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5
MINUTE READ TIME
Published
January 2, 2024
|
Shannon Curley
|
Trends & Insights

Navigating TikTok's Ecommerce Wave: Opportunities and Challenges for Amazon Sellers

Navigating TikTok's Ecommerce Wave: Opportunities and Challenges for Amazon Sellers

Table of Contents

TikTok is aggressively pursuing its push into the ecommerce space with TikTok Shop, but that doesn’t mean that Amazon operators can’t benefit from the platform in one way or another. With TikTok's burgeoning ecommerce presence, it's crucial to understand this dynamic platform's opportunities and pitfalls, especially as it makes a play to rival Amazon in the online retail space.

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TikTok Actively Courts Amazon Sellers

Since TikTok’s U.S. store debuted in September, TikTok has worked on attracting Amazon sellers with the promise of much lower fees for selling their products and other perks.

Consider Scott McIntosh, who experienced a surge in sales of his “Cell Phone Seat”(a car smartphone mount that fits into a standard cupholder) after embracing TikTok's unique video-based promotion approach. That’s no accident: In return for paying for product shipping and covering discounts of up to 30% out of its own pocket, the bite-sized video platform expects its sellers to create a consistent stream of product videos.

“I think TikTok has immense potential to drive visibility and engagement for your products,” said Amazon PPC advertiser Taqi Abbas Khan. “Excited to see how it transforms the seller space!”

The Rising Popularity of TikTok Shopping

TikTok's shift from entertainment to a consumer trend incubator has been seamless. It's not just about the number of users (150 million in the US) but the engagement – an average US TikTok user spends 33 hours a month on the app compared to less than an hour and a half on Amazon. Of course, people go to Amazon largely to buy, not to be entertained, but the difference in time spent is nonetheless remarkable.

With that in mind, moving to direct selling through the TikTok app makes sense: We’re long past the era of consumer discomfort with purchasing products on their smartphones – especially amongst the under-50 set.  

TikTok’s push into ecommerce aims to blend the convenience of Amazon with the interactive nature of social media and utterly dominate the market in a way that other video-heavy social media like Instagram and Snapchat haven’t been able to. 

RELATED: How TikTok Social Shopping Can Expand Your Ecommerce Business

Amazon Has the Upper Hand, For Now

But let’s not sell Amazon short. Three out of every four households in the US hold a Prime subscription, and there are 173 million US Prime subscribers. That simple fact of the matter is that many TikTok users end up purchasing products seen on TikTok from Amazon, benefiting from its vast network and fast delivery.

This is where products like PixelMe can help sellers maximize their value on social platforms including TikTok by driving external traffic directly to your Amazon products. 

Amazon's established customer loyalty, especially among Prime subscribers, will keep them in contention for a long time, but their US market share is no longer growing at an exponential rate. TikTok, meanwhile, is in a growth phase with nowhere to go but up. 

That comes with its own headaches, however. TikTok's shopping experience is still evolving, with its algorithm-driven product suggestions creating a unique but sometimes chaotic shopping environment.

“It’s making Amazon look like a dinosaur .. and for some of us who are 30+, I would like Amazon to remain like a dinosaur because I don’t have the patience or headspace for stuff like Tik Tok. IMO, the generations will go separate ways here.” – Paul Walsh, Founder, All Things Amazon

Potential and Risks for Amazon Sellers:

But let’s say you’re ready to dive in on TikTok selling, and ride the early waves onto the shorelines of new profitability: Selling on TikTok requires a different strategy than Amazon.

It's not just about listing products but creating engaging video content and leveraging influencers. This involves a learning curve in video production and marketing. For instance, Wyze Labs, a consumer hardware company, dedicates substantial resources to maintain a consistent presence on TikTok, to the tune of two daily videos and four live events weekly. Not every Amazon seller has the capability or drive to make that kind of resource commitment.  

Furthermore, TikTok isn’t going to be a good fit for all kinds of sellers and product. The platform lends itself to impulse buys – things like gadgets, fast fashion, toys, and supplements – and less everyday staples, hardware, or high-end electronics. 

But if you’re willing and have the right product and mindset,  TikTok offers a burgeoning market with a different demographic – primarily Gen Z – that’s an opportunity to diversify sales channels and tap into a new customer base. However, be cautious of:

  • The need for a different level of  constant content creation.
  • The uncertainty of TikTok's long-term ecommerce strategies and potential regulatory challenges.
  • Balancing TikTok's engaging but demanding platform with Amazon's established, more transactional model.
“TikTok undoubtedly presents significant opportunities for Amazon sellers, but navigating its landscape comes with challenges. A primary concern we've noticed among our clients is TikTok's rapid pace of change. Features present one week may be altered drastically the next, often with little transparency or logical explanation. This unpredictability makes it difficult for sellers to adapt and strategize effectively, raising questions about the sources of feedback and rationale behind these frequent updates.” – Omer Riaz, CEO, Urtasker

TikTok Still Highly Values Amazon Sellers

Whether you decide to dip a toe into the rushing current of TikTok Shop or not, there are still many positive signs that TikTok values all Amazon sellers as a key driver of engagement and revenue. Amazon spends a lot of money on the platform and the platform is aware of the value that it provides, perhaps going as far as directing its moderators to give Amazon preferential treatment, according to some reports

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TikTok's ecommerce expansion is an exciting opportunity but requires a nuanced approach. For ambitious Amazon sellers with the right target markets, it presents a chance to explore new avenues and demographics and engage customers differently. However, it's vital to weigh the investment in time and resources against the potential benefits and stay aware of the evolving landscape of online retail.

“TikTok has immense potential to drive visibility and engagement for your products. Excited to see how it transforms the seller space!” – Taqi Abbas Khan, Amazon PPC and Advertising Specialist

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