TikTok Shop US New Dividends! Who Will Be the Next Billion-Dollar Merchant?

The rapid development of TikTok Shop USA

TikTok Shop USA is in a new stage of development and is showing strong growth potential. Since the end of last year, TikTok Shop USA has been breaking records and attracting widespread attention in the industry. Here is a detailed analysis of its achievements and market performance:

1. TikTok Shop USA's amazing achievements

End-2023 results: TikTok Shop officially opened in the US market just three months ago, and it has already achieved a single-day GMV of over 14 million US dollars, which is exciting for the industry and marks a strong start for the platform.
Outstanding performance in May and June 2024: TikTok Shop continued to innovate and achieve good results in 2024. In May, the platform saw small shops with monthly sales of over 10 million US dollars. In early June, well-known influencers Jeffree Star and Mandy Pena set new records with live sales of 665,000 US dollars and 700,000 US dollars respectively. Influencer Stormi Steele even broke the million-dollar sales mark in a single game, marking the full rise of TikTok Shop in the field of live streaming and product sales in the United States.
Summer sales explosion: During the US summer sales period from May 30 to June 10, 2024, the overall GMV of the platform increased by 129%. The GMV of the content field and the shelf field also increased by 129% and 132% respectively, with single-day sales reaching a record high, even surpassing last year's Black Friday sales.

2. The platform promotes and merchants have exploded

Multi-mode and multi-field synergies: Since TikTok Shop was fully opened for entry in September last year, it has helped merchants quickly find ways to sell products through a combination of multiple sales models (including fully managed and merchant-operated) and multiple sales scenarios (such as short videos, live broadcasts, and shopping malls). These features and services of the platform have accelerated the development of merchants' e-commerce businesses.
Merchant success stories: For example, Sweet Furniture, an early merchant of the TikTok Shop US cross-border store, achieved tens of millions of dollars in sales in just a few months. Jason, the founder of Sweet Furniture, said that their 100-day inventory was sold out in just three days, highlighting the platform's strong ability to drive sales.

3. Operational optimization and profit improvement

Inventory and cash flow optimization: Jason said that after a few months of operation, Sweet Furniture's inventory turnover rate and cash flow have improved significantly, and the overall profit margin has also increased substantially. The profit margin jumped from less than 5% to more than 10%, and in some months it even reached more than 20%. This rapid improvement in performance shows the effectiveness of TikTok Shop in optimizing the operational efficiency of merchants.

4. TikTok Shop's future potential in the US market

The market continues to expand: As TikTok Shop continues to grow and attract more sellers, the platform's market potential continues to expand. More and more merchants have experienced explosive growth through TikTok Shop, laying the foundation for the platform to become an important force in the US e-commerce market in the future. It is expected that there will be more billion-dollar sales in the future, which will drive the further expansion of TikTok Shop in the US market.

TikTok Shop US is releasing new dividends

TikTok Shop USA is releasing new growth dividends by lowering the threshold and strengthening support for merchants. These policy adjustments not only help merchants expand the supply side, but also create benchmark cases to inspire more merchants to flourish.

Lower the entry threshold to attract more merchants

Cross-border merchants' self-operation model adjustment: Recently, TikTok Shop has adjusted its investment policy for the self-operation model of cross-border merchants on the US site, opening up to merchants on platforms such as Amazon, eBay, and Walmart in mainland China and Hong Kong, as well as independent store sellers. Previously, the requirement for cross-border stores was an annual GMV of no less than 2 million US dollars. The new policy significantly lowers the entry threshold, enabling more sellers to join TikTok Shop as an e-commerce platform.
Expanding supplier participation: By doing so, the platform intends to attract more merchants to join and further expand the supply side. This change means that more and more merchants will be able to expand their market share with the help of TikTok Shop, thereby promoting the overall growth of the platform.

Release of the “100 Million Club” special policy

Resources and support: In order to cultivate a group of top sellers with a volume of 100 million yuan, TikTok Shop has launched a special policy for the “100 Million Club”. The policy includes five key benefits: commission reductions and exemptions, logistics support (including official FBT platform warehouse and delivery services), special plans for potential best-sellers, priority participation in brand marketing and promotional resources, and governance guarantees. Through these measures, the platform provides merchants with comprehensive support to promote their rapid growth.
Focused support for big sellers: Through these policies, TikTok Shop plans to provide dedicated promotional support for big sellers, including resource bias in shelves and content fields. For merchants with outstanding performance, the platform will also provide more preferential docking privileges and large subsidies to help merchants quickly increase volume in the early stages.

Solve merchant pain points and optimize operations

Logistics and shipping support: For cross-border e-commerce sellers, inventory, logistics and pricing are often the three main challenges in operations. TikTok Shop alleviates the operational burden on merchants by providing shipping subsidies. Take Sweet Furniture as an example. Initially, the cost of shipping a legless chair could be as high as 18-20 US dollars, but the platform provides almost full shipping subsidies to help merchants reduce costs. As the order volume increases, the platform gradually optimizes shipping and related costs, and the cost range is reduced to 12-15 US dollars.
Long-term benefits: These shipping subsidies not only improve short-term profitability, but also optimize merchants' logistics supply chains, further improve the efficiency of warehouses and courier accounts, and lay a solid foundation for merchants' long-term sustainable operations.

Policy support brings business growth

Commission reductions and financial support: TikTok Shop's “100 Million Club” policy not only provides logistics support, but also includes commission reductions based on incremental GMV and commission reductions after merchants' self-broadcast GMV targets are met. These subsidies and reductions can effectively reduce the financial pressure on merchants and help them grow faster on the platform.
Exclusive promotional resources: Merchants who enter the “100 Million Club” will receive priority support from platform resources, including advantages in shelf space and content display. This allows merchants to stand out in a competitive market and gain more exposure.

The platform's long-term support for cross-border merchants

Promotes global business success: Mu Qing, Vice President of TikTok Shop's Cross-Border E-Commerce, said that the platform will continue to support the operations and sustainable development of all types of merchants, especially those cross-border merchants that entered early, many of which have already achieved success in multiple global markets. Through this incentive policy and e-commerce solution package, TikTok Shop hopes to help more cross-border merchants grow and promote new consumer trends and fads.
Impact on the e-commerce ecosystem: TikTok Shop's initiatives not only help merchants grow, but also have a positive impact on the broader e-commerce ecosystem, promoting the platform's continued expansion and influence in the global market.

Through these policy adjustments and support measures, TikTok Shop USA has further enhanced its attractiveness to cross-border merchants and provided more comprehensive support for the growth of sellers. These initiatives not only help merchants optimize operations, but also lay a solid foundation for the long-term development of the platform.

Seize the next potential growth explosion

After achieving certain initial successes, merchants can continue to drive business growth through a series of strategies. As the TikTok platform continues to grow rapidly, and in particular as TikTok Shop's e-commerce livestream business in the US matures, merchants should actively seize these potential growth opportunities, optimize their operational strategies, and further maximize sales opportunities.

Product iteration and content accumulation

Prduct iteration: Merchants not only need to focus on the promotion of current hot products, but also need to consider how to maintain market competitiveness through continuous product iteration. By continuously optimizing product design, improving product quality, or expanding product categories, merchants can respond to changes in market demand and quickly reach new consumer groups with the help of TikTok's traffic advantages.
Content accumulation: On TikTok, a platform where content is king, the accumulation of content and the establishment of brand influence are crucial. Merchants need to use creative and diverse content to not only showcase the product itself, but also tell the brand story, shape the brand personality, and gradually enhance users' awareness of and loyalty to the brand.

The rise of live commerce

The explosion of live commerce in the United States: According to third-party data provider FastMoss, live commerce on TikTok in the United States is accelerating. In the second quarter of 2024, TikTok in the United States has already seen multiple live streaming sessions with millions of dollars in GMV, with countless live streams generating more than 400,000 dollars in GMV per session, and the ability of top live streamers to drive sales continues to set records. For example, Jeffree and Stormi Steele's live streams generated a single-game GMV of 665,000 and 1.02 million US dollars respectively, highlighting the huge potential of live e-commerce.
Live e-commerce has more controllable traffic and sales: Compared with short video e-commerce, live e-commerce can provide more controllable traffic and sales data. Especially in the United States, where users are accustomed to TV shopping, it is only a matter of time before live e-commerce on TikTok becomes popular. Merchants who can fully leverage the traffic advantages of live streaming will be able to further increase product exposure and sales.

TikTok Super Brand Day (Super Brand Day) strategy

Omni-channel brand building: Many merchants have realised that a successful “TikTok explosive product strategy” is not just about short-term product explosions, but about building brand momentum and tapping long-term value. This includes live streaming, e-commerce content, social interaction and other methods to achieve a win-win situation in terms of brand awareness, sales and brand influence. Taking the Super Brand Day on the US TikTok Shop as an example, leading merchants such as Halara, elf and NYX have achieved a double increase in brand awareness and sales by participating in the project.
Brand strategy in-depth layout: Merchants should combine the characteristics of the TikTok platform to carry out multi-dimensional omni-channel brand building. Through continuous brand exposure and precise market positioning, merchants can turn the short-term explosive product effect into a long-term driving force for brand growth.

Diversified entry of cross-border e-commerce sellers

Platform policy changes bring opportunities: With the update of TikTok Shop's cross-border US self-operated model, more cross-border e-commerce sellers will flock to the platform, bringing a richer seller ecosystem. Sellers from platforms such as Amazon, eBay, and Walmart, as well as independent store merchants, will all join TikTok Shop, bringing more diverse products and competition to the platform, and further promoting the development of the platform's e-commerce ecosystem.
Diversification of the merchant ecosystem: With the addition of more cross-border e-commerce sellers, TikTok Shop will form a more diverse seller ecosystem. Merchants must not only focus on how to compete with leading merchants, but also learn how to cooperate with more different types of sellers, leverage the platform's traffic advantages and social attributes, and expand their market share.

Live broadcast room construction and talent recruitment

Create exclusive live broadcast rooms to quickly respond to market demand: For example, Sweet furniture has already established multiple live broadcast rooms near the TikTok headquarters in California, USA, and has quickly set up live e-commerce by recruiting professional anchors and talents to collaborate. This flexible strategy has helped merchants maintain a keen response to market trends and improve sales performance.
The importance of collaborations between anchors and KOLs: Collaborating with influential anchors and KOLs can quickly increase a brand's exposure and credibility. Merchants should find suitable partners in different fields and markets through a diverse combination of KOLs to achieve broader market penetration.

Looking to the future, continue to optimize business strategies

Long-term value mining: Merchants should focus on long-term opportunities on the TikTok platform, especially in the areas of live streaming, cross-border e-commerce, and omnichannel marketing. By continuously optimizing product lines, improving warehousing and logistics capabilities, and strengthening the layout of live streaming e-commerce, merchants can occupy a favorable position in the future market.
Dynamic adjustment of strategies: In the rapidly changing e-commerce environment, merchants need to remain flexible at all times and adapt to the constant changes in the market. TikTok is a global platform, and merchants should combine their own advantages to develop flexible and sustainable long-term strategies.

By implementing these strategies, merchants will not only be able to seize current growth opportunities, but also steadily advance in the future e-commerce competition, promoting the sustainable development of brands and businesses on the TikTok platform.

The TikTok Shop new policy opens the door to the following five types of merchants:

Amazon self-operated model (SC) merchants, with a store evaluation score of 4 (including a score of 3.8 in the furniture, men's clothing and underwear categories), at least 3 months in operation, and an account health score of 250;
Amazon Vendor (VC) merchants must have a supply record within the past 6 months;
eBay/Walmart merchants must have a single store sales (GMV) of more than 500,000 USD in the past 12 months, have been in operation for more than 3 months, and have a store rating or score that meets the specified standards;
Walmart suppliers with delivery records in the past 6 months are eligible;
independent merchants must have experience operating a DTC independent website in the US market, a Trustpilot score of more than 3.8, and a total of 10,000 followers on overseas social media.

Frequently Asked Questions (FAQ)

1.What is TikTok Shop and how do I open a store on the platform?

TikTok Shop is an e-commerce function on the TikTok platform that allows merchants to sell products directly on TikTok. The steps to open a store include: registering a TikTok merchant account, uploading products, setting up payment methods, and optimizing product pages. Merchants can use various TikTok tools and functions, such as live broadcasts and e-commerce content, to increase product exposure and sales.

2.How do I host a live stream on TikTok Shop?

To host a live stream on TikTok Shop, you need to apply for the live streaming function and prepare products suitable for live streaming. Merchants can create a dedicated live streaming room, recruit anchors or celebrities to collaborate, showcase products and interact with the audience. The success of live streaming usually depends on the performance of the anchor, creative content and accurate product positioning.

3.Why is product iteration crucial for merchants on TikTok Shop?

On a fast-changing platform like TikTok Shop, product iteration can help merchants stay competitive. Constantly optimizing and updating products to adapt to changes in user needs is the key to maintaining sales growth in the long term. Through product innovation, merchants can better attract target customers and increase their brand's market share.

4.How can I increase sales through live streaming on TikTok?

TikTok live streaming is a real-time promotion method that allows merchants to showcase products and interact with viewers through anchors or influencers. To increase sales, merchants should choose suitable anchors, accurately target their target audience, set up attractive promotional activities, and ensure that the live streaming content is interesting and interactive, so as to increase viewer engagement and purchase desire.

5.What is TikTok Super Brand Day and how can I participate?

TikTok Super Brand Day is a brand promotion event on the TikTok platform for merchants, where they can achieve large-scale brand exposure. Participating in Super Brand Day can help merchants increase brand awareness and drive sales growth. Merchants can apply to participate, create promotional offers, and optimize marketing strategies to get more traffic and sales.

6.How can cross-border sellers enter TikTok Shop?

Cross-border sellers can enter the platform through TikTok Shop's cross-border e-commerce model. Merchants need to register and review their merchant accounts, set up payment methods and logistics channels. As the platform's policies continue to be updated, more cross-border e-commerce sellers will be able to enter TikTok Shop, bringing more diverse products and competition.

7.How do I manage inventory and warehousing on TikTok Shop?

Merchants need to manage inventory based on sales and market demand. In TikTok Shop, fast warehousing and logistics response is crucial to maintaining a good customer experience. Merchants can ensure timely delivery and improve logistics efficiency by setting up overseas warehouses, increasing storage capacity and optimizing inventory management.

8.What is the future development trend of TikTok Shop?

As livestream e-commerce and omnichannel brand building progress, TikTok Shop will continue to expand its market share in the future. It is expected that by 2024, TikTok Shop's livestream commerce business will grow rapidly and become one of the most important sales channels on the platform. At the same time, the addition of more cross-border e-commerce sellers will enrich the platform's product categories and seller ecology.

9.How can I increase the exposure of my TikTok Shop store?

Merchants can increase the exposure of their stores in a variety of ways, such as cooperating with influencers and anchors to promote their products, using short videos and live broadcasts to showcase products, participating in platform promotions (such as Super Brand Day), and targeted advertising. Content creativity and interactivity are also key factors in increasing exposure.

10.What are TikTok Shop's requirements for product pricing?

TikTok Shop does not have mandatory pricing requirements, but merchants should price their products based on market demand, competition, and target profit. A reasonable pricing strategy will not only attract consumers, but also enhance the competitiveness of the products. Merchants should also adjust pricing according to the platform's promotional activities to gain more traffic and sales.