however, varies based on your brand identity, current sales channels, organizational structure, and objectives.
Discover:
- Why operations and support matter more on TikTok Shop.
- How Creators can drive sales quickly.
- When dropshipping on TikTok makes sense.
- How to dropship from Amazon to TikTok.
What's different about selling on TikTok Shop?
There are key operational differences between TikTok Shop and other channels like Amazon, Walmart, Google or your own online store. It's important to understand these nuances when testing your channel expansion strategy.
1. TikTok wants to be an additional channel, not your only channel (for now)
Historically, most US marketplaces wanted to be the sole majority of your focus to drive sales, which means you felt the administrative pain as a multichannel seller. However, just like Google Shopping, TikTok's first iteration in e-commerce required connecting product ads with other sales channels to drive Pay-per-Click traffic. This is likely the reason TikTok's business workflows are more oriented to multichannel sellers and make it simple to complete tasks like connecting Shopify to TikTok Shop.
Another reason TikTok Shop serves better as an additional channel is how their shoppable catalog is managed. During the setup process, Sellers are asked to classify a primary product for the account, which seems to impact how the Shop ranks in search results. Other nuances, like their 'invite-only' categories, prohibit sellers from expanding on the channel at their own pace. Combine this with daily product sync limitations with platforms like Shopify (100 products per day), it's clear TikTok doesn't want Sellers flooding the channel with their complete product catalogs.
2. Operations ratings and product reviews have a higher influence than other marketplaces
Every marketplace has ratings and we know how important they are to drive trust, brand awareness, and more sales. These platforms use product ratings to influence search results and shopping functionality, with a few marketplaces also considering store-level ratings. For instance, TikTok Shop considers product ratings, store ratings, and the severity of platform violations in their search ranking.
On TikTok, if a brand doesn't allow an order cancellation in the initial hour, they may receive a negative product rating from the Shopper, a negative store rating, AND violation points, leading to a spiraling decline in search ranking from a single order. These nuances are important because common integrations, like the one between ShipStation and TikTok, don't automatically prevent fulfilling an order in the first hour. As nothing decreases ratings faster than a missed expectation or bad experience, having efficient operations on these marketplaces, like optimized product listings, seamless order management, and accurate inventory data, are critical in keeping high ratings for products and stores.
However, there's also a third rating that influences the TikTok Shop ecosystem, which is the Creator Product Selection Score (PSS). Creators are the certified influencers who can earn money by advertising your products. Once an influencer has 5,000 followers, TikTok makes it easy for them to search for products in their Creator Marketplace and create engaging videos with links to your product and checkout pages. If an order is attributed to their video, then TikTok automatically tracks and pays the influencer. The Creator's Product Selection Score improves as they select more highly rated products and stores to promote. This generates a ratings flywheel where Creators are incentivized to promote highly rated products from highly rated stores, which further increases their PSS score as they drive more order volume. This means lower ratings from poor customer experiences or operations has an even bigger impact to sales on TikTok than other platforms.
3. TikTok will subsidize some of your promotions based on performance
Promotions play a crucial role on TikTok, where offerings like giveaways and purchase-based incentives drive engagement and sales. Giveaways, such as "Join to win" and "Comment to win," offer Shoppers the chance to participate in contests without cost, while enhancing brand interaction. Then, purchase-based incentives like 'Buy One Get One Free' deals are encouraged to boost customer satisfaction and sales.
TikTok believes strongly in these brand promotions and they are willing to subsidize some of the associated costs. These subsidies are granted for completing 'Missions' that appear in the Seller Center, like achieving a new delivery time target or deploying a new ad, and range from $50 to a few hundred dollars in coupons. By incentivizing sellers to meet these performance targets or advertise more on the platform, TikTok empowers brands to elevate their marketing efforts while reducing some of the associated costs.
How do brands further reduce risk while testing TikTok?
In our exploration of how brands are testing TikTok, we've touched on collaborating with Creators and tapping into promotional subsidies. However, the cornerstone of effectively experimenting with TikTok lies in order support and fulfillment. Given the platform's emphasis on high ratings, often a result of swift and reliable operations, selecting the right fulfillment strategy is crucial. We'll delve into four key approaches: Fulfilled by TikTok (FBT), self-fulfillment, leveraging a third-party logistics provider (3PL), and using Amazon Multi-Channel Fulfillment (MCF). Each offers unique benefits and challenges, aimed at helping you choose a pathway that best fits your operational needs and strategic goals.
Fulfilled by TikTok (FBT)
Introduced to streamline the e-commerce process on the platform, Fulfilled by TikTok offers an all-in-one solution for storage, picking, packing, and shipping. This model is ideal for sellers seeking to minimize their operational burden and willing to dedicate shelves of stock to their TikTok sales channel, similar to the early days of Fulfilled By Amazon. FBT promises a seamless fulfillment process and provides benefits like integrated customer support and potential subsidies for storage. This fulfillment process uses partners, which is a similar model to the old Shopify Fulfillment Network with Deliverr. However, during the early phases of experimenting on a new channel, dedicating inventory that can only be fulfilled on TikTok is a costly maneuver. It's also important to note that FBT's availability might be limited to certain markets and involves specific eligibility criteria.
Self-fulfillment
For brands that prefer to maintain control over every aspect of the fulfillment process, self-fulfillment offers the highest level of autonomy. This method involves managing inventory, packing, and shipping orders directly from your own facility. While it allows for a hands-on approach and direct oversight, self-fulfillment can be challenging in terms of scalability and managing spikes in demand, especially those driven by viral content on TikTok. Since meeting SLA's will be critical in increasing ratings and reducing onboarding probationary periods on the platform, this might be the most streamlined but riskiest approach.
Dropship from a 3PL Like Cart.com
If you don't already partner with a 3PL, then this might not be the most viable option to quickly test TikTok. Using third-party logistics providers, such as Cart.com, are better as a strategic move for sustainable growth. A 3PL can offer scalable solutions that adapt to fluctuating order volumes, providing expertise in logistics that many e-commerce brands might lack. This approach not only alleviates the burden of fulfillment logistics but also enables brands to leverage the 3PL's technology and infrastructure, potentially reducing costs and improving delivery times. If already using a 3PL, then diverting stock into a separate fulfillment network won't be needed, but your 3PL partner will be able to handle unexpected increases in demand from a new channel like TikTok. Many 3PLs will also adjust SLAs by sales channel, so there's shared risk in supporting the changing requirements. Although integrating a 3PL into your TikTok sales strategy requires an initial setup and ongoing management, the long-term benefits include enhanced operational efficiency and the ability to focus on core business activities.
Dropship from a fulfillment network like Amazon Multi-Channel Fulfillment
For businesses already selling on Amazon and utilizing Fulfillment by Amazon (FBA) to fulfill their Amazon orders, using Amazon’s fulfillment network to fulfill TikTok orders with Amazon Multi-Channel Fulfillment (MCF) presents a straightforward and low-risk option. Amazon MCF allows sellers to use Amazon's extensive logistics network to fulfill orders placed across online sales channels like TikTok. Sellers can then benefit from letting Amazon handle the pick, pack, and ship of their orders. This approach minimizes the need for additional operational adjustments, making it an attractive option for brands seeking to test the TikTok waters without committing to new logistical arrangements. However, it’s important to note that sellers aren’t required to have an Amazon store to use Amazon MCF. Another benefit of this model is the limited upfront investment required, since Amazon MCF has a simple pricing structure where sellers only pay for fulfillment and storage. Sellers can avoid investing in additional inventory or operations personnel which is why using Amazon MCF top dropship TikTok orders is a flexible approach with limited risk. However, it's crucial to weigh the costs and benefits over time. After proving TikTok's viability for your brand and the platform’s rapidly changing requirements become more stable, you might review ways to create long-term optimization.
Automate dropshipping on TikTok Shop using MCF
Once you decide to utilize Amazon Multi-Channel Fulfillment (MCF) for your TikTok Shop, the key to efficiency lies in seamlessly integrating MCF with your TikTok operations. The most expedient and cost-effective method to achieve this is through a provider like SellerActive. The platform uses API integrations, industry mappings, and Artificial Intelligence to automate the synchronization of product listings, inventory, and orders across multiple storefronts or marketplaces, including TikTok Shop, and then adeptly routes orders to MCF for fulfillment.
SellerActive’s AutoMerch functionality recommends which categories to sell on each channel
Simplifying an integration using SellerActive
To integrate Amazon MCF with TikTok Shop effectively, leveraging SellerActive offers a straightforward pathway in 7 simple steps:
- Connect Your Catalog and Fulfillment Centers: Begin by linking your primary product catalog and Amazon MCF as your fulfillment center to SellerActive. This ensures that your inventory levels and product information are accurately reflected across all sales channels.
- Set Up Your TikTok Shop Account: If you're new to TikTok Shop, sign up and get your account approved. With SellerActive, you can easily integrate your TikTok Shop once your account is set up.
- Warehouse Configuration: In SellerActive, designate warehouses that correspond to your Amazon MCF locations. This step is crucial for accurate fulfillment routing.
- Activate SellerActive Integration: Connect your TikTok Shop with SellerActive to automate the listing and inventory synchronization process. This integration streamlines the management of your TikTok storefront, ensuring that your product listings are always up-to-date.
- Publish Your Listings: Utilize SellerActive to publish your product listings to TikTok Shop, either individually or in bulk. SellerActive's platform simplifies meeting TikTok's publishing requirements and helps avoid common errors, ensuring a smooth listing process.
- Automate Order Management: SellerActive automatically imports orders from TikTok Shop and routes them to Amazon MCF for fulfillment. This automation saves time and reduces the risk of fulfillment errors, enhancing customer satisfaction.
- Implement Pricing Strategies: With SellerActive, you can apply dynamic pricing strategies across your TikTok Shop listings, ensuring competitive pricing and maximizing sales potential.
Embracing the dynamic world of TikTok Shop offers unparalleled opportunities for e-commerce brands to connect with multiple growing demographics, driving sales and enhancing brand visibility. By leveraging the creative power of TikTok Creators alongside the robust fulfillment capabilities of Amazon Multi-Channel Fulfillment (MCF), brands can explore this vibrant platform with minimized risk and maximized efficiency. SellerActive emerges as an indispensable tool in this journey, streamlining the integration between TikTok Shop and MCF, automating the synchronization of listings, inventory, and orders, and ensuring a seamless operational flow from product discovery to delivery. This strategic approach not only optimizes the dropshipping process on TikTok Shop but also positions brands to capitalize on emerging trends, adapt to evolving consumer behaviors, and achieve sustainable growth in the ever-expanding digital marketplace.
FAQ
Q: How can I maximize my early sales potential on TikTok Shop?
A: Partner with TikTok Creators and influencers whose followers match your target demographic and then leverage them to create compelling and authentic content that showcases your products. Offering exclusive promotions or discounts to the Creators' audiences can also drive higher engagement and conversions.
Q: How do TikTok Creators influence sales on TikTok Shop?
A: By creating engaging content that features products available on TikTok Shop, creators can drive traffic to product listings, enhance product visibility, and boost sales. The Product Selection Score (PSS) also incentivizes creators to promote high-quality and popular products, further amplifying sales potential.
Q: When does it make sense to dropship on TikTok Shop?
A: Dropshipping on TikTok Shop is ideal for capitalizing on your trending products and testing their success on TikTok without the risks of inventory management. It offers a cost-efficient way to scale and reach a global audience, leveraging the platform's vast user base with minimal logistical complexity.
Q: What are the benefits of using Amazon MCF for TikTok Shop orders?
A: This approach accesses Amazon's world-class fulfillment network, which offers fast and reliable shipping options. It also reduces the operational burden on sellers by handling inventory storage, order fulfillment, and shipping logistics, allowing sellers to focus on marketing and sales strategies on TikTok.
Q: How does Amazon MCF work for TikTok dropshipping?
A: Amazon MCF fulfills orders from your TikTok sales channel by using the inventory stored in Amazon fulfillment centers, providing fast, reliable fulfillment.
Q: How do I integrate Amazon MCF with TikTok Shop?
A: Integrating Amazon MCF with TikTok Shop typically involves using a third-party tool like SellerActive, which automates the synchronization of product listings, inventory levels, and order processing between TikTok Shop, your product catalog, and Amazon MCF. This setup allows for efficient management of orders placed on TikTok Shop, utilizing Amazon's fulfillment services for seamless delivery.
Q: Is SellerActive compatible with sales channels other than TikTok Shop and Shopify?
A: Absolutely. SellerActive integrates with various marketplaces including Amazon, eBay, Walmart, and more.
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Ready to propel your e-commerce business to new heights? Try SellerActive for free and discover how easy it is to automate dropshipping on TikTok Shop using Amazon MCF. With Amazon’s operational expertise and the innovative solutions from SellerActive, your path to e-commerce success is clear. Book a demo to start your journey today or visit our SellerActive Website to learn more about how we can expand your e-commerce reach.
Your foray into TikTok Shop awaits. Partner with SellerActive and watch your business thrive.