What Is TikTok Shop and How Does It Work?

Welcome to the next phase of social media's new shopping culture. TikTok recently announced a new way for people to shop products on TikTok. They're calling it TikTokShop. TikTok Shop is going to be an in-app way to purchase items directly from the social media platform's feed, shops, and marketplace. We are going to dive into how this TikTok shop will work, how consumers will react to it, and how to keep your kids from spending more money and time on TikTok.

​​How Does TikTok Shop Work?

TikTok Shop will be directly integrated into the app in tagged products. The For You page will have a link where businesses can call out products on their page. These products will be displayed as product tiles on their profile, complete with reviews, and they even have the option to curate custom collections. And, of course, items displayed on the For You page will be targeted, to help TikTok's scrollers discover products from brands using TikTok Shop.

In addition to this, there will be a dedicated Shop Tab or Shop page, where businesses can sell products and customers can discover promotions, manage orders, and get product recommendations. TikTok Shop also offers an Affiliate Program to create commission-based product marketing opportunities. This program gives creators a new avenue to monetize their content by promoting products through short videos and livestreams. For additional visibility, businesses can take advantage of TikTok Shop Ads to promote their products directly within the app to TikTok users.

All of these features and more are sure to drive some sales in the TikTok community. According to a study done by eMarketer 39.5% of social users on TikTok will make at least one purchase in a calendar year.

How Will Consumers React?

Consumers are likely to have a mixed, but overall positive, reaction to TikTok's entry into e-commerce and fulfillment. Brands using the social media platform, especially those that already sell directly to customers on other platforms, like Instagram—would be wise to get their products in front of the app's users using the new Shop feature.

We think that the convenience of shopping directly through a platform where they already spend a significant amount of time is likely to be well-received. Imagine watching a viral video and being able to purchase the featured products right then and there, without having to switch apps or platforms. It's live shopping, driven by popular TikTok creators (thanks to the affiliate program) that lets brand take advantage of the platform's community-driven trends.

It also appears that the actual purchase process is cut down to a few simple steps, which eliminates the need to switch applications, giving people a smooth experience from watching live videos into shopping. The easy process will likely lead to impulse buying.

However, some users might find it somewhat annoying to have ads, products, and promotions scattered throughout the page. For example, Instagram launched its shop feature in 2020. This caused some pushback, and Instagram later replaced this section with Instagram Reels. They ultimately found a compromise with their own marketplace link to a brand's feed, where ecommerce companies can create opportunities to showcase their new products and lead users toward transactions.

This commerce-oriented shift on TikTok could also clutter the user experience with more promotional material, making some users wary of commercial overload.

However, TikTok's approach to entertainment focuses on a dynamic and an interactive experience. The seamless integration of shopping on the app is a bit more seamless and convenient then their counterpart—Instagram.

Where Creators Come In

The affiliate program is very much integral to the success of TikTok Shop. Brands can team up with creators to sell to people they otherwise wouldn't reach—and tap into trust the creators have already developed with their substantial followings. That means a company doesn't need to work as hard to build their own authority and trust with consumers.

This is exactly why it's a huge launch for sellers. Popular influencers can now serve up products from a company into a For You page of someone who puts great weight into the influencer's opinions and suggestions. And if, after watching enough videos from creators recommending a certain product, they want to buy it, the features included in the launch (like live shopping and the shop button) make purchasing easier than ever.

Where Videos Come In

Instagram figured out how to integrate products in a feed-based app without losing too many people. But before they cracked that, YouTube had already proven that creators with clout could effectively use videos to sell products. Creating videos around products, product reviews, and product comparisons is successful for both brands and creators—and, thanks to YouTube, we have plenty of data behind that.

Merging the shopping feature with their video platform was, essentially, a no-brainer for TikTok. And since the app already has reporting technology, selling on the platform will give brands another source of data on their customers.

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What is “Fulfilled by TikTok”?

Fulfilled by TikTok is a way for a TikTok Shop seller to handle logistics. TikTok will handle the heavy lifting of storage, picking, packing, and shipping for the business. It will be an all-in-one service in which sellers can pick and choose the products that they wish to have fulfilled by TikTok. Once they choose the products they want to store, they will sign over the stock. Tiktok will pick, pack, and label their items before shipment. Then Tiktok will integrate into the online store of the sellers and ship the items once they are ordered.

TikTok Shop charges fees for warehousing, shipping, and other added-value services such as labeling, pre-packing, and inserting leaflets. Here's an outline of their charges.

This new offering from the social media company is a game-changer—not just for TikTok but for the whole e-commerce scene. Think less stress for merchants and faster shopping for shoppers. It's the kind of move that makes everyone in logistics, like All Points, sit up and think, "Okay, how can we level up?"

“This is going to change the game for e-commerce in general. TikTok is making it easier for sellers and buyers, which will lead to more sales and more growth for the platform,” our Director of E-Commerce said on a call. We think that this change may come with some pushback from users at first but will overall become accepted as the norm. With major firms like Meta, Twitter, and now TikTok launching e-commerce sections on their platforms, it's only a matter of time before they tap into the Amazon market.

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TikTok Shop FAQs

How to get to TikTok Shop

You can access the shopping feature by engaging with videos that feature shopping content, through LIVEs, or by tapping the Shop icon in a brand or creator's profile. You'll also now see some Shop content on your For You page.

Why can't I find the TikTok Shop?

You may have to toggle TikTok shop on. To do that, click on the three dots in the upper right corner to access your Settings menu. Select “Settings,” then look for the “Shop” section and tap on it. Verify that the toggle switch for TikTok shop is set to enable this feature.

How much does TikTok Shop take?

Although you can register to become a seller for free, the app will take a commission of 5% your sales. That's equivalent to Instagram's commission fee and lower than Amazon's, which ranges from 8 to 15%.

How to sell on TikTok Shop

If you already have a business account on the platform, you'll need to verify that you can promote your products (some are off-limits), then sync your product listings to your TikTok account. The platform has technology to connect with several major ecommerce platforms like Shopify, WooCommerce, BigCommerce, and Square Online. You'll also want to start linking to your products in your videos.

Is TikTok Shop free?

While it's free for merchants to sign up to sell their products through TikTok Shop, the social media platform does charge a commission fee of 5% which is automatically deducted from earnings once the product has been successfully delivered.