“Ask the Expert” is an occasional feature where we pose questions to experienced ecommerce pros. This time, we asked SaaS ecommerce entrepreneur, Simple DXCustomer Acquisition Platform, Actionable E-commerce Contributor.
He talks about the feasibility of selling on TikTok Shop.
Practical e-commerce: Despite political uncertainty, should retailers consider TikTok Shop?
Charles Nichols: When evaluating TikTok Shop, merchants should first decide whether they want to sell on social channels.
Charles Nichols
Social platforms like TikTok Shop, Instagram Shop, and others work similarly to traditional marketplaces like Amazon. But there are trade-offs: the social platform acts as the seller of record, managing customer data, the sales process, and returns. These channels can generate significant sales volume, but often at the expense of margins and relationships. Unlike selling directly from an e-commerce site, selling on social platforms limits your ability to know and engage with customers for repeat sales.
Social commerce is Increasingly influentialFor many brands, social media now accounts for more than half of their sales, but measuring its impact remains difficult. Traditional tools like Google Analytics4 often underestimate the impact of social media, and the true impact is usually only revealed through customer surveys.
Merchants typically approach social commerce in one of two ways, both of which are focused on initiating the buying process. The key decision is where the ultimate sale will take place. If your business model relies on long-term customer relationships and repeat sales, driving traffic to your e-commerce site is essential. Conversely, if you’re looking to increase market share, brand awareness, or sales volume, it may be useful to sell directly on social platforms.
TikTok shops offer unique opportunities and challenges. The algorithm prioritizes viral, engaging content, favoring skilled creators who can rapidly increase product awareness and sales among their followers. So, sellers considering TikTok should: Consider I work with influencers.
TikTok shoppers are highly price-sensitive and respond to discounts and impulse buys, so merchants with lower-priced, entry-level products, like beauty products, can build their brand on the platform.
But the key factor is consumer preference: over 75% of online shoppers prefer to buy directly from brands rather than via influencers or marketplaces. Consumers value authenticity and reliability of brands.
Should merchants sell on TikTok Shop? The decision comes down to your priorities. The benefits are name recognition and sales volume. The drawbacks are lower profit margins and poor customer relationships.
