Tiktok Shop ⚡
Tiktok Shop ⚡
We opened our Tiktok Shop 3 weeks ago. Now it is our top sales channel. A 2 hr livestream does 2 weeks worth of revenue (all channels combined). Tiktok has led to explosion of livestream sales.
👋 Hola! Welcome to Out of Singapore. I am Shantanu. I like to build businesses. My first business failed, the second one is taking off and the third one is coming along. The fourth and fifth ones are taking shape in the mind. This newsletter is an effort to unclutter entrepreneurship for everyone.
Here is one of my lowest points of past 1 year - In Dec 2023, my co-founder quit and the team split up. We couldn’t raise funds. Orders were not confirmed. We let go off the team of 4 in Jakarta. I was thinking to go back to India to look for a job. However, I took a bet and decided to stay back in SG and survive.
I gave myself 4 months to find a job (or revenue source). This is a note from my “way forward 2023” document, written in Jan 2023.
The plan worked. I secured a job in the 3rd month. Right now I am paying off all debts.
That’s how life has been. Bitter sweet!
Would you like to share a low point in the recent times? I am all ears. You can reply back to this email.
Tiktok shop is ecommerce on steroids
For the past 10 days, I have been working on our Tiktok shop from morning till 11 pm. Look at these peaks. The value of the peaks is high enough to wipe out the complete inventory each night.
So, why does Tiktok shop work so well? What did we do differently?
#1 Tiktok Shop is live commerce, not ecommerce
Tiktok shop’s priorities are clear - product listing, affiliate marketing and live management. Affiliate marketing is simply livestream sellers and live manager is about your own livestreams. The focus is clear - sell via livestreams.
On Shopee or Amazon, a brand sets up a store and drives traffic to its store/product, hoping for conversion. Tiktok Shop, on the other hand, is driven by livestreams. Tiktok users are watching videos in the morning, afternoon, evening and night. Especially of interest are live videos.
This is how live sales go - explain the product, benefits and top up with a good price, and boom, the sale is done.
95% of our sales are driven by live sessions. The conversion rates are upwards of 15%. Good part about this conversion rate is, you can use Tiktok Ads to drive traffic to these livestreams.
#2 Affiliates and creators drive your sale
Tiktok selling happens via affiliates hosting livestream sales for you. Each creator (affiliate for us) has a specific audience base. We treat each creator as a distributor for the brand. We allot inventory, promotion and request them to sell.
Affiliates who just list your product on their showcase are useless. Ignore them.
Tips:
Offer differentiated commission rate to high potential affiliates.
Boost the livestream to ensure the livestream session has good traffic (spend 300-500 USD)
Finding the right livestreamer is a big win.
Watch livestreams regularly to find who is better at selling (simple and easy). I found someone selling Turmeric Curcumin supplement. I went into the livestream and started telling the audience about curcumin benefits. The host was happy at being supported. He got a good perspective of the brand. Then I requested him to sell our products on the live chat. He agreed 😆
The first livestream wasn’t good. We only received 2 orders. For next livestream, here is what we did
Boosted the traffic to his livestream (traffic ⬆️)
Gave a sweeter deal for consumers. (conversion ⬆️)
Made the livestream exclusive, no other brands in picture. (zero competition ⛔)
Now, the livestreamer is hooked on to us (we give him commission) and we are hooked on him (he gives us sales).
#3 Sales are driven by impulse
Here is my version of a user’s buying journey on Tiktok -
Watches videos
Finds something interesting
Lands on a livestream selling the product
Asks questions to iron out doubts.
Gets a deal.
Carts out immediately.
To capture impulse, we have to ensure regular livestreams happen, questions and concerns are answered, users on the fence are given more information and finally, a good deal is offered.
The deals cannot be long term. They need to be flash deals or 1-2 hour deals to drive the impulse up.
So much can be done to initiate impulse led checkouts with video! Imagine this storyline - The creator goes to retail store and gets a huge discount if he can sell 1000 units in next 3 hours. The creator goes live from the shop and starts shouting out the offer. (now, boost the livestream). You suddenly create the perfect mix of product, traffic and promotion to initiate sales.
#4 Product placement in creator videos
Live commerce is big but costly. Brands have to offer promotion and additional sale commission, making the whole transaction expensive, possibly unprofitable. This is where product placement in creator videos comes in. Few good video content that users like and can be used to run ads are a gold. You can use the content to generate over a long time.
Tiktok, at its heart, is a content recommendation platform. Creators can link the Tiktok shop products in their video. Finally you can let the content do the selling! So much more efficient than offering a promo code to Instagram creators. 😤
#5 Managing Tiktok Shop orders is a breeze
Finally, Tiktok has the smoothest interface to manage and fulfil orders. Pick up happens even if your store has low volume, is fast and delivered is within 1-2 days.
For comparison, this is how I handle a Facebook livestream - The livestream happens and sells 100 units. The next day we send stocks to the livestreamer warehouse. They then dispatch the stock to the customers. This whole process can easily take 15-20 days. This is large scale inefficiency.
Now, you know how breezy selling on livestreams via Tiktok Shop is!
Thank you for coming back again 🤗
Please like and share :)
The week has busy and unplanned due to Tiktok Shop. I attended a friend’s bachelors party where undies were thrown off the high rise window. So many rules were broken that I should keep quite for my safety from Singapore laws.
I didn’t run this weekend. Work out has been slow. Haven’t been sleeping well. So this week, my prime agenda is to put a structure to Tiktok Shop operations. Also sleep on time and long.
I wish Jisoo livestreamed with me 🥹 Why is she so cute?
Haha, please have a great week ahead. Enjoy 🍷