THIS ISSUE:
The brands that should have stopped
If they can't fund four months, they can't afford TikTok Shop
Recently a brand cancelled and asked for their money back.
The reason? We moved too fast.
Not too slow. Too fast……
They're a very good Amazon seller. They'd done all this before. Just not here.
Looking back, the warning signs were all there on the first call.
A low budget cannot carry a brand….. unless it wins the lottery and goes viral……
BEST LINKS
📈 Growth
Sephora went live on TikTok Shop on 19 September. Under a month later it's showing over $3 million in estimated sales. The big brands have arrived, and they brought big budgets. (Corey Santiago)
Dr. Squatch is in Target and Walmart and owned by Unilever. Its TikTok Shop sales still jumped 641% in one month. Retail isn't the finish line, it's a second engine. (Dan Albert)
💰 Margin
TikTok Shop US sales are up 48% this year, but the number of shoppers is up just 8.6%. Most of the growth is existing buyers spending more. Brands buying customers at a loss in November only win if those customers come back. Know the repeat rate before you set a BFCM budget. (Fernando Campos)
🗞️ TikTok Shop news
Black Friday and Cyber Monday on TikTok Shop runs 11 to 30 November, a day earlier than last year. Best Buy, Ulta and Sephora are all in it for the first time. If a brand's samples aren't out by now, those videos won't be live in time. (Modern Retail)
DEEP DIVE
THEY WANTED A REFUND BECAUSE WE MOVED TOO FAST
Amazon experience doesn't carry over
On Amazon, they knew exactly what to do. Fix the listing, switch on the ads, watch the numbers, adjust. They'd done it for years and they were good at it.
TikTok Shop doesn't work like that.
We did what we always do in month one:
1. Create the strategy
2. Implement the strategy:
Message and research thousands of affiliates
Send samples, brief the affiliates
Setup Ad campaigns
To us, that's the job. To them, it felt like losing control of their own brand.
They weren't wrong to feel it. We were wrong not to warn them.
What I listen for now, on the first call:
They talk about ad returns before they talk about creators
They want to approve every sample by hand, but won't say how many they'll send
"We already know how to sell this product"
They expect month one to look like month one on Amazon
They can't say what they'll spend on samples, commission and ads before the first sale comes in
None of that makes them a bad brand. It makes them a brand that needs a slower start, a lot more explaining, and a written plan for what happens when.
An experienced Amazon seller isn't an easy fit for TikTok Shop. They're a brand with habits you have to un-teach.
DEEP DIVE
"LET'S TEST IT FOR SIX WEEKS FIRST"
The sentence that tells you how it ends
I hear this on most first calls.
It sounds sensible. Small budget, low risk, see if it works.
Here's the problem. TikTok Shop doesn't pay out in week six. It pays out in months two and three, when the creators you sampled in month one start posting….. and the ones who sold start posting again.
A six week test measures the bit where nothing has happened yet.
So the brand sees six weeks of cost, no sales, and says "see, it doesn't work". You get the blame for a shop that was about to turn.
My rule: four months minimum, or we don't start.
That rule is really a budget question. If a brand can't fund four months of samples, creator commission and ads before the money comes back, it can't afford TikTok Shop yet. Better to tell them that on the first call than in month two.
I'd rather lose the deal than win a refund.
On your next first call…… ask this before you send the proposal:
"Quick question before we go any further. Picture week six. Hundreds of creators messaged, samples out, a few videos up, and sales still close to zero.
What do you do?"
If the answer is "keep going, that's normal"….. sign them.
If the answer is "pull the plug"….. you've just found out how this ends. For free.
THAT'S A WRAP
Until Wednesday,
- Paul 👊
P.S. Any thoughts, hit reply….. I read every one