Ask an Expert: Should Merchants Sell on TikTok Shop?

“Ask an Expert” is an occasional feature where we pose questions to seasoned ecommerce pros. For this installment, we’ve turned to Charles Nicholls, a serial SaaS ecommerce entrepreneur, most recently of SimplicityDX, a customer acquisition platform, and a Practical Ecommerce contributor.

He addresses the viability of selling on TikTok Shops.

Practical Ecommerce: Should merchants consider TikTok Shop despite the political uncertainties?

Charles Nicholls: When evaluating TikTok Shop, merchants should first decide whether to sell on social channels at all.

Charles Nicholls

Social platforms such as TikTok Shop, Instagram Shop, and others function similarly to marketplaces such as Amazon, but they come with trade-offs. They act as the merchant of record, controlling customer data, the sales process, and returns. The channels can generate significant sales volume, but often at the expense of margins and relationships. Unlike direct sales from an ecommerce site, selling on social platforms limits the ability to know and engage with customers for repeat sales.

Social commerce is becoming increasingly influential. For many brands, social media is now the starting point for over half of sales. Yet measuring its impact remains challenging. Traditional tools such as Google Analytics 4 often underestimate social media’s influence. Only customer surveys typically reveal the actual effect.

Merchants usually approach social commerce in one of two ways, both centered on the start of the buying journey. The key decision is where the sale occurs. If the business model relies on long-term customer relationships and repeat sales, directing traffic to the ecommerce site is essential. Conversely, if it’s gaining market share, brand visibility, and volume sales, then selling on social platforms could help.

TikTok Shop offers unique opportunities and challenges. The algorithm prioritizes viral, engaging content, favoring skilled creators who can rapidly drive product awareness and sales among their followers. Hence merchants contemplating TikTok should factor in working with those influencers.

TikTok shoppers are highly price-sensitive and respond to discounts and impulse buys. Sellers with low-cost entry-level products, such as beauty, can build a brand on that platform.

Yet a critical component is consumer preference. Upwards of 75% of online shoppers prefer purchasing directly from brands rather than through influencers or marketplaces. Consumers value brands’ authenticity and trust.

Should merchants sell on TikTok Shop? The decision boils down to priorities. The benefits are visibility and sales volume. The downsides are lower margins and diminished customer relationships.