Combining the dropshipping model with TikTok Shop can be a great business idea but it has to be supported by a firm understanding of what it means to dropship on this platform. As we will show you, it’s a different approach from what you might be used to on other sales channels.
At Synder, we work directly with TikTok Shop store owners and provide them with accounting software for syncing their orders and payouts into their books. To develop the software, we need to know exactly what our clients’ needs are and what issues they are facing.
With this deepened understanding of TikTok Shop, we will explain many aspects of dropshipping on this platform and practical steps to open up a store on TikTok.
Learn more about Synder and how it helps ecommerce businesses like yours in their journey.
TL;DR
- Dropshipping on TikTok Shop allows you to reach a wide audience, but requires following specific platform rules and choosing reliable suppliers.
- Utilize software to automate and manage transactions effectively, integrating sales data from TikTok Shop and other ecommerce platforms.
- Ensure compliance with TikTok Shop’s shipping rules, focus on stocking products in the US, and maintain high customer service standards.
How to start dropshipping on TikTok?
TikTok Shop is booming right now and the number of sellers is growing rapidly. We do know, however, that sellers are starting this journey from different places. There are those of you who:
- already have a dropshipping store or stores on other marketplaces and sales channels and would like to expand to TikTok Shop;
- have an ecommerce store (without a dropshipping model) on another marketplace and would like to try dropshipping on TikTok;
- use TikTok and see its potential as a business avenue and would like to open a TikTok Shop without the need to keep the inventory (dropshipping model);
- Are new to both dropshipping and TikTok as a social media platform but would like to start a TikTok dropshipping business.
This guide aims to equip you with all the necessary insights and strategies to successfully launch and manage your dropshipping business on TikTok Shop, no matter your starting point.
What is dropshipping?
Let’s start with the basics: What is dropshipping in the first place? Dropshipping is a retail or fulfillment method where the seller doesn’t keep the products they sell in stock. Instead, when they sell a product, they buy it from a third party—like a wholesaler or manufacturer—and have it shipped directly to the customer. This setup means that the dropshipper never actually handles the product themselves. So the dropshipping essentially comes down to how the orders are fulfilled.
The big draw of dropshipping is that it’s easy to get started and doesn’t cost much upfront. You don’t need to manage a stockpile of products, deal with a warehouse, or handle shipping logistics. This makes it a great option for newcomers to the business world or for existing businesses looking to try out new product lines without a big investment.
But dropshipping isn’t without its headaches. Since you’re not in charge of your inventory or shipping, you have less control over how quickly products get to your customers and what condition they arrive in. These issues can really affect how happy your customers are with your service.
Bear in mind these points, as they will keep coming back at us so we will show you the ways to combat them effectively.
What is TikTok Shop?
For those of you new to this platform, TikTok is a social media app where people share short videos, ranging from fun dances to informative clips. It’s very popular, especially among young users.
TikTok Shop is a feature within the app that lets users buy products directly. This makes shopping easy and fun, as you can watch a video and buy featured products without leaving the app. It’s a handy way for businesses to reach more people by combining entertainment with shopping.
So in essence, TikTok Shop is an ecommerce feature integrated into the TikTok platform, allowing users to browse and buy products directly through the app.
This feature turns TikTok from merely a platform for entertainment and social interaction into a powerful tool for online selling and shopping. Sellers can showcase their products through in-feed videos, live streams, or a dedicated shopping tab on their profiles.
Can you dropship on the TikTok Shop?
As you probably know by now – the answer is yes, you can definitely dropship on TikTok Shop. But there are several things you need to be wary of, as TikTok Shop has a specific set of rules and guidelines that make dropshipping harder. At the same time, the way marketing works on TikTok gives you a pool of opportunities that you simply don’t get to see in other places.
You should review all the policies, in particular those about:
- Order fulfillment (there are different rules for dropshippers);
- Customer service (handling of customer communication);
- Products (what products can you sell and how to do it);
- Account Health score (all of the above aspects – and more – impact your Account Health score. This metric informs you about your store’s standing. Maintaining a very low could potentially result in your store being banned from TikTok Shop).
We can’t stress this strongly enough, please get familiar with the rules of TikTok Shop in your country, including the consequences of violating them. This is regardless of the fulfillment method. Whether dropshipping or fulfilling orders through TikTok, it’s crucial to stay on the right side of those rules.
How to start a dropshipping with TikTok?
There are several key parts to this process and depending on your business model or business stage, you will need to initially take different steps. Let’s have a look at how to go about it.
1. Choose your niche and your products
If you’re new to TikTok or ecommerce in general, you will need to pick the products you would like to sell in your store. Since you will be making videos or live streams to promote them or have other people promoting them for you (known on TikTok as affiliates), you need to choose great products or even a single product to start with.
It’s a cliche, but it’s true – if you’re passionate about the product, it will shine through the videos that in turn will increase engagement on your content and eventually sales. TikTok is all about engagement.
So regardless of what products you choose to sell, pick something that you can speak about with confidence and passion.
Why it’s good to find a niche
TikTok works differently from Amazon, for example. On TikTok, videos go viral because the content seems appealing, interesting, and engaging to users. That’s why selling regular items might not work as well. A niche for TikTok Shop is what builds that uniqueness. It fuels your brand story and brand itself, allowing your customers to engage with your products.
2. Find a third-party supplier or manufacturer
That’s the part of the dropshipping business that usually makes it or breaks it – the reliable supplier. If your shipping takes a long time, your orders get late, your products don’t look as advertised, or the quality of the products is poor or it keeps fluctuating – this all spells troubles.
When you search for a good third-party supplier, check all their terms against those of TikTok Shop in your country. Unique and quality products coupled with fast delivery are what you are aiming for.
There is a wide variety of different suppliers but you should go where there is reliability and quality assurance. Finding a cheap and new supplier on the market will oftentimes be too risky for TikTok dropshipping in particular.
3. Choosing your dropshipping integrations
There are many ways in which you can dropship on TikTok Shop. At this step, we won’t be connecting platforms or uploading products but rather deciding on how this dropshipping business model should look like, in terms of the backend operations.
While technically you can do all of the product setup and order fulfillment manually – that is a job that can’t be sustained once the orders keep pouring in. So to help you run your business smoothly it is best to automate most of the processes.
Store integration
You can create your dropshipping store only on TikTok Shop and upload product images, descriptions, and all other elements straight into the product catalog that you have on the platform when you set it up.
However, what many of the dropshippers do instead is integrate their store from another marketplace into TikTok Shop. This automatically uploads all their products. The popular choices are Shopify, Magento, or BigCommerce, but plenty of other platforms and marketplaces can also be integrated.
That’s a great idea if you are thinking of expanding your ecommerce business. But you need to remember that regardless of the number of platforms you sell on, your business is usually seen as one entity (unless you set up separate businesses, for different platforms). This takes us neatly to the next type of integration, namely bookkeeping and accounting
Bookkeeping and accounting integration
Those of you who already run your business know how crucial this part is and how hard it can get to keep track of all the sales, fees, discounts, refunds, oh and yes – taxes.
Key information: The payout you will get from TikTok Shop into your bank account, is NOT your total sales amount. Meaning that this is the money that TikTok Shop sends you after fees, discounts, refunds, etc. have been taken. But you need to put all these numbers into your books, and we mean each and every single type of transaction.
On top of your TikTok Shop transactions, would you like to add your Amazon dropshipping purchases, your Shopify store transactions, and a few payment gateways (Stripe, PayPal, or Afterpay for example) into the mix? That’s a maze we know all too well and we help our clients solve it. We automate all that and more.
How Synder syncs your TikTok Shop transactions
Synder is a financial management software designed to automatically synchronize detailed transaction data into your accounting books from over 30 different platforms, including marketplaces, payment gateways, and even some POS systems.
Synder offers TikTok Shop integrations for the following accounting software:
- QuickBooks Online;
- QuickBooks Desktop;
- Xero;
- Sage Intacct.
The beauty of Synder is that once you set everything up, all those transactions are neatly allocated into the right accounts – you don’t have to do anything. It’s fully automated and accurate. It even gives you a pre-matched reconciliation.
We also have a host of cool features that let you customize how your orders and payouts get into your bookkeeping system. On the ecommerce KPIs side, you can get instant data on your top products, platform fees, gross profit margins, COGS, and many more, so you can compare how your business is doing as a whole and also per platform.
We support our clients’ expansion of their businesses, so we don’t charge per connected platform but for the number of transaction syncs. Meaning, you can connect as many platforms as you want at no extra charge.
If you want to know more about Synder, join our Weekly Public Demo. You can also start a 15-day free trial and experience first-hand how effortlessly you can manage your TikTok transactions.
Order fulfillment integration
It’s the same idea here as above – processing orders with your supplier manually, while possible with a small number of purchases, becomes too overwhelming with a steady stream of orders. That’s why automating this part of your TikTok Shop business is also highly advisable.
There are some good software that have already had plenty of experience with order fulfillment and can integrate easily between different platforms, including TikTok Shop. Choose a reliable solution for this and one that can handle all your orders.
4. Sign up for TikTok Shop
As we said at the beginning, dropshipping is an order fulfillment method. That means you will follow the usual steps that all other sellers take until the fulfillment method process.
We do have a detailed article on how to set up a TikTok Shop for sellers, so you can head there for more information as well.
Here are the steps needed to sign up for TikTok Shop.
Step 1. Choose your business type and region
Start by selecting the appropriate category for your business on TikTok Shop’s main page. There will be 4 to choose from:
- Sellers (those who sell products like yourself);
- Creators (those who create content – think viral dance videos, makeup tutorials, etc.);
- Affiliates (those who connect the above two groups and earn commission);
- Partners (those who provide services to all like Synder).
For dropshipping business, you usually would choose Seller. Then, you need to specify your region: North America, Europe, or Asia. This will direct you to the appropriate TikTok Shop Seller Center.
It’s important to note that TikTok Shop is available only in the United States, the United Kingdom, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Step 2. Register at the Seller Center
Here you need to complete the registration by providing your business details such as name, address, and Tax Identification Number (TIN), along with the primary contact person’s details.
You will also need to include your shop’s name and the main product category.
Step 3. Verify your account
After registration, you need to verify your account by uploading the required documents, which may include personal ID, business verification documents, and more. The specific documents required will depend on your business type and the country you’re applying from.
Submission of documents leads to a review phase, typically completed quickly, although it can take up to 48 hours.
We want to mention that you might need to verify your dropshipping business by submitting other information too. TikTok often asks for additional information in relationship to order fulfillment, if you’re dropshipping.
Step 4. Tax information
Here, you enter the necessary tax information, tailored to whether you are an individual seller, a sole proprietorship, a corporation, or a partnership. It’s regular tax information that you will see on other marketplace application forms.
Step 5. Setup your TikTok dropshipping store
That is a step that covers several points, namely adding your products, filling up shipping details, and connecting your accounts.
You can add products either manually or via bulk upload. If your store is already on other platforms you can check whether there are direct integrations to link and sync your products.
Fulfillment method
Now comes the key fulfillment part – here is where your path diverges from the other sellers. What you need to know is that TikTok Shop provides two main shipping methods for sellers:
- Ship by TikTok: In this method, sellers pick from a selection of logistics providers that TikTok Shop has pre-approved and lists in the Seller Center. This allows sellers to use recognized logistics partners that are familiar with TikTok’s shipping protocols.
- Ship by Seller: This option gives sellers more control by allowing them to use their own preferred logistics service provider, provided that TikTok Shop supports them. This information can be found in the Ship by Seller User Guide. Note that this method is not available to all sellers and may be restricted to certain accounts.
As you can see, already at this stage TikTok is making it very clear that not all accounts will be permitted to use this option. This means that not every seller will be able to dropship with TikTok Shop. This usually is apparent at the verification stage and you can try to appeal your case with TikTok if they decide that you can’t proceed with fulfillment by the seller option.
Here you need to select Ship by Seller option of course. Then you will need to provide all the information regarding your fulfillment.
Dropshipping rules for the US sellers
If you’re selling on TikTok Shop from the US, here are a few rules you must know about:
- Stick to the US suppliers: You can’t use suppliers from outside the US to ship orders. All your products need to be sent from within the country.
- Ship from listed locations: You must ship all orders from the locations you’ve listed in your Seller Center on TikTok Shop. Make sure these details are correct and updated.
- Use the US shipping services: You are allowed to use shipping services that help bundle your orders together (known as consolidation services), but these services must be based in the US too.
- Directly stock your products: You can’t list products that are fulfilled by another retailer or ecommerce marketplace. Your products need to be stocked in your own US warehouses that you’ve told TikTok Shop about in the Seller Center.
Link your bank account
To be able to receive payouts, you need to tell TikTok which account they should be depositing the money into. Follow the prompts to add your bank details, and submit to finalize the linking process.
Want to learn more about this platform? Read our guide on TikTok’s safety, access, and selling.
Conclusion
TikTok Shop dropshipping lets you tap into a vast user base, but it also demands high standards in customer service and order fulfillment. The success of your TikTok dropshipping store hinges on your understanding of the platform’s rules, creatively engaging your audience, and continually improving your business strategies based on what works.
Looking ahead, focus on being innovative and keeping your customers happy. Stay informed about the latest changes in TikTok policies and market trends to keep your business compliant and competitive. With the right strategies and tools, your TikTok dropshipping business could be very successful.
Good luck as you dive into the exciting world of dropshipping on TikTok Shop!
Share your experience
Have you tried dropshipping on TikTok Shop? We’re eager to hear about your journey! Whether it’s your successes, challenges, or any tips you’ve gathered along the way, your insights are invaluable. Your story could inspire and guide many in our community!
